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What changed in JETBLUE AIRWAYS CORP's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of JETBLUE AIRWAYS CORP's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+567 added−634 removedSource: 10-K (2023-12-31) vs 10-K (2022-12-31)

Top changes in JETBLUE AIRWAYS CORP's 2023 10-K

567 paragraphs added · 634 removed · 372 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

105 edited+44 added−87 removed48 unchanged
Biggest changeAircraft Type Number of seats on aircraft Number of aircraft in fleet at December 31, 2022 A220 140 14 A320 150 11 A320 Restyled (1) 162 119 A321 200 28 A321 with Mint® 159 35 A321neo 200 16 A321neo with Mint® 160 2 A321neo LR with Mint® 138 5 Embraer E190 (2) 100 60 Total 290 (1) Our restyle program, which was completed in the first quarter of 2022, allowed us to increase capacity in a capital-efficient and customer-focused way.
Biggest changeFleet Structure Our fleet consists of the following aircraft types and configurations as shown in the table below as of December 31, 2023 : Aircraft Number of seats on aircraft Aircraft Count (1) Airbus A220 140 24 Airbus A320 150 11 Airbus A320 Restyled 162 119 Airbus A321 200 28 Airbus A321 with Mint ® 159 35 Airbus A321neo 200 16 Airbus A321neo with Mint ® 160 5 Airbus A321neoLR with Mint ® 138 9 Embraer E190 (2) 100 53 Total 300 (1) Includes aircraft that have been temporarily removed from service, but are expected to return to operation in the future.
We believe we can adapt to the changing needs of our customers and a key element of our success is the belief that competitive fares and great product need not be mutually exclusive.
We believe we can adapt to the changing needs of our customers and a key element of our success is the belief that competitive fares and a great product need not be mutually exclusive.
In the event of a downturn in our business, resulting in a reduction of flying and related work hours, we are obligated to pay these crewmembers a guaranteed level of income and to continue their benefits. We provide what we believe to be industry-leading job protection through these agreements.
In the event of a downturn in our business, resulting in a reduction of flying and related work hours, we are obligated to pay these crewmembers a guaranteed level of income and continue their benefits. We provide what we believe to be industry-leading job protection through these agreements.
Our scheduled flights at San Diego airport are in compliance with the noise curfew limits, but on occasion when we experience irregular operations, we may violate these curfews. Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit GHG emissions, including our aircraft and ground operations emissions.
Our scheduled flights at San Diego airport are in compliance with the noise curfew limits, but we may violate these curfews on occasion when we experience irregular operations. Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit GHG emissions, including our aircraft and ground operations emissions.
We believe these agreements provide JetBlue and crewmembers flexibility and allow us to react to crewmembers needs' more efficiently than collective bargaining agreements. A key feature of the direct relationship with our crewmembers is our Values Committees, which are made up of peer-elected frontline crewmembers from each of our major work-groups other than pilots and inflight crewmembers.
We believe these agreements provide JetBlue and crewmembers flexibility and allow us to react to crewmembers needs' more efficiently than collective bargaining agreements. A key feature of the direct relationship with our crewmembers are our Values Committees, which are made up of peer-elected frontline crewmembers from each of our major work-groups other than pilots and inflight crewmembers.
We currently have co-branded loyalty credit cards available to eligible U.S. residents, as well as co-brand agreements in Puerto Rico and the Dominican Republic to allow cardholders to earn TrueBlue ® points. Our co-branded credit cards in the United States are issued in partnership with Barclaycard ® on the MasterCard ® network.
We currently have co-branded loyalty credit cards available to eligible U.S. residents, as well as co-brand agreements in Puerto Rico, the Dominican Republic, and the Caribbean to allow cardholders to earn TrueBlue ® points. Our co-branded credit cards in the United States are issued in partnership with Barclaycard ® on the MasterCard ® network.
Foreign Ownership - Under federal law and DOT regulations, JetBlue must be controlled by U.S. citizens. In this regard, our chief executive officer and at least two-thirds of our board of directors must be U.S. citizens. Further, no more than 24.99% of our outstanding common stock may be voted by non-U.S. citizens.
Foreign Ownership - Under federal law and DOT regulations, JetBlue must be controlled by U.S. citizens. In this regard, our chief executive officer and at least two-thirds of our Board must be U.S. citizens. Further, no more than 24.99% of our outstanding common stock may be voted by non-U.S. citizens.
(4) Electric Ground Operations : Where feasible, we are converting our Ground Service Equipment (“GSE”) to electric and maximizing electric ground power and air systems for our aircraft to minimize our fuel use and emissions on the ramp. We are committed to converting 40% of our GSE to electric by 2025, and 50% by 2030.
(4) Electric Ground Operations: Where feasible, we are converting our Ground Service Equipment (“GSE”) to electric power and maximizing electric ground power and air systems for our aircraft to minimize our fuel use and emissions on the ramp. We have committed to converting 40% of our GSE to electric power by 2025, and 50% by 2030.
Crewmember Programs We are committed to supporting our crewmembers through a number of programs including: • Crewmember Resource Groups (CRGs) - We encourage crewmembers to celebrate their individuality and build camaraderie through our various CRGs. CRGs spearhead programs to embrace and encourage the sharing of different perspectives, thoughts, and ideas.
Crewmember Programs We are committed to supporting our crewmembers through a number of programs including: • Crewmember Resource Groups (“CRGs”) - We encourage crewmembers to celebrate their individuality and build camaraderie through our various CRGs. CRGs spearhead programs to embrace and encourage the sharing of different perspectives, thoughts, and ideas.
Our award winning service begins from the moment our customers purchase a ticket through one of our distribution channels such as www.jetblue.com , our mobile applications, or our reservations centers. Customers can purchase one of five branded fares: Blue Basic , Blue , Blue Plus, Blue Extra, and Mint ® , our premium service.
Our award winning service begins from the moment our customers purchase a ticket through one of our distribution channels such as www.jetblue.com , our mobile application, or our reservations centers. Customers can purchase one of five branded fares: Blue Basic , Blue , Blue Plus, Blue Extra, and Mint ® , our premium service.
As a result, we continually work to manage our mix of customers to include both business travelers and travelers visiting friends and relatives, or VFR. VFR travelers tend to be slightly less seasonal and less susceptible to economic downturns than traditional leisure destination travelers.
As a result, we continually work to manage our mix of customers to include both business travelers and travelers visiting friends and relatives (“VFR”). VFR travelers tend to be slightly less seasonal and less susceptible to economic downturns than traditional leisure destination travelers.
Each fare includes different offerings such as early boarding, advance seat selections, free checked bags, no change fees, and additional TrueBlue ® points, with all 4 Table of Contents fares including our core offering of free inflight entertainment, free high-speed wi-fi, free snacks, and free non-alcoholic beverages. Customers can choose to “buy up” to an option with additional offerings.
Each fare includes different offerings such as early boarding, advance seat selections, free checked bags, no change fees, and additional TrueBlue ® points, with all fares including our core offering of free inflight entertainment, free high-speed wi-fi, free snacks, and free non-alcoholic beverages. Customers can choose to “buy up” to an option with additional offerings.
Our SEC filings, including exhibits filed therewith, are also available at the SEC’s website at www.sec.gov .
Our SEC filings, including exhibits filed therewith, are also available on the SEC’s website at www.sec.gov .
Community Programs JetBlue is committed to supporting the communities and BlueCities we serve through a variety of community programs including: • Corporate Social Responsibility (CSR) - The CSR strategy, JetBlue For Good, focuses on three areas that our customers and crewmembers are passionate about: (1) youth and education, (2) community, and (3) environment. 14 Table of Contents ◦ Youth and Education: As a pillar of JetBlue For Good, our youth and education efforts focus on providing children from underserved areas the resources needed to obtain a quality education and sustainable careers.
Community Programs JetBlue is committed to supporting the communities and BlueCities we serve through a variety of community programs including: • Corporate Social Responsibility (“CSR ” ) - The CSR strategy, JetBlue For Good, focuses on three areas that our customers and crewmembers are passionate about: (1) youth and education, (2) community, and (3) environment. 16 Table of Contents ◦ Youth and Education: As a pillar of JetBlue For Good, our youth and education efforts focus on providing children from underserved areas the resources needed to obtain a quality education and sustainable careers.
Our efforts to promote diversity, equity and inclusion (“DEI”) are centered around three key areas: (1) people; (2) sourcing; and (3) brand. • People ◦ Develop a hiring process that mitigates harmful biases in order to improve representation of talent at all levels of the Company. ◦ Educate and inform on DEI through informal learning and review of practices and policies. ◦ Focus on our people, continue to promote, and invest in diverse talent. ◦ Our goal is to double our racial and ethnic minority representation at the officer and director level to 25%, and to increase our female representation at these levels to 40%, by the end of 2025. • Sourcing ◦ Engage minority and women-owned business enterprises with a proven commitment to DEI in their lines of business.
Our efforts to promote diversity, equity and inclusion (“DEI”) are centered around three key areas: (1) people; (2) sourcing; and (3) brand. • People ◦ Develop a hiring process that mitigates harmful biases in order to improve representation of talent at all levels of the Company. ◦ Educate and inform on DEI through informal learning and review of practices and policies. ◦ Focus on our people, continue to promote, and invest in talent, and to consider a diverse range of talent for opportunities. ◦ Our goal is to increase our racial and ethnic minority representation at the officer and director level to 25% and our female representation at these levels to 40% by the end of 2025. • Sourcing ◦ Engage with more minority and women-owned business enterprises with a proven commitment to DEI in their lines of business.
Network We are a predominately point-to-point system carrier with 93% of our routes touching at least one of our six focus cities: New York, Boston, Fort Lauderdale-Hollywood, Orlando, Los Angeles, and San Juan, Puerto Rico. All six of our focus cities are in regions with a diverse mix of traffic. Leisure traveler focused airlines are often faced with high seasonality.
Network We are a predominately point-to-point system carrier with 95% of our routes touching at least one of our six focus cities: New York, Boston, Fort Lauderdale-Hollywood, Orlando, Los Angeles and San Juan. All six of our focus cities are in regions with a diverse mix of traffic. Leisure traveler focused airlines are often faced with high seasonality.
Our participation in global distribution systems, or GDS, supports our profitable growth, particularly in the business market. We find business customers are more likely to book through a travel agency or a booking product which relies on a GDS platform.
Our participation in a global distribution system (“GDS”), supports our profitable growth, particularly in the business market. We find business customers are more likely to book through a travel agency or a booking product which relies on a GDS platform.
We have fixed price agreements for the repair, overhaul, modification, and logistics of our Airbus aircraft engines. We have flight hour agreements for our Embraer E190, Airbus A220, and Airbus A321neo aircraft engines. Many of our 9 Table of Contents maintenance service agreements are based on a fixed cost per flight hour.
We have fixed price agreements for the repair, overhaul, modification, and logistics of our Airbus aircraft engines. We have flight hour agreements for our Embraer E190, Airbus A220, and Airbus A321neo aircraft engines. Many of our maintenance service agreements are based on a fixed cost per flight hour.
Customs and Border Protection, or CBP, operate under the Department of Homeland Security and are responsible for all civil aviation security. This includes passenger and baggage screening; cargo security measures; airport security; assessment and distribution of intelligence; security research and development; international passenger screening; customs; and agriculture.
Customs and Border Protection (“CBP”), operate under the Department of Homeland Security and are responsible for all civil aviation security. This includes passenger and baggage screening; cargo security measures; airport security; assessment and distribution of intelligence; security research and development; international passenger screening; customs; and agriculture.
Our entire fleet is equipped with Fly-Fi ® , a broadband product that allows gate-to-gate Wi-Fi at every seat. Customers also have access to the Fly-Fi ® Hub, a content portal where customers can access a wide range of movies, television shows, and additional content from their own personal devices.
Our entire fleet is equipped with Fly-Fi ® , a broadband product that allows gate-to-gate Wi-Fi at every seat. Customers also have access to the Fly-Fi ® Hub, a content portal where customers can access a wide range of additional content from their own personal devices.
Effective and frequent communication throughout the organization is fostered through various means including weekly email messages from our CEO and other senior leaders, weekday news updates to all crewmembers, crewmember engagement surveys, and active leadership participation in new hire orientations.
Effective and frequent communication throughout the organization is fostered through various means including periodic email messages from our CEO and other senior leaders, weekday news updates to all crewmembers, crewmember engagement surveys, and active leadership participation in new hire orientation.
ITEM 1. BUSINESS OVERVIEW General JetBlue Airways Corporation, or JetBlue, is New York's Hometo wn Airline ® . As of December 31, 2022, JetBlue served over 100 destinations across the United States, the Caribbean and Latin America, Canada, and England. JetBlue was incorporated in Delaware in August 1998 and commenced service on February 11, 2000.
ITEM 1. BUSINESS OVERVIEW General JetBlue Airways Corporation, is New York's Hometo wn Airline ® . As of December 31, 2023, JetBlue served over 100 destinations across the United States, the Caribbean and Latin America, Canada and Europe. JetBlue was incorporated in Delaware in August 1998 and commenced service on February 11, 2000.
As used in this Report, the terms “JetBlue,” the “Company,” “we,” “us,” “our,” and similar terms refer to JetBlue Airways Corporation and its subsidiaries, unless the context indicates otherwise. Our principal executive offices are located at 27-01 Queens Plaza North, Long Island City, New York 11101 and our telephone number is (718) 286-7900. Merger Our acquisition of Spirit Airlines, Inc.
As used in this Report, the terms “JetBlue,” the “Company,” “we,” “us,” “our,” and similar terms refer to JetBlue Airways Corporation and its subsidiaries, unless the context indicates otherwise. Our principal executive offices are located at 27-01 Queens Plaza North, Long Island City, New York 11101 and our telephone number is (718) 286-7900.
Typically, the group hosts our annual Fly Like a Girl event, teaching young girls about different career paths in aviation. • JetBlue Crewmember Crisis Fund (JCCF) - This organization, originally formed in 2002, is a non-profit corporation independent from JetBlue and recognized by the IRS as a tax-exempt entity.
Typically, the group hosts our annual Fly Like a Girl event, teaching young girls about different career paths in aviation. • JetBlue Crewmember Crisis Fund (“JCCF”) - This organization is a non-profit corporation independent from JetBlue and recognized by the IRS as a tax-exempt entity.
The net book value of our assets pledged, or committed to be pledged, as security under various financing arrangements increased by $470 million from $5.7 billion at December 31, 2021 to $6.2 billion at December 31, 2022. JetBlue Ventures JetBlue Technology Ventures, LLC, (“JetBlue Ventures”) or (“JBV”) is a wholly owned subsidiary of JetBlue.
The net book value of our assets pledged, or committed to be pledged, as security under various financing arrangements increased by $900 million from $6.2 billion at December 31, 2022 to $7.1 billion at December 31, 2023. JetBlue Ventures JetBlue Technology Ventures, LLC, (“JetBlue Ventures” or “JBV”) is a wholly owned subsidiary of JetBlue.
We believe we are currently in compliance with these ownership provisions. Other Regulations - All airlines are subject to certain provisions of the Communications Act of 1934 due to their extensive use of radio and other communication facilities. They are also required to obtain an aeronautical radio license from the Federal Communications Commission, or FCC.
We believe we are currently in compliance with these ownership provisions. 20 Table of Contents Other Regulations - All airlines are subject to certain provisions of the Communications Act of 1934 due to their extensive use of radio and other communication facilities. They are also required to obtain an aeronautical radio license from the Federal Communications Commission (“FCC”).
Generally speaking, many of our areas of operations in the Northeast experience poor winter weather conditions, resulting in increased costs associated with de-icing aircraft, canceling flights, and accommodating displaced customers. Many of our Florida and Caribbean routes experience bad weather conditions in the summer and fall due to thunderstorms and hurricanes.
Generally speaking, many of our areas of operations in the Northeast experience ATC delays and weather-related disruptions resulting in increased costs associated with de-icing aircraft, canceling flights, and accommodating displaced customers. Many of our Florida and Caribbean routes experience bad weather conditions in the summer and fall due to thunderstorms and hurricanes.
In February 2023, our crewmembers voted to maintain our direct relationship rather than elect a union. 12 Table of Contents As of December 31, 2022, approximately 48% of our full-time equivalent crewmembers were represented by unions. The following table sets forth our crewmember groups and the status of their respective collective bargaining agreements.
In February 2023, our ground operations crewmembers voted to maintain our direct relationship rather than elect a union. 14 Table of Contents As of December 31, 2023, approximately 51% of our full-time equivalent crewmembers were represented by unions. The following table sets forth our crewmember groups and the status of their respective collective bargaining agreements.
Although the distribution cost through this channel is higher than through our website, the average fare purchased through a GDS is generally higher and often covers the increased distribution costs. We currently participate in several major GDSs and online travel agents, or OTAs.
Although the distribution cost through this channel is higher than through our website, the average fare purchased through a GDS is generally higher and often covers the increased distribution costs. We currently participate in 10 Table of Contents several major GDSs and online travel agents.
Fleet Maintenance Consistent with our core value of safety, our Federal Aviation Administration, or FAA-approved maintenance programs are administered by our technical operations department. We use qualified maintenance personnel and ensure they have comprehensive training. We maintain our aircraft and associated maintenance records in accordance with, if not exceeding, FAA regulations.
Fleet Maintenance Consistent with our core value of safety, our Federal Aviation Administration (“FAA”) approved maintenance programs are administered by our technical operations department. We use qualified maintenance personnel who receive comprehensive training. We maintain our aircraft and associated maintenance records in accordance with, if not exceeding, FAA regulations.
We are dedicated to disclosing accurate data across a variety of material topics such as governance, executive pay, company emissions, and workforce diversity. Our Board of Directors (“Board”) has ultimate oversight of enterprise risks and is informed of these risks quarterly by the Audit Committee and at least annually by the Governance and Nominating Committee.
We are dedicated to disclosing accurate data across a variety of topics important to our various stakeholders, such as governance, executive pay, company emissions, and workforce diversity, among others. Our Board has ultimate oversight of enterprise risks and is informed of these risks quarterly by the Audit Committee and at least annually by the Governance and Nominating Committee.
We regularly develop, evaluate, and reshape company policies and procedures to ensure fairness and alignment to our values. We take a proactive approach to tracking, operationalization, and mitigation of risks JetBlue faces. This includes climate risk scenario planning and internal response protocols in response to ESG trends.
We regularly develop, evaluate, and reshape company policies and procedures to promote fairness and alignment to our values. We aim to take a proactive approach to tracking, operationalization, and mitigation of risks JetBlue faces. This includes climate impacts and internal response protocols in response to ESG trends.
Crewmember Group Representative Crewmembers (1) Amendable Date (2) Pilots Air Line Pilots Association (ALPA) 4,314 February 1, 2025 Inflight Transport Workers Union (TWU) 5,603 December 13, 2026 (1) Approximate number of active full-time equivalent crewmembers as of December 31, 2022.
