JetBlue ended the first quarter with approximately $1.8 billion in unrestricted cash, cash equivalents, and short-term investments, or 22.2% of 2019 revenue.JetBlue repaid $102 million in regularly scheduled debt and finance lease obligations during the first quarter of 2020.JetBlue has taken the following measures to-date to bolster liquidity:Raised $1.0 billion under a secured, 364-day term loan.Drew down $550 million under the existing credit revolver.Negotiated with business partners to extend payment terms and reduce expenses.Revised order book with Airbus, resulting in a $1.1 billion reduction in aircraft capital expenditures through 2022.Deferred plans to take delivery of four leased aircraft announced in January.Paused A320 cabin restyling program, having completed over half of our fleet.Suspended all non-essential projects across the organization.Ceased share repurchases until further notice.Resulting from the actions taken, JetBlue expects to reduce its daily cash burn from an average of $18 million in the second half of March to just below $10 million in May, excluding the CARES Act support of approximately $5 million per day through the end of the third quarter.
JetBlue reached an agreement with the Department of Treasury to receive $936 million under the Payroll Support Program of the CARES Act. The payment consists of $685 million in grants and $251 million in an unsecured term loan. In consideration for the payment, we issued approximately 2.6 million warrants to the Department of Treasury. In late April, JetBlue applied for the Loan Program of the CARES Act, which would provide up to $1.14 billion in additional liquidity, if needed.
The realized fuel price in the quarter was $1.86 per gallon, a 9.3% decline versus first quarter 2019 realized fuel price of $2.05.The decline in average fuel prices reduced the Company's first quarter 2020 fuel expense by approximately $46 million versus our January 2020 guidance. The reduction in fuel consumption driven by capacity cuts reduced the Company’s first quarter 2020 fuel expense by approximately $40 million versus our January 2020 guidance.JetBlue has entered into forward fuel derivative contracts to hedge its fuel consumption for the second, third, and fourth quarter of 2020. Based on the forward curve as of April 24th, JetBlue expects an average all-in price per gallon of fuel of $0.76 in the second quarter of 2020.
.
JETBLUE AIRWAYS CORPORATION | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||
(in millions, except per share amounts) | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended |
|
| ||||||||||||
March 31, |
| Percent | ||||||||||||
| 2020 |
|
|
| 2019 |
|
| Change | ||||||
OPERATING REVENUES | ||||||||||||||
Passenger | $ | 1,511 |
| $ | 1,802 |
| (16.1 | ) | ||||||
Other |
| 77 |
|
| 69 |
| 10.7 |
| ||||||
Total operating revenues |
| 1,588 |
|
| 1,871 |
| (15.1 | ) | ||||||
OPERATING EXPENSES | ||||||||||||||
Aircraft fuel and related taxes |
| 365 |
|
| 437 |
| (16.4 | ) | ||||||
Salaries, wages and benefits |
| 601 |
|
| 575 |
| 4.5 |
| ||||||
Landing fees and other rents |
| 112 |
|
| 115 |
| (3.3 | ) | ||||||
Depreciation and amortization |
| 139 |
|
| 124 |
| 12.0 |
| ||||||
Aircraft rent |
| 21 |
|
| 25 |
| (14.4 | ) | ||||||
Sales and marketing |
| 53 |
|
| 66 |
| (20.2 | ) | ||||||
Maintenance, materials and repairs |
| 160 |
|
| 155 |
| 3.1 |
| ||||||
Other operating expenses |
| 269 |
|
| 286 |
| (5.8 | ) | ||||||
Special items |
| 202 |
|
| 12 |
| 1,642.9 |
| ||||||
Total operating expenses |
| 1,922 |
|
| 1,795 |
| 7.1 |
| ||||||
OPERATING (LOSS) INCOME |
| (334 | ) |
| 76 |
| (540.2 | ) | ||||||
Operating margin |
| -21.0 | % |
| 4.1 | % | (25.1 | ) | pts. | |||||
OTHER INCOME (EXPENSE) | ||||||||||||||
Interest expense |
| (25 | ) |
| (20 | ) | 26.8 |
| ||||||
Capitalized interest |
| 3 |
|
| 3 |
| 21.1 |
