Good morning. My name is Cody, and I would like to welcome everyone to the JetBlue Airways second quarter 2022 earnings conference call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. I would now like to turn the call over to JetBlue's Director of Investor Relations, Joe Caiado. Please go ahead, sir. Thanks, Cody. Good morning, everyone, and thanks for joining us for our second quarter 2022 earnings call. This morning, we issued our earnings release and a presentation that we will reference during this call. All of those documents are available on our website at investor.jetblue.com and have been filed with the SEC. In New York to discuss our results are Robin Hayes, our Chief Executive Officer, Joanna Geraghty, our President and Chief Operating Officer, Ursula Hurley, our Chief Financial Officer, and also joining us for Q&A are Dave Clark, Head of Revenue and Planning, and Andres Barry, President of JetBlue Travel Products. This morning's call includes forward-looking statements about future events. All such forward-looking statements are subject to certain risks and uncertainties, and actual results may differ materially. Please refer to our most recent earnings release and our most recent Form 10-Q or 10-K for a more detailed discussion of the factors that could cause the actual results to differ materially from those contained in our forward-looking statements, including, among others, the COVID-19 pandemic, fuel availability and pricing, the outcome of the lawsuit filed by the DOJ related to our Northeast Alliance, the occurrence of any circumstances that could give rise to the right of JetBlue or Spirit Airlines or both to terminate the merger agreement, failure to obtain applicable regulatory or Spirit stockholder approval in a timely manner or otherwise, and the potential financial consequences thereof, failure to satisfy other closing conditions or failure of the parties to consummate the proposed transaction, and the possibility that JetBlue may be unable to achieve expected synergies and operating efficiencies within the expected time frames or at all, and to successfully integrate Spirit's operations with those of JetBlue. The statements made during this call are made only as of the date of this call, and we undertake no obligation to update the information. Investors should not place undue reliance on these forward-looking statements. Also, during the course of our call, we may discuss several non-GAAP financial measures. For a reconciliation of these non-GAAP measures to GAAP measures, please refer to the tables at the end of our earnings release, a copy of which is available on our website. Now I'd like to turn the call over to Robin Hayes, JetBlue CEO. Thanks, Joe. Good morning, everyone, and thanks for joining us today. I'd like to start with my thanks to our more than 24,000 crew members for their tremendous work and dedication to delivering the award-winning JetBlue experience to our customers as we mark some significant milestones in our recovery this summer. This morning, we reported a record-breaking absolute revenue result for the second quarter, and we're on pace to top it again here in the third quarter and drive our first quarterly profit since the start of the pandemic. Turning to slide five. Before we dig into our financial results and outlook, I'd like to take a moment to discuss our recently announced agreement to acquire Spirit Airlines. I'm very pleased we found a path forward with Spirit, and we can't wait to welcome their incredible 10,000 team members to JetBlue as we create a true national low-fare, high-quality challenger to the dominant Big Four airlines. Together, we will expand our uniquely disruptive combination of award-winning service and competitive low fares to more customers across the country as we combine the best of both airlines. You've heard me say it before, this transaction turbocharges our strategic growth plan. It will diversify and expand our network for customers, create new jobs and opportunities for crew members, and expand our foundation for profitable growth, unlocking sustained long-term value for all of our stakeholders. We remain highly confident in our ability to obtain regulatory approval no later than the first half of 2024. We expect the transaction to be accretive to EPS in the first full year following closing and to deliver $600 million-$700 million in annual net synergies once integration is complete. You can find more information about this transaction and the many stakeholder benefits on our website. We are thrilled about this unique long-term opportunity, but we also recognize that we are still some time away from closing. Even as we begin early work on integration planning, we remain focused on running the standalone business in the interim, and we also continue to execute on our organic initiatives. Returning to sustained profitability. Slide five. With that, we're here today to discuss earnings, and I'd like to start with our quarterly reports on slide six. For the second quarter, we reported an adjusted loss per share of $0.47. As you will recall, we had some operational challenges earlier in the spring, which drove a sizable reset to our full-year growth plan and a number of investments to ensure we could operate reliably during this exceptionally busy summer season. I'm proud to say that our operational performance improved significantly throughout the quarter, and we capitalized on the strong demand environment to deliver record revenue growth at the top end of our original guidance range and a record quarterly revenue result for JetBlue. We were profitable in the month of June on an adjusted basis, entering the third quarter with solid momentum as we expect to carry forward through to sustained profitability. I'm pleased to see record demand to travel with JetBlue and the solid underlying momentum in our recovery as we work to build an even better JetBlue for our stakeholders. Moving now to slide seven. With high fuel prices and our short-term operational investments are weighing on our margins this summer, we are making steady underlying progress on our long-term initiatives to structurally improve our profitability and enhance our long-term earnings power. Our network is foundational to our success, and we continue to strengthen relevance this year, primarily through our Northeast Alliance with American Airlines or the NEA. The NEA will be a significant margin builder for JetBlue by allowing us to grow in New York and Boston, our two largest focus cities, and offering more value to all customers in the region. Together with American Airlines, we've created robust competition with industry-leading network depth and breadth and more combined daily departures than Delta and United. The NEA continues to scale nicely on its multi-year path to steady state as we build our connectivity, enhance loyalty benefits, and a seamless customer experience. Across the pond, I'm delighted to say that we've secured permanent slots at London Heathrow starting at the end of October, the culmination of some great work together with our airport and government partners. In