Crewmember Group Representative Crewmembers (1) Amendable Date (2) Pilots Air Line Pilots Association (ALPA) 4,447 February 1, 2025 Inflight Transport Workers Union (TWU) 5,930 December 13, 2026 (1) Number of active full-time equivalent crewmembers as of December 31, 2023.
Our historical fuel consumption and costs for the years ended December 31 were: 2022 2021 2020 Gallons consumed (millions) 842 696 412 Total cost (millions) (1) $ 3,105 $ 1,436 $ 631 Average price per gallon (1) $ 3.69 $ 2.06 $ 1.53 Percent of operating expenses 32.8 % 23.5 % 13.5 % (1) Total cost and average price per gallon each include related fuel taxes as well as effective fuel hedging gains and losses.
Our historical fuel consumption and costs for the years ended December 31 were: 2023 2022 2021 Gallons consumed (millions) 897 842 696 Total cost (millions) (1) $ 2,720 $ 3,105 $ 1,436 Average price per gallon (1) $ 3.03 $ 3.69 $ 2.06 Percent of operating expenses 27.6 % 32.8 % 23.5 % (1) Total cost and average price per gallon each include related fuel taxes as well as effective fuel hedging gains and losses.
Environmental, Social, and Governance Management Mitigating risks to ensure the long-term sustainability of our business is imperative for JetBlue. We remain focused on continuing to lead in environmental, social, and governance (“ESG”) initiatives, through ambitious target setting, clear actions and strategy, and transparent reporting.
Environmental, Social, and Governance Management Mitigating risks to promote the long-term sustainability of our business is imperative for JetBlue. We remain focused on continuing to lead in environmental, social, and governance (“ESG”) initiatives, through ambitious target setting, clear actions and strategy, and transparent reporting. We regularly analyze and map the issues facing our stakeholders.
JADE leads cultural events during Black History Month and hosts TravelCon, a day-long event for crewmembers to learn about the diverse experience of Black travelers, among other events. ◦ JetPride : Offers professional development opportunities for LGBTQ+ crewmembers and their allies.
JADE leads cultural events throughout the year and hosts TravelCon, a day-long event for crewmembers to learn about the diverse experience of Black travelers. ◦ JetPride : Offers professional development opportunities for LGBTQ+ crewmembers and their allies.
The historic distribution of available seat miles (“ASMs”), or capacity, by region for the years ending December 31 was: Capacity Distribution 2022 2021 2020 Transcontinental 30.8 % 31.0 % 31.7 % Caribbean & Latin America (1) 32.5 36.8 31.4 Florida 24.6 24.9 27.4 East 5.1 3.2 4.5 Central 5.0 3.0 4.0 West 0.5 0.7 1.0 Transatlantic (2) 1.5 0.4 — Total 100.0 % 100.0 % 100.0 % (1) Domestic operations as defined by the U.S.
The historic distribution of available seat miles (“ASMs”), which we also refer to as capacity, by region for the years ending December 31 was: Capacity Distribution 2023 2022 2021 Transcontinental 29.9 % 30.8 % 31.0 % Caribbean & Latin America (1) 33.2 32.5 36.8 Florida 23.7 24.6 24.9 East 5.0 5.1 3.2 Central 4.5 5.0 3.0 West 0.6 0.5 0.7 Transatlantic (2) 3.1 1.5 0.4 Total 100.0 % 100.0 % 100.0 % (1) Domestic operations as defined by the U.S.
Opportunities include the promotion of single-engine taxi and single-engine taxi without auxiliary power, improved ground power and pre-conditioned air hookup times when aircraft arrive at gates, investing in ground power infrastructure for use during maintenance, and improvements to dispatch procedures to reduce over fueling (reducing onboard weight).
Opportunities include the promotion of single-engine taxi and single-engine taxi without auxiliary power, improved ground power and pre-conditioned air hookup times when aircraft arrive at gates, 17 Table of Contents investing in ground power infrastructure for use during maintenance, and improvements to dispatch procedures to optimize fueling.
With sustainability as one of our key company-wide strategic priorities, we are pursuing the following six key levers to reduce the emissions associated with our business: (1) Aircraft Efficiency : Our investments in new next generation aircraft are increasing fuel efficiency and reducing associated costs. Our growing fleet of Airbus A321neo aircraft are improving fuel economy by approximately 20%.
With environmental sustainability as one of our key company-wide strategic priorities, we are pursuing the following six key levers to reduce the emissions associated with our business: (1) Fleet Renewal: Our investments in new next generation aircraft are increasing fuel efficiency and reducing associated costs.
The new program is designed to ensure that even more TrueBlue ® members have the opportunity 7 Table of Contents to get rewarded, even before achieving Mosaic ® status. The new TrueBlue ® also enhances the TrueBlue Mosaic ® program to include four distinct Mosaic levels, each featuring a Mosaic signature perk and an additional Mosaic perk you pick.
The new program is designed to provide even more TrueBlue ® members with the opportunity to get rewarded, even before achieving Mosaic ® status. The new TrueBlue ® also enhances the TrueBlue Mosaic ® program to include four distinct Mosaic levels, each featuring a Mosaic signature perk and an additional Mosaic perk you pick.
On September 21, 2021, the United States Department of Justice, along with the Attorneys General of six states and the District of Columbia filed suit against JetBlue and American seeking to enjoin the NEA, alleging that it violates Section 1 of the Sherman Act.
On September 21, 2021, the United States Department of Justice, along with the Attorneys General of six states and the District of Columbia filed suit against JetBlue and American Airlines seeking to enjoin the NEA, alleging that it violates Section 1 of the Sherman Act. The court issued a decision on May 19, 2023, permanently enjoining the NEA.
We have individual employment agreements with each of our non-unionized FAA licensed crewmembers which consist of dispatchers, technicians, inspectors, and air traffic controllers. Each employment agreement is for a term of five years and renews for an additional five-year term.
The Flight Instructors voted for TWU representation. Contract negotiations have not yet begun. We have individual employment agreements with each of our non-unionized FAA licensed crewmembers which consist of dispatchers, technicians, inspectors, and air traffic controllers. Each employment agreement is for a term of five years and renews for an additional five-year term.
State and Local - In addition to the federal regulations with which we must comply, we are also subject to state and local laws and regulations in the states in which we operate and the regulations of various local authorities operating the airports we serve.
State and Local - In addition to the federal regulations with which we must comply, we are also subject to state and local laws and regulations in the states in which we operate and the regulations of various local authorities operating the airports we serve. Foreign Operations - International air transportation is subject to extensive government regulation.
We also operate under specific regulations due to our operations within the high density airspace of the Northeast. Most of our airline operations are regulated by U.S. governmental agencies, including: DOT - The DOT primarily regulates economic issues affecting air service including, but not limited to, certification and fitness, insurance, consumer protection, and competitive practices.
Most of our airline operations are regulated by U.S. governmental agencies, including: DOT - The DOT primarily regulates economic issues affecting air service including, but not limited to, certification and fitness, insurance, consumer protection, and competitive practices.
As of December 31, 2022, we had 46 a i rline commercial partnerships. Our commercial partnerships typically begin as an interline agreement allowing a customer to book a single itinerary with tickets on multiple airlines. On their day of travel, they enjoy a simplified airport experience with single check-in and bag drop.
Our commercial partnerships typically begin as an interline agreement allowing a customer to book a single itinerary with tickets on multiple airlines. On their day of travel, customers have a simplified airport experience with single check-in and bag drop.
Department of Transportation (“DOT”), include Puerto Rico and the U.S. Virgin Islands, but for the purposes of the capacity distribution table above, we have included these locations in the Caribbean and Latin America region.
Department of Transportation (“DOT”), include Puerto Rico and the U.S. Virgin Islands, but for the purposes of the capacity distribution table above, we have included these locations in the Caribbean and Latin America region. (2) We further expanded our presence in the transatlantic market with service from John F.
Taxes & Fees - The airline industry is one of the most heavily taxed in the U.S., with taxes and fees accounting for approximately 15% of the total fare charged to a customer. Airlines are obligated to fund all of these taxes and fees regardless of their ability to pass these charges on to the customer.
Taxes & Fees - The airline industry is one of the most heavily taxed industries in the U.S. Airlines are obligated to fund all of the taxes and fees imposed on them regardless of their ability to pass these charges on to the customer.
It is uniquely susceptible to external factors such as fuel costs, downturns in domestic and international economic conditions, weather-related disruptions, the spread of infectious diseases, such as the coronavirus (“COVID-19”) pandemic, vaccination mandates, masking requirements and travel restrictions, the impact of airline restructurings or consolidations, and military actions or acts of terrorism.
It is uniquely susceptible to external factors such as fuel costs, downturns in domestic and international economic conditions, weather-related disruptions, air traffic control (“ATC”) shortages, the spread of infectious diseases, the impact of airline restructurings or consolidations, and military actions or acts of terrorism.
Northeast Alliance In July 2020, JetBlue and American entered into the NEA designed to optimize our respective networks at John F. Kennedy International Airport, LaGuardia Airport, Newark and Boston. Following review by the DOT, JetBlue and American began implementing the NEA in July 2021.
Northeast Alliance In July 2020, JetBlue and American Airlines entered into the NEA which was designed to optimize our respective networks at JFK, BOS, LaGuardia Airport (“LaGuardia”), and Newark Liberty International Airport (“Newark”). Following review and agreement by the DOT, JetBlue and American Airlines began implementing the NEA in July 2021.
We look to attract new customers to our brand and provide current customers with a reason to come back by continuing to innovate and evolve the JetBlue Experience.
Differentiated Product and Culture Delivering the JetBlue Experience to our customers through our differentiated product and culture is core to our mission to inspire humanity. We look to attract new customers to our brand and provide current customers with a reason to come back by continuing to innovate and evolve the JetBlue Experience.
Understanding the purpose of our customers' travel helps us to optimize destinations, strengthen our network, and increase unit revenues. As of December 31, 2022, our network serv ed 108 BlueCities in 32 states , the District of Columbia, the Commonwealth of Puerto Rico, the U.S.
Understanding the purpose of our customers' travel helps us to optimize destinations, strengthen our network, and increase unit revenues. As of December 31, 2023, we serv ed 115 destinations (“BlueCities”) in 32 states , the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Island s, and 31 countries in the Caribbean and Latin America, Canada and Europe.
We also have co-branded loyalty credit cards issued by Banco Popular de Puerto Rico and MasterCard ® in Puerto Rico as well as Banco Popular Dominicano and MasterCard ® in the Dominican Republic. These credit cards allow customers in Puerto Rico and the Dominican Republic to take full advantage of our TrueBlue ® loyalty program.
We also have co-branded loyalty credit cards issued by Banco Popular de Puerto Rico and MasterCard ® in Puerto Rico as well as Banco Popular Dominicano and MasterCard ® in the Dominican Republic.
This structure allows us to optimize costs as well as accommodate customers' preference for nonstop itineraries. A vast majority of our operations are centered in the heavily populated northeast corridor of the U.S., which includes the New York and Boston metropolitan areas.
Route Structure JetBlue's point-to-point system is designed to optimize costs as well as accommodate customers' preference for nonstop itineraries. A vast majority of our operations are centered in the heavily populated Northeast corridor of the U.S., which includes the New York and Boston metropolitan areas. This airspace is some of the world's most congested and drives certain operational constraints.
We believe a direct relationship between crewmembers and our leadership is in the best interests of our crewmembers, our customers, and our stockholders. Except for our pilots and inflight crewmembers, our other frontline crewmembers do not have third-party representation. In 2014, JetBlue pilots elected to be represented by the Air Line Pilots Association, or ALPA.
We believe a direct relationship between crewmembers and our leadership is in the best interest of our crewmembers, our customers, and our stockholders. Except for our pilots and inflight crewmembers, our other frontline crewmembers do not have third-party representation.
One of the programs, known as JetBlue Emerging Talent (“JET”), offers a pathway for our frontline operational crewmembers to transition into corporate services roles which includes hands-on experience, rotational job placements, and job placement assistance upon completion of the program.
JetBlue Emerging Talent is a program that offers a pathway for our frontline operational crewmembers to transition into corporate services roles which includes hands-on experience, rotational job placements, and job placement assistance upon completion of the program. We provide additional professional and leadership development programs to elevate the performance and support the career growth of our crewmembers.
The assistance process is confidential with only the fund administrator and coordinator knowing the identity of the crewmembers in need. • JetBlue Scholars - Developed in 2015, this program offers a new and innovative model to our crewmembers wishing to further their education.
The assistance process is confidential with only the fund administrator and coordinator knowing the identity of the crewmembers in need. • JetBlue Scholars - This program offers a new and innovative model to our crewmembers wishing to further their education. Crewmembers enrolled in the program can earn an undergraduate degree through self-directed online college courses facilitated by JetBlue.
At the end of 2022, we had eight CRGs which include: ◦ BlueAbilities : New in 2022, BlueAbilities promotes the inclusion of people with visible and nonvisible disabilities and champions an accessibility-friendly workplace. ◦ Blue Aviasian : Celebrates the history of Asians, Asian Americans, and Pacific Islanders.
These CRGs and their programs are open to all crewmembers, regardless of how they personally identify. At the end of 2023, we had eight CRGs which include: ◦ BlueAbilities : Promotes the inclusion of people with visible and nonvisible disabilities and champions an accessibility-friendly workplace. ◦ Blue Aviasian : Celebrates the history of Asians, Asian Americans, and Pacific Islanders.
We, like other airlines, have also committed to the government to provide services to mitigate customer inconveniences when the cause of cancellation or delay was due to circumstances in our control.
This Customer Bill of Rights commits us to high service standards and holds us accountable if we fall short. We, like other airlines, have also committed to the government to provide services to mitigate customer inconveniences when the cause of cancellation or delay was due to circumstances in our control.
To the extent we are subject to FCC requirements, we take all necessary steps to comply with those requirements. Additionally, as a result of our operations to Havana, Cuba, we are required to comply with regulations promulgated by the U.S. Department of the Treasury's Office of Foreign Assets Control.
Additionally, as a result of our operations to Havana, Cuba, we are required to comply with regulations promulgated by the U.S. Department of the Treasury's Office of Foreign Assets Control. As of September 2023, we have suspended service to Havana.
We provide additional professional and leadership development programs to elevate the performance and support the career growth of our crewmembers. We offer broad-based access to learning and development through our enterprise license for LinkedIn learning, providing on-demand access to over 16,000 skill-based online learning courses.
We offer broad-based access to learning and development through our enterprise license for LinkedIn learning, providing on-demand access to over 16,000 skill-based online learning courses.
These fixed costs vary based upon the age of the aircraft and other operating factors impacting the related component. Required maintenance not otherwise covered by these agreements is performed on a time and materials basis. All other maintenance activities are sub-contracted to qualified maintenance, repair, and overhaul facilities. Aircraft Fuel Aircraft fuel continues to be one of our largest expenses.
These fixed costs vary based upon the age of the aircraft and other operating factors impacting the related component. Required maintenance not otherwise covered by these agreements is performed on a time and materials basis.
Annual international emissions reporting is required via CORSIA as of the 2019 reporting year, and offsetting compliance is scheduled to be implemented through multiple phases beginning in 2021.
Annual international emissions reporting is required via CORSIA as of the 2019 reporting year, and offsetting compliance relative to a predetermined baseline is scheduled to be implemented through multiple phases that began in 2021. ICAO originally defined the baseline as the average emissions from covered flights in 2019 and 2020.
We attempt to protect ourselves against the volatility of fuel prices by entering into a variety of derivative instruments. These include call spread options, call options, swaps, caps, collars, and basis swaps with underlyings of jet fuel, crude, and heating oil.
We attempt to protect ourselves against the volatility of fuel prices by entering into a variety of derivative instruments with underlyings of jet fuel, crude, and heating oil. In 2023, we effectively hedged a portion of exposure to price spikes by utilizing call spread options with an underlying of jet fuel.
The rules limit the air traffic in and out of these airports during specific times; however, even with the rules in place, delays remain among the highest in the nation due to continuing airspace congestion.
A slot is legal permission to conduct an arrival or departure. FAA rules limit the air traffic in and out of these airports during specific times; however, even with the rules in place, delays remain among the highest in the nation due to continuing shortages in the air traffic control workforce.
Enabled by the NEA, we announced expanded Mint ® flying and two new seasonal routes beginning in summer 2023. Airline Commercial Partnerships Airlines frequently participate in commercial partnerships with other carriers in order to increase customer convenience by providing interline-connectivity, codeshare, complementary flight schedules, frequent flyer program reciprocity, and other joint marketing activities.
Airline Commercial Partnerships Airlines frequently participate in commercial partnerships with other carriers in order to increase customer convenience by providing interline-connectivity, codeshare, complementary flight schedules, frequent flyer program reciprocity, and other joint marketing activities. As of December 31, 2023, we had 47 a i rline commercial partnerships.
In 2022, we saw upward pressure on wages within many of the markets we serve and this trend is expected to continue in 2023. Our leadership team communicates on a regular basis with all crewmembers to bolster our culture and to keep them informed about news, strategy updates, and challenges affecting the airline and the industry.
Our leadership team communicates on a regular basis with all crewmembers to bolster our culture and to keep them informed about news, strategy updates, and challenges affecting the airline and the industry.
In 2022, we engaged with 210 diverse business partners and spent $74 million with diverse businesses. • Brand 16 Table of Contents ◦ Ensure inclusivity in our offerings by capturing the diverse needs across our customer base. ◦ Partner with values-aligned businesses and organizations within the communities we serve. ◦ Evaluate social and market shifts and their impact on our customers' experience.
In 2023, we engaged with 206 diverse business partners and spent $82 million. • Brand ◦ Encourage inclusivity in our offerings by capturing the diverse needs across our customer base. ◦ Partner with values-aligned businesses and organizations within the communities we serve. ◦ Evaluate social and market shifts and their impact on our customers' experience. 18 Table of Contents Governance We believe that strong corporate governance, informed by direct engagement with our stakeholders, creates the foundation that allows us to pursue our mission to inspire humanity.
Our average number of full-time equivalent crewmembers for the year ended December 31, 2022 consisted of Crewmember Group Number of full time crewmembers Pilots 4,102 Inflight 1 5,528 Airport operations 4,300 Technicians 2 813 Reservation agents 1,362 Management and other personnel 3,970 (1) other airlines may refer to as flight attendants (2) other airlines may refer to as mechanics For the year ended December 31, 2022, we employed an average of 16,669 full-time and 4,232 part-time crewmembers.
Our average full-time equivalent crewmembers for the year ended December 31, 2023 consisted of: Crewmember Group Number of full-time equivalent crewmembers Pilots 4,436 Inflight (1) 5,921 Airport operations 4,178 Technicians (2) 938 Reservation agents 779 Management and other personnel 4,380 (1) Referred to as flight attendants by other airlines. (2) Referred to as mechanics by other airlines.