| ||||||
Interest income and other |
| 2 |
|
| (1 | ) | 310.3 |
| ||||||
Total other income (expense) |
| (20 | ) |
| (18 | ) | 10.9 |
| ||||||
(LOSS) INCOME BEFORE INCOME TAXES |
| (354 | ) |
| 58 |
| (710.8 | ) | ||||||
Pre-tax margin |
| -22.3 | % |
| 3.1 | % | (25.4 | ) | pts. | |||||
Income tax (benefit) expense |
| (86 | ) |
| 16 |
| (625.6 | ) | ||||||
NET (LOSS) INCOME | $ | (268 | ) | $ | 42 |
| (744.4 | ) | ||||||
(LOSS) EARNINGS PER COMMON SHARE: | ||||||||||||||
Basic | $ | (0.97 | ) | $ | 0.14 |
| ||||||||
Diluted | $ | (0.97 | ) | $ | 0.14 |
| ||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||||||||||||
Basic |
| 277.2 |
|
| 305.3 |
| ||||||||
Diluted |
| 277.2 |
|
| 306.9 |
| ||||||||
JETBLUE AIRWAYS CORPORATION | ||||||||||||||
COMPARATIVE OPERATING STATISTICS | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended |
|
| ||||||||||||
March 31, |
| Percent | ||||||||||||
| 2020 |
|
|
| 2019 |
|
| Change | ||||||
Revenue passengers (thousands) |
| 8,150 |
|
| 10,165 |
| (19.8 | ) | ||||||
Revenue passenger miles (millions) |
| 10,392 |
|
| 12,734 |
| (18.4 | ) | ||||||
Available seat miles (ASMs) (millions) |
| 14,891 |
|
| 15,437 |
| (3.5 | ) | ||||||
Load factor |
| 69.8 | % |
| 82.5 | % | (12.7 | ) | pts. | |||||
Aircraft utilization (hours per day) |
| 10.6 |
|
| 11.8 |
| (10.2 | ) | ||||||
Average fare | $ | 185.44 |
| $ | 177.24 |
| 4.6 |
| ||||||
Yield per passenger mile (cents) |
| 14.54 |
|
| 14.15 |
| 2.8 |
| ||||||
Passenger revenue per ASM (cents) |
| 10.15 |
|
| 11.67 |
| (13.0 | ) | ||||||
Revenue per ASM (cents) |
| 10.67 |
|
| 12.12 |
| (12.0 | ) | ||||||
Operating expense per ASM (cents) |
| 12.91 |
|
| 11.63 |
| 11.0 |
| ||||||
Operating expense per ASM, excluding fuel (cents)(1) |
| 9.01 |
|
| 8.66 |
| 4.0 |
| ||||||
Departures |
| 83,295 |
|
| 89,236 |
| (6.7 | ) | ||||||
Average stage length (miles) |
| 1,160 |
|
| 1,153 |
| 0.6 |
| ||||||
Average number of operating aircraft during period |
| 259.1 |
|
| 252.9 |
| 2.5 |
| ||||||
Average fuel cost per gallon, including fuel taxes | $ | 1.86 |
| $ | 2.05 |
| (9.3 | ) | ||||||
Fuel gallons consumed (millions) |
| 197 |
|
| 213 |
| (7.8 | ) | ||||||
Average number of full-time equivalent crewmembers |
| 18,698 |
|
| 18,292 |
|
(1) Refer to Note A at the end of our Earnings Release for more information on this non-GAAP financial measure. Operating expense per available seat mile, excluding fuel (“CASM Ex-Fuel”) excludes fuel and related taxes, other non-airline operating expenses, and special items. |
JETBLUE AIRWAYS CORPORATION | ||||||
SELECTED CONSOLIDATED BALANCE SHEET DATA | ||||||
(in millions) | ||||||
March 31, |
| December 31, | ||||
2020 |
| 2019 | ||||
(unaudited) | ||||||
Cash and cash equivalents | $ | 1,618 | $ | 959 | ||
Total investment securities |
| 184 |
| 372 | ||
Total assets |
| 12,340 |
| 11,918 | ||
Total debt |
| 3,217 |
| 2,334 | ||
Stockholders' equity |
| 4,366 |
| 4,799 | ||
Note A – Non-GAAP Financial Measures
JetBlue sometimes uses non-GAAP financial measures in this press release. 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
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. We exclude aircraft fuel and related taxes, operating expenses related to other non-airline businesses, such as 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. For the first quarter of 2020, special items include the impairment charge of our Embraer E190 fleet resulting from the decline in demand caused by the coronavirus ("COVID-19") pandemic. Special items for the first quarter of 2019 include one-time costs related to the Embraer E190 fleet transition as well as one-time costs related to the implementation of our pilots' collective bargaining agreement. 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 certain non-airline businesses. 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.