addition, we're excited to expand our award-winning transatlantic service to our second largest focus city with the launch of service from Boston this week, further strengthening our relevance in the Northeast. With the addition of a third frequency between JFK and London in October, we'll be operating five daily flights between the Northeast and London this fall. More customers are engaging with JetBlue than ever before as we continue to see double-digit growth in our loyalty business, fueled by the NEA and the strength of our brand preference as we generate record cash flows from the program. Back in 2018, we shared with you a vision for our new JetBlue Travel Products subsidiary with an audacious goal of contributing $100 million in EBIT by 2022. Despite all of the challenges of the last 24 months, we are on track to deliver close to that target this year. Last month, just in time for the busy summer travel period, the JTP team rolled out a revamped website and additional inventory to Paisly by JetBlue, a travel website that we launched just over a year ago and offers customers a one-stop shopping platform to conveniently purchase ancillary travel products relevant to their trip, all backed by JetBlue's great customer service. Earlier this year, when we reset our medium-term capacity plan to reflect the industry's constraints, we highlighted some potential mitigating actions to rightsize our footprint for this new reality. Today, we announced a further acceleration of our E190 transition with our fleet modernization efforts poised to accelerate not only our margin expansion, but our path to reducing emissions. Ursula will walk you through our new structural cost program, which will set a new foundation for our long-term low cost structure. Finally, our responsibility to mitigate climate risk is a core part of our mission, and we remain steadfast in leading the industry in our efforts. We've recently announced our commitment to work with the Science-Based Targets initiative to set a near-term emissions reduction target for our airline operations. In addition to our sustainability efforts, we remain committed by fostering diversity. We're proud to say that underrepresented groups represent over 60% and 90% of students enrolled in our Gateway Select and Gateway Direct programs respectively, which are industry-leading career development programs that allow crew members and external applicants to pursue a path to become a pilot or maintenance technician at JetBlue. Once again, I'd like to thank our passionate crew members for caring for our customers, each other, and JetBlue. With the foundation we put in place and the many exciting initiatives we have underway, I've never been more excited about our long-term cost outlook, our long-term outlook, which will only be enhanced by our acquisition of Spirit. With that, over to you, Joanna. Great. Thank you, Robin. I'd also like to add my thanks to our great team. Earlier this year, we made a number of operational decisions to better set us up for the summer. While this summer has not been without its challenges, these investments are providing relief, and we are pleased that our completion factor is now back above 98%. We'd like to thank our team, as we know it has been a particularly challenging operating environment. I'd also like to thank our industry partners at the FAA for their continued support and importantly, their transparency as we all work to bring flying back to the level and quality of a pre-pandemic environment. Turning to capacity on slide 9. As Robin mentioned, we actually began moderating our capacity plans back in March. Following a challenging few weeks in April, we moved quickly to reset our full year growth plan. The reality is that almost no airline has been immune to operational challenges this year as the industry quickly ramps back up. It's clear that what we experienced has now been felt by all of our peers. Frankly, it just hit us earlier giving our network footprint, and therefore we were able to reset earlier. On our last call, we announced we were taking decisive action to reduce our full year capacity plan by 10 points to build greater resiliency into the operation, and today we are tightening that capacity range. In fact, the incremental investments for the summer partially delayed an anticipated productivity benefit into the fourth quarter. As an example, in June, we had 16% more active pilots, but 8% fewer block hours compared with 2019. We are also carrying elevated reserve levels. As we move beyond the peak summer, we expect some of these investments will gradually normalize as the broader aviation ecosystem stabilizes and we ramp utilization back up. That said, we firmly believe that this level of investment and a more conservative operational planning philosophy was necessary to ensure that we can reliably deliver for our customers and crew members, especially as external factors continue to make for a challenging operating environment during this busy summer season. As noted, we closed May and June with a completion factor above 98% compared to approximately 90% during the first three weeks of April. As a result, when we provided our Q2 investor update in late May, we were the only airline to guide up capacity on a better May completion factor, while others were enacting further schedule reductions. In our congested geography, where more than two-thirds of our flights touch the Northeast, we had a higher completion factor than our peers in May and in June. With this said, we do continue to see challenges beyond what we can control, with continued difficult weather events on the East Coast and meaningful ATC constraints, as they too face some of the same staffing challenges as most other businesses. To address this and build in a degree of resilience, we will continue to plan appropriate levels of reserve crews in the context of a more fragile national aviation system, and one that is likely to remain so for the near to medium term. We continue to work collaboratively with the FAA to better understand their constraints, improve transparency, and ensure we are set up to deliver for the flying public. For the second quarter of 2022, our capacity increased 2.3% year-over-year, with strong completion factor trends. For the third quarter, we expect capacity to be -3% to flat year-over-year. We believe the sequential step down in capacity in Q3, consistent with the revised capacity plan we announced back in April, is the right move to set us up for success this quarter. For the full year 2022, we are tightening our forecast for capacity to grow between 0% and 3% versus 2019. During the second quarter, we continued our international expansion with the start of service to our first Canadian Blue city, Vancouver, marking another milestone in JetBlue's history and making us the only airline to offer nonstop flights from JFK. As Robin mentioned, we're boosting transatlantic service even more this quarter with new daily service between Boston and both Gatwick and Heathrow, as well as a third frequency between JFK and London in October. We are obviously very pleased to see the CDC