The agreement is a five-year, renewable contract effective December 13, 2021. In September 2022, the International Association of Machinists and Aerospace Workers filed for an election to unionize our ground operations crewmembers.
Labor Unions and Non-Unionized Crewmembers In September 2022, the International Association of Machinists and Aerospace Workers filed for an election to unionize our ground operations crewmembers.
(2) As of December 31, 2022 we parked 9 of these aircraft. The reliability of our fleet is essential to ensuring our operations run efficiently and we are continually working with our aircraft and engine manufacturers to enhance our performance.
(2) Embraer E190 includes seven permanently parked aircraft owned by the Company and six parked aircraft awaiting lease return. The reliability of our fleet is essential to ensuring our operations run efficiently and we are continually working with our aircraft and engine manufacturers to enhance our performance.
TrueBlue ® will now offer tiles as the new way to track and measure progress toward Mosaic status. Tiles are earned based on a combination of travel spend and credit card spend.
The new program maintains most of TrueBlue's ® signature perks while also providing for new opportunities for customers to earn additional perks along the way to achieve Mosaic status. TrueBlue ® now offers tiles as the new way to track and measure progress toward Mosaic status. Tiles are earned based on a combination of travel spend and credit card spend.
Our Even More ® Space seats are available for purchase across our fleet, giving customers the opportunity to enjoy additional legroom. Customers on certain routes have the option to purchase Mint ® , our premium service. In February 2021, we unveiled a reimagined version of our Mint ® experience.
Our Even More ® Space seats are available for purchase across our fleet, giving customers the opportunity to enjoy additional legroom. Customers on select coast-to-coast, Caribbean and Latin American routes and all transatlantic flights have the option to purchase Mint ® , our premium service.
HUMAN CAPITAL MANAGEMENT Our People and Culture We believe our success depends on our crewmembers delivering the JetBlue Experience in the sky and on the ground. One of our competitive strengths is a service oriented culture grounded in our five key values: safety, caring, integrity, passion, and fun. We believe a highly productive and engaged workforce enhances customer loyalty.
One of our competitive strengths is a service-oriented culture grounded in our five key values: safety, caring, integrity, passion, and fun. We believe a highly productive and engaged workforce enhances customer loyalty. Our goal is to hire, train, and retain a diverse workforce of caring, passionate, fun, and friendly people who share our mission to inspire humanity.
The industry's principal competitive factors include fares, brand and customer service, route networks, flight schedules, aircraft types, safety records, codeshare and interline relationships, inflight entertainment and connectivity systems, and frequent flyer loyalty programs. The COVID-19 Pandemic The unprecedented COVID-19 pandemic has had a material adverse impact on our operating revenues and financial position.
The industry's principal competitive factors include fares, brand and customer service, frequent flyer loyalty programs, route networks, flight schedules, aircraft types, safety records, codeshare and interline relationships, inflight entertainment and connectivity systems. JETBLUE EXPERIENCE We offer our customers a distinctive flying experience which we refer to as the “JetBlue Experience”.
JETBLUE EXPERIENCE We offer our customers a distinctive flying experience which we refer to as the “JetBlue Experience”. We believe we deliver award-winning service and product with low fares that focuses on the entire customer experience, from booking an itinerary to arrival at the final destination.
We believe we deliver award-winning service and product with low fares that focuses on the entire customer experience, from booking an itinerary to arrival at the final destination. We believe JetBlue is the carrier of choice for the majority of travelers who have been underserved by other airlines.
These services include rebooking at no additional cost, meal and/or meal/cash vouchers for flight delays over three hours, complimentary hotel accommodations if necessary, and complimentary ground transportation to and from hotels. 5 Table of Contents Our customers have repeatedly indicated the distinctive JetBlue Experience is an important reason why they select us over other carriers.
These services include rebooking at no additional cost, meal and/or meal/cash vouchers for flight delays over four hours, complimentary hotel accommodations if necessary, and complimentary ground transportation to and from hotels.
ICAO continues to develop details regarding implementation, but we expect compliance with CORSIA will increase our operating costs. As part of our sustainability and environmental strategy, we are embracing new technologies and making changes that will ultimately benefit our crewmembers, customers, and stockholders. We discuss some of our sustainability initiatives in “Environmental, Social Governance – Environmental” above.
As part of our sustainability and environmental strategy, we are looking for opportunities to embrace new technologies and make changes that we believe will ultimately benefit our crewmembers, customers, and stockholders. We discuss some of our sustainability initiatives in our Environmental, Social, and Governance Management section above.
Maarten, Trinidad and Tobago, and the Turks and Caicos Islands. We anticipate further expanding our network to Paris, France in 2023. To the extent we seek to provide air transportation to additional international markets in the future, we would be required to obtain necessary authority from the DOT and the FAA as well as the applicable foreign government.
The availability of international routes to U.S. airlines is regulated by treaties and related agreements between the U.S. and foreign governments. To the extent we seek to provide air transportation to additional international markets in the future, we would be required to obtain necessary authority from the DOT and the FAA as well as the applicable foreign government.
In 2019, our Board formed an ESG Subcommittee to the Governance and Nominating Committee to ensure the Board is aware of the Company's ESG strategy and has a comprehensive understanding of ESG matters, which we continued to operate throughout 2022. We report annually on ESG issues using the Sustainable Accounting Standards Board and Task Force on Climate-Related Financial Disclosures frameworks.
In 2019, our Board formed an ESG Subcommittee to the Governance and Nominating Committee to help the Board keep aware of the Company's ESG strategy and have a comprehensive understanding of ESG matters, which we continued to operate throughout 2023. The ESG Subcommittee is also responsible for the Board’s oversight of ESG matters, including progress on ESG targets and metrics.
We believe these commercial partnerships allow us to better leverage our strong network and drive incremental traffic and revenue while improving off-peak travel. Marketing JetBlue is a widely recognized and respected global brand. JetBlue created a new category in air travel and our brand stands for offering a great product with low fares.
JetBlue believes these lawsuits are without merit and has moved to dismiss the claims. Marketing JetBlue is a widely recognized and respected global brand. JetBlue created a new category in air travel and our brand stands for offering a great product with low fares.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf the Merger is not completed in a timely manner or at all, our ongoing business may be adversely affected as follows: • we may experience negative reactions from the financial markets, including investors and rating agencies, and the price of our common stock could decline to the extent that the current market price reflects an assumption that the Merger will be completed; • we may experience negative reactions from crewmembers, customers, suppliers or other third parties; • we may be subject to litigation, which could result in significant costs and expenses; • management’s focus may have been diverted from day-to-day business operations and pursuing other opportunities that could have been beneficial to us; 27 Table of Contents • in certain circumstances, if the Merger is not consummated for antitrust reasons, JetBlue will pay Spirit a reverse break-up of $70 million and will pay the Spirit stockholders directly a reverse break-up fee of $400 million, less the aggregate amount of the prepayment of $2.50 per share in cash paid following Spirit stockholders’ approval of the transaction and a ticking fee of $0.10 per month starting in January 2023 through the earlier of the date of the closing or termination of the transaction; and • our costs of pursuing the Merger may be higher than anticipated.
Biggest changeThere can be no assurance that governmental entities will not impose conditions, terms, obligations or restrictions and that such conditions, terms, obligations or restrictions will not have the effect of delaying or preventing consummation of the Merger or imposing additional material costs on or materially limiting the revenues of the combined company following the Merger, or otherwise adversely affecting, including to a material extent, our business, results of operations and financial condition after consummation of the Merger. 26 Table of Contents If the Merger is not completed in a timely manner or at all, our ongoing business may be adversely affected as follows: • the anticipated benefits of the Merger could be reduced; • we may experience negative reactions from the financial markets, including investors and rating agencies, and the price of our common stock could decline to the extent that the current market price reflects an assumption that the Merger will be completed; • we may experience negative reactions from crewmembers, customers, suppliers or other third parties; • we may be subject to litigation, which could result in significant costs and expenses; • management’s focus may be diverted from day-to-day business operations and pursuing other opportunities that could have been beneficial to us; • in certain circumstances, if the Merger is not consummated solely for specific antitrust reasons, JetBlue may be obligated to pay Spirit a reverse break-up fee of $70 million and pay Spirit stockholders a reverse break-up fee of $400 million, less the aggregate amount of the prepayment of $2.50 per share in cash paid following Spirit stockholders’ approval of the transaction and the aggregate amount of ticking fees of $0.10 per share per month that commenced in January 2023 and continues under the Merger Agreement through the earlier of the date of the closing or termination of the transaction.
Given our large dependency on New York harbor jet fuel, we have been more impacted than our competitors by these price spikes due to decreases in refining capacity and increases in US exports filling the void left by Russia.
Given our large dependency on New York harbor jet fuel, we have been impacted more than our competitors by these price spikes due to decreases in refining capacity and increases in US exports filling the void left by Russia.
Any disruption or perceived uncertainty may make it more difficult for us to meet our crewmember retention and hiring goals which could materially impact our business, results of operations and financial condition. The pendency of the Merger could cause disruptions to our business or business relationships, which could have an adverse impact on our results of operations.
Any disruption or perceived uncertainty may make it more difficult for us to meet our crewmember hiring and retention goals, which could materially impact our business, results of operations and financial condition. The pendency of the Merger could cause disruptions to our business or business relationships, which could have an adverse impact on our results of operations.
In connection with the integration of our business with Spirit’s in a manner that permits us to achieve the synergies anticipated to result from the Merger we will need to address, among other things, the following issues: • combining the companies’ separate operational, financial, reporting and internal control functions; • maintaining existing or negotiating new agreements with unions, crewmembers, suppliers, third-party service providers and third-party distribution channels, and avoiding delays in entering into new agreements with prospective crewmembers, suppliers, third-party service providers and third-party distribution channels; • integrating complex systems and technologies, including implementing an integrated customer reservations system, operating procedures, regulatory compliance programs, aircraft fleets, networks, and other assets in a manner that minimizes any adverse impact on customers, suppliers, crewmembers and other constituencies; • addressing possible differences in business backgrounds, corporate cultures, and management philosophies; • integrating the businesses’ corporate, administrative and information technology infrastructure, including coordinating geographically dispersed companies; • diversion of the attention of management and other key crewmembers; • harmonizing the companies’ employee development, compensation and benefit programs and related policies, procedures and practices; • integrating workforces and attracting and retaining key personnel while maintaining focus on providing consistent, high quality customer service and running an efficient operation; • identifying and eliminating redundant and underperforming operations and assets in both companies; • managing the expanded operations of a significantly larger and more complex company; • coordinating sales, distribution and marketing efforts, including the rebranding initiatives related to the Spirit business; • effecting potential actions that may be required in connection with obtaining regulatory approvals; and • resolving potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the Merger.
In connection with the integration of our business with Spirit’s in a manner that permits us to achieve the synergies anticipated to result from the Merger we will need to address, among other things, the following issues: • combining the companies’ separate operational, financial, reporting and internal control functions; • maintaining existing or negotiating new agreements with unions, crewmembers, suppliers, third-party service providers and third-party distribution channels, and avoiding delays in entering into new agreements with prospective crewmembers, suppliers, third-party service providers and third-party distribution channels; • integrating complex systems and technologies, including implementing an integrated customer reservations system, operating procedures, regulatory compliance programs, aircraft fleets, networks, and other assets in a manner that minimizes any adverse impact on customers, suppliers, crewmembers and other constituencies; • addressing possible differences in business backgrounds, corporate cultures, and management philosophies; • integrating the businesses’ corporate, administrative and information technology infrastructure, including coordinating geographically dispersed companies; • managing any diversion of the attention of management and other key crewmembers; • harmonizing the companies’ employee development, compensation and benefit programs and related policies, procedures and practices; • integrating workforces and attracting and retaining key personnel while maintaining focus on providing consistent, high quality customer service and running an efficient operation; • identifying and eliminating redundant and underperforming operations and assets in both companies; • managing the expanded operations of a significantly larger and more complex company; • coordinating sales, distribution and marketing efforts, including the rebranding initiatives related to the Spirit business; • effecting potential actions that may be required in connection with obtaining regulatory approvals; and • resolving potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the Merger.
The need to integrate the JetBlue and Spirit workforces following the Merger and negotiate joint labor agreements presents the potential for delay in achieving expected synergies, increased labor costs or labor disputes that could adversely affect the combined company’s operations.
The need to integrate the JetBlue and Spirit workforces following the Merger and negotiate joint labor agreements presents the potential for delay in achieving expected synergies, and for increased labor costs or labor disputes that could adversely affect the combined company’s operations.
As a result, we are subject to the risks of doing business outside the United States, including: 24 Table of Contents • the costs of complying with laws, regulations, and policies (including taxation policies) of foreign governments relating to investments and operations, the costs or desirability of complying with local practices and customs, and the impact of various anti-corruption and other laws affecting the activities of U.S. companies abroad; • evolving local data residency requirements that require data to be stored only in and, in some cases, also to be accessed only from within, a certain jurisdiction; • U.S. taxation of income earned abroad; • import and export licensing requirements and regulations, as well as unforeseen changes in regulatory requirements, including imposition of tariffs or embargoes, import or export regulations, controls, and other trade restrictions; • political and economic instability, including as a result of the ongoing conflict between Russia and Ukraine; • fluctuations in GDP, interest and currency exchange rates, civil disturbances, government instability, nationalization and expropriation of private assets, trafficking and the imposition of taxes or other charges by governments; • health and safety protocols, including global care and cleanliness certifications, at the airports in which we operate; • the complexity of managing an organization doing business in many jurisdictions; • uncertainties as to local laws and enforcement of contract and intellectual property rights and occasional requirements for onerous contract clauses; and • rapid changes in government, economic, and political policies; political or civil unrest; acts of terrorism; or the threat of international boycotts or U.S. anti-boycott legislation.
As a result, we are subject to the risks of doing business outside the United States, including: • the costs of complying with laws, regulations, and policies (including taxation policies) of foreign governments relating to investments and operations, the costs or desirability of complying with local practices and customs, and the impact of various anti-corruption and other laws affecting the activities of U.S. companies abroad; • evolving local data residency requirements that require data to be stored only in and, in some cases, also to be accessed only from within, a certain jurisdiction; • U.S. taxation of income earned abroad; • import and export licensing requirements and regulations, as well as unforeseen changes in regulatory requirements, including imposition of tariffs or embargoes, import or export regulations, controls, and other trade restrictions; 23 Table of Contents • political and economic instability, including as a result of the ongoing conflict between Russia and Ukraine; • fluctuations in GDP, interest and currency exchange rates, civil disturbances, government instability, nationalization and expropriation of private assets, trafficking and the imposition of taxes or other charges by governments; • health and safety protocols, including global care and cleanliness certifications, at the airports in which we operate; • the complexity of managing an organization doing business in many jurisdictions; • uncertainties as to local laws and enforcement of contract and intellectual property rights and occasional requirements for onerous contract clauses; and • rapid changes in government, economic, and political policies; political or civil unrest; acts of terrorism; or the threat of international boycotts or U.S. anti-boycott legislation.
As we enter new markets we could be subject to additional seasonal variations along with any competitive responses to our entry by other airlines. Price changes in aircraft fuel as well as the timing and amount of maintenance and advertising expenditures also impact our operations.
As we enter new markets we could be subject to additional seasonal variations along with any competitive responses to our entry by other airlines. Price changes in aircraft fuel as well as the timing and amount of maintenance and advertising expenditures may also impact our operations.
Our high aircraft utilization rate helps us keep our costs low, but also makes us vulnerable to delays and cancellations; such delays and cancellations could reduce our profitability and reputation. We maintain a high daily aircraft utilization rate, which is the amount of time our aircraft spend in the air carrying passengers.
Our high aircraft utilization rate helps us keep our costs low, but also makes us vulnerable to delays and cancellations; such delays and cancellations could reduce our profitability and harm our reputation. We maintain a high daily aircraft utilization rate, which is the amount of time our aircraft spend in the air carrying passengers.
We expect our quarterly operating results to fluctuate due to seasonality including high vacation and leisure demand generally occurring on our Florida routes between October and April and on our western routes during the summer. Actions of our competitors and travel restrictions may also contribute to fluctuations in our results.
We expect our quarterly operating results to fluctuate due to seasonality including high vacation and leisure demand generally occurring on our Florida and Caribbean routes between October and April and on our western routes during the summer. Actions of our competitors and travel restrictions may also contribute to fluctuations in our results.
We may seek to postpone or cancel delivery of certain aircraft currently scheduled for delivery, and we may choose not to purchase in the future as many aircraft as we intended. In addition, should additional or different retaliatory tariffs be imposed, our business could be harmed.
We may seek to postpone or cancel delivery of certain aircraft or parts currently scheduled for delivery or purchase, and we may choose not to purchase in the future as many aircraft as we intended. In addition, should additional or different retaliatory tariffs be imposed, our business could be harmed.
As a condition to approving the Merger, these governmental entities may impose conditions, terms, obligations or restrictions or require divestitures or place restrictions on the conduct of our business after consummation of the Merger.
As a condition to approving the Merger, governmental entities may impose conditions, terms, obligations or restrictions or require divestitures or place restrictions on the conduct of our business after consummation of the Merger.
Risks Associated with the Airline Industry We could be adversely affected by an outbreak of a disease or an environmental disaster that significantly affects travel behavior.
Risks Associated with the Airline Industry We could be adversely affected by an outbreak or resurgence of a disease or an environmental disaster that significantly affects travel behavior.
If any maintenance provider with whom we have a flight hour agreement fails to perform or honor such agreements, we could incur higher interim maintenance costs until we negotiate new agreements. Furthermore we expect to continue to implement various fleet modifications over the next several years to ensure our aircraft's continued efficiency, modernization, brand consistency, and safety.
If any maintenance provider with whom we have a flight hour agreement fails to perform or honor such agreements, we could incur higher interim maintenance costs until we negotiate new agreements. Furthermore, we expect to continue to implement various fleet modifications over the next several years to facilitate our aircraft's continued efficiency, modernization, brand consistency, and safety.
Extended interruptions or disruptions in service at one or more of our focus cities could have a material adverse impact on our operations. Our business is heavily dependent on our operations in the New York Metropolitan area, particularly at JFK, and at our other focus cities in Boston, Orlando, Fort Lauderdale, the Los Angeles basin, and San Juan, Puerto Rico.
Extended interruptions or disruptions in service at one or more of our focus cities could have a material adverse impact on our operations. Our business is heavily dependent on our operations in the New York Metropolitan area, particularly at JFK, and in our other focus cities: Boston, Orlando, Fort Lauderdale, the Los Angeles basin, and San Juan.
The impact on financial institutions from global economic conditions, including COVID-19, may adversely affect the availability and cost of credit to JetBlue as well as to prospective purchasers of our aircraft should we undertake to sell in the future, including financing commitments we have already obtained for purchases of new aircraft or financing or refinancing of existing aircraft.
