Good morning. My name is Sylvie, I would like to welcome everyone to the JetBlue Airways first quarter 2023 earnings conference call. As a reminder, today's call is being recorded. At this time, all participant lines are in a listen-only mode. I would now like to turn the call over to JetBlue's Director, Assistant Treasurer and COO, Joe Caiado. Please go ahead, sir. Thank you, Sylvie. Good morning, everyone, and thanks for joining us for our first quarter 2023 earnings call. This morning, we issued our earnings release and a presentation that we'll 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, and Ursula Hurley, our Chief Financial Officer. Also joining us for Q&A are Dave Clark, our 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 from these statements. Please refer to our most recent earnings release and our most recent 10-K and other filings for a more detailed discussion of the risks and uncertainties 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 outcomes of the lawsuits filed related to our Northeast Alliance and our merger with Spirit Airlines, and various other risks and uncertainties related to JetBlue's acquisition of Spirit. 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. During the course of our call, we may discuss certain non-GAAP financial measures. For an explanation and 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's CEO. Thanks, Joe, thanks to you for continuing to do double duty in 2 different jobs. Good morning, everyone, thank you for joining us today. Our thoughts are with those affected by the recent storm and flooding in South Florida. I'd like to start by thanking our 25,000 crew members, particularly those down in Fort Lauderdale, as well as all of the employees of Broward County Aviation Department for supporting our customers and each other while prioritizing safety above all through a very challenging event. I'd like to thank Marc Gale for his leadership down at the airport and also all county, state, and federal agencies for their incredible work to get the airport reopened again. We stay true to our mission to inspire humanity now for 22 years and counting. We recently celebrated our birthday in February. As I reflect on our progress, I could not be more proud of the exceptional brand and experience we've cultivated that continues to disrupt the broader industry. With JetBlue, customers simply do not have to choose between low fares and great service. Before going through our quarterly results, I'd like to provide a quick update on our combination with Spirit. We are fully committed, forging ahead with our planned acquisition. In fact, we are more convinced than ever of the strategic logic of the combination. We firmly believe that creating a stronger JetBlue is the best solution to transform the industry, creating more competition and loosening the dominance of the Big Four. Over the past several months, support for our combination and recognition of its pro-consumer benefits have continued to grow, including from the state of Florida, who declined to join the Department of Justice lawsuit and instead views this as an opportunity to grow high-quality and low-fare air service. The state of Florida has helped promote the combination, which is expected to result in the biggest transformation in air travel that Florida has ever experienced, including at our Orlando and Fort Lauderdale focus cities, and additionally entails strong job creation across multiple airports in the state of Florida. It's disappointing, though not surprising, that the Department of Justice is trying to block this transaction, and by doing so, protect the status quo and enabling the largest airlines to continue operating unfettered in setting high fares and limiting competition. However, these actions do not change our conviction in the merits of this transaction. JetBlue is one of a kind. There's no other airline that disrupts the market like us, a fact the Department of Justice has recognized and applauded. Combining with Spirit, this will give us the scale to keep the Big Four on their toes in even more markets and with all travelers. As you'll hear, we all feel good about the progress, I should say, we are making on our organic plan. As we said at the outset, our combination with Spirit will turbocharge our plan, enabling us to serve more customers at lower fares and great service while delivering increased value for our stakeholders over the long term as an even better JetBlue brings even more competition to the industry. We are confident in the pro-competitive merits of this transaction, and we look forward to demonstrating that in court this fall. Let's turn to slide 4 and our organic business and our first quarter results. For the first quarter, we reported a GAAP loss per share of $0.58, an adjusted loss per share of $0.34, above the better end of our guidance. Throughout the quarter, our team delivered excellent operational performance against a very challenging ATC backdrop. The FAA staffing shortcoming, years in the making, has boiled over, especially in New York. Their request for 10% voluntary reductions by carriers creates a significant headwind for the American travelers flying this summer. While we cannot control the ATC staffing issues, nor what happens in the economy, we are focused on successfully managing everything we can control. We've made significant progress in building resiliency into our schedule, buffering our operation, and continuing to make strategic investments in improving operability. By aligning all of our efforts and minimizing operational challenges, we're able to generate more revenue, better control of our costs, and importantly, deliver for our customers. Looking ahead, we expect to carry this momentum forward with strong sequential pre-tax margin improvement into the second quarter. We will remain well on track in executing our comprehensive plan to enhance long-term profitability and restore our historical earnings power. In 2023, we're poised to deliver another year of record revenue performance as we continue to expand our product reach and value proposition to more customers across more destinations. These efforts, combined with the success of our structural cost program, gives me great confidence in our full-year earnings outlook. Having said that, looking beyond 2023, we recognize that we have more work to do to return our margins back to pre-pandemic levels. Moving now to slide 5. Looking ahead, there are 4 key margin builders that are critical to the JetBlue investment case. The Northeast Alliance, our ongoing evolution of our TrueBlue loyalty program, JetBlue Travel Products, and our structural cost program. Joanna will provide some additional color on the progress we are making with the NEA and TrueBlue, and Ursula will provide an update on our structural cost program. I'd like, though, to take a minute to