follow the science and remove inbound testing requirements for international arrivals into the U.S., finally eliminating a cumbersome hurdle to the industry's continued recovery and driving further improvement in international demand, particularly in our Caribbean network, where trends were already strong. On the other hand, we were disappointed to see the Canadian government reinstate their random testing regime, which we believe is a step in the wrong direction, but also serves as a reminder of the ever-evolving landscape of pandemic recovery. Domestically, we have fully consolidated our LaGuardia operations to Terminal B earlier this month. In the fall, we're relocating to the brand new South Terminal C in Orlando as the anchor tenant. In the fourth quarter, we also plan to move into Newark's new Terminal A. We are excited to welcome our customers in these world-class terminals and provide them with an enhanced airport experience and a more seamless travel journey with JetBlue. Of course, operationally, we are looking forward to the improved efficiencies that come with eliminating split terminal operations at LaGuardia. We've smoothed out and de-risked our return to growth this year, we are setting a strong foundation for the network to deliver sustained profitability as we build out our relevance. As always, we'll remain nimble and adapt as needed to the broader macro environment, making decisions through the lens of margin. Turning to slide 10. During the second quarter, our revenue increased 16.1% year-over-year, better than the high end of our initial outlook as a result of robust demand across the network with a record number of customers, and we expect load factors to remain in the high 80s through the summer. Our ancillary revenue per customer grew 65% in the second quarter to well over $50 per customer, and we are pleased with the success of our segmentation strategy with a broad product portfolio that offers great value and choice for all customers. For the third quarter, we expect unit revenue to increase between 19% and 23% to the highest levels in our history as strong demand combined with a tight supply backdrop help offset the high price of fuel. Revenue is tracking well to help deliver a profitable quarter, and early bookings keep us cautiously optimistic about the fall. As Robin mentioned, we are solidly executing across a number of commercial initiatives. On the network front, we're making good progress in ramping up our margin accretive Northeast Alliance with American Airlines. While the industry has yet to return capacity to 2019 levels, the NEA is growing well in excess of the U.S. market. We've added over 50 new routes not previously served by either carrier and increased frequencies on another 130. Collectively, with American Airlines, we are now offering more departures out of New York than Delta and United. This growth is delivering tremendous consumer benefits as we offer more customers our award-winning combination of low fares and great service while eliciting a strong competitive response from other carriers, such as Delta's substantial growth at Boston and United's additions at Newark, as well as new service between Boston and London. Through the NEA, JetBlue is able to serve a broader set of customers, including business travelers, fly to more markets, and create thousands of jobs in the process. Business travel also continues to recover nicely, with Q2 contracted corporate bookings improving 10 points sequentially as we move closer to pre-pandemic levels. The Northeast Alliance positions us well to capitalize on the continued business travel recovery as we expand our share of the corporate travel wallet in the region with a compelling network, schedule, and service offering, as well as reciprocity across our loyalty programs. Turning to loyalty and co-brand, the value proposition of our TrueBlue loyalty program continues to resonate extremely well with our customers. With program engagement at all-time highs. I'm pleased to see yet another record quarter of program growth, with spend growth that continues to consistently and meaningfully exceed pre-pandemic levels, up over 40% year-over-year. This is an area with ample runway for growth, and our team continues to find new ways to add further value as we evolve the programs and enhance this resilient cash flow stream. The short-term investments we made in the operation have positioned us well to reliably deliver the JetBlue experience as we capitalize on the strong demand environment, while our strategic initiatives fuel our profitable growth over the long term. I'll close with another thanks to our crew members. We know it's been a long summer, and we are very appreciative of how you've taken care of our customers and importantly, one another. I'll turn the call over to you, Ursula. Thank you, Joanna. I'd also like to thank our incredible crew members for their commitment and hard work to ensure that we deliver for our customers, our fellow crew members, and our owners as we lay the foundation to build back our margins beyond pre-pandemic levels and create sustainable long-term value for all of our stakeholders. I'll start on slide 12 with a brief overview of our financial results for the quarter. Revenue was a record $2.4 billion, up 16.1% year-over-year. Cost per available seat mile was up 34.7% year-over-year. CASM excluding fuel and special items was up 14.5% year-over-year, and our GAAP loss per share was $0.58, and adjusted loss per share was $0.47. I'm very pleased with the team's execution this quarter to position us to return to sustained profitability in the back half of the year. Despite the operational headwinds in April, the subsequent operational investments we made, and the sharp rise in fuel prices throughout the quarter, we exited Q2 with an adjusted pre-tax profit for the month of June, and we look forward to carrying this momentum into Q3 and beyond. Turning to slide 13. During the second quarter, CASM ex-fuel increased 14.5% versus 2019, below our original guidance, driven by efficiencies tied to a better operation. As you've heard, the reliability investments we made for this summer are yielding much improved operational results and have helped to de-risk the summer, but they are weighing on our margin recovery. For the third quarter, we are forecasting CASM ex-fuel to increase 15%-17%. We do expect this heightened investment to ease once we get beyond the summer peak. As a result, we expect to see some productivity improvement in the fourth quarter and into 2023. We are also tightening our forecast for full year 2022 CASM ex-fuel to increase in the range of 11%-14% versus 2019 from prior guidance of 10%-15%. As a reminder, this includes 6 points from the capacity reductions announced back in April, a total of 3 points from the spring operational challenges and the investments we're making for the summer, and 1 point from inflationary pressures from pilots and our business partners. Turning to slide 14. On our last call, we mentioned that we had engaged some outside experts to conduct a thorough review of our costs to help us identify the optimal