The impact on financial institutions from global economic conditions may adversely affect the availability and cost of credit to JetBlue as well as to prospective purchasers of our aircraft should we undertake to sell in the future, including financing commitments we have already obtained for purchases of new aircraft or financing or refinancing of existing aircraft.
Additionally, if a traditional network airline were to fully develop a low cost structure, or if we were to experience increased competition from low cost carriers or new entrants, our business could be materially adversely affected. We may be subject to competitive risks due to the long-term nature of our fleet order book.
Lastly, if a traditional network airline were to fully develop a low-cost structure, or if we were to experience increased competition from low cost carriers or new entrants, our business could be materially adversely affected. We may be subject to competitive risks due to the long-term nature of our fleet order book.
We may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, such as aircraft, route 37 Table of Contents authorities, airport slots and frequent flyer database, unfavorable trends in historical or forecasted results of operations and cash flows and an uncertain economic environment, as well as other uncertainties.
We may be required to recognize losses in the future due to, among other factors, extreme fuel price volatility, tight credit markets, government regulatory changes, decline in the fair values of certain tangible or intangible assets, such as aircraft, route authorities, airport slots and frequent flyer database, unfavorable trends in historical or forecasted results of operations and cash flows and an uncertain economic environment, as well as other uncertainties.
Since the domestic airline industry is increasingly price sensitive, we may not be able to recover the cost of compliance with new or more stringent environmental laws and regulations from our customers, which could adversely affect our business.
Since the domestic airline industry is increasingly price sensitive, we may not be able to recover the cost of compliance with new or more stringent environmental laws and regulations from our customers, which could adversely affect our business and financial results.
American Rescue Plan Act – Payroll Support Program 3 On May 6, 2021, we entered into a Payroll Support 3 Agreement with Treasury governing our participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 (the “Payroll Support Program 3 ” ).
American Rescue Plan Act – Payroll Support Program 3 On May 6, 2021, we entered into a Payroll Support 3 Agreement with Treasury governing our participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021.
Consolidated Appropriations Act – Payroll Support Program 2 On January 15, 2021, we entered into a Payroll Support Program Extension Agreement with Treasury governing our participation in the federal Payroll Support Program for passenger air carriers under the United States Consolidated Appropriations Act, 2021 (the “ Payroll Support Program 2”).
Consolidated Appropriations Act – Payroll Support Program 2 On January 15, 2021, we entered into a Payroll Support Program Extension Agreement with Treasury governing our participation in the federal Payroll Support Program for passenger air carriers under the United States Consolidated Appropriations Act, 2021.
Our business is highly dependent on the New York metropolitan market and increases in competition or congestion or a reduction in demand for air travel in this market, or governmental reduction of our operating capacity at JFK, would harm our business.
Our business is highly dependent on the New York metropolitan market and increases in competition or congestion or a reduction in demand for air travel in this market, or governmental reduction of our operating capacity at JFK, could harm our business.
We also require our third party providers to have disaster recovery plans; however, we cannot assure you these measures are adequate to prevent disruptions, which, if they were to occur, could result in the loss of important data, increase our expenses, decrease our revenues, and generally harm our business, reputation, and brand.
We also require our third party 32 Table of Contents providers to have disaster recovery plans; however, we cannot assure you these measures are adequate to prevent disruptions, which, if they were to occur, could result in the loss of important data, increase our expenses, decrease our revenues, and generally harm our business, reputation, and brand.
The increased indebtedness could also reduce funds available to engage in investments in our business development, capital expenditures and other activities and may create competitive disadvantages for us relative to other companies with lower debt levels. In addition, our credit ratings impact the cost and availability of our future borrowings, and, as a result, our cost of capital.
The increased indebtedness could also reduce funds available to engage in investments in our business development, capital expenditures and other activities and may create competitive disadvantages for us relative to other companies with lower debt levels. 27 Table of Contents In addition, our credit ratings impact the cost and availability of our future borrowings, and, as a result, our cost of capital.
A significant data security breach or our failure to comply with applicable U.S. or foreign data security regulations or other data security standards may expose us to litigation, claims for contract breach, fines, sanctions or other penalties, which could disrupt our operations, harm our reputation, and materially and adversely affect our business, results of operations, and 32 Table of Contents financial condition.
A significant data security breach or our failure to comply with applicable U.S. or foreign data security regulations or other data security standards may expose us to litigation, claims for contract breach, fines, sanctions or other penalties, which could disrupt our operations, harm our reputation, and materially and adversely affect our business, results of operations, and financial condition.
Any of these events would be disruptive to our operations and could harm our business. In general, unionization has increased costs in the airline industry. In 2014, our pilots voted to be represented by the Airlines Pilot Association, or ALPA, and our first collective bargaining agreement was ratified by the pilots and became effective on August 1, 2018.
Any of these events would be disruptive to our operations and could harm our business. In general, unionization has increased costs in the airline industry. In 2014, our pilots voted to be represented by the Airlines Pilot Association (“ALPA”), and our first collective bargaining agreement was ratified by the pilots and became effective on August 1, 2018.
Under these agreements, certain key employees of Spirit could resign from employment following specified circumstances set forth in the applicable agreement, including an adverse change in title, authority or responsibilities, compensation and benefits or primary office location, and receive significant severance payments.
Under these 29 Table of Contents agreements, certain key employees of Spirit could resign from employment following specified circumstances set forth in the applicable agreement, including an adverse change in title, authority or responsibilities, compensation and benefits or primary office location, and receive significant severance payments.
Although we don't expect the costs of complying with current environmental regulations will have a material adverse effect on our financial position, results of operations, or cash flows, no assurance can be made that the costs of complying with environmental regulations in the future will not have such an effect.
Although we don't expect the costs of complying with current environmental regulations will have a 37 Table of Contents material adverse effect on our financial position, results of operations, or cash flows, no assurance can be made that the costs of complying with environmental regulations in the future will not have such an effect.
We may suffer damage to our reputation as a result of negative or inaccurate posts or comments about JetBlue on social media platforms, including related delays or cancellations on our flights even when it is due to weather or other circumstances that are outside of our control.
We may suffer damage to our reputation as a result of negative or inaccurate posts or comments about JetBlue on social media platforms, including related delays or cancellations on our flights even when these are due to weather or other circumstances that are outside of our control.
Moreover, as a result of our recent financing activities in response to the COVID-19 pandemic, the number of financings and the aggregate amount of indebtedness with respect to which such covenants and provisions apply has increased, thereby subjecting us to more substantial risk of cross-default and cross-acceleration in the event of breach, and additional operating and financial covenants could become binding on us as we continue to seek additional liquidity.
Moreover, as a result of our recent financing activities, the number of financings and the aggregate amount of indebtedness with respect to which such covenants and provisions apply has increased, thereby subjecting us to more substantial risk of cross-default and cross-acceleration in the event of breach, and additional operating and financial covenants could become binding on us as we continue to seek additional liquidity.
Each of these operations includes flights that gather and distribute traffic to other major cities. A significant interruption or disruption in 25 Table of Contents service at one or more of our focus cities could have a serious impact on our business, financial condition, and results of operations.
Each of these operations includes flights that gather and distribute traffic to other major cities. A significant interruption or disruption in service at one or more of our focus cities could have a serious impact on our business, financial condition, and results of operations.
The combined company’s success after the Merger will depend in part upon the ability of our and Spirit to retain key management personnel and other key employees.
The combined company’s success after the Merger will depend in part upon the ability of us and Spirit to retain key management personnel and other key employees.
The availability of fuel is also affected by demand for home heating oil, 23 Table of Contents gasoline and other petroleum products, as well as crude oil reserves, dependence on foreign imports of crude oil and potential hostilities in oil producing areas of the world.
The availability of fuel is also affected by demand for home heating oil, gasoline and other petroleum products, as well as crude oil reserves, dependence on foreign imports of crude oil and potential hostilities in oil producing areas of the world.
At present, we have existing aircraft commitments through 2027. As technological evolution occurs in our industry, through the use of composites and other innovations, we may be competitively disadvantaged because we have existing extensive fleet commitments that would prohibit us from adopting new technologies on an expedited basis.
At present, we have existing aircraft commitments through 2029. As technological evolution occurs in our industry, through the use of composites and other innovations, we may be competitively disadvantaged because we have existing extensive fleet commitments that could prohibit us from adopting new technologies on an expedited basis.
Any outbreak of another disease or variants of COVID-19, which affect travel behavior, travel demand, or travel restrictions, or a similar public health threat, or fear of such an event could have a material adverse impact on airlines.
Any outbreak or resurgence of a disease, including variants of COVID-19, which affect travel behavior, travel demand, or travel restrictions, or a similar public health threat, or fear of such an event could have a material adverse impact on airlines.
Our business would also be harmed by any circumstances causing a reduction in demand for air transportation in the New York metropolitan area, such as adverse changes in local economic conditions, health concerns, including COVID-19, negative public perception of New York City, acts of terrorism, or significant price or tax increases linked to increases in airport access costs and fees imposed on passengers.
Our business would also be harmed by any circumstances causing a reduction in demand for air transportation in the New York metropolitan area, such as adverse changes in local economic conditions, health concerns, including a resurgence of COVID-19, climatic concerns (including adverse weather and sea-level rise), negative public perception of New York City, acts of terrorism, or significant price or tax increases linked to increases in airport access costs and fees imposed on passengers.
We are more susceptible to adverse weather conditions, including snow storms and hurricanes, as a result of our operations being concentrated on the East Coast, than some of our competitors. Our Florida and Caribbean operations are subject to hurricanes.
We are more susceptible to adverse weather conditions, including snow storms and hurricanes, than some of our competitors as a result of our operations being concentrated on the East Coast.
We are subject to certain restrictions on our business as a result of our participation in governmental programs under the CARES Act, the Consolidated Appropriations Act, and the American Rescue Plan Act (collectively the “Acts”).
We have been subject to certain restrictions on our business as a result of our participation in governmental programs under the CARES Act, the Consolidated Appropriations Act, and the American Rescue Plan Act (collectively the “Acts”).
Because we derive a portion of our revenues from operations outside the United States, the risks of doing business internationally, or in a particular country or region, could lower our revenues, increase our costs, reduce our profits, or disrupt our business. We currently opera te in 108 airports in 24 count ries around the world.
Because we derive a portion of our revenues from operations outside the United States, the risks of doing business internationally, or in a particular country or region, could lower our revenues, increase our costs, reduce our profits, or disrupt our business. We currently opera te in 31 count ries around the world.
Risks Related to Our Merger with Spirit In order to consummate the Merger, we and Spirit must obtain certain governmental approvals, and if such approvals are not granted or are granted with conditions, consummation of the Merger may be jeopardized or the anticipated benefits of the Merger could be reduced.
Risks Related to Our Merger with Spirit In order to consummate the Merger, we and Spirit must obtain certain governmental approvals and satisfy closing conditions, and if such approvals are not granted or are granted untimely and/or with conditions, and if closing conditions are not satisfied, consummation of the Merger may be jeopardized or the anticipated benefits of the Merger could be reduced.
Further, these restrictions could limit our ability to take actions that we otherwise might have determined to be in the best interest of our Company and our shareholders.
Further, these restrictions limited and could in the future continue to limit our ability to take actions that we otherwise might have determined to be in the best interest of our Company and our shareholders.
In February 2022, we commenced negotiations for a successor contract, in accordance with the 33 Table of Contents collective bargaining agreement, and in December 2022 we reached a tentative agreement with ALPA to extend the current collective bargaining agreement by two years.The agreement was ratified by the JetBlue pilots in January 2023.
In February 2022, we commenced negotiations for a successor contract, in accordance with the collective bargaining agreement, and in December 2022 we reached a tentative agreement with ALPA to extend the current collective bargaining agreement by two years. The agreement was ratified by the JetBlue pilots in January 2023.
Although the RLA makes such actions unlawful until the parties have been lawfully released to self-help, and we and Spirit can seek injunctive relief against premature self-help, such actions can cause significant harm even if ultimately enjoined.
Although the RLA makes such actions unlawful until 30 Table of Contents the parties have been lawfully released to self-help, and we and Spirit can seek injunctive relief against premature self-help, such actions can cause significant harm even if ultimately enjoined.
Our available seat miles that take off or land outside the United States represented approximatel y 34% of o ur revenues for the year ended December 31, 2022. Over the long term, we expect our international operations may account for an increasing portion of our total revenues and available seat miles.
Our available seat miles that take off or land outside the United States and Canada represented approximatel y 37% of o ur revenues for the year ended December 31, 2023. Over the long term, we expect our international operations may account for an increasing portion of our total revenues and available seat miles.
Among the principal risks of integrating our and Spirit’s businesses and operations are the risks relating to integrating various computer, communications and other technology systems, including implementing an integrated customer reservations system, that will be necessary to operate JetBlue and Spirit as a single airline.
We may face challenges in integrating our computer, communications and other technology systems. Among the principal risks of integrating our and Spirit’s businesses and operations are the risks relating to integrating various computer, communications and other technology systems, including implementing an integrated customer reservations system, that will be necessary to operate JetBlue and Spirit as a single airline.
We emphasize legal compliance and have implemented and continue to implement and refresh policies, procedures and certain ongoing training of crewmembers with regard to business ethics and compliance, anti-corruption policies and many key legal requirements; however, there can be no assurance our crewmembers or third party service providers in such locations will adhere to our code of business conduct, anti-corruption policies, other Company policies, or other legal requirements.
We emphasize legal compliance and have implemented and continue to implement and refresh policies, procedures and certain ongoing training of crewmembers with regard to business ethics and compliance, compliance with economic and trade sanctions, anti-corruption policies and many key legal requirements; however, there can be no assurance our crewmembers or third party service providers will adhere to our code of business conduct, anti-corruption and trade compliance policies, other Company policies, or other legal requirements.
As our overall workforce ages, we expect our medical and related benefits to increase as well, despite an increased corporate focus on crewmember wellness.
As our overall workforce ages, we expect the cost of our medical and related benefits to increase as well, despite an increased corporate focus on crewmember wellness.
We cannot assure you that we will be able to obtain additional financing on terms acceptable to us or at all. 28 Table of Contents Although we expect that the Merger will result in synergies and other benefits to us, we may not realize those benefits to the extent predicted because of required divestitures, difficulties related to integration and the achievement of such synergies and other challenges.
We cannot assure you that we will be able to obtain additional financing on terms acceptable to us or at all. Although we expect the Merger will result in synergies and other benefits to us, we may not realize those benefits to the full extent predicted because of required divestitures, difficulties related to integration and other challenges.
In April 2018, JetBlue inflight crewmembers elected to be solely represented by the Transport Workers Union of America, or TWU. The NMB certified the TWU as the representative body for JetBlue inflight crewmembers. In November 2020, our inflight crewmembers voted to decline the ratification of a tentative collective bargaining agreement between JetBlue and TWU.
In April 2018, JetBlue inflight crewmembers elected to be solely represented by TWU. The NMB certified the TWU as the representative body for JetBlue inflight crewmembers. In November 2020, our inflight crewmembers voted to decline the ratification of a tentative collective bargaining agreement between JetBlue and TWU.
As we experience turnover, we may be unable to identify, hire, or retain enough people who meet the above criteria, including those in management or other key positions. Our company culture could otherwise be adversely affected by our growing operations and broader geographic diversity.
As we experience turnover, we may be unable to identify, hire, or retain enough people who demonstrate the values of our company culture, including those in management or other key positions. Our company culture could otherwise be adversely affected by our growing operations and broader geographic diversity.
The risks currently facing each of our and Spirit’s business and the airline industry, including the ongoing impact of the COVID-19 pandemic and any possible resurgence in infection rates and the impact on airline travel, will also present additional challenges for us to successfully integrate our two companies.
The risks currently facing each of our and Spirit’s business and the airline 28 Table of Contents industry, including any possible resurgence in COVID-19 infection rates and the related impact on airline travel, will also present additional challenges for us to successfully integrate our two companies.
These fleet modifications require significant investment over several years, including taking aircraft out of service for several weeks at a time. Our salaries, wages and benefits costs will increase as our workforce ages. As our crewmembers' tenure with JetBlue matures, our salaries, wages, and benefits costs increase.
These fleet modifications require significant investment over several years, some of which involve taking aircraft out of service for days or weeks at a time. Our salaries, wages and benefits costs will increase as our workforce ages. As our crewmembers' tenure with JetBlue matures, our salaries, wages, and benefits costs increase.
In consideration for the Payroll Support 2 Payments, we issued warrants to purchase approximately 1.0 million shares of our common stock to Treasury at an exercise price of $14.43 per share.
In consideration for these payments, we issued warrants to purchase approximately 1.0 million shares of our common stock to Treasury at an exercise price of $14.43 per share.
We rely heavily on automated systems to operate our business; any failure of these systems could harm our business. We are dependent on automated systems and technology to operate our business, enhance the JetBlue Experience, and achieve low operating costs.
We rely heavily on automated systems to operate our business; any failure of these systems could harm our business. We are dependent on a broad range of IT Systems, for example, automated systems and technology to operate our business, enhance the JetBlue Experience, and achieve low operating costs.
As part of the Merger Agreement, we have agreed to take any such required divestiture actions in connection with the consummation of Merger, provided that we are not required to take any divestiture actions if such action would or would reasonably be expected to result in a material adverse effect on us and our subsidiaries (including, following the consummation of the Merger, Spirit and its subsidiaries) nor are we required to take any action that, in our discretion, would be reasonably likely to materially and adversely affect the anticipated benefits of our NEA with American.
As part of the Merger Agreement, we have agreed to take any such required divestiture actions in connection with the consummation of Merger, provided that we are not required to take any divestiture actions if such action would or would reasonably be expected to result in a material adverse effect on us and our subsidiaries (including, following the consummation of the Merger, Spirit and its subsidiaries).
The Acts also require subject to various timeframes, certain levels of commercial air service be maintained; the prohibitions on share repurchases and the payment of common stock dividends; and restrictions on the payment of certain executive compensation.
The Acts also required, subject to various timeframes, certain levels of commercial air service be maintained; the prohibitions on share repurchases and the payment of common stock dividends; and, through April 1, 2023, restrictions on the payment of certain executive compensation.
In connection with this initial drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share.
In connection with this drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share. The Company repaid all outstanding amounts in 2021.
Similarly, if an environmental disaster were to occur and adversely impact any of our destination cities, travel behavior could be affected and in turn, could materially adversely impact our business, operating results, liquidity and financial condition. Compliance with future environmental regulations may harm our business.
Similarly, if an environmental disaster were to occur and adversely impact any of our destination cities, travel behavior could be affected and in turn, could materially adversely impact our business, operating results, liquidity and financial condition. Compliance with environmental laws and regulations may cause us to incur substantial costs.
Our business depends on our strong reputation and the value of the JetBlue brand. The JetBlue brand name symbolizes high-quality friendly customer service, innovation, fun, and a pleasant travel experience. JetBlue is a widely recognized and respected global brand; the JetBlue brand is one of our most important and valuable assets.