talk about the success of JetBlue Travel Products. Since 2019, Travel Products has achieved profit growth 7x. JetBlue Travel Products continues to provide a platform for profitable growth while deepening our relationship with customers. Recently, when we announced a very important milestone in opening access to Paisly, our homegrown travel booking website, to all travelers, not just those who have a JetBlue flight, greatly expanding our addressable market. We've already seen a meaningful step change in Paisly bookings in the first few weeks. As we continue to grow, as well as through our planned acquisition of Spirit Airlines, these traveler offerings beyond flights will become increasingly relevant to even more customers and will fuel profitable growth for JetBlue Airways. Turning to the second quarter, we do expect strong revenue growth to continue as demand remains robust, and our multi-year structural cost program continues to deliver as we remain on track to hit our full-year CASM x target, giving us confidence to reaffirm our EPS guidance of $0.70-$1.00 for the full year 2023. We continue to solidify our sustainability commitment and demonstrate our leadership in aviation decarbonization. Last quarter, we announced a leading agreement with Shell Aviation for delivery of 10 million gallons of blended sustainable aviation fuel, or SAF, at LAX over the next two years, starting this quarter, with an option to purchase more. The deal with Shell is a strong signal of the growing engagement of the oil and gas majors in SAF production and something that we welcome. I'd like to close by thanking our crew members once again for delivering solid first quarter results. Our collective hard work has positioned us well for long-term success. Despite an uncertain economic outlook and a challenged ATC environment, I am optimistic about our future. We've built a solid foundation to succeed based on the unique JetBlue combination of low fares and great service. Over to you, Joanna. Thank you, Robin. I'd also like to add my thanks to our crew members for all that you do to ensure we deliver for our customers. I'm pleased with the success that we are seeing as a result of the efforts from our teams, as well as the operational investments and enhanced planning that we've implemented. Despite the highly congested airspace that we operate in, we achieved our operational goals for the quarter and ranked third in the industry in the first quarter for completion factor. Turning to slide seven. For the first quarter of 2023, capacity grew 9% year-over-year, above the high end of our initial expectations, driven in part by fewer than expected weather events. We do continue to experience ATC-related challenges across our system. As widely reported, the FAA has announced that their New York air traffic control staffing is at 54% of their 2014 target, far short of where it needs to be to avoid significant disruptions and accommodate the industry's growth. I'd like to thank the FAA for acknowledging the issues and for their close collaboration to ensure the industry minimizes the impact to customers. In line with the FAA's slot waiver incentive to carriers, we are fine-tuning our summer capacity plans to help mitigate delays we can control and provide a better customer experience. Even with the flight cutbacks, we still expect challenges in the operating environment this summer. The FAA has said that delays are expected to vastly increase year-over-year. With our large footprint in the Northeast, JetBlue is disproportionately exposed to these challenges. We are focused on what we can control, like protecting scheduled overnight maintenance time so the fleet can launch on time. We also continue to invest in technology to aid recovery during irregular operations, and we're enforcing our schedule and network planning processes to support operational success. We continue to plan the operation with conservativism, with schedule buffers, and elevated crew reserve levels. We expect capacity to be up 4.5%-7.5% year-over-year in the second quarter. For the full year 2023, we are reiterating our expectations for capacity to be up 5.5%-8.5%. As we've demonstrated in the past few years, we will maintain a nimble approach with capacity should conditions change. We have many exciting opportunities across our network, and we are focused on restoring targeted capacity across our non-slotted focus cities. Later this quarter, we expect to launch service to Paris from New York. We are also thrilled to announce this morning that tickets to our third transatlantic BlueCity, Amsterdam, are now out for sale, with service beginning in August as we continue strengthening our relevance in our largest focus city and building on our successful Mint platform. Over the longer term, we are delighted to have announced our growth plans in Florida, enabled by our combination with Spirit, including reaching 200 daily flights at Orlando and more than 250 daily flights at Fort Lauderdale as we bring more low fares, more choice, more high-quality service, and more jobs to Florida. Turning to revenue. In the first quarter, we grew revenue by 34% year-over-year, driven by leisure and VFR demand strength across our network, with load factors increasing throughout the quarter. For the second quarter, we are forecasting revenue to increase between 4.5%-8.5% year-over-year. This includes a 0.5 point impact from the recent closure of Fort Lauderdale Airport due to flooding and the immediate aftermath. That said, demand trends remain very robust into the second quarter, particularly during peak periods. Our Latin franchise continues to drive very strong revenue generation with higher year-over-year loads and yields. Our revenue guide is based on a continuation of current trends. We are seeing a strong domestic demand environment throughout the U.S. and are particularly pleased with the continued improvement in our New York City performance. We've also seen a steady recovery in business travel, which was roughly 80% recovered in the first quarter, with sequential improvement expected into the second quarter. While we did see a brief drop in demand immediately following the banking sector scare, it has now recovered. We continue to manage the business to margin and have great confidence in our full year earnings outlook on the back of our better than expected performance in the first quarter. Our revenue outlook for the remainder of the year is bolstered by strong revenue streams from the NEA, our TrueBlue loyalty program, and JetBlue Travel Products. Starting with the NEA, which is already a meaningful revenue generator for JetBlue as we've grown daily flight offerings in New York City by over 25% versus pre-pandemic levels, generating significant benefits for consumers in the process. We expect a year-over-year margin tailwind in New York as the NEA markets continue