long-term cost structure for JetBlue as we emerge from the pandemic. The result of that work is the new structural cost program that I'm pleased to share with you today. Just prior to the pandemic, we concluded our first structural cost program, which successfully removed over $300 million of cost and was centered largely around sourcing contracts, distribution, and implementing self-service technology and rationalizing other fixed costs. That program drove an industry-leading CASM ex performance in 2019, and we were on track to execute a 0%-1% CASM ex take from 2018 to 2020. Fast-forward to today, and while we are still benefiting from our first structural cost program, we're embarking on a new plan to keep our costs low as part of our continuous focus on this area of our business. This new program focuses on cross-functional costs and is more about gaining operational and planning efficiencies. This past quarter, we announced the creation of a new enterprise planning team, which will play a critical role in unlocking these structural efficiencies across the airline longer term, some of which we have already begun implementing successfully. For example, Joanna mentioned that we are currently staffed at much higher levels of flying activity, and we have strategically invested in reserves as part of our more conservative summer planning. At the same time, we're actually seeing big improvements in planning productivity and reductions in pilot soft time. These are exactly the types of underlying efficiencies that will carry forward and ramp beyond the summer while utilization also improves. We're also investing in automation across the business, especially in support of end-of-life maintenance planning, given that we are now in a position where we are retiring aircraft for the first time. Specifically, we are investing in software that optimizes when to swap or remove engines to maximize utilization before retirement, thereby reducing total system-wide cost of engine ownership. We expect this new structural cost program to deliver run rate cost savings of approximately $175 million by the end of 2024, with half of these savings expected by the end of 2023. This will help to mitigate any medium-term CASM headwinds and support our objective of a flat or better CASM ex trajectory over a multiyear period, fueling our margin expansion beyond pre-pandemic levels. You'll also recall that earlier this year, we exercised and accelerated 30 A220 options in order to exit our E190 fleet by 2026. Today, we announced a further acceleration of our E190 retirement, pulling it forward by over a year to mid-2025 as we further optimize our fleet planning and maintenance spend. As part of this acceleration, we've already parked three E190 aircraft and plan to park an additional nine for a total of 12 E190 exits this year. We expect to save at least $75 million in maintenance expense through 2024, and will benefit from reallocating flying to much more CASM efficient A220s, which have 30% lower direct operating costs and 35% better fuel efficiency. Our fleet modernization plans will not only improve our margins, but also accelerate our decarbonization journey. In total, the structural cost program and the accelerated E190 retirements will drive approximately $250 million of cost savings through 2024, with $150 million-$200 million of that representing a permanent run rate cost reduction. Turning to the balance sheet on slide 15. In the second quarter, we paid down approximately $106 million of debt, and we funded approximately $205 million in capital expenditures. For the full year 2022, our CapEx forecast remains at approximately $1 billion. At the end of June, our adjusted debt to cap was 54%, and we closed the quarter with liquidity of $2.6 billion or 32% of 2019 revenue, excluding our revolving credit facility. As we think about our proposed acquisition of Spirit, it's important to remember that JetBlue's relative balance sheet strength is the key enabler of this transaction. Post-closing, we continue to expect that JetBlue would maintain a strong balance sheet with pro forma net leverage of approximately 3-3.5 times, which we believe to be very manageable level that still compares favorably to the peer group. A strong balance sheet is foundational to JetBlue's strategy, and the strong earnings accretion and cash flow profile of the combined business will allow us to quickly delever the balance sheet as we integrate. To close, we recognize there is a lot of work ahead, but through the strong underlying momentum in the business and the continued execution of our various strategic initiatives, from the Northeast Alliance to the evolution of our loyalty program, to scaling JetBlue Travel Products, and now our new structural cost program as well, we are setting a foundation to structurally improve our long-term earnings potential beyond pre-pandemic levels. I'm also very excited to welcome Spirit team members to JetBlue as we create the number five carrier in the U.S. and unleash a national low-fare challenger to the Big Four. I'd like to once again express my sincere thanks to our crew members for their tireless efforts in helping to build a better JetBlue for all of our stakeholders. With that, we will now take your questions. Thanks, everyone. Cody, we're now ready for the question and answer session with the analysts. Please go ahead with the instructions. Absolutely. Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach our equipment. A voice prompt on your phone line will indicate once your line has been opened. Please state your name and your company before posing your question. Once again, please state your name and company before posing your question. Once again, that's star one. We'll take our first question. Caller, please go ahead. This is Duane Pfennigwerth from Evercore ISI. Just on the timing of the debt raise to support the Spirit acquisition, how do you think about the timing of that? Are there sort of regulatory hurdles you wanna clear before that happens? If you could comment at all on, you know, estimated cost of capital on that debt raise. Good morning, Duane. We currently have a 364-day bridge facility in place for $3.5 billion. We envision that staying in place until we receive regulatory approval. Once we receive regulatory approval, we will then take out that bridge. We'll assess the various markets at that point in time and focus on all-in cost of funding, and we'll determine appropriately which assets and which markets to utilize in order to take out that bridge. The cost of debt in regards to the bridge at the moment is around 6%. Given the timeframe in which the bridge stays in place, there are some step-up fees along the way, so that could slightly increase depending on the length of the regulatory approval. Obviously, the cost of debt when we take out the bridge facility, that could be the end of next year or early 2024. The financing markets at that point in time could look very different than what they look like today. You should envision us, playing a keen focus on all-in cost of funding when we take it out. Thanks. Just for my