The JetBlue brand name symbolizes our values of high-quality friendly customer service, innovation, fun, and a pleasant travel experience. JetBlue is a widely recognized and respected global brand; the JetBlue brand is one of our most important and valuable assets.
Additionally, any material failure by us to achieve or maintain compliance with the Payment Card Industry, or PCI, security requirements or rectify a security issue may result in fines and the imposition of restrictions on our ability to accept credit cards as a form of payment.
Additionally, any material failure by us to achieve or maintain compliance with the Payment Card Industry Data Security Standards, (“PCI DSS”) and related requirements or rectify a security issue may result in fines and the imposition of restrictions on our ability to accept 31 Table of Contents credit cards as a form of payment.
For example, during the year ended December 31, 2022, we recorded $52 million of impairment related to our Embraer E190 fleet transition. We can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period.
For example, during the year ended December 31, 2022, we recorded $52 million of impairment as well as engine exchanges as part of the retirement of our Embraer E190 fleet. We can provide no assurance that a material impairment loss of tangible or intangible assets will not occur in a future period.
Under the Payroll Support Program, Treasury provided us with a total of approximately $963 million (the “ Payroll Support Payments”) consisting of $704 million in grants and $259 million in unsecured term loans.
Under the Payroll Support Program, on April 23, 2020, Treasury provided us with a total of approximately $963 million consisting of $704 million in grants and $259 million in unsecured term loans.
High-profile security breaches at other companies and in government agencies have increased in recent years, and security industry experts and government officials have warned about the risks of hackers and cyberattacks targeting businesses such as ours. Computer hackers routinely attempt to breach our networks.
High-profile cyberattacks and security breaches at other companies and in government agencies have increased in recent years, and security industry experts and government officials have warned about the risks of cyberattacks targeting businesses such as ours.
Pending operational integration, it is generally necessary to maintain a “fence” between employee groups, during which time the combined company will keep the employee groups separate and apply the terms of the existing collective bargaining agreements, unless other terms have been negotiated.
The process is also governed to a certain extent, by union policy related to seniority integration. Pending operational integration, it is generally necessary to maintain a “fence” between employee groups, during which time the combined company will keep the employee groups separate and apply the terms of the existing collective bargaining agreements, unless other terms have been negotiated.
Furthermore, if key employees of JetBlue or Spirit depart or are at risk of departing, we may have to incur significant costs (in addition to the retention program to be implemented by Spirit in connection with the Merger Agreement) in retaining such individuals or in identifying, hiring and retaining replacements and may lose significant expertise and talent, and our ability to realize the anticipated benefits of the Merger may be materially and adversely affected.
Furthermore, if key employees of JetBlue or Spirit depart or are at risk of departing, we may have to incur significant costs (in addition to the retention program to be implemented by Spirit in connection with the Merger Agreement) in retaining such individuals or in identifying, hiring and retaining replacements.
See “ Our liquidity could be adversely impacted in the event one or more of our credit card processors were to impose material reserve requirements for payments due to us from credit card transactions.” Our substantial level of indebtedness and non-investment grade credit rating, as well as market conditions and the availability of assets as collateral for loans or other indebtedness, together with the effect the COVID-19 pandemic has had on the global economy generally and on us and the air transportation industry specifically, may make it difficult for us to raise additional capital if needed to meet our liquidity needs on acceptable terms, or at all.
See “ Our liquidity could be adversely impacted in the event one or more of our credit card processors were to impose material reserve requirements for payments due to us from credit card transactions.” Our substantial level of indebtedness and non-investment grade credit rating, as well as market conditions and the availability of assets as collateral for loans or other indebtedness, may make it difficult for us to raise additional capital if 36 Table of Contents needed to meet our liquidity needs on acceptable terms, or at all.
These payouts could also make retention of these officers and employees following the closing more difficult. Additionally, pursuant to employment agreements and/or other agreements or arrangements with Spirit, certain key employees of Spirit are entitled to receive severance payments upon a termination without cause and/or a resignation for “good reason” following consummation of the Merger.
Additionally, pursuant to employment agreements and/or other agreements or arrangements with Spirit, certain key employees of Spirit are entitled to receive severance payments upon a termination without cause and/or a resignation for “good reason” following consummation of the Merger.
The warrants associated with each of the support programs described above will expire 5 years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.
In addition, the principal amount may be repaid at any time prior to maturity at par. The warrants associated with each of the programs described above will expire 5 years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.
Additionally, some of our competitors may have more leverage than we do in obtaining fuel. We have and may continue to enter into a variety of option contracts and swap agreements for crude oil, heating oil, and jet fuel to partially protect against significant increases in fuel prices.
We have and may continue to enter into a variety of option contracts and swap agreements for crude oil, heating oil, and jet fuel to partially protect against significant increases in fuel prices.
Under the RLA, the National Mediation Board (“NMB”) has exclusive authority to resolve representation disputes arising out of airline mergers.
Under the RLA, the NMB has exclusive authority to resolve representation disputes arising out of airline mergers.
The costs associated with these airports are often negotiated on a short-term basis with the airport authority and we could be subject to increases in costs on a regular basis with or without our approval.
This includes gates, check-in facilities, operations facilities, and landing slots, where applicable. The costs associated with these airports are often negotiated on a short-term basis with the airport authority and we could be subject to increases in costs on a regular basis with or without our approval.
The substance and duration of restrictions to which we are subject under the grants and/or loans under the Acts, including, but not limited to, those outlined above, will materially affect our operations, and we may not be successful in managing these impacts.
The continued effects of restrictions under the grants and/or loans under the Acts, including, but not limited to, those outlined above, could still materially affect our operations, and we may not be successful in managing these impacts.
If we are unable to hire, train, and retain qualified crewmembers representing diverse backgrounds, experiences, and skill sets, our business could be harmed and we may be unable to implement our growth plans. In addition, our business may be harmed if we lose too many individuals with institutional knowledge.
If we are unable to hire, train, and retain qualified crewmembers representing diverse backgrounds, experiences, and skill sets, our business could be harmed and we may be unable to implement our growth plans.
Tariffs imposed on commercial aircraft and related parts imported from outside the United States, or tariffs that may be escalated over time, may have a material adverse effect on our fleet, business, financial condition, and results of operations.
JetBlue believes these lawsuits are without merit and has moved to dismiss the claims. Tariffs imposed on commercial aircraft and related parts imported from outside the United States, or tariffs that may be escalated over time, may have a material adverse effect on our fleet, business, financial condition, and results of operations.
T5 at JFK is under a lease with the PANYNJ that ends on the 28th anniversary of the date of beneficial occupancy of the new International Arrivals facility and three net new gates at the former Terminal 6 (“T5i”).
T5 at JFK is under a lease with the PANYNJ that ends on the 28th anniversary of the date of beneficial occupancy of the new International Arrivals facility and three net new gates at the former Terminal 6 (“T5i”). The minimum payments under this lease have been included in the future minimum payment totals above.
Many aspects of airlines’ operations are subject to increasingly stringent environmental regulations, and growing concerns about climate change may result in the imposition of additional regulation.
Many aspects of airlines’ operations are subject to increasingly stringent environmental regulations, and growing concerns about climate change and other matters, including an evolving set of previously unregulated substances, may result in the imposition of additional regulation.
Despite these actions, several airlines have reorganized under Chapter 11 of the U.S. Bankruptcy Code to permit them to reduce labor rates, restructure debt, terminate pension plans, and generally reduce their cost structure. Since 2005, the U.S. airline industry has experienced significant consolidation and liquidations.
Bankruptcy Code to permit them to reduce labor rates, restructure debt, terminate pension plans, and generally reduce their cost structure. Since 2005, the U.S. airline industry has experienced significant consolidation and liquidations.
We may be impacted by increases in airport expenses relating to infrastructure and facilities. In order to operate within our current markets as well as continue to grow in new markets, we must be able to obtain adequate infrastructure and facilities within the airports we serve. This includes gates, check-in facilities, operations facilities, and landing slots, where applicable.
We may be impacted by increases in airport expenses relating to infrastructure and facilities, as well as by infrastructure disruptions or failures. In order to operate within our current markets as well as continue to grow in new markets, we must be able to obtain adequate infrastructure and facilities within the airports we serve.
We expect to continue to incur expenses in connection with complying with government regulations. Additional laws including executive orders, regulations, taxes, and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce the demand for air travel.
Additional laws including executive orders, regulations, tax laws, and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce the demand for air travel.
Treasury provided us with a total of approximately $580 million (the “ Payroll Support 2 Payments”) under the program, consisting of $436 million in grants and $144 million in unsecured term loans, with funding received on January 15, 2021, March 5, 2021 and April 29, 2021.
Treasury provided us with a total of approximately $580 million, consisting of $436 million in grants an d $144 mi llion in unsecured term loans, with funding received on January 15, 2021, March 5, 2021 and April 29, 2021.
Treasury provided us with a total of approximately $541 million (the “Payroll Support 3 Payments ” ) under the program, consisting of $409 million in grants and $132 million in unsecured term loans.
Treasury provided us with a total of approximately $541 million, consisting of $409 million in grants and $132 million in unsecured term loans.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES Aircraft As of December 31, 2022, we operated a fleet consisting of 14 Airbus A220 aircraft, 130 Airbus A320 aircraft, 63 Airbus A321 aircraft, 23 Airbus A321neo aircraft, and 60 Embraer E190 aircraft as summarized below: Aircraft Seating Capacity Owned (4) Operating Leased Total Average Age in Years Airbus A220 140 14 — 14 1.1 Airbus A320 162 / 150 (1) 98 32 130 17.3 Airbus A321 200 / 159 (2) 63 — 63 6.6 Airbus A321neo 200 / 160 / 138 (3) 23 — 23 1.9 Embraer E190 100 30 30 60 14.3 228 62 290 12.4 (1) Our Airbus A320 with a restyled cabin configuration has a seating capacity of 162 seats.
Biggest changePROPERTIES Aircraft As of December 31, 2023, our aircraft types and configurations consisted of the following (1) : Aircraft Seating Capacity Owned (2) Operating Lease Total Average Age in Years Airbus A220 140 24 — 24 1.3 Airbus A320 150 4 7 11 23.2 Airbus A320 Restyled 162 98 21 119 17.4 Airbus A321 200 28 — 28 7.6 Airbus A321 with Mint ® 159 35 — 35 7.4 Airbus A321neo 200 16 — 16 3.6 Airbus A321neo with Mint ® 160 5 — 5 1.4 Airbus A321neoLR with Mint ® 138 9 — 9 1.3 Embraer E190 (3) 100 25 28 53 15.1 244 56 300 12.3 (1) This table includes aircraft that have been temporarily removed from service, but are expected to return to operation in the future.
Ground Facilities Airports All of our facilities at the airports we serve are under leases or other occupancy agreements. This space is leased directly or indirectly from the local airport authority on varying terms dependent on prevailing practices at each airport.
Ground Facilities Airports All of our airport facilities are under leases or other occupancy agreements. This space is leased directly or indirectly from the local airport authority on varying terms dependent on prevailing practices at each airport.
Our passenger terminal service facilities consisting of ticket counters, gate space, operations support area, and baggage service offices generally have agreement terms ranging from less than one year to five years. They can contain provisions for periodic adjustments of rental rates, landing fees, and other charges applicable under the type of lease.
Our passenger terminal service facilities consisting of ticket counters, gate space, operations support area, and baggage service offices generally have agreement terms ranging from less than one year to five years. They can contain provisions for periodic adjustments of rental 42 Table of Contents rates, landing fees, and other charges applicable under the type of lease.
We have since entered into multiple amendments with Massport to continue to grow that footprint in Terminal C. As of December 31, 2022, we leased 30 gates in Boston. Our lease with Massport is scheduled to expire in April 2030.
We have since entered into multiple amendments with Massport to continue to grow our footprint in Terminal C. As of December 31, 2023, we leased 30 gates in Boston. Our lease with Massport is scheduled to expire in April 2030.
In November 2022, we amended the lease to relinquish a portion of the former Terminal 6 property to allow for development of a new Terminal 6 by our development partner, JMP. • BOS - In May 2005, we entered into a lease with Massachusetts Port Authority (“Massport”) with a five year term (and 20 automatic one-year renewals), for initial five gates in Terminal C; which expanded to 11 by November 2008.
In November 2022, we amended the lease to relinquish a portion of the former Terminal 6 property to allow for development of a new Terminal 6 by our development partner, JFK Millennium Partners (“JMP”). • BOS - In May 2005, we entered into a lease with Massachusetts Port Authority (“Massport”) with a five-year term (and 20 automatic one-year renewals), for five gates in Terminal C; which expanded to 11 by November 2008.
We also lease a building from the PANYNJ which is mainly used for ground equipment maintenance work. • Boston - We have a ground and building lease agreement which expired in 2022 for an aircraft maintenance hangar and associated support space, and are actively negotiating an extension of that agreement.
We also lease a building from the PANYNJ which is mainly used for ground equipment maintenance work. • Boston - We have a ground and building lease agreement which expires in 2028 for an aircraft maintenance hangar and associated support space, with an option to extend for five additional years.
We also occupy a training center, JetBlue University, with a lease agreement expiring in 2035 which we use for the initial and recurrent training of our pilots and inflight crewmembers, as well as support training for our technical operations and airport crewmembers.
We also occupy a training center, JetBlue University, with a lease agreement expiring in 2035 which we use for training our pilots and inflight crewmembers, as well as support training for our technical operations and airport crewmembers. This facility is equipped with eleven full flight simulators, eleven flight training devices, three cabin trainers, a training pool, classrooms, and support areas.
The lease extends until November 2042, but we have the option to terminate the agreement in 2033. In 2012, we amended the Terminal 5 lease to extend into the former Terminal 6 property in order to build T5i.
In 2012, we amended the lease to extend into the former Terminal 6 property in order to build T5i.
Under some of these agreements, we are responsible for the maintenance, insurance, utilities, and certain other facility-related expenses and services. A summary of our most significant lease agreements is provided below: • JFK - We have a lease agreement with the PANYNJ for Terminal 5.
Under some of these agreements, we are responsible for the maintenance, insurance, utilities, and certain other facility-related expenses and services.
We also maintain other facilities that are necessary to support our operations in the cities we serve.
We have an additional support center located in Salt Lake City, Utah with our lease expiring in May 2028. We also maintain other facilities that are necessary to support our operations in the cities we serve.
We have the option to extend most of these leases for additional periods or to purchase the aircraft at the end of the related lease term. As of December 31, 2022, options for 20 additional A220-300 aircraft deliveries remain available to us and we retain the flexibility to convert certain aircraft to the A220-100 model.
As of December 31, 2023, our aircraft leases had an average remaining term of approximately 1.6 years, with expiration dates between 2024 and 2028. We have the option to extend most of these leases for additional periods or to purchase the aircraft at the end of the related lease term.
This facility is equipped with nine full flight simulators, nine flight training devices, three cabin trainers, a training pool, classrooms, and support areas. 41 Table of Contents In 2015, we opened the Lodge at Orlando Support Center (“OSC”) which is adjacent to JetBlue University and is used for lodging our crewmembers when they attend training.
The Lodge at the Orlando Support Center (“OSC”) is adjacent to JetBlue University and is used for lodging our crewmembers when they attend training. Our primary corporate office is located in Long Island City, New York with our lease expiring in 2039.
(4) Total owned aircraft include aircraft associated with sale-leaseback transactions that did not qualify as sales for accounting purposes. As of December 31, 2022, our aircraft leases had an average remaining term of approximately 2.3 years, with expiration dates between 2023 and 2032.
(2) Total owned aircraft includes aircraft associated with sale-leaseback transactions that did not qualify as sales for accounting purposes. (3) Embraer E190 includes seven permanently parked aircraft owned by the Company, and six parked aircraft awaiting lease return.
Our future aircraft delivery schedule is as follows 1 : Contractual Order Book Year Airbus A321neo Airbus A220 Total 2023 12 18 30 2024 13 30 43 2025 11 24 35 2026 12 14 26 2027 14 — 14 Total 62 86 148 (1) Our aircraft order book is subject to change based on modifications to the contractual agreements or changes in the delivery schedules.
Our future aircraft delivery schedule is as follows (1) : Contractual Order Book Year Airbus A220 Airbus A321neo Total 2024 20 7 27 2025 20 5 25 2026 20 4 24 2027 5 9 14 Thereafter 11 30 41 Total (2) 76 55 131 (1) On January 26, 2024, JetBlue and Airbus entered into an amended delivery schedule pursuant to which we agreed to defer 41 aircraft originally scheduled for delivery from 2024 through 2027 to revised delivery dates from 2025 through 2029.
Removed
Our Airbus A320 with a classic cabin configuration has a seating capacity of 150 seats. (2) Our Airbus A321 with a single cabin layout has a seating capacity of 200 seats. Our Airbus A321 with Mint ® premium service has a seating capacity of 159 seats.
Added
As of the date of filing, we had 131 aircraft on order and scheduled for delivery through 2029.
Removed
(3) Our Airbus A321neo with a single cabin layout has a seating capacity of 200 seats. Our Airbus A321neo with Mint ® premium service has a seating capacity of 160 seats. The long range version of our A321neo with Mint ® premium service has a seating capacity of 138 seats.
Added
The table above and the table in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – “Contractual Obligations” reflect our aircraft purchase commitments after giving effect to this revised delivery schedule. (2) As of December 31, 2023, we have options to purchase an additional 20 A220-300 aircraft.
Removed
Both members of the A220 family share commonality in more than 99 percent of their replaceable parts and utilize the same family of engines. 40 Table of Contents As of December 31, 2022, we had 148 aircraft on order and scheduled for delivery through 2027.
Added
A summary of our most significant lease agreements is provided below: • JFK - We have a lease agreement with the Port Authority of New York and New Jersey (“PANYNJ”) for Terminal 5 until November 2042, but we have the option to terminate the agreement in 2033.
Removed
In February 2022, we exercised our option to purchase 30 additional Airbus A220-300 aircraft under our existing agreement with Airbus Canada Limited Partnership. The 30 additional A220-300 aircraft are expected to be delivered from 2023 to 2026. Options for 20 additional A220-300 aircraft remain available to us.
Removed
Our primary corporate offices are located in Long Island City, New York with our lease expiring in 2023. Reaffirming our commitment to New York, in February 2022, we executed a new lease for our primarily corporate offices that will extend our stay in the present Long Island City location until 2039.
Removed
Our offices in Salt Lake City, Utah contain a core team of crewmembers who are responsible for group sales, customer service, at-home reservation agent supervision, disbursements, and certain other finance functions. The lease for our Salt Lake City facility was amended and renewed for another year from June 2022 through May 2023.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+0 added−0 removed0 unchanged
Biggest changeOther than as described unde r Note 11 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, we believe the ultimate outcome of these proceedings to which we are currently a party will not have a material adverse effect on our business, financial position, results of operations or cash flows.