to mature. Recall, for example, that we roughly tripled our service at LaGuardia in 2022 compared to pre-pandemic levels. We're already seeing meaningful margin improvements as our service matures. Our TrueBlue loyalty program also continues to show exceptional growth. Co-brand card spend and active membership increased by over 20% in the first quarter, and we forecast continued strength as we launch our newly redesigned TrueBlue program later this quarter. We're expanding the ability to earn and redeem points, the addition of benefits for less frequent travelers, and increased value for our most loyal customers. Through these value enhancements, we expect engagement with the loyalty program to continue reaching all-time highs this year and beyond. As Robin mentioned, we recently enabled travelers to earn TrueBlue points when booking travel beyond just flights through Paisley. Paisley is fully integrated into JetBlue TrueBlue. Customers who book travel on Paisley will earn points and achieve TrueBlue perks. These enhancements are all part of our multi-year journey in evolving our TrueBlue program, helping us close the gap to our peers. I'll close with another thank you to our crew members for delivering for our customers. While we do expect a challenging summer ahead, I'm very excited about the incredible path we've paved to set us up for success. Together, we're focused on executing our plan to generate solid revenue growth and deliver on our cost goals, building a better JetBlue for all stakeholders. Ursula, I'll now turn the call over to you. Thank you, Joanna. I'd like to add my thanks to our crew members. Through their tremendous efforts and discipline, we're well on our way to delivering on our comprehensive plan to create value for our stakeholders this year and beyond. We continue to anticipate closing our acquisition of Spirit in the first half of 2024. With a dedicated team running our integration management office, we're ensuring that we are thoughtfully and appropriately prioritizing our efforts to ultimately create significant long-term value for our owners and all of our stakeholders. Turning to slide 9, as Robin mentioned, our first quarter results were ahead of our initial expectations, with strong improvement in revenue and non-fuel unit costs throughout the quarter somewhat offset by fuel prices. I am especially pleased with our team's continued cost execution as this quarter marked the 5th consecutive quarter where we met or beat our quarterly cost guidance. 1st quarter CASM ex-fuel performance was also aided by 1 point from higher capacity given fewer than expected weather events and roughly half a point from operational efficiencies. Through better operational planning going into the quarter, we were able to deliver a better outcome by controlling for factors such as labor premiums and disruption-related costs. We have been successfully implementing our structural cost program, which is supporting our efforts to mitigate cost pressures related to maintenance and rents and landing fees. To date, we have already achieved roughly $35 million since launch. Putting us well on track to drive approximately $70 million in cost reduction this year and $150 million-$200 million in cumulative cost savings through 2024. In addition, we continue to expect our fleet modernization program to generate over $40 million of savings this year and $75 million through 2024 as we replace our E190 fleet with the margin-accretive A220. We've already achieved over $30 million in savings with 12 E190s retired to date, including 10 currently parked in the desert and two that we've sold. For the second quarter, we're expecting to generate EPS between $0.35 and $0.45, driven by strong revenue and continued execution on costs. For the second quarter, we're forecasting CASM ex-fuel to increase 1.5% to 3.5% year-over-year, which includes a point of impact from our reduced summer schedule tied to ATC constraints and half a point impact from the closure of Fort Lauderdale Airport. We remain on track to meet our full-year CASM ex-fuel target of up 1.5% to 4.5%. This does imply a step-up in CASM ex in the back half of the year, which is primarily driven by two factors: an additional step-up tied to our pilot agreement, which is about four points total year-over-year in both the third and fourth quarter, and the timing of maintenance events, which is about two points year-over-year in the fourth quarter. Turning to liquidity and balance sheet on Slide 10. We closed the first quarter with $2.3 billion in liquidity, including our $600 million revolving credit facility, which remains undrawn. We continue to take a conservative approach to managing our liquidity, especially in light of the step-up in aircraft CapEx this year and our ongoing Spirit shareholder prepayments. To that end, we've previously shared our intention to finance a portion of our aircraft deliveries this year, and we've raised $116 million in aircraft financing year to date. We will continue to evaluate a variety of different products and structures for our financing needs, including leases, bank debt, and capital markets transactions. Before closing, I'd like to touch on fuel. Volatility in New York Harbor jet fuel prices impacted our weighted average fuel price in the first quarter by approximately $0.26. That said, New York Harbor pricing has since eased, and we expect the impact in the second quarter to be approximately $0.16. Importantly, we continue to look at hedging opportunities to protect our earnings outlook. As a reminder, our approach to fuel hedging is to enter into hedges on a discretionary basis to mitigate the risk from significant volatility and price spikes, and we actively monitor the market to take advantage of opportunities when conditions are favorable. As of today, we have hedged approximately 23% of our expected fuel consumption for the full year. In closing, I want to thank our crew members for helping to build a stronger JetBlue as we significantly improve our financial performance. Coming out of the first quarter, I'm excited about the trajectory of the business in the coming quarters and years. Based on everything we see today, we have confidence in our full-year earnings outlook of $0.70-$1.00, which implies margins approaching 2019 levels as we move through the year. We are well positioned to continue navigating uncertainty around the economic backdrop later in the year, as well as ongoing ATC challenges. We also look forward to closing the Spirit transaction to turbocharge our organic plan and create even more long-term value for our stakeholders. With that, we will now take your questions. Thanks, everyone. Sylvie, we're now ready for the question and answer session. Please go ahead with the instructions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your touchtone phone. You will then hear a three tone prompt acknowledging your request. If you would like to withdraw from the question queue, you will need to press star followed by two. If you're using a speakerphone, we do ask that you please lift the handset before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from Savanthi Syth at Raymond James. Please go ahead. Good morning, everybody. This is Matthew Wong for Savi. My first question, when I look at the implied margin guide for 2Q, you're still lagging 2019 levels by several points. Maybe could you provide some color on any specific cost lines that might have moved structurally higher and how you think those items could be improved to close the margin gap versus peers? Yeah, thanks for the question, Matt. Our objective is to get the business back to consistent profitability while approaching 19 levels of profitability. Our Q2 guide is the first step in that process. I'm actually significantly Pleased with the CASM ex-fuel guide for the quarter. It's up 1.5%-3.5%, and we essentially called out 1.5 points of headwind. 