second, you know, there was a competitor where an extension of basically credit balances impacted revenue trends, you know, or their outlook for the third quarter. In going through that after that call, it looks like, you know, JetBlue does have some policies of sort of, you know, COVID credits that expire at the end of September. Can you comment on how many points of revenue growth or how many points of revenue are from credit balance breakage? Hi, Duane, this is Dave Clark. I can take that one. Regarding the credits, since the pandemic began, we've seen a higher cancellation rate and thus more credits being issued. This is especially true early in the pandemic when customers were canceling their flights in pretty high numbers. We've been forecasting the usage rates of the credits and recognizing increased breakage revenue since Q3 of 2020. This is two years into the process for us. It's a relatively smooth ramp for us with no large lumps sort of as we go up or down. The highest breakage revenue recognition was actually the past three quarters, from Q4 of 2021 to Q2 of 2022, and we're starting to normalize right now. This is all sort of fairly low numbers, you know, low single digits on the way up and, you know, it will normalize at a higher rate than it was because customer cancellation behavior has changed with the removal of most change cancel fees. On the way down, it's roughly a 1-point headwind, but all pretty smooth and low numbers for us. Thanks. Just to put a finer point, that 1-point headwind would be like a 4Q relative to 3Q. Is that the right way to think about it or, you know, next year versus this year? Correct. Think starting Q4 and throughout the first few quarters of 2023. Okay. Thank you. Thank you. We'll now move on to our next question. Caller, please go ahead. Good morning. It's Savanthi Syth from Raymond James. I'm just kind of curious, Ursula, you know, keeping CASM ex flattish versus kind of 2022, which let's say it's around 12.5% above 2019 on kind of mid- to high-single digits. That seems a little bit disappointing given that, you know, in 2020, you were supposed to have a step down because of the first structural cost program, and you have had some kind of one-time items this year. Could you talk about, you know, what's the incremental cost you're seeing in 2023 that requires the new program to kind of maintain this flattish level? Sure. Thanks for the question, Savi. Maybe just to walk forward. The midpoint of our guide this year is 12.5%. If you take out the spring disruption costs as well as the summer investments, you get down to an underlying CASM ex-fuel of 8.5% for 2022. Next year, if you think about us growing capacity mid- to high-single digits next year, that's historically what we've said is the sweet spot. You would expect us to drive, to your point, a flattish CASM ex-fuel. However, we have also highlighted that we do have some headwinds next year. One of those being we will have a small incremental impact due to the NEA, and this is really because we moved into new terminal space in LaGuardia this year as well as Newark. You'll have the full year effect of that increase in 2023. We also have an aging fleet, so we've highlighted that we have a level of maintenance investment that will need to take place. We also have some in-flight rate increases from our new contracts that are effective in January as well. Essentially, our structural cost program that we rolled out today is going to help offset those headwinds, and essentially, we intend to deliver a flattish, if not better, CASM ex-fuel next year. That's super helpful. Thank you. Can I just ask on the capacity to kind of start going back to that mid- to high-single-digit growth level, especially the step up from third quarter to fourth quarter? You know, what are you kind of expecting on the resource side or on the operation side that's giving you confidence you can kind of meet that level? I know you mentioned that it sounds like the pilot shortages are coming down, but I'm just kind of curious what, you know, given the issues that the industry has been having on kind of restoring capacity, you know, where the confidence comes from for the fourth quarter and beyond. Yes. Thanks, Savi. I'll take that. It's Joanna. You know, we're confident with the investments that we've made into the summer that we're now in a position where we are ramped up to handle that level of capacity. You know, we teased out some of the investments we made with pilots and additional reserves. You know, we expect to continue some of those investments as we move forward just to ensure a level of operational reliability. Yes, there are some shorter-term summer investments that will peel off, but there's some, given the more fragile aviation ecosystem that will stay, and we'll continue to invest there. We feel that we're adequately staffed to handle that capacity adjustment. Obviously, the talent landscape is challenging, but the underlying infrastructure to support all of that, whether it's training, hiring, is fully ramped, and we feel good about that. Thank you. Thank you. We'll take our next question. Caller, please go ahead. Thanks. It's Scott Group from Wolfe Research. I just wanna clarify just one thing on that CASM point about flattish. Are you guys guiding flattish versus the up 12.5% this year or versus what you tried to talk about the more normalized underlying in a plus 8% for this year? Yes, Scott. It's against the 12.5 midpoint of our 2022 guide. Okay. Perfect. I just wanna clarify. Can you guys share some color on the monthly sort of TRASM trajectory throughout second quarter and what you're assuming sort of as you look out, you know, throughout third quarter? Robin, I know you had some, you know, I don't know, cautious or maybe uncertain comments around fall and what business travel could look like. Any updated thoughts or color there? Hey, maybe, I'll take that and flip it to Dave to give you some color, additional color. As we think about Q2 into Q3, we're seeing many of the same trends that were present in Q2 carry into Q3. Ultimately, broad strength across most of our geographies. Transcon actually outperformed most of the geographies. As we look at VFR and international, the removal of the inbound testing requirements provided some nice lift there. Domestic Mint is also significantly performing. If you look at load factors, we're back to 2019 levels. Fares and yields for Q2 both above 2019 levels. You know, we're pleased with what we're seeing, obviously, you know, cautiously optimistic about the fall and seeing these trends carry into the fall. Dave, if you wanna add any color. Sure. Thanks, Joanna. This is Dave. As you mentioned, the trends continue. We've actually been remarkably steady throughout the quarter. Ramped up really well during Q2, and then have just more or less plateaued and stayed relatively flat as we move through the third quarter with the leisure bookings that we've taken so far into September and October remaining very strong and indicating that that leisure travel should be resilient through the fall. In terms of corporate continues to progress. We