Biggest changeItem 8 of this Report, we believe the ultimate outcome of these proceedings to which we are currently a party will not have a material adverse effect on our business, financial position, results of operations or cash flows.
ITEM 3. LEGAL PROCEEDINGS In the ordinary course of our business, we are party to various legal proceedings and claims which we believe are incidental to the operation of our business.
ITEM 3. LEGAL PROCEEDINGS In the ordinary course of our business, we are party to various legal proceedings and claims which we believe are incidental to the operation of our business. Other than as described unde r Note 11 to our consolidated financial statements included in Part II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+2 added−8 removed0 unchanged
Biggest changeThe acquisition of treasury stock reflected on our consolidated statement of cash flows for the year ended December 31, 2022 represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the period.
Biggest changeThe acquisition of treasury stock reflected on our consolidated statement of cash flows for the year ended December 31, 2023, represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the period. 44 Table of Contents Stock Performance Graph This performance graph shall not be deemed “filed” with the SEC or subject to Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any of our filings under the Securities Act.
We have not paid cash dividends on our common stock and have no current intention to do so. Any future determination to pay cash dividends would be at the discretion of our Board of Directors, subject to applicable limitations under Delaware law or legislation.
We have not paid cash dividends on our common stock and have no current intention to do so. Any future determination to pay cash dividends would be at the discretion of our Board, subject to applicable limitations under Delaware law or legislation.
This decision would be dependent upon our results of operations, financial condition, and other factors deemed relevant by our Board of Directors.
This decision would be dependent upon our results of operations, financial condition, and other factors deemed relevant by our Board.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Stockholder Matters Our common stock is traded on the NASDAQ Global Select Market under the symbol JBLU. As of January 31, 2023, there were approximately 390 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Stockholder Matters Our common stock is traded on the NASDAQ Global Select Market under the symbol JBLU. As of January 31, 2024, there were approximately 380 holders of record of our common stock.
The following line graph compares the cumulative total stockholder return on our common stock with the cumulative total return of the S&P 500 Stock Index and the NYSE Arca Airline Index from December 31, 2018 to December 31, 2022.
The following graph compares the cumulative total stockholder return on our common stock to the cumulative total return of the S&P 500 Stock Index and the NYSE ARCA Airline Index from December 31, 2018 to December 31, 2023.
The stock performance shown represents historical performance and is not representative of future stock performance. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 JetBlue Airways Corporation $ 100 $ 117 $ 91 $ 89 $ 40 S&P 500 Stock Index 100 129 150 190 153 NYSE Arca Airline Index 100 121 92 90 58
The stock performance shown represents historical performance and is not representative of future stock performance. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 JetBlue Airways Corporation $ 100 $ 117 $ 91 $ 89 $ 40 $ 35 S&P 500 Stock Index 100 129 150 190 153 190 NYSE ARCA Airline Index 100 121 92 90 58 75 45 Table of Contents ITEM 6.
The comparison assumes the investment of $100 in our common stock and in each of the foregoing indices and reinvestment of all dividends.
The comparison assumes the investment of $100 on December 31, 2018 in our common stock and in each of the foregoing indices and assumes reinvestment of all dividends.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchases Our share repurchase programs include authorization for repurchases in open market transactions pursuant to Rules 10b-18 and/or 10b5-1 of the Exchange Act, and/or one or more privately-negotiated accelerated stock repurchase transactions. The timing, price, and volume of any repurchases will be based on market conditions and other relevant factors.
Added
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We suspended our share repurchase program as of March 31, 2020, and were further restricted from repurchasing Company shares in connection with our receipt of financial assistance under various federal payroll support programs. The remaining authority under the suspended share repurchase program expired on December 31, 2021.
Removed
On December 8, 2017, the Board of Directors approved a two year share repurchase program, or the 2017 Authorization, of up to $750 million worth of common stock beginning on January 1, 2018. The 2017 Authorization was completed in 2019.
Added
We have not restarted nor approved a new share repurchase program since that date. Any future determination to enter into a share repurchase program will be at the discretion of the Board, subject to applicable legal limitations, and will depend upon our results of operations, financial condition, contractual restrictions and other factors deemed relevant by the Board.
Removed
On September 19, 2019, the Board of Directors approved a share repurchase program, or the 2019 Authorization, of up to $800 million worth of common stock beginning on October 1, 2019 and ending no later than December 31, 2021. We suspended our share repurchase program as of March 31, 2020.
Removed
In accordance with restrictions under the Acts, we were prohibited from making any share repurchases through September 30, 2022. We have not restarted our share repurchase program since that date.
Removed
In consideration for the Payroll Support Payments and payments received under the CARES Act Loan Program, during the year ended December 31, 2020, we issued warrants to purchase approximately 3.9 million shares of our common stock to the Treasury at an exercise price of $9.50 per share.
Removed
In consideration for the Payroll Support 2 Payments, during the year ended December 31, 2021, we issued warrants to purchase approximately 1.0 million shares of our common stock to the Treasury at an exercise price of $14.43 per share.
Removed
In consideration for the Payroll Support 3 Payments, during the year ended December 31, 2021, we issued warrants to purchase approximately 0.7 million shares of our common stock to the Treasury at an exercise price of $19.90 per share.
Removed
See Note 3 to our consolidated financial statements for further details. 43 Table of Contents Stock Performance Graph This performance graph shall not be deemed “filed” with the SEC or subject to Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any of our filings under the Securities Act.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

95 edited+54 added−80 removed23 unchanged
Biggest changeThe table below provides a reconciliation of our GAAP reported amounts to the non-GAAP amounts excluding the impacts of these items. 61 Table of Contents NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE, INCOME (LOSS) BEFORE TAXES, NET INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY INVESTMENTS Year Ended December 31, (in millions except per share amounts) 2022 2021 2020 Total operating revenues $ 9,158 $ 6,037 $ 2,957 Total operating expenses $ 9,456 $ 6,117 $ 4,671 Less: Special items 113 (833) (283) Total operating expenses excluding special items $ 9,343 $ 6,950 $ 4,954 Operating loss $ (298) $ (80) $ (1,714) Add back: Special items 113 (833) (283) Operating loss excluding special items $ (185) $ (913) $ (1,997) Operating margin excluding special items (2.0) % (15.1) % (67.5) % Loss before income taxes $ (437) $ (263) $ (1,893) Add back: Special items 113 (833) (283) Less: (Loss) gain on equity investments (9) 47 — Loss before income taxes excluding special items and (loss) gain on equity investments $ (315) $ (1,143) $ (2,176) Pre-tax margin excluding special items and (loss) gain on equity investments (3.4) % (18.9) % (73.6) % Net loss $ (362) $ (182) $ (1,354) Add back: Special items 113 (833) (283) Less: Income tax benefit (expense) related to special items 19 (249) (69) Less: (Loss) gain on equity investments (9) 47 — Less: Income tax benefit (expense) related to (loss) gain on equity investments 1 (13) — Net loss excluding special items and (loss) gain on equity investments $ (260) $ (800) $ (1,568) Earnings loss per common share: Basic $ (1.12) $ (0.57) $ (4.88) Add back: Special items, net of tax 0.29 (1.84) (0.77) Less: (Loss) gain on equity investments, net of tax (0.03) 0.10 — Basic excluding special items and (loss) gain on equity investments $ (0.80) $ (2.51) $ (5.65) Diluted $ (1.12) $ (0.57) $ (4.88) Add back: Special items, net of tax 0.29 (1.84) (0.77) Less: (Loss) gain on equity investments, net of tax (0.03) 0.1 — Diluted excluding special items and (loss) gain on equity investments $ (0.80) $ (2.51) $ (5.65) 62 Table of Contents Adjusted Debt to Capitalization Ratio Adjusted debt to capitalization ratio is a non-GAAP financial measure which we believe is relevant in assessing the Company's overall debt profile.
Biggest changeNON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE, OPERATING LOSS, ADJUSTED OPERATING MARGIN, PRE-TAX LOSS, ADJUSTED PRE-TAX MARGIN, NET LOSS, LOSS PER SHARE, EXCLUDING SPECIAL ITEMS AND NET GAIN (LOSS) ON INVESTMENTS Year Ended December 31, (in millions except percentages) 2023 2022 2021 Total operating revenues $ 9,615 $ 9,158 $ 6,037 RECONCILIATION OF OPERATING EXPENSE Total operating expenses $ 9,845 $ 9,456 $ 6,117 Less: Special items 197 113 (833) Total operating expenses excluding special items $ 9,648 $ 9,343 $ 6,950 RECONCILIATION OF OPERATING LOSS Operating loss $ (230) $ (298) $ (80) Add back: Special items 197 113 (833) Operating loss excluding special items $ (33) $ (185) $ (913) RECONCILIATION OF ADJUSTED OPERATING MARGIN Operating margin (2.4) % (3.3) % (1.3) % Operating loss excluding special items $ (33) $ (185) $ (913) Total operating revenues 9,615 9,158 6,037 Adjusted operating margin (0.3) % (2.0) % (15.1) % RECONCILIATION OF PRE-TAX LOSS Loss before income taxes $ (334) $ (437) $ (263) Add back: Special items 197 113 (833) Less: Net gain (loss) on investments 9 (9) 47 Loss before income taxes excluding special items and net gain (loss) on investments $ (146) $ (315) $ (1,143) RECONCILIATION OF ADJUSTED PRE-TAX MARGIN Pre-tax margin (3.5) % (4.8) % (4.4) % Loss before income taxes excluding special items and net gain (loss) on investments $ (146) $ (315) $ (1,143) Total operating revenues 9,615 9,158 6,037 Adjusted pre-tax margin (1.5) % (3.4) % (18.9) % 60 Table of Contents NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE, OPERATING LOSS, ADJUSTED OPERATING MARGIN, PRE-TAX LOSS, ADJUSTED PRE-TAX MARGIN, NET LOSS, LOSS PER SHARE, EXCLUDING SPECIAL ITEMS AND NET GAIN (LOSS) ON INVESTMENTS (CONTINUED) (in millions except per share amounts) Year Ended December 31, 2023 2022 2021 RECONCILIATION OF NET LOSS Net loss $ (310) $ (362) $ (182) Add back: Special items 197 113 (833) Less: Income tax benefit (expense) related to special items 31 19 (249) Less: Net gain (loss) on investments 9 (9) 47 Less: Income tax benefit (expense) related to net gain (loss) on investments (2) 1 (13) Net loss excluding special items and net gain (loss) on investments $ (151) $ (260) $ (800) CALCULATION OF LOSS PER SHARE Loss per common share Basic $ (0.93) $ (1.12) $ (0.57) Add back: Special items 0.59 0.35 (2.62) Less: Income tax benefit (expense) related to special items 0.09 0.06 (0.78) Less: Net gain (loss) on investments 0.03 (0.03) 0.14 Less: Income tax benefit (expense) related to net gain (loss) on investments (0.01) — (0.04) Basic excluding special items and net gain (loss) on investments $ (0.45) $ (0.80) $ (2.51) Diluted $ (0.93) $ (1.12) $ (0.57) Add back: Special items 0.59 0.35 (2.62) Less: Income tax benefit (expense) related to special items 0.09 0.06 (0.78) Less: Net gain (loss) on investments 0.03 (0.03) 0.14 Less: Income tax benefit (expense) related to net gain (loss) on investments (0.01) — (0.04) Diluted excluding special items and net gain (loss) on investments $ (0.45) $ (0.80) $ (2.51) Adjusted Debt to Capitalization Ratio Adjusted debt to capitalization ratio is a non-GAAP financial measure which we believe is relevant in assessing the Company's overall debt profile.
This includes ground rents for the terminal site which began at the time of the lease execution in 2005 and facility rents commenced in October 2008 upon our occupancy of T5. The facility rents are based on the number of passengers enplaned out of the terminal, subject to annual minimums.
This includes ground rents for the terminal site which began at the time of the lease execution in 2005 and facility rents which commenced in October 2008 upon our occupancy of T5. The facility rents are based on the number of passengers enplaned out of the terminal, subject to annual minimums.
In addition, the covenants restrict our ability to, among other things, dispose of certain collateral, or merge, consolidate, or sell assets. As of and for the years ended December 31, 2022 and 2021, we did not have a balance outstanding or any borrowings under the Revolving Facility.
In addition, the covenants restrict our ability to, among other things, dispose of certain collateral, or merge, consolidate, or sell assets. As of and for the years ended December 31, 2023, 2022 and 2021, we did not have a balance outstanding or any borrowings under the Revolving Facility.
Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies.
Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 55 Table of Contents CLIMATE CHANGE Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit greenhouse gas emissions, including our aircraft and ground operations emissions.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 54 Table of Contents CLIMATE CHANGE Concern over climate change, including the impact of global warming, has led to significant U.S. and international legislative and regulatory efforts to limit greenhouse gas emissions, including our aircraft and ground operations emissions.
We have a revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative agent, for up to $600 million (the “Revolving Facility”). The term of the Revolving Facility runs through October 2024. Borrowings under the Revolving Facility bear interest at a variable rate equal to SOFR, plus a margin.
We have a revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative agent, for up to $600 million (the “Revolving Facility”). The term of the Revolving Facility runs through October 2025. Borrowings under the Revolving Facility bear interest at a variable rate equal to SOFR, plus a margin.
Passenger Revenue Ticket sales and the fees collected for related ancillary services are initially deferred in air traffic liability. Air traffic liability represents tickets sold but not yet flown, credits which can be used for future travel, and a portion of the liability related to our TrueBlue ® loyalty program.
Passenger Revenue Ticket sales and related ancillary fees are initially deferred in air traffic liability. Air traffic liability represents tickets sold but not yet flown, credits which can be used for future travel, and a portion of the liability related to our TrueBlue ® loyalty program.
The policies and estimates discussed below have been reviewed with our independent registered public accounting firm and with the Audit Committee of our Board of Directors. For a discussion of these and other significant accounting policies, see Note 1 to our consolidated financial statements included in Item 8.
The policies and estimates discussed below have been reviewed with our independent registered public accounting firm and with the Audit Committee of our Board of Directors. For a discussion of these and other significant accounting policies, see Note 1 to our consolidated financial statements included in Part II. Item 8.
Financing activities during the year primarily consisted of debt repayments of $369 million on our outstanding debt and finance lease obligations, which included the following repayments and extinguishments: • $351 million on our term loan debt; • $11 million towards early extinguishment of debt; • $6 million on our sale leaseback obligations; and • $1 million on our finance lease.
Financing activities during 2022 primarily consisted of debt repayments of $369 million on our outstanding debt and finance lease obligations, which included the following repayments and extinguishments: • $351 million on our term loan debt; • $11 million towards early extinguishment of debt; • $6 million on our sale leaseback obligations; and • $1 million on our finance lease obligations.
Breakage revenue consists of non-refundable tickets that remain unused past the departure date, have continued validity, and are expected to ultimately expire unused, as well as passenger credits that are not expected to be redeemed prior to expiration.
Breakage revenue consists of tickets that remain unused past the departure date, have continued validity, and are expected to ultimately expire unused, as well as passenger credits that are not expected to be redeemed prior to expiration.
See Notes 3, 4, and 11 to our consolidated financial statements included in Item 8, for a more detailed discussion of our variable interests and other contingencies, including guar antees and indemnities.
See Notes 3, 4, and 11 to our consolidated financial statements included in Part II. Item 8, for a more detailed discussion of our variable interests and other contingencies, including guar antees and indemnities.
Occurrences of these extreme weather events may result inflight cancellations, delays, and diversions, severely impacting our operations and thus adversely affecting our financial results and conditions. 56 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of our consolidated financial statements in conformity with generally accepted accounting principles in the United States, or GAAP, requires management to adopt accounting policies as well as make estimates and judgments to develop amounts reported in our financial statements and accompanying notes.
Occurrences of these extreme weather events may result inflight cancellations, delays, and diversions, impacting our operations and thus adversely affecting our financial results and conditions. 56 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES The preparation of our consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”), requires management to adopt accounting policies as well as make estimates and judgments to develop amounts reported in our financial statements and accompanying notes.
Analysis of Cash Flows We had unrestricted cash and cash equivalents of $1.0 billion as of December 31, 2022. This compares to $2.0 billion and $1.9 billion as of December 31, 2021 and 2020, respectively. We held both short and long-term investments in 2022, 2021, and 2020.
Analysis of Cash Flows We had unrestricted cash and cash equivalents of $1.2 billion as of December 31, 2023. This compares to $1.0 billion and $2.0 billion as of December 31, 2022 and 2021, respectively. We held both short and long-term investments in 2023, 2022, and 2021.
In determining the estimated standalone selling price, JetBlue considers multiple inputs, methods, and assumptions, including: discounted cash flows; estimated redemption value, net of fulfillment discount; points expected to be awarded and redeemed; estimated annual spending by cardholders; estimated annual royalty for use of JetBlue's frequent flyer customer lists; and estimated utilization of other airline benefits.
In determining the estimated standalone selling price, for co-branded credit card partnerships, JetBlue considers multiple inputs, methods, and assumptions, including: discounted cash flows; estimated redemption value, net of fulfillment discount; points expected to be awarded and redeemed; estimated annual spending by cardholders; estimated annual royalty for use of JetBlue's frequent flyer customer lists; and estimated utilization of other airline benefits.
Our ability to successfully execute our growth plans is largely dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business depends on maintaining sufficient liquidity. We believe we have adequate resources from a combination of cash and cash equivalents and investment securities on-hand.
Our ability to successfully execute our growth plan is largely dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business depends on maintaining sufficient liquidity. We believe we have adequate resources from a combination of cash and cash equivalents, investment securities on-hand, and available lines of credit.
Also included in financing activities during 2022 were $37 million in financing fees, of which $35 million was related to the $3.5 billion Senior Secured Bridge Facility to support the purchase of Spirit, and $6 million used for the acquisition of treasury stock, which represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the period.
Financing activities during 2022 also included $37 million in financing fees, of which $35 million relate to the $3.5 billion Senior Secured Bridg e Facility to support the purchase of Spirit, and $6 million used for the acquisition of treasury stock, which represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the period.
Although we believe debt and/or lease financing should be available to us if needed, we cannot give assurances we will be able to secure financing on terms attractive to us, if at all. We have a revolving line of credit with Morgan Stanley for up to approximately $200 million.
For deliveries after 2024, although we believe debt and/or lease financing should be available to us, we cannot give any assurance that we will be able to secure financing on attractive terms, if at all. We have a revolving line of credit with Morgan Stanley for up to approximately $200 million.
However, we cannot predict what the effect on our business might be from the extremely competitive environment in which we operate, or from events beyond our control, such as volatile fuel prices, economic conditions, weather-related disruptions, airport infrastructure challenges, the spread of infectious diseases, the impact of other airline bankruptcies, restructurings or consolidations, U.S. military actions, or acts of terrorism.