1 point is associated with the investment that we're making in pulling down capacity driven by ATC constraints in New York, and the other 0.5 points of CASM ex-fuel is driven by the Fort Lauderdale Airport closure. Net-net, if you back out that 1.5 points, I'm pleased and with our controllable cost guide and essentially, you know, we would beat I think what the consensus is out there on the cost side of the equation. We're confident in the $0.35-$0.45 EPS for the quarter, and it puts us on a path to more closely come in line with 2019 profitability levels as we navigate through the year. Okay. Thanks for the additional color there. Also in the presentation, you've referenced the return to seasonality. Maybe could you provide some additional color on the impact you think that'll have on 2Q and any additional color on how 2Q is trending in terms of booking rates to date and, or materialization rates changing or increasing, like we've heard on other calls? Thank you very much. Hi. Good morning, Matt. This is Dave. I'll take that one. Overall, we feel really good about the demand we're seeing out there. Very strong internationally, strong domestically as well. The peaks remain very strong, driven by this leisure demand. Whether it was the holidays at the end of the year or spring break, we've seen very strong demand in the peaks, and we expect the same for this coming summer, including June at the end of this quarter. Very strong April with the peak, strong June with the peak. May will be, you know, it's a bit of a shorter period, so it'll probably be a bit lower, but that's what we experience just about every year. And in general, the seasonality is returning towards normalcy with just the peaks a bit higher. The troughs obviously have a bit of a headwind from the corporate travel, which is, as mentioned before, about 80% recovered or so. It's creating a bit more of a peak-to-trough ratio than we saw before, but in general, feeling really good about demand throughout the network. Okay. Thanks for that. Quickly, could you touch on how much of 2Q has been booked to date or changes in materialization rates in that quarter as well? Sure. We're about two-thirds booked to date for the second quarter. That's normal for us. We have seen the booking curve elongate somewhat over the past couple quarters, but still roughly two-thirds. Okay. Thank you. Thank you. Next question will be from Andrew Didora at Bank of America. Please go ahead. Hi. Good morning, everyone. Thanks for the questions. I guess just in terms of kind of the change in New York capacity, given the ATC issues in the market, how should we think about your potential being able to reallocate some of that flying? You know, I guess in terms of how much of the cut capacity in New York do you think you can backfill into other markets? Hey, Andrew. This is Joanna. Thanks for the question. Maybe I'll provide sort of a broader answer and then get specifically into your capacity redeployment question. We're obviously very concerned about New York City for the summer. The FAA continues to be significantly understaffed, as we said in the prepared remarks. This is a continuing issue and frankly only getting worse this summer. We do appreciate the FAA's transparency around their staffing challenges. You know, it's obviously a concern across the NAS, but more acute in the New York region. You know, while we are pleased that the FAA has given carriers relief on the slots, this is obviously something that's not good for customers, and it's not good for JetBlue, coming with, you know, pretty significant financial impact into Q2 and potentially into Q3. You know, while this is the right decision for us, given the need to protect the operation, you know, this is gonna be a most challenging summer ahead. We are not gonna be redeploying the capacity that we pulled. If you look at our network footprint, because we are so concentrated in New York and the Northeast, and because there are staffing challenges across the entire NAS, our decision is to reinvest those crews in higher reserves, and reinvest that aircraft in additional aircraft time to help mitigate the delays that we expect that we're gonna see this summer. You know, this is definitely a challenging environment. You know, we're frustrated. Our customers are frustrated. We do appreciate the fact that the FAA is working with us and being transparent, but this is something that needs to get fixed, and unfortunately, there is not a short-term fix to it. That's, that's the decision we've made for the summer, and, you know, we'll navigate as best we can as these challenges arise. That's really helpful. Thank you. Just a second question, Robin. When I think about, you know, kind of strategically over the longer term, just in terms of the fleet, given everything going on with the OEMs and whatnot, just in the event the Spirit deal does not go through, you know, how do you think your long-term growth profile changes given kind of your order book shrinks a little bit starting in 2024, 2025? Thanks for the question, Andrew, and of course, I'm gonna start by giving you the straight bad answer saying, you know, we're confident in our case and the Spirit transaction closing because it's great for consumers. If it doesn't, then, you know, I think, clearly we still have an order book. We are challenged by delays as other airlines are, and we would have to look at opportunities, you know, both short to medium term, in the leasing market and then longer term to layer in sort of additional positions. You know, I think, everything we've got is focused on the Spirit Airlines transaction. I think, you know, when I look at the government challenges in keeping FAA staff, which is a problem years in the making, and as Joanna Geraghty said, has just been getting worse, I think it just adds to the importance of JetBlue