progressed about 10 points in the recovery during the second quarter. We've seen that continue here for the first month of the third. We expect to see another step up in the fall, driven by you know, continued return to work after Labor Day. There's certainly high traveler willingness to be on the road. We see that in the surveys and with all of our discussions with corporate customers. We think the recovery will continue as we head through the fall. Okay. Thank you guys for the time. Thank you. We'll now take our next question. Oh, hey, good morning. It's Jamie Baker at J.P. Morgan. Robin, we didn't speak last week, so I did wanna offer my congratulations on getting the deal announced. A question on the regulatory process. You know, a second data request has already been made. You disclosed that. What happens from here? I mean, in the case of Alaska-Virgin, you know, they pushed back their closing date to give them more time to work with Justice, which, you know, essentially disclosed the fact that they were talking. Do you envision providing color in this regard? Are you even permitted to do so? Would a third data request be disclosed, for example? I'm just trying to think through how to monitor from the outside. No, thanks, Jamie. You know, appreciate the comments and the thoughts about getting the Spirit transaction closed. We're extremely pleased with that. You know, I think we have laid out, on the regulatory front, right through this process, a sense that we expected this to take a fair amount of time. Obviously we're not in control of the timeline, although we are active participants in the process. We're gonna continue to engage with both DOJ and DOT as well as we work through the process. You know, Jamie, I don't know at this point what we'll exactly say and when. Okay. Obviously understand people want to know where we are in the process, but equally, you know, I think it's a process that is gonna take some time, and we wanna be respectful of the regulators' view and rights to review this transaction. Okay, that's fair. Thanks, Robin. Second, how do you think a US recession plays out for JetBlue? You know, as a public company, you've only experienced a single downturn, so not a huge history to call on, but that's exactly why I'm interested in asking the question. Thanks. Thanks, Jamie. I'll ask Joanna to pick that up. Hey, Jamie. How are you? Hey. You know, you mentioned our history. If you take a look at how we performed during the 2008, 2009 cycle, you know, we actually performed better in 2009 versus 2008. You know, obviously a lot has changed. Hopefully, you know, we don't see a recession, but, you know, if we do, you know, we've taken, you know, a hard look at our business model and its resilience during, what we believe, you know, could happen. You know, we've changed quite a bit since then, I think for the good, in terms of building additional resilience in. You know, we've continued to evolve our customer segmentation strategy. As you know, premium leisure tends to be more resilient during economic downturns. We now have our Mint product, which we did not have. Back in the 2008, 2009 crisis. We also carry a higher mix of VFR traffic, which also tends to be resilient. We saw this, you know, even in the face of the pandemic when there were barriers to travel, and this customer segment continued to fly to see their friends and family. As you think about segments potentially choosing to go down sort of the segmentation ladder, the introduction of our price-sensitive product, Blue Basic, is also, I think, you know, bodes well for us. Finally, ancillary revenue. This has only grown over the last decade, and this tends to be much stickier during a recession. you know, we do think there are inherent advantages in our business model, but we also recognize that recessions bring about a lot of change and, you know, not just on the demand side, but also it could include lower input costs as well. That said, as you think about the levers that we have to pull, capacity. We've demonstrated. I think all airlines have demonstrated their ability to pull capacity, you know, in a challenging environment, so we could slow our growth rate and obviously right size to the demand environment. Labor, you know, that continues to be an opportunity as we think about what JetBlue was able to accomplish during COVID with voluntary programs, and, you know, crew members taking advantage of those. Obviously our fleet. We do have an aging fleet, so there could be opportunities to retire aircraft early. Again, inherent advantages in our business model, we think, will serve us well during a recession, but not looking at that through rose-colored glasses and recognizing that we do have these additional levers in our toolkit that we could pull if we needed to. You've obviously put a lot of time and thought into it. Thank you, Joanna. I appreciate it. Take care. Thank you. We'll now move on to our next question. Oh, hey. Good morning, everyone. Mike Linenberg, Deutsche Bank. Robin, just to follow up on Jamie's question, obviously it seems like it's gonna be a long regulatory process, but what can you do before you've gotten the full approval? Can you initiate code sharing, frequent flyer reciprocity? Can your fleet people talk to their fleet people? I know that there are things that you can do. Some of them may need DOT approval. Can you just talk about maybe some of the things that you could do or planning to do in the near term? Yeah. Hi, Michael. Yeah, no, thanks for the question. You know, obviously, you know, many airlines have been through this many times, so you know, we have a lot to learn from what others have done. You know, yes, it is true there are a small number of things that you're able to sort of talk about in that period. You know, we're gonna take a very cautious approach to that. Okay. You know, we're gonna follow our legal advice, and make sure that we're doing nothing to jeopardize or close the transaction or to you know, give concern to our regulators who are re-reviewing it. You know, I think work is all underway in terms of some internal planning that we do. Right now, our focus, in addition to obviously the regulatory process, which is underway, is to you know, make sure we get the shareholder approval, Spirit shareholder approval, for the transaction. What is the date of that, Robin? Have you come out with a date on the Spirit shareholder? No. You know, my best estimate, Michael, is sort of 60-90 days, and we have to get the proxy completed with Spirit, then we have to see if there's any SEC comments on that. And then it's got to, you know, we've got to publish a meeting date. Don't have the exact date yet, but we'll know more on that soon. Okay, great. Just my second question. Joanna, you know, getting from a 90% completion factor to 98, obviously a step in the right direction, but I suspect 98 is not still where you wanna be, you know, probably 99.2, 99.3. You did call out, you know, operational challenges for not just you, but the industry in the near and medium term. You know, how do we get to 99% plus? Do we get there by year-end? Is