We cannot predict what the effect on our business might be from future developments related to the extremely competitive environment in which we operate, or from events beyond our control, such as volatile fuel prices, economic conditions, weather-related disruptions, air traffic control shortages, airport infrastructure challenges, the spread of infectious diseases, the impact of other airline bankruptcies, restructurings or consolidations, U.S. or international military actions, acts of terrorism, or other external geopolitical events and conditions.
We exclude aircraft fuel and related taxes, operating expenses related to other non-airline businesses, such as our subsidiaries, JetBlue Technology Ventures and JetBlue Travel Products, and special items from operating expenses to determine CASM ex-fuel, which is a non-GAAP financial measure.
We exclude aircraft fuel and related taxes, operating expenses related to other non-airline businesses, such as JetBlue Ventures and JetBlue Travel Products, and special items from total operating expenses to determine Operating Expenses ex-fuel, which is a non-GAAP financial measure, and we exclude the same items from CASM to determine CASM ex-fuel, which is also a non-GAAP financial measure.
This compares to cash provided by operating activities of $1.6 billion in 2021 and cash used in operating activities of $683 million in 2020. 2021 includes federal grants received under various payroll support programs, and the initial cash receipts associated with our new co-branded credit card agreements, contributing to the $1.3 billion decrease in operating cash flows year-over-year.
This compares to cash provided by operating activities of $379 million in 2022 and $1.6 billion in 2021. 2021 includes federal grants received under various payroll support programs, and the initial cash receipts associated with our co-branded credit card agreements, contributing to the decrease in operating cash flows of $1.3 billion in 2022 compared to 2021.
In addition to seat revenue, passenger revenue includes revenue from our ancillary product offerings such as Even More ® Space. Revenue generated from international routes, including Puerto Rico, accounted for 34% of our total operating revenues in 2022. Passenger revenue, including certain ancillary fees directly related to passenger tickets, is recognized when the transportation is provided.
In addition, passenger revenue includes revenue from our ancillary product offerings such as Even More ® Space. Revenue generated from international routes, including Puerto Rico and excluding Canada, accounted for 36.8% of our total operating revenues in 2023. Passenger revenue, including certain ancillary fees directly related to passenger tickets, is recognized when the transportation is provided.
We believe that CASM ex-fuel is useful for investors because it provides investors the ability to measure financial performance excluding items beyond our control, such as fuel costs, which are subject to many economic and political factors, or not related to the generation of an available seat mile, such as operating expense related to other non-airline businesses.
We believe that Operating Expenses ex-fuel and CASM ex-fuel are useful for investors because they provide investors the ability to measure our financial performance excluding items that are beyond our control, such as fuel costs, which are subject to many economic and political factors, as well as items that are not related to the generation of an available seat mile, such as operating expense related to certain non-airline businesses and special items.
Working Capital We had a working capital deficit of $1.8 billion as of Decemb er 31, 2022 compared to a deficit of $172 million as of December 31, 2021.
Working Capital We had a working capital deficit of $1.5 billion as of Decemb er 31, 2023 compared to a deficit of $1.8 billion as of December 31, 2022.
This compares to net (loss) of $(182) million, operating (loss) of $(80) million, and operating margin of (1.3)% for the year ended December 31, 2021. Our (loss) per share was $(1.12) for 2022 compared to $(0.57) for 2021. Our 2022 and 2021 reported results included the effects of special items.
This compares to net loss of $362 million, operating loss of $298 million, and operating margin of (3.3)% for the year ended December 31, 2022. Our loss per share was $0.93 for 2023 compared to a loss per share of $1.12 for 2022. Our 2023 and 2022 reported results included the effects of special items.
Passenger breakage revenue from unused tickets and passenger credits will be recognized in proportion to flown revenue based on estimates of expected expiration when the likelihood of the customer exercising his or her remaining rights becomes remote.
Passenger credits can be used for future travel up to a year from the date of booking. Passenger breakage revenue from unused tickets and passenger credits will be recognized in proportion to flown revenue based on estimates of expected expiration when the likelihood of the customer exercising his or her remaining rights becomes remote.
Adjusting for these one-time items, our adjusted net (loss) (1) was $(260) million, adjusted operating (loss) (1) was $(185) million, and our adjusted operating margin (1) was (2.0)% for 2022. This compares to an adjusted net (loss) (1) of $(800) million, adjusted operating (loss) (1) of $(913) million, and an adjusted operating margin (1) of (15.1)% for 2021.
Adjusting for these one-time items, our adjusted net loss (1) was $151 million, adjusted operating loss (1) was $33 million, and our adjusted operating margin (1) was (0.3)% for 2023. This compares to an adjusted net loss (1) of $260 million, adjusted operating loss (1) of $185 million, and an adjusted operating margin (1) of (2.0)% for 2022.
As one of our key company-wide strategic priorities, we are pursuing six key levers to decarbonize our business. We discuss these levers and other sustainability initiatives in “Item 1. Business – Environmental, Social Governance – Environmental” above.
As one of our key company-wide strategic priorities, we 55 Table of Contents are pursuing six key levers to decarbonize our business. We discuss these levers and other sustainability initiatives in “Item 1.
We allocate the transaction price to each performance obligation identified in a passenger ticket on a relative standalone basis. Passenger revenue, including certain ancillary fees directly related to passenger tickets, is recognized when the transportation is provided.
The transaction price is allocated to each performance obligation identified in a passenger ticket on a relative standalone basis. Passenger revenue, including certain ancillary fees directly related to passenger tickets, is recognized when transportation is provided. The majority of passenger tickets sold are non-refundable.
Annual international emissions reporting is required via CORSIA as of the 2019 reporting year, and offsetting compliance is scheduled to be implemented through multiple phases beginning in 2021.
Annual international emissions reporting is required via CORSIA as of the 2019 reporting year, and offsetting compliance is being implemented through multiple phases that began in 2021.
The information below provides an explanation of each non-GAAP financial measure and shows a reconciliation of non-GAAP financial measures used in this filing to the most directly comparable GAAP financial measures.
The information below provides an explanation of each non-GAAP financial measure presented in this Report and shows a reconciliation of each such non-GAAP financial measure to its most directly comparable GAAP financial measure.
Passenger revenue from unused tickets and passenger credits are recognized in proportion to flown revenue based on estimates of expected expiration or when the likelihood of the customer exercising his or her remaining rights becomes remote.
Passenger revenue from unused tickets and passenger credits are recognized in proportion to flown revenue based on estimates of expected expiration or when the likelihood of the customer exercising his or her remaining rights becomes remote. O ther revenue is primarily comprised of the marketing component of the sales of our TrueBlue ® points.
(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 59 Table of Contents REGULATION G RECONCILIATION OF NON-GAAP FINANCIAL MEASURES We sometimes use non-GAAP financial measures in this report.
(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 58 Table of Contents REGULATION G RECONCILIATION OF NON-GAAP FINANCIAL MEASURES We report our financial results in accordance with GAAP; however, we present certain non-GAAP financial measures in this Report.
Co-branded credit card partnerships have the following identified performance obligations: air transportation; use of the JetBlue brand name, and access to our frequent flyer customer lists; advertising; and other airline benefits.
Points Sold to TrueBlue ® Partners. Our most significant contract to sell TrueBlue ® points is with our co-branded credit card partner Barclays. Co-branded credit card partnerships have the following identified performance obligations: air transportation; use of the JetBlue brand name, and access to our frequent flyer customer lists; advertising; and other airline benefits.
Excluding one-time items, our adjusted (loss) per share (1) was $(0.80) for 2022 compared to $(2.52) for 2021.
Excluding one-time items, our adjusted loss per share (1) was $0.45 for 2023 compared to an adjusted loss per share of $0.80 for 2022.
Non-GAAP financial measures are financial measures that are derived from the consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the United States, or GAAP. We believe these non-GAAP financial measures provide a meaningful comparison of our results to others in the airline industry and our prior year results.
Non-GAAP financial measures are financial measures that are derived from the consolidated financial statements, but that are not presented in accordance with GAAP. We present these non-GAAP financial measures because we believe they provide useful supplemental information that enables a meaningful comparison of our results to others in the airline industry and our prior year results.
An impairment occurs when the sum of the estimated undiscounted future cash flows are less than the aggregate carrying value of the fleet. The impairment loss recognized is the amount by which the fleet's carrying value exceeds its estimated fair value.
An impairment occurs when the sum of the estimated undiscounted future cash flows are less than the aggregate carrying value of the fleet. The impairment loss recognized is the amount by which the fleet's carrying value exceeds its estimated fair value. Refer to Note 17 to our consolidated financial statements included in Part II.
Operating Expense per Available Seat Mile, excluding fuel and related taxes, other non-airline operating expenses, and special items (“CASM Ex-Fuel”) Operating expenses per available seat mile, or CASM, is a common metric used in the airline industry.
Operating Expenses, excluding Fuel and Related Taxes, Other Non-Airline Operating Expenses, and Special Items (“Operating Expenses ex-fuel”) and Operating Expense ex-fuel per Available Seat Mile ex-fuel (“CASM ex-fuel”) Operating Expense per Available Seat Mile ( “ CASM”) is a common metric used in the airline industry. Our CASM for the relevant periods are summarized in the table below.
Other property and equipment capital expenditures included ground equipment purchases and facilities improvements for $132 million. Investing activities in 2022 also included the net proceeds of $321 million from our investment securities. In 2022, investing activities also included $297 million in payments related to our acquisition of Spirit.
Flight capital expenditures also included $64 million for spare part purchases. Other property and equipment capital expenditures included ground equipment purchases and facility improvements for $132 million. Investing activities in 2022 also included the net proceeds of $321 million from our investment securities, $297 million in Spirit payments and $156 million in flight equipment pre-delivery deposits.
Financing activities during 2021 primarily consisted of debt repayments of $1.9 billion on our outstanding debt and finance lease obligations, which included the following repayments: • $722 million on our term loan facility; • $550 million on our revolving credit facility; and • $115 million on our secured loan balance under the CARES Act Loan Program.
Financing activities during 2021 primarily consisted of repayments of $1.9 billion on our outstanding debt and finance lease obligations, which included the following repayments: (1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 51 Table of Contents • $722 million on our term loan facility; • $550 million on our revolving credit facility; and • $115 million on our secured loan balance under the CARES Act Loan Program.
The beneficiaries of these pass-through trusts are the purchasers of equipment notes issued by us to finance the acquisition of aircraft. Each trust maintains a liquidity facility whereby a third party agrees to make payments sufficient to pay up to 18 months of interest on the applicable certificates if a payment default occurs.
Each trust maintains a liquidity facility whereby a third party agrees to make payments sufficient to pay up to 18 months of interest on the applicable certificates if a payment default occurs.
Other Impacts of Climate Change The number of extreme weather events, such as hurricanes, typhoons, wildfires, and rainstorms, associated with climate change is expected to increase.
Business – Environmental, Social Governance – Environmental.” Other Impacts of Climate Change The number of extreme weather events, such as hurricanes, typhoons, wildfires, and rainstorms, is generally expected to increase over time as our climate warms.
Special items for 2021 include contra-expenses recognized on the utilization of federal grants received under various payroll support programs, contra-expenses recognized on the Employee Retention Credits provided by the CARES Act, and one-time costs related to the ratification of the collective bargaining agreement with our inflight crewmembers.
Special items for 2021 include contra-expenses recognized on the u tilization of federal grants received under various payroll support programs, contra-expenses recognized on the Employee Retention Credits provided by the CARES Act, and union contract costs.
Also included in financing activities during 2021 were $8 million used for the acquisition of treasury stock which represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the period.
Financing activities during 2021 also included $8 million used for the acquisition of treasury stock which represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the period. Capital Resources Depending on market conditions, we anticipate using a mix of cash and debt financing for aircraft scheduled for delivery in 2024.
Our short-term investments totaled $350 million as of December 31, 2022 compared to $824 million and $1.1 billion as of December 31, 2021 and 2020, respectively. Operating Activities Cash provided by operating activities totaled approximately $379 million in 2022.
Our investments totaled $564 million as of December 31, 2023 compared to $522 million and $863 million as of December 31, 2022 and 2021, respectively. Operating Activities Cash provided by operating activities totaled approximately $400 million in 2023.
As of December 31, 2022, we had operating lease obligations for 62 aircraft with lease terms that expire between 2023 and 2032. Our a ircraft lease agreements contain termination provisions which include standard maintenance and return conditions. Our policy is to record these lease return conditions when they are probable and the costs can be estimated.
Our a ircraft lease agreements contain termination provisions which include standard maintenance and return conditions. Our policy is to record these lease return conditions when they are probable and the costs can be estimated. As of December 31, 2023, the average age of our operating fl eet was 12.3 ye ars.
Failure to cancel a refundable fare prior to departure will result in the cancellation of the original ticket and an issuance of a credit for future travel. Passenger credits can generally be used for future travel up to a year from the date of issuance.
Non-refundable fares may be canceled prior to the scheduled departure date for a credit for future travel. Refundable fares may be canceled at any time prior to the scheduled departure date. Failure to cancel a refundable fare prior to departure will result in the cancellation of the original ticket and an issuance of a credit for future travel.
As our fleet ages our maintenance costs will increase significantly, both on an absolute basis and as a percentage of our unit costs, as older aircraft require additional, more expensive repairs over time. We had an average of 11.8 additional total operating aircraft in 2022 compared to 2021.
The average age of our aircraft in 2023 was 12.3 years. As our fleet ages our maintenance costs will increase significantly, both on an absolute basis and as a percentage of our unit costs, as older aircraft require additional, more expensive repairs over time. In 2023, maintenance, materials and repairs increased by $63 million, or 10.9% compared to 2022.
Our share repurchase program has been suspended since March 31, 2020. In February 2022, we filed an automatic shelf registration statement with the SEC. Under this shelf registration statement, we may offer and sell from time to time common stock, preferred stock, debt securities, depository shares, warrants, stock purchase contracts, stock purchase units, subscription rights, and pass-through certificates.
Under this shelf registration statement, we may offer and sell from time to time common stock, preferred stock, debt securities, depository shares, warrants, stock purchase contracts, stock purchase units, subscription rights, and pass-through certificates.
When compared to 2019, our operating expenses excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses (1) increase d by 14.8%. • Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our cost per available seat mile (CASM ex-fuel) (1) decreased by 5.2% to 9.59 cents year-over-year and increased by 13.6% compared to 2019. • Our operating margin was (3.3)% in 2022, (1.3)% in 2021, and 9.9% in 2019.
Excluding fuel and related taxes, special items, and operating expenses related to our non-airline businesses, our 2023 adjusted operating expense (1) increased by 11.0% to $6.9 billion, year-over-year. • Excluding fuel and related taxes, special items, and operating expenses related to our non-airline businesses, our cost per available seat mile (“CASM ex-fuel”) (1) increased by 4.5% to 10.02 cents year-over-year. • Our operating margin was (2.4)% in 2023 and (3.3)% in 2022.
As of December 31, 2022, we believe we were in compliance with the covenants of our debt and lease agreements and approximately 65% of our owned property and equipment and intangible assets at net book value were pledged or committed to be pledged as security under various loan agreements.
Approximately 70% of our owned property and equipment and intangible assets at net book value were pledged or committed to be pledged as security under various loan agreements. Operating Lease Obligations As of December 31, 2023, we had operating lease obligations for 56 aircraft with lease terms that expire between 2024 and 2028.
Amounts allocated to the air transportation element which are initially deferred include a portion that are expected to be redeemed during the following twelve months (included within Air traffic liability), and a portion that are not expected to be redeemed during the following twelve months (included within Air traffic liability - non-current).
(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 57 Table of Contents Amounts allocated to the air transportation element which are initially deferred include a portion that are expected to be redeemed during the following twelve months (included within air traffic liability), and a portion that are not expected to be redeemed during the following twelve months (included within air traffic liability - non-current).
In 2019, reported net income was $569 million. • Our reported loss per share for 2022 and 2021 was $(1.12) and $(0.57), respectively. Excluding special items, our adjusted loss per share (1) was $(0.80) for 2022, and $(2.51) for 2021.
Excluding special items, adjusted net loss (1) for 2023 of $151 million compared to adjusted net loss of $260 million in 2022. • Our reported loss per share for 2023 and 2022 was $0.93 and $1.12, respectively.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 48 Table of Contents Aircraft Rent Aircraft rent increased $15 million, or 15.0%, in 2022.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 52 Table of Contents Other In February 2022, we filed an automatic shelf registration statement with the SEC.
Excluding special items, our adjusted operating margins (1) were (2.0)%, (15.1)%, and 10.1% for the full years 2022, 2021, and 2019, respectively. • We reported a net loss of $(362) million in 2022 compared to a net loss of $(182) million in 2021.
Excluding special items, our adjusted operating margin (1) was (0.3)% in 2023 and (2.0)% in 2022. • We reported a net loss of $310 million in 2023 compared to a net loss of $362 million in 2022.
We believe there is sufficient liquidity available to us to meet our cash requirements for at least the next 12 months.
We believe there is sufficient liquidity available to us to meet our cash requirements for at least the next 12 months. Debt and Finance Leases As part of our efforts to effectively manage our balance sheet, we expect to continue to actively manage our debt balances.
The average fuel price increased 79.1% in 2022 to $3.69 per gallon. Our fuel consumption increased by 21.0%, or 146 million gallons, due to capacity increases as demand for travel grew. We expect our fuel consumption to be higher in 2023 as we anticipate returning capacity to pre-pandemic levels.
The average fuel price decreased 17.9% in 2023 to $3.03 per gallon. Our fuel consumption increased by 6.5%, or 55 million gallons, due to higher capacity increases as demand for travel grew.
Operating Revenues (revenues in millions; percent changes based on unrounded numbers) Year-over-Year Change 2022 2021 $ % Passenger revenue $ 8,586 $ 5,609 2,977 53.1 Other revenue 572 428 144 33.5 Operating revenues $ 9,158 $ 6,037 3,121 51.7 Average fare $ 217.03 $ 186.39 30.64 16.4 Yield per passenger mile (cents) 16.34 13.63 2.71 19.9 Passenger revenue per ASM (cents) 13.32 10.37 2.95 28.5 Operating revenue per ASM (cents) 14.20 11.16 3.04 27.3 Average stage length (miles) 1,213 1,283 (70) (5.5) Revenue passengers (thousands) 39,562 30,094 9,468 31.5 Revenue passenger miles (millions) 52,552 41,152 11,400 27.7 Available seat miles (ASMs) (millions) 64,475 54,113 10,362 19.1 Load factor 81.5 % 76.0 % 5.5 pts Passenger revenue accounted for 93.8% of our total operating revenue for the year ended December 31, 2022.