Airways expanding its national footprint. We want to do that not by pulling down New York, because New York is home. We're the hometown airline of New York. We're proud to be based here in New York City. By building a more national presence, Spirit is going to help us do that much quicker than we would be able to do ourselves and bring those benefits to consumers and the employees at both airlines, our crew members and their team members more quickly. Great. Thank you, everyone. Thank you. Next question will be from Jamie Baker at J.P. Morgan. Please go ahead. Hey, good morning, everybody. actually, I was thinking what you should do for your earnings deck in the future is feature analyst photos taken from JetBlue flights. I mean, Ursula's picture is great, but it would be a lot of fun to, you know, try to give her a run for the money. Ursula, the second quarter question that was asked before, you know, about the margin deficit relative to 2019, you know, obviously something that jumped out to us as well, I think I missed something at the end of your prepared remarks. You said margins for the year would be approaching those of 2019. I mean, Did you mean moving in the right direction or actually starting to rival those margins? I'm just trying to square what I think I might have misunderstood against the $0.70-$1.00 EPS guide. Yeah. No, thanks for the question, Jamie. I've been telling everyone that it's fair game. Anyone can submit pictures to get on the cover of our earnings presentation. Thanks for the question. I think as we navigate through the year, we're making progress towards achieving 2019 margin levels. I feel good about the momentum that the business has heading into the 2Q. The revenue and demand environment continue to be really strong. As we navigate in the back half of this year, we actually are in a position where unit revenue could be slightly down year-over-year as we cycle against some very strong comps, and that seems reasonable and achievable, especially in light of the revenue initiatives that we have. We've got the NEA, and New York continues to recover. We're pleased with the progress that we've been seeing, but it continues to be a tailwind. As we roll out our TrueBlue loyalty program, we'll continue to make progress and as well as JetBlue Travel Products. I'm extremely pleased with the cost execution and the progress of the structural cost program. That's what gives us confidence in the full year EPS number. As I mentioned, the first milestone is making progress towards 2019 margin levels. Got it. Got it. Okay, that's really helpful. Then just, you know, on fuel, the hedging program is obviously still in its infancy, but, you know, by the looks of things, you might already be underwater. I can't say for certain, but just looking at the 350 all in, you know, during the first quarter and how New York Harbor has settled down, I mean, at the forward curve, do you assume you lose money on your hedges this year? We do at the moment, but it's immaterial. Okay. All right. Helpful. Okay. Thank you, everybody. Jamie, a very happy birthday. I don't want you thinking that we have forgotten you. Well, you never do. Thank you, Rob, and I appreciate that. Thank you very much. Thank you. Next question will be from Mike Linenberg at Deutsche Bank. Please go ahead. Yeah. Hey, good morning, everyone. Hey, Joanna, I want to go back to the point that you made about, you know, no short-term fix with the airspace issues specifically in New York. You know, the FAA is, I guess, what you said, 54% staffed of the levels that they need to be. What's the risk that, you know, we get to September, and I realize mid-September on, things slow a bit, but given 54% and no short-term fix, are you gonna have to go back to the FAA, or are they gonna come back to you and say, "Can you guys continue to run, you know, an abbreviated schedule? Yeah. Thanks for the question. Yeah, just to be clear, it's 54% of 2014 staffing levels. I don't know who manages the 2014 in the year 2023, but it's a 2014 staffing level. I think that's an important point. The second piece is we don't expect a problem this fall. Obviously it's a trough. This has been an ongoing issue for years. It's gotten worse. you know, we manage through the challenges. We have built an operation around trying to mitigate irregular operations. It's something, given our footprint, that we've gotten quite good at, but we don't expect the fall itself to be a problem. This is a multi-year kind of path of FAA's down to try to remedy its staffing shortages, and it's not going to get fixed in the near time. Where it significantly presents itself is in convective weather activity and when there are peak periods, and there's just a lot of travel. Okay, great. Then just my second question, I guess maybe this is to Dave, just, you know, within the context of demand trends remaining robust, I mean, we're hearing that from other carriers. I think one other carrier, though, did call out some softness to Heathrow. I think it's more just a function of everybody being forced to utilize slots right now under the use it or lose it rule. I'm not sure if you're seeing that. I mean, you're a relatively small player. Maybe you're not seeing it tuned from Heathrow to Boston and New York, and then I think, you know, there's been some comment about maybe transcons and pricing. Any markets in particular where maybe you are seeing some softness, you know, again, within the context that overall demand is actually quite good in the majority of your markets? Thank you. Sure. Good morning, Mike, and thanks for the question. No, I'd say there's no parts of our network where I would say we're seeing any softness. You know, at the highest levels, those markets that did have a very high business mix before COVID, have seen the biggest traffic reduction, we've appropriately scaled capacity in those to account for that, we feel pretty good. Our European, you know, markets continue to ramp well. We're pleased to be at 5 flights to London a day from New York and Boston combined, to have that second to Heathrow from New York flight in there on a daily basis. No concerns for us. As we look ahead to the summer, for Europe, we're seeing very strong early demand trends, so feeling quite good about the continued progress and ramp of our European franchise. Great. Thank you. Thank you. Next question will be from Duane Pfennigwerth at Evercore ISI. Please go ahead. Hey, thanks. I wanted to ask you about your hotel inventory on JetBlue Travel Products. Where are you getting your hotel inventory from, are you working to create direct relationships with hotels in this business? I guess just broadly, do you have any anecdotes as to why the value proposition is more compelling to a customer than booking separately or maybe through an OTA? Hi, Duane, and thank you for the question. A couple pieces. We, we