that a 2023 phenomenon? You know, every point of completion factor is probably, you know, the old saw was worth a point of margin, and I'm not sure if that's still applicable to you or not. It does seem like there's some upside there, but it may take some time. If you can comment on that. Thank you. Thanks for the- Yeah, sure. Obviously weather and then continued ATC disruptions are what will stand in the way of improving completion factor. I would say we're nearing historical levels. I think we're really pleased with where we are now. The teams have done a really nice job. At the end of the day, weather and ATC challenges continue to be sort of the impediment to getting it up above 98%. Yeah. Okay. Michael, let me just add to that. If we take July, and, you know, Joanna mentioned this, but if we were to take our completion factor in July 2022 and compare it with 2019, it is extremely close. I mean, I think it's like 0.2%. Okay. I think the biggest driver of completion factor during the summer period is just the amount of ATC programs that get put in place. Primarily, those are weather connected. You know, on a good day here, we'll have a completion factor, I hope of, you know, as close to 100 as we can. Okay. Because of the jobs here in the Northeast and just the number of ATC programs that we see, on a day when you sort of a 3-4-hour ground delay program is pushed into New York, you're gonna see the industry with a completion factor, you know, somewhere probably between 90%-95%. When you average those, you know, you kind of get to that sort of 98%-99% summer completion factor. Which I think means that we're basically completing almost every flight other than those that are directly impacted by an ATC program or weather. Okay. Great for the details. Thanks, everyone. Thank you. We'll now move on to our next question. Good morning. Dan McKenzie from Seaport here. Couple things. It's great to see the messaging that reiterates the prior objective of, you know, achieving the same or better margins versus pre-pandemic levels. You know, the growth and cost commentary is helpful. On the balance sheet side, it looks like the plan is for lower leverage on a standalone, you know, and/or a merger scenario. On this point, are there free cash flow targets that you can share once back to normalized levels of profitability? Good morning, Dan. Good to hear from you. We did highlight that post-transaction, we expect to end up at 3-3.5 turns of leverage, which is below the median within the industry. Obviously, the joint combined company, we intend to generate meaningful cash flow right out of the gate. The focus will be on delevering the balance sheet to get it back to an even more acceptable level to JetBlue based on our historical performance and the way in which we manage the balance sheet. We do believe that that could be a fairly quick delevering exercise once the two combined companies come together. What I will say is the synergies obviously ramp up over a multi-period time frame, so it will take us a few years, but the goal obviously will be, as I mentioned, to get even lower than the 3-3.5 times. Mm-hmm. Understood. On the corporate trends, you know, I'm wondering if you can just put a finer point on, you know, some of the prior Q&A questions. You know, I guess, with respect to the operational challenges, to what extent did they impact the corporate trends in the second quarter? Is there an impact on corporate demand heading into third quarter? I'm just trying to get a better read on what's behind the revenue outlook. And, you know, is there some pent-up corporate demand here? You know, and when can the volumes in revenue really surpass 2019 levels? Thanks, Dan, for the question. This is Dave. We saw just a little pressure, I'd say, at the beginning of the second quarter, more of a blip as we had the difficult first half of April, slightly on the corporate side, saw it some on the leisure side as well. As we moved through the second quarter and improved and got back towards our targets and at above where our peers were, any of that has dissipated away. We've seen corporate sentiment continue to, you know, rebound, as the operation has improved. It's clear the corporates are the travelers themselves, the individuals are ready to get on the road. All the surveys show that. As return to office continues, that will help enable more trips. Certainly, corporate customers are excited to get back in front of their customers, and to do face-to-face revenue-generating meetings, as well as some internal work and conference work that's been suspended for the last couple of years. A lot of different pieces there. The NEA is really helping to add more options for these customers in the Northeast. As our seamlessness continues to ramp up, we've seen increasingly positive sentiment from our corporate customers, and about two-thirds of them now have the NEA code share benefits in their corporate contracts. Things continue to improve. Don't have a final date yet on when we'll reach fully recovered. At this trend, we're probably looking, you know, late this year or over the winter, but we'll see how that progresses, and it could happen sooner. Oh, very good. Thanks for the time, you guys. Thank you. We'll now move on to our next question. Good morning. Thanks for taking my question. This is Christopher Custureri with Susquehanna Financial Group. Ursula or Robin, I just wanna dig into this, the buckets here you've outlined on slide 14. The range of these numbers here, are these independent of the high single digit ASM guide you put out? Meaning if we are in a recessionary scenario and that high single digit is perhaps a 4-5, can you still hit these targets? And then B, you know, how much of this? Because the maintenance piece was in tech ops, if I remember, was a big focus in the last plan. How much of this is sort of, you know, identified during the pandemic versus a natural evolution of the plan that you envisioned as you were coming, exiting, 2019? Thanks for the question, Chris. First and foremost, half of the program that we've laid out is tied to enterprise planning. When I think of network and crew planning, we're essentially redesigning our processes to improve operability, which should result in improved cost performance. The way in which our network has evolved, given COVID, it's the pertinent time to actually ensure that we're iterating past performance and identifying, quite frankly, the optimal intersection between network operability and quality of life for our crew. The ranges take into consideration the capacity growth. In regards to end-of-life maintenance optimization, the structural cost program 1.0 that we delivered on, that was really focused in Tech Ops on airframe and engine contracts. This program is putting technology in place to optimize, quite frankly, end-of-life retirements for aircraft and engines. This program also is focused for maintenance on operational improvements. Given how the network has evolved, having the right tools, parts, and processes in place to deliver from an operability perspective. From a maintenance perspective, these