NON-GAAP FINANCIAL MEASURE | ||||||||||||
RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL | ||||||||||||
($ in millions, per ASM data in cents) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2020 |
| 2019 | ||||||||||
$ |
| per ASM |
| $ |
| per ASM | ||||||
Total operating expenses | $ | 1,922 | $ | 12.91 | $ | 1,795 | $ | 11.63 | ||||
Less: | ||||||||||||
Aircraft fuel and related taxes |
| 365 |
| 2.45 |
| 437 |
| 2.83 | ||||
Other non-airline expenses |
| 14 |
| 0.09 |
| 9 |
| 0.06 | ||||
Special items |
| 202 |
| 1.36 |
| 12 |
| 0.08 | ||||
Operating expenses, excluding fuel | $ | 1,341 | $ | 9.01 | $ | 1,337 | $ | 8.66 | ||||
Operating Expense, Income before Taxes, Net Income and Earnings per Share, excluding special items
Our GAAP results in the applicable periods were impacted by charges that are deemed special items. We believe the impacts of these items make our results difficult to compare to prior periods as well as future periods and guidance. For the first quarter of 2020, special items include the impairment charge of our Embraer E190 fleet resulting from the decline in demand caused by the coronavirus ("COVID-19") pandemic. Special items for the first quarter of 2019 include one-time costs related to the Embraer E190 fleet transition as well as one-time costs related to the implementation of our pilots' collective bargaining agreement. We believe the impacts of these items distort our overall trends and that our metrics and results are enhanced 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 impacts of these items.
NON-GAAP FINANCIAL MEASURE | ||||||||
RECONCILIATION OF OPERATING EXPENSE, INCOME BEFORE TAXES, NET | ||||||||
INCOME AND EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS | ||||||||
(in millions, except per share amounts) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
| 2020 |
|
|
| 2019 |
| ||
Total operating revenues | $ | 1,588 |
| $ | 1,871 |
| ||
Total operating expenses | $ | 1,922 |
| $ | 1,795 |
| ||
Less: Special items |
| 202 |
|
| 12 |
| ||
Total operating expenses excluding special items | $ | 1,720 |
| $ | 1,783 |
| ||
Operating (loss) income | $ | (334 | ) | $ | 76 |
| ||
Add back: Special items |
| 202 |
|
| 12 |
| ||
Operating (loss) income excluding special items | $ | (132 | ) | $ | 88 |
| ||
Operating margin excluding special items |
| -8.3 | % |
| 4.7 | % | ||
(Loss) income before income taxes | $ | (354 | ) | $ | 58 |
| ||
Add back: Special items |
| 202 |
|
| 12 |
| ||
(Loss) income before income taxes excluding special items | $ | (152 | ) | $ | 70 |
| ||
Pre-tax margin excluding special items |
| -9.5 | % |
| 3.7 | % | ||
Net (loss) income | $ | (268 | ) | $ | 42 |
| ||
Add back: Special items |
| 202 |
|
| 12 |
| ||
Less: Income tax benefit related to special items |
| 50 |
|
| 3 |
| ||
Net (loss) income excluding special items | $ | (116 | ) | $ | 51 |
| ||
(Loss) Earnings Per Common Share: | ||||||||
Basic | $ | (0.97 | ) | $ | 0.14 |
| ||
Add back: Special items, net of tax |
| 0.55 |
|
| 0.02 |
| ||
Basic excluding special items | $ | (0.42 | ) | $ | 0.16 |
| ||
Diluted | $ | (0.97 | ) | $ | 0.14 |
| ||
Add back: Special items, net of tax |
| 0.55 |
|
| 0.02 |
| ||
Diluted excluding special items | $ | (0.42 | ) | $ | 0.16 |
| ||