do have direct relationships with hotels, and we do see that helps a lot on the, on the servicing side and to create a compelling value proposition for customers. We do also supplement that with other third parties that we source, but the vast majority of our bookings are the hotels we have direct relationships with. In terms of the value proposition, I mean, it's taking what made JetBlue the airline special, which is not having to pick between good price and good service and taking that to broader travel, and I think that's what customers are appreciating. Appreciate that. Maybe just a little modeling one just for my follow-up. On hedges, can you comment on the values in your hedge disclosure represent floors, and it seems like they'd be sort of modestly out of the money today. Thanks for taking the questions. Yeah, thanks for the question, Duane. Just as a reminder, you know, we view hedging as a way to mitigate risk and volatility in the market. We found a period after the banking crisis where pricing made sense for us to reenter the hedging market in a meaningful way. That's when we layered on most of these hedges. We feel okay about them. We get to participate in the downside, obviously, the way that these are structured in terms of when prices fall. And I can confirm that they're slightly out of the money at the moment. Okay. Thank you. Thank you. Next question will be from Dan McKenzie at Seaport Global. Please go ahead. Hey, good morning. Thanks, guys. Going back to the script on planning the operation conservatively and, you know, buffering operations in New York City, you touched on the cost hit in the script. I'm wondering what the revenue hit is from that lost flying. I guess where I'm going, there's a pretty big profit impact on what I believe is 50% of the flying that should go away at some point. It'd be great if you could just kind of give us a sense for what that might look like and, you know, whether it's gonna take a fully staffed ATC, you know, to get back to that historical $3 EPS target. Good morning, Dan. Thanks for the question. This is Dave. As we pulled down on New York City flying, we did it pretty surgically to ensure that we were hitting, you know, shorter haul routes, smaller gauge flights, and routes that generally we felt would have the least impact if they lost a frequency. Based on that, both the capacity impact of the pull as well as any revenue impact is quite a bit less than the departure pull. We pulled about 10% of departures out, but capacity is much, much smaller than that. And the revenue is really to be determined. We have initial estimates, but, you know, we'll see as we go through the quarter how things come in. It's tough to size up at the moment. Dan, if I could just add, I mean, we're very prepared for this summer. Most airlines are. Unfortunately, the FAA is not. These are obviously the steps that we've had to take. You know, last summer, we made a number of investments to try to insulate the operation from air traffic control challenges, some of which were transient in nature, some of which, you know, have stayed with us, things like investing in more people and crew services and planning the network in a way that allows us to more easily manage days where there is convective activity, so a higher% of out and back flights that enable you to kind of cleanly cut those flights and contain it to, a specific, a specific route. We've also made a number of investments in technology, a new solver that enables us to more quickly repair flights. You know, as we think about JetBlue's footprint in the Northeast... We are making operational decisions, planning decisions, and investments to enable us to operate in this airspace, because this is something that's not going to change in the very near term. We obviously have more reserves, as most carriers do. The capacity pool this summer in New York has enabled us to kind of redistribute those reserves a couple of points into our operational plan so that we're more resilient for the summer. You know, we're fully prepared for the summer timeframe. We're fully prepared for, you know, the next few years of challenges that we expect will present themselves because of this ATC staffing shortage. We need the FAA to, you know, continue to focus on a longer term fix, because this is coming at a cost to JetBlue and frankly, a cost to customers. Customers deserve and should get more out of the FAA in terms of the services that they provide. Yeah. Very good. Second question here. You know, as we think about the 2023 revenue outlook, I'm just wondering if we can flesh that out a little bit more. I'm wondering if you can speak to the revenue recovery in the capacity-constrained airports in 2022 and to what extent JetBlue's RASM at those airports lagged the industry, and how last year's trends are inflecting and contributing to the outlook this year. The RASM hit, you know, what the RASM hit was from overcapacity last year in the constrained airports, and how the trends this summer are aiding those airports this year. Thanks, Dan. This is Dave. I'll take that one. Clearly in 2022, we had a headwind in our slotted airports as use or lose came back into effect, and us and the rest of the industry needed to fly those slots, which ramped up capacity a bit faster than demand was ramping up. We also in addition to that, our strong growth in New York City, you know, enabled by the Northeast Alliance, led to a lot of capacity that was relatively new, and that capacity always goes through ramp. We're now seeing the flip side. Those headwinds last year have turned into a tailwind this year, which is great. I think maybe the easiest way to size it is if you look at the first quarter, which just completed, our New York City year-over-year RASM was 10 points better than the rest of our system. We're seeing the catch-up happening. It's still behind. It's, you know, not caught up to where it was relative to the system before COVID. A 10-point improvement last quarter on a year-over-year basis obviously shows the rate at which it's starting to catch up. Yeah. Thanks so much, you guys. Thank you. Next question will be from Catherine O'Brien at Goldman Sachs. Please go ahead. Hi. Good morning, everyone. Thanks for the time. Maybe just on the maintenance costs, you called out that maintenance expense will be a headwind the second half and gave us some good information on the 4Q impact specifically. Can you just help us think about, you know, is like the magnitude of the timing impact this year? You know, I know maintenance is always gonna be lumpy around events, but is 2023 a good comp for a normal maintenance year or are maintenance events still elevated from a pandemic recovery perspective? Thanks. Katie, thanks for the question. Good morning. I mean, maintenance is always gonna be somewhat volatile. It's really just driven by the number