initiatives are very different than the first structural cost program. All in all, to summarize that, you know, we feel confident in delivering the $150 million-$200 million in structural cost savings by the end of 2024, and the ranges do take into account, you know, a small capacity range. Okay. The flattish my follow-up CASM ex guide through 2024, that is on a sustained high single digit ASM base. Does that just remind us if that includes any labor deals? On that high single digit ASM base, if you could, any color you could break out in terms of how you're thinking about gauge, stage length, or new markets, or building out depths of schedules. Just wanna understand the buildup into that ASM guide. Thank you. We're technically not providing, you know, 2023 and 2024 capacity guidance. However, historically, we've provided those guardrails around mid- to high-single digits% being the sweet spot for JetBlue in delivering superior margins. That's how I would think about the next few years. I actually forget the second part of. Oh, labor. Yeah, I'm not gonna comment on labor at this point in time. We are in discussions with our pilots, but not gonna comment on that today. Over to you, Dave, any color on stage and gauge over the coming years? Sure. I think we'll see, you know, roughly what we're seeing today. Obviously, with the retirement of the E190s and bringing in the A220s, there's a bit of a gauge increase, that's well known as part of that. In general, we'll see the same sort of trends that we've had for the last couple of years. Thank you. Thank you. We'll now take our next question. Oh, hi, team. It's Helane Becker from Cowen. Thank you for the time. So just on the question of moving later, I guess, did you say later this winter or fall into new Terminal A at Newark and then new operations or new terminal at Orlando? As you think about the cost of doing that versus the benefits, can you just talk about the, I don't know, whether it's a cost savings that you would experience at those two or and maybe include LaGuardia in there, airports, so those three airports? Yeah. Thanks for the question, Helane. Obviously, moving into new terminals will have an impact on the cost structure. However, we're growing in high-value geographies. We expect the margin expansion to heavily offset the infrastructure investments that are taking place. Dave, it is an enhanced customer experience for our customers, and there are benefits there. Dave, anything else to add? Sure. Thanks, Ursula. Hi, Helane. This is Dave. In addition to the superior customer experience, there's some efficiencies as well. Think in LaGuardia Terminal B, we're reducing from two terminals that we were operating in before down to one. That creates efficiencies. We're also co-locating with American, which provides the efficiencies in terms of customer connections within the Northeast Alliance. Feel really good about that one. Newark's also been a real challenge, in the old terminal, there wasn't enough space, security room, hold room space. We're pushing departures across multiple terminals as well. There's a lot of efficiency in just getting the customer experience to an acceptable level, and then to a very good level that we're excited about there. Certainly some benefits that come with simplifying operations into one terminal across various cities. Thanks for that. Just for a follow-up question on, as you think about Ursula, since you mentioned geographies and you know, operating in high-value geographies, is there a way for you over maybe the next year or three to move some of that capacity to other geographies that maybe are less impacted by air traffic control? Hey, Helane, this is Gwen. I'll take it, and then Robbie, I'm sure, wants to chime in. As you look about the Spirit transaction, that's in part what it is about, is the ability to grow more quickly and diversify our network outside of the Northeast. If you look at the divestitures that we've put out there, it's really keeping the Northeast growth kind of in line with where it is today, and growing outside of that geography. I think the piece I will point out is, you know, New York has historically been a great sort of margin-building engine for JetBlue, and it's not fully recovered yet. If you think about potential upside, even in the Northeast geographies, New York is one of those places where, you know, whether it's moving to the new terminal in Newark or LaGuardia, these are long-term investments. By the way, Newark, they're tearing it down, so there's not an option there. These are, you know, investments we think are more than appropriate given, you know, where New York has historically been and where we think it's going to return to over the medium term. Thank you very much. Thank you. Thank you. We'll take our final question. Please go ahead. Yeah. It's James Hollins from BNP Paribas. Just my first question is on staffing levels. It looks like they've probably ticked just above 20,000. Just wondering if that's kind of the right number through the rest of 2022 and maybe where you'd expect to be in 2023 as you look to grow at what sounds like mid- to high-single-digit%. Thank you. Yeah, I think the staffing numbers around 24,000, they'll stay, I'd say, roughly in line. I mean, at this point, you know, we're really hiring for just that sort of mid to mid-single digit growth. You know, part of what you saw from kind of 2020, 2021 through today was really ramping up. We also obviously have had some elevated levels of attrition, so we'll continue to hire there. It's largely backfilling and then just, you know, small incremental growth associated with our capacity growth. Thank you. Yeah, I expect I know the answer to this, but does your Atlantic strategy change at all with the Spirit deal being landed, and also with an eye to the ramp up in Heathrow costs? Thanks. No, it's unchanged. I mean, as we think about Europe, it's really flying to the markets in Europe that are most important to New York and Boston, you know, others to follow. You know, we're really looking at the Spirit transaction to help grow our footprint outside of the Northeast. To Helane's point, we, you know, we like our New York, we like our Northeast geography. It's very important that JetBlue stays relevant in these markets in order to drive long-term margin success. As Joanna mentioned, despite the very strong revenue guide into Q3, New York is still ramping up. We added a lot of capacity over the summer and, as we all know, as you add that, it takes some time to ramp up. You know, I think good legs on that still. You know, while Heathrow cost increases have gone up, it is a very small part of our network. As we add Boston, it will be two, you know, two departures and arrivals a day. Sort of de minimis really in terms of the overall impact. Appreciate it. Great. Thanks, Robin. Oh, James, go ahead. Did you have a follow-up? No, that was it. Great. Well, that's gonna conclude our conference call for today. Thank you so much for joining us and have a great day. Thank you. That does conclude today's call. Thank you all for your participation. You may now disconnect.