Operating Revenues (revenues in millions; percent changes based on unrounded numbers) Year-over-Year Change 2023 2022 $ % Passenger revenue $ 9,008 $ 8,586 422 4.9 % Other revenue 607 572 35 6.2 Total operating revenues $ 9,615 $ 9,158 457 5.0 % Average fare $ 211.79 $ 217.03 (5.24) (2.4) Yield per passenger mile (cents) 15.92 16.34 (0.42) (2.6) Passenger revenue per ASM (cents) 13.15 13.32 (0.17) (1.2) Operating revenue per ASM (cents) 14.04 14.20 (0.16) (1.2) Average stage length (miles) 1,230 1,213 17 1.4 Revenue passengers (thousands) 42,534 39,562 2,972 7.5 Revenue passenger miles (millions) 56,578 52,552 4,026 7.7 Available seat miles (ASMs) (millions) 68,497 64,475 4,022 6.2 Load factor 82.6 % 81.5 % 1.1 pts Passenger revenue accounted for 93.7% of our total operating revenue for the year ended December 31, 2023 and is our primary source of revenue which includes seat revenue and baggage fees.
NON-GAAP FINANCIAL MEASURE RECONCILIATION OF FREE CASH FLOW (in millions) Year Ended December 31, 2022 2021 2020 2019 Net cash provided by (used in) operating activities $ 379 $ 1,642 $ (683) $ 1,449 Less: Capital expenditures (767) (907) (715) (932) Less: Pre-delivery deposits for flight equipment (156) (88) (76) (224) Free Cash Flow $ (544) $ 647 $ (1,474) $ 293 Glossary of Airline terminology Airline terminology used in this section and elsewhere in this Report: • Aircraft utilization - The average number of block hours operated per day per aircraft for the total fleet of aircraft. • Available seat miles - The number of seats available for passengers multiplied by the number of miles the seats are flown. • Average fare - The average one-way fare paid per flight segment by a revenue passenger. • Average fuel cost per gallon - Total aircraft fuel costs, including fuel taxes and effective portion of fuel hedging, divided by the total number of fuel gallons consumed. • Average stage length - The average number of miles flown per flight. • Load factor - The percentage of aircraft seating capacity actually utilized, calculated by dividing revenue passenger miles by available seat miles. • Operating expense per available seat mile - Operating expenses divided by available seat miles. • Operating expense per available seat mile, excluding fuel - Operating expenses, less aircraft fuel, other non-airline expenses, and special items, divided by available seat miles. • Operating revenue per available seat mile - Operating revenues divided by available seat miles. • Passenger revenue per available seat mile - Passenger revenue divided by available seat miles. • Revenue passengers - The total number of paying passengers flown on all flight segments. • Revenue passenger miles - The number of miles flown by revenue passengers. • Yield per passenger mile - The average amount one passenger pays to fly one mile. 64 Table of Contents
Investors should consider this non-GAAP financial measure in addition to, and not as a substitute for, our financial measures prepared in accordance with GAAP. 61 Table of Contents NON-GAAP FINANCIAL MEASURE ADJUSTED DEBT TO CAPITALIZATION RATIO (in millions) December 31, 2023 2022 Long-term debt and finance lease obligations $ 4,409 $ 3,093 Current maturities of long-term debt and finance lease obligations 307 554 Operating lease liabilities — aircraft 148 206 Adjusted debt $ 4,864 $ 3,853 Long-term debt and finance lease obligations $ 4,409 $ 3,093 Current maturities of long-term debt and finance lease obligations 307 554 Operating lease liabilities — aircraft 148 206 Stockholders' equity 3,337 3,563 Adjusted capitalization $ 8,201 $ 7,416 Adjusted debt to capitalization ratio 59 % 52 % Glossary of Airline terminology Airline terminology used in this section and elsewhere in this Report: • Aircraft utilization - The average number of block hours operated per day per aircraft for the total fleet of aircraft. • Available seat miles - The number of seats available for passengers multiplied by the number of miles the seats are flown. • Average fare - The average one-way fare paid per flight segment by a revenue passenger. • Average fuel cost per gallon - Total aircraft fuel costs, including fuel taxes and effective portion of fuel hedging, divided by the total number of fuel gallons consumed. • Average stage length - The average number of miles flown per flight. • Load factor - The percentage of aircraft seating capacity actually utilized, calculated by dividing revenue passenger miles by available seat miles. • Operating expense per available seat mile - Operating expenses divided by available seat miles. • Operating expense per available seat mile, excluding fuel - Operating expenses, less aircraft fuel, other non-airline expenses, and special items, divided by available seat miles. • Operating revenue per available seat mile - Operating revenues divided by available seat miles. • Passenger revenue per available seat mile - Passenger revenue divided by available seat miles. • Revenue passengers - The total number of paying passengers flown on all flight segments. • Revenue passenger miles - The number of miles flown by revenue passengers. • Yield per passenger mile - The average amount one passenger pays to fly one mile. 62 Table of Contents
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 54 Table of Contents Our Terminal at JFK, T5, is governed by a lease agreement we entered into with the PANYNJ in 2005. We are responsible for making various payments under the lease.
Other Obligations Our Terminal at JFK, T5, is governed by a lease agreement we entered into with the PANYNJ in 2005. We are responsible for making various payments under the lease.
Committed expenditures for our firm aircraft and spare engines include estimated amounts for contractual price escalations and pre-delivery deposits. We expect to meet our pre-delivery deposit requirements for our aircraft by paying cash or by using short-term borrowing facilities for deposits generally required six to 24 months prior to delivery.
We expect to meet our pre-delivery deposit requirements for our aircraft by paying cash or by using short-term borrowing facilities for deposits generally required six to 24 months prior to delivery. Any pre-delivery deposits paid by the issuance of notes are fully repaid at the time of delivery of the related aircraft.
Operating Expenses (in millions; per ASM data in cents; percentages based on unrounded numbers) Year-over-Year Change per ASM 2022 2021 $ % 2022 2021 % Change Aircraft fuel and related taxes $ 3,105 $ 1,436 1,669 116.3 4.82 2.65 81.5 Salaries, wages and benefits 2,747 2,358 389 16.5 4.26 4.36 (2.3) Landing fees and other rents 544 628 (84) (13.3) 0.84 1.16 (27.2) Depreciation and amortization 585 540 45 8.4 0.91 1.00 (9.0) Aircraft rent 114 99 15 15.0 0.18 0.18 (3.5) Sales and marketing 289 183 106 57.7 0.45 0.34 32.3 Maintenance, materials and repairs 591 626 (35) (5.7) 0.91 1.15 (20.9) Other operating expenses 1,368 1,080 288 26.7 2.12 2.00 6.3 Special Items 113 (833) 946 NM 0.18 (1.54) NM Total operating expenses $ 9,456 $ 6,117 3,339 54.6 14.67 11.30 29.7 Aircraft Fuel and Related Taxes Aircraft fuel and related taxes represented 32.8% of our total operating expenses in 2022 compared to 23.5% in 2021.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 48 Table of Contents Operating Expenses (in millions; per ASM data in cents; percentages based on unrounded numbers) Year-over-Year Change Cents per ASM 2023 2022 $ % 2023 2022 % Change Aircraft fuel and related taxes $ 2,720 $ 3,105 (385) (12.4) 3.97 4.82 (17.5) Salaries, wages and benefits 3,055 2,747 308 11.2 4.46 4.26 4.7 Landing fees and other rents 657 544 113 20.7 0.96 0.84 13.6 Depreciation and amortization 621 585 36 6.1 0.90 0.91 (0.1) Aircraft rent 126 114 12 10.4 0.18 0.18 3.9 Sales and marketing 316 289 27 9.2 0.46 0.45 2.8 Maintenance, materials and repairs 654 591 63 10.9 0.96 0.91 4.4 Special items 197 113 84 74.1 0.29 0.18 63.8 Other operating expenses 1,499 1,368 131 9.6 2.19 2.12 3.1 Total operating expenses $ 9,845 $ 9,456 389 4.1 14.37 14.67 (2.0) Aircraft Fuel and Related Taxes Aircraft fuel and related taxes represented 27.6% of our total operating expenses in 2023 compared to 32.8% in 2022.
We attempt to increase Passenger revenue primarily by increasing our yield per flight which produces higher revenue per available seat mile. Our objective is to optimize our fare mix to increase our overall average fare while continuing to provide our customers with competitive fares.
Our objective is to optimize our fare mix to increase our overall average fare while continuing to provide our customers with competitive fares.
Other property and equipment capital expenditures included ground equipment purchases and facilities improvements for $93 million. Investing activities in 2021 also included the net proceeds of $296 million from our investment securities.
Investing activities in 2021 also included the net proceeds of $296 million in investment securities and $88 million for flight equipment pre-delivery deposits.
Minimum ground and facility rents at JFK totaling $496 million are included in the commitments table above as operating lease obligations. In November 2022, we amended the lease to relinquish a portion of the former Terminal 6 property to allow for development of a new Terminal 6 by our development partners JMP.
In November 2022, we amended the lease to relinquish a portion of the former Terminal 6 property to allow for development of a new Terminal 6 by our development partners JMP through a $65 million letter of credit in exchange for 5% ownership.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 47 Table of Contents In 2022, Passenger revenue increased by $2.98 billion, or 53.1% year-over-year.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 50 Table of Contents Investing Activities Cash used in investing activities totaled approximately $1.4 billion, $908 million, and $704 million in 2023, 2022, and 2021, respectively.
Legislation, Regulation, and Accords on Climate Change Carbon Offsetting and Reduction Scheme for International Aviation In October 2016, ICAO passed a resolution adopting the Carbon Offsetting and Reduction Scheme for International Aviation (“CORSIA”), which is a global, market-based emissions offset program to encourage carbon-neutral growth beyond 2020.
Below is a discussion of the regulations that are relevant to JetBlue and the efforts we have taken to address climate change. Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA") In October 2016, ICAO passed a resolution adopting CORSIA, which is a global, market-based measure for the airline industry to achieve carbon-neutral growth for international flying beyond 2020.
(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 58 Table of Contents The Derivatives and Hedging topic is a complex accounting standard.
We expect discussions with Pratt & Whitney for further compensation to be ongoing. (1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 47 Table of Contents RESULTS OF OPERATIONS The following discussion is a comparison of the 2023 to 2022 results of operations.
Certain gains and losses on our equity investments were also excluded from our 2022 and 2021 non-GAAP results. We believe the impact of these items distort our overall trends and that our metrics are more comparable with the presentation of our results excluding the impact of these items.
We believe the impact of these items distort our overall trends and that our metrics are more comparable with the presentation of our results excluding the impact of these items. The table below provides a reconciliation of our GAAP reported amounts to the non-GAAP amounts excluding the impact of these items for the periods presented.
Adjusted debt includes aircraft operating lease liabilities, in addition to total debt and finance lease obligations. Adjusted capitalization represents total equity plus adjusted debt. Investors should consider this non-GAAP financial measure in addition to, and not as a substitute for, our financial measures prepared in accordance with GAAP.
Adjusted debt includes aircraft operating lease liabilities, in addition to total debt and finance lease obligations. Adjusted capitalization represents total equity plus adjusted debt.
In 2021, special items include contra-expenses recognized on the utilization of federal grants received under various payroll support programs, contra-expenses recognized on the Employee Retention Credits (ERCs) provided by the CARES Act, and one-time costs related to the ratification of the collective bargaining agreement with our inflight crewmembers.
Special items for 2021 include contra-expenses recognized on the utilization of federal grants received under various payroll support programs, contra-expenses recognized on the Employee Retention Credits provided by the CARES Act, and union contract costs. Certain net gains and losses on our investments were also excluded from our 2023, 2022 and 2021 non-GAAP results.
This line of credit is secured by a portion of our investment securities held by Morgan Stanley and the borrowing amount may vary accordingly. This line of credit bears interest at a floating rate based upon the London Interbank Offered Rate, or LIBOR, plus a margin. We did not borrow under this facility in 2022 or 2021.
This line of credit is secured by a portion of our investment securities held by Morgan Stanley and the borrowing amount may vary accordingly.
We measure capacity in terms of available seat miles, which represents the number of seats available for passengers multiplied by the number of miles the seats are flown. Yield, or the average amount one passenger pays to fly one mile, is calculated by dividing Passenger revenue by Revenue passenger miles.
Yield, or the average amount one passenger pays to fly one mile, is calculated by dividing passenger revenue by revenue passenger miles. We attempt to increase passenger revenue primarily by increasing our yield per flight which produces higher revenue per available seat mile.
We recognized fuel hedge losses of $7 million in 2022 on our consolidated statement of operations. There were no fuel hedge gains or losses recognized in 2021. These losses were recorded in Aircraft fuel and related taxes.
We recognized fuel hedge gains of $7 million and losses of $7 million in 2023 and 2022, respectively, which are recorded in aircraft fuel and related taxes in our consolidated statement of operations. Salaries, Wages and Benefits Salaries, wages, and benefits increased $308 million, or 11.2% in 2023, driven by higher wage rates.
We believe this non-GAAP measure is more indicative of our ability to manage airline costs and is more comparable to measures reported by other major airlines.
We believe these non-GAAP measures are more indicative of our ability to manage airline costs and are more comparable to measures reported by other major airlines. The table below provides a reconciliation of our total operating expenses ( “ GAAP measure”) to Operating Expenses ex-fuel, and our CASM to CASM ex-fuel for the periods presented.
As we are not currently obligated to pay this guaranteed income and benefits, no amounts related to these guarantees are included in the contractual obligations table above. OFF-BALANCE SHEET ARRANGEMENTS We have determined that we hold a variable interest in, but are not the primary beneficiary of, certain pass-through trusts.
OFF-BALANCE SHEET ARRANGEMENTS We have determined that we hold a variable interest in, but are not the primary beneficiary of, certain pass-through trusts. The beneficiaries of these pass-through trusts are the purchasers of equipment notes issued by us to finance the acquisition of aircraft.
At the end of the initial lease term, we have the option to renew the lease for either one renewal term of 10 years, or two renewal terms of five years each. We enter into individual employment agreements with each of our non-unionized FAA-licensed crewmembers, inspectors, and air traffic controllers.
At the end of the initial lease term, we have the option to renew the lease for either one renewal term of 10 years, or two renewal terms of five years each. The total committed expenditure for the lease through 2039 is approximately $86 million.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 49 Table of Contents CONSOLIDATED BALANCE SHEET ANALYSIS Below is a discussion of the significant changes on our consolidated balance sheet between December 31, 2022 and December 31, 2021.
(1) Refer to our “Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure. 49 Table of Contents Maintenance, Materials and Repairs Maintenance, materials, and repairs are generally expensed when incurred unless covered by a long-term flight hour services contract.
Special Items In 2022, special items included the following: • Impairment of $52 million relating to our Embraer E190 fleet transition; • Expense of $32 million related to the ALPA ratification bonus and associated payroll taxes; • Expense of $28 million related to our acquisition of Spirit Airlines; and • Expense of $1 million relating to the implementation of the TWU contract.
In 2022, special items included the following: • $52 million relating to an impairment as well as engine exchanges as part of the retirement of our Embraer E190 fleet; • $33 million relating to union contract costs; and • $28 million relating to Spirit costs.
Working capital deficits can be customary in the airline industry since a large portion of air traffic liability is classified within current liability. We expect to meet our obligations as they become due through available cash, investment securities, and internally generated funds, supplemented, as necessary, by financing activities and federal government assistance programs, which may be available to us.
We expect to meet our obligations as they become due through available cash, investment securities, and internally generated funds, supplemented, as necessary, by financing activities.
For 2019, our reported earnings per diluted share was $1.91 and adjusted earnings per diluted share (1) was $1.90. • During 2022, we took d elivery of two Airbus A321neo aircraft and six Airbus A2 20 aircraft.
Excluding special items, our adjusted loss per share (1) for 2023 and 2022 was $0.45 and $0.80, respectively. • During 2023, we took d elivery of seven Airbus A321neo aircraft and 10 Airbus A220 aircraft.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−1 removed2 unchanged
Biggest changeIf interest rates were on average 100 basis points higher in 2023 than they were during 2022, our interest expense would increase by approximately $1 million. This amount is determined by considering the impact of the hypothetical change in interest rates on our variable rate debt.
Biggest changeThis amount is determined by considering the impact of the hypothetical change in interest rates on our variable rate debt. If interest rates were on average 100 basis points lower in 2024 than they were during 2023, our interest income from cash and investment balances would decrease by approximately $7 million.
Actual results may differ from the sensitivity analyses. See Notes 1, 4 and 13 to our consolidated financial statements included in Item 8 for accounting policies and additional information. Aircraft fuel Our results of operations are affected by changes in the price and availability of aircraft fuel.
Actual results may differ from the sensitivity analyses. See Notes 1, 4 and 13 to our consolidated financial statements included in Part II. Item 8 for accounting policies and additional information. Aircraft fuel Our results of operations are affected by changes in the price and availability of aircraft fuel.
Market risk is estimated as a hypothetical 10% increase in the December 31, 2022 cost per gallon of fuel. Based on projected 2023 fuel consumption, such an increase would result in an increase to aircraft fuel expense of approximat ely $304 million in 2023.
Market risk is estimated as a hypothetical 10% increase in the December 31, 2023 cost per gallon of fuel. Based on projected 2024 fuel consumption, such an increase would result in an increase to aircraft fuel expense of approximat ely $244 million in 2024.
The financial derivative instrument agreements we have with our counterparties may require us to fund all, or a portion of, outstanding loss positions related to these contracts prior to their scheduled maturities. The amount of collateral posted, if any, is periodically adjusted based on the fair value of the hedge contracts.
As of December 31, 2023, we have hedged 30% of our projected fuel requirement for the first quarter of 2024. The financial derivative instrument agreements we have with our counterparties may require us to fund all, or a portion of, outstanding loss positions related to these contracts prior to their scheduled maturities.
Interest Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments and on interest income generated from our cash and investment balances. The interest rate is fixed for $3.6 billion of our debt and finance lease obligations, with the remaining $0.1 billion having floating interest rates.
The amount of collateral posted, if any, is periodically adjusted based on the fair value of the hedge contracts. Interest Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments and on interest income generated from our cash and investment balances.
If interest rates were an average 100 basis points lower in 2023 than they were during 2022, our interest income from cash and investment balances would decrease by approximately $1 million. This amount is determined by considering the impact of the hypothetical interest rates on the balances of our money market funds and short-term, interest-bearing investments. 65 Table of Contents
This amount is determined by considering the impact of the hypothetical change in interest rates on the balances of our money market funds and short-term, interest-bearing investments for the trailing twelve-month period. 63 Table of Contents
Removed
As of December 31, 2022, we have hedged 8.8% of our projected fuel requirement for the first quarter of 2023. In February 2023, we hedged 19.3% of our projected fuel requirement for the second quarter of 2023 and 5.5% for the third quarter of 2023.
Added
The interest rate is fixed for $4.6 billion of our debt and finance lease obligations, with the remaining $109 million having floating interest rates. If interest rates were on average 100 basis points higher in 2024 than they were during 2023, our annual interest expense would increase by approximately $1 million.

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