of events within the quarter, and it just happens to be that in the fourth quarter this year, it's somewhat heavier than what we saw last year. There's gonna be volatility. We'll try to be as transparent as possible as we navigate. I think the important thing here is that our full year CASM ex-fuel guide we're reiterating, and this was expected. We knew that we were gonna have a meaningful step up in the fourth quarter of this year. Got it. Then maybe just on your European service, you know, you've always hinted that it would be London and a couple of other cities where you had gaps for your New York City and Boston flyers. Does Amsterdam round out that list, or could there be more? You know, should we still think about Europe as a couple percentage points of total capacity fully ramped, or has anything changed based on the initial performance of these routes? Thanks. Sure. Thanks, Katie. This is Dave. I think the easiest way to look at it is with our fleet plan, which has about 26 transatlantic-capable aircraft in it, both the Airbus A321LR and A321XLR. Looking at what we've now announced between London, Paris, and Amsterdam, as those ramp up, it will be about 10 flights per day and take about the first 11 of those 26 airplanes. There's certainly more transatlantic-capable aircraft coming. It, it'll take sort of a year or 2 to get to them, through the order book. We expect based on our initial results to continue growing. We now have the, you know, the big 3 markets, which really adds relevance for us in the North Atlantic. After that, I think you can see us be a bit more sort of creative and spread over where we wanna go and use some of the features of our aircraft that are unique and fit some markets really well. More to come, for most of next year, you'll see us ramping up these markets we've already announced. Thank you. Thank you. Next question will be from Helane Becker at TD Cowen. Please go ahead. Thanks very much, operator. Hi, team. Thanks for the time. On the Fort Lauderdale issues that you had with the weather, I'm wondering if there are any read-throughs that you can take for how the team handled it, into handling other disruptions elsewhere in the network when they occur. Hey, Helane. Thanks. You know, I'll start with a, you know, sort of every time there's an event, we do a post-action review, and in this case, the team, whether it's Broward County Aviation Department and Mark and his team or the JetBlue team, you know, there's always learnings, but overall, the team did an exceptionally good job. Not only do we Have to restart the operation, wind the operation down and restart the operation. We also have to support the crew members who are impacted in the local communities because they've been personally hit, losing cars and things of that nature. You know, given that we have a footprint in the Northeast, and we see a lot of these types of events, we've gotten pretty good at managing regular operations. Obviously there's nuances to each one of them, but this one I think the team did an exceptionally good job in taking care of the safety of our customers and our crew members, and then restarting the operation when it was safe to do so. Yeah, we do an after-action report on all of these so that we can take learnings and incorporate them into the next event. Okay, that's really helpful. Thank you. My follow-up question is just on kind of going from first half breakeven, which is looks like on an adjusted earnings basis is where you'll be, to profit of $0.70-$1 in I guess in the second half, right? How are you thinking about the third and fourth quarter? The third should normally be a very strong quarter, and fourth maybe not so good. I'm wondering how we should think about bridging that, you know, breakeven to somewhere between $0.70 and $1. Thank you. Good morning, Helane. Obviously, in the 1st quarter of this year, it's typically always the seasonally weakest, the year tends to ramp from there. What you have to believe for us to achieve the $0.70 to $1 is that we continue to see a strong demand and revenue environment. I mentioned earlier, our full year guidance allows for unit revenue to be slightly down year-over-year. We are cycling through obviously strong comps year-over-year, but that seems reasonable given the JetBlue initiatives that we have in place, right? The continued recovery in New York, JetBlue loyalty program launching, as well as JetBlue Travel Products. On a top-line perspective, that's what you need to believe. On the cost execution side, you know, I'm very pleased that for five quarters in a row, we've either met or beat our controllable cost guidance. The continued execution of the structural cost program in the second half of the year, I feel really confident in. Those are the things that we feel good about and very strong that we can deliver the $0.70-$1.00. That's very helpful. Thank you. Thank you. Next question will be from Conor Cunningham at Melius Research. Please go ahead. Everyone. Thank you. You had a couple questions on RASM, maybe to ask it a different way. You know, I mean, you're outperforming pretty nicely in the second quarter, relative to what we've heard from some other carriers. Is the way of thinking basically whatever the domestic market does, JetBlue's ultimately gonna outperform this year, just given the tailwinds from the NEA and some of the other revenue initiatives that you've put in place? Good morning, Conor. This is Dave. Thanks for the question. Yeah, I think that's a good way to think about it. I think given our exposure to the slotted markets and the recovery that they've had, as mentioned, that headwind last year turning into a tailwind this year, I think we're well positioned in the domestic market compared to the industry as a whole. Then just also we're about 30%-33% international too, so we're certainly getting some benefit from the improvements there as well. Okay. Then maybe a longer-term question. You know, 1Q is obviously your seasonally weakest quarter, but you typically add capacity from 4Q to 1Q. There's been obviously a lot of changes in how people are booking and what that may look like going forward. Just long term, why wouldn't JetBlue somewhat reshape their capacity to drive long-term profits? You know, some of your competitors are talking about looking at 1Q and how they make it a little bit better. I'm just curious if that's a thought process for you guys as well. Thank you. Yep. I'd say absolutely. You know, every time we complete a season, we immediately scrub it and learn from it as we plan the capacity for the next year. We certainly saw some different trends this winter that we'll factor in. Of course, we don't want to react to any one season and look for larger trends over time. We'll continue to update our capacity plan as we see customer behavior and trends evolve. Thank you. Thank you. Next question