JetBlue Airways Corporation (NASDAQ:JBLU) Q4 2022 Earnings Call Transcript

Page 3 of 10

Joanna Geraghty: Sure. One of the things that we’ve been focused on is how do we really reward and incentivize all different types of customers, not just the customers who fly us frequently and who are Mosaic but also the customers who are infrequent and try to engage them. So, customers will have the ability to pick the perks that they like, and that includes customers who fly infrequently. We also are providing additional layers of Mosaic levels, which we think will incentivize some of our most loyal customers. But at the end of the day, this is a holistic approach to our loyalty program by bringing benefits to customers who fly JetBlue. And then customers also use the co-brand card, which is such an incremental — an important part of our loyalty program.

If you think of loyalty overall in co-brand, it represented 10% of our total revenue. We continue to see that increase quarter-over-quarter. We’re very excited with the positive momentum that we have from co-brand and TrueBlue. The new TrueBlue program will only amplify that momentum that we are seeing.

Savi Syth: Okay, Helpful. Thank you.

Operator: Thank you. Next question comes from Jamie Baker at JPMorgan. Please go ahead.

Jamie Baker: Hey, good morning everybody. So I was impressed that on United’s call. Scott gave your operations a shout-out. Just wondering what’s really driving the improvement in operational integrity. I know in American’s case, paying pilots double time for Thanksgiving and Christmas obviously helped them. I don’t recall JetBlue doing that. So was it really just the more cautious scheduling that Joanna mentioned in her prepared remarks, or is there a labor component to the improvement in operations?

Joanna Geraghty : Yes. Maybe to give you some visibility, Jamie, thanks for the question. There’s a few things going on. I think, first, from a planning perspective, we are trying to plan more conservatively, recognizing that we are disproportionately impacted with delays, given the geography that we fly into. So that’s kind of the first thing. And that includes everything from increased level of reserves. So when things start to run late, our crew doesn’t time out and we can replace crew to protect the operation or, in some cases, double crew if you need to, to some of our one-a-day markets in the Caribbean. A higher percentage of out back flights. That’s a really important part of how we plan the schedule, particularly with the airspace we fly into so that if we do get into trouble, we can cleanly cancel a flight.

And then as I mentioned to Savi, increasing the number of flying out of places where we have crew bases, which makes it easier to recover and get additional resources when we need to. The other piece that we’ve been on a multi-year journey around is modernizing the systems that we had in our operations center. I’ll use an example. Last year, we introduced a new crew solver, which enables us to repair canceled flights and broken pattering crew pairings more quickly, which ultimately means that we can recover faster and take advantage of the resources that we do have without having those resources time out or lose track of them. So our focus has been on the Blue Sky days. We need to be great. And on the IROP days, the regular operation days where we have, frankly, more than most, we need to better manage how we plan for those days, how we execute day-of and then how we recover.

Over the holidays, you saw a very clear focus on driving for completion factor, but also recognizing that when you start seeing lengthy delays, you’ve got to take quick action and address those lengthy delays so that they don’t bleed into the following day and the day after. So it’s multi-pronged planning, day of operational execution and then ensuring that our crew members understand and know the plan and are prepared to execute to it.

Page 3 of 10