will be from Chris Stathoulopoulos at Susquehanna International Group. Please go ahead. Good morning, everyone. Thanks for taking my question. Robin Hayes and Joanna Geraghty, I'm curious, the capacity guide for this year, 5.5%-8.5%, you have the ATC issues you spoke to. There's always weather, there's always additional slippage with deliveries, and certainly there's increasingly macro and consumer risk in the second half. I'm curious why shouldn't we look at the closer to the lower end of that guide as a kind of a more realistic starting point for the full year? Yeah, I mean, I'll add and then Robin, feel free to jump in. We're confident where we sit today that that's the right, that's the right capacity guide for the year. You are correct. I mean, this summer, you know, if ATC presents itself as far worse than anybody's anticipated, even in the face of the capacity pulls we've made, that could obviously impact completion factor, you know, going forward. Obviously, if there's a significant change in the macroeconomic environment, that could also impact our capacity guide because we want to stay nimble with capacity and adjust as conditions warrant. You know, based upon what we know now, we think that is, the right capacity guide for the year, but we are mindful of the broader environment that we operate in, and we will plan the business accordingly. Yeah. The, the only thing I'd say to add to that is that, you know, the idea of pulling these flights out of Q2 is to make the summer more offerable. That should mean that we are able to complete more flights. I mean, I think our team do a really, really good job, trying to complete flights, even in very challenging circumstances. I mean, you know, we talked about Fort Lauderdale earlier. That was the beginning of a very tough five days because we had the Fort Lauderdale closure that bled into weather into the New York area and ATC delays on Saturday night. It led into weather and thunderstorms in Florida on Sunday. It was a very challenging event. Yet, you know, I think our team did a really good job trying to get as many people home as they could. You know, those are things. Obviously, high completion rates will help us operate the capacity that we are sort of publishing. Look, you know, again, there'd always be puts and takes in it. Right now we feel good about the guide that we are laying out. Okay, thank you. Ursula, I think you might have said for the second half the potential for unit revenue down. Just on the math here on the full year revenue guide, the capacity guide implies around, I think it's around 2 points of acceleration in TRASM from the second quarter to the second half. You know, I just wanna make sure I understood your prepared comments. If the math is correct here, you know, how are you anticipating growing RASM in the second half while most peers are guiding for deceleration? I know you have the NEA, you have travel products and some other initiatives going on here, wanna understand sort of the thought process here. Thank you. Hi, Chris, this is Dave. I'll take that one, and we can loop offline afterwards if you'd like, with the team. We do not need to see positive RASM in the second half of the year. Given our Q1 performance, given our guidance for Q2, we can then be, you know, slightly negative RASM for Q3 and Q4 and still achieve the revenue and EPS numbers. Okay. Thank you. Yeah. By the way, I would also add, you know, I think again, with the capacity changes that you're seeing in the New York region this summer, which are quite significant, not just from JetBlue, but from other airlines, you know, it is possible, some of that demand spills into the fall. You know, we don't know that yet. We did see some of that last year. Though I think whilst that's not we're not assuming that today, you know, I think that rightly it won't focus on the economic uncertainty that's out there. We're all very watchful about that. We're thinking about that. There's, but there's some, I think, some revenue tailwinds here linked to just continued New York recovery, spilling demand out the peak into the fall and some of the JetBlue and the initiatives that we've already outlined. Thank you. Thank you. Next question will be from Stephen Trent at Citi. Please go ahead. Good morning, and thanks very much for taking my questions. Just two quick ones for you here. First, I'm wondering if it's possible that you guys can expand your sustainable aviation fuel purchases beyond Los Angeles. Two, any high-level view as to where you guys expect to get your pilots over the next five years, you know, if you're partnering with a flight school or something like that, would just love to hear that. Thank you. No. Thanks for the question. On sustainable aviation fuel, that's something our team is extremely focused on. You know, it's become, it's become the gold rush of the airline industry, so I'm not gonna be too specific about what we're thinking about, but it's clearly something that we're committed to, and the 10% target by 2030 is something that we are working towards every day. On the pilot issue, I mean, something that I'm incredibly proud of is several years ago, JetBlue created some internal, some JetBlue Gateways to take pilots and take people who want to become pilots and train them. Call our JetBlue Gateways. You know, we have, I think now, close to 1,000 pilots who have either been through one of those programs or in one of those programs or due to come into one of those programs this year. The retention from these pilots is extremely high and, you know, more recently we've opened up programs internally for our crew members. If you wanna come and work at JetBlue, if you work at JetBlue, then after two years, you wanna become a pilot, we'll train you. Also, that applies to family members as well. Really removing a lot of the economic, and practical, challenges that come with learning to fly. I think we couldn't be more pleased about that, and we're gonna continue to work that in partnership with others in the industry. You know, again, we're not having any issue right now hiring or attracting pilots. We are seeing heightened levels of attrition. And again, that is another thing that drives a cost headwind that we're having to navigate. But, you know, we feel good about our ability to attract and train pilots. Our JetBlue Gateways have just been so transforming for so many people over the years. Transformative, I should say. Appreciate that, Robin. Thank you. Thank you. At this time, we have no other questions registered. I will turn it back to our speakers for closing remarks. Great, thank you very much. That will conclude our first quarter 2023 conference call. Thank you all for joining us. Have a great day. Thank you. Again, this will conclude today's conference. Thank you for your participation, and we do ask that you please disconnect your lines.