|
Delaware
|
|
|
87-0617894
|
(State of Other Jurisdiction of Incorporation)
|
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
27-01 Queens Plaza North
|
Long Island City
|
New York
|
11101
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol
|
Name of each exchange on which registered
|
Common Stock, $0.01 par value
|
JBLU
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
|
☑
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
|
|
Emerging growth company
|
☐
|
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
|
|
|
PART II. OTHER INFORMATION
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
||||
CURRENT ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
461
|
|
|
$
|
474
|
|
Investment securities
|
448
|
|
|
413
|
|
||
Receivables, less allowance (2019-$2; 2018-$1)
|
282
|
|
|
211
|
|
||
Inventories, less allowance (2019-$20; 2018-$18)
|
85
|
|
|
78
|
|
||
Prepaid expenses and other
|
193
|
|
|
212
|
|
||
Total current assets
|
1,469
|
|
|
1,388
|
|
||
PROPERTY AND EQUIPMENT
|
|
|
|
||||
Flight equipment
|
9,814
|
|
|
9,525
|
|
||
Predelivery deposits for flight equipment
|
408
|
|
|
293
|
|
||
Total flight equipment and predelivery deposits, gross
|
10,222
|
|
|
9,818
|
|
||
Less accumulated depreciation
|
2,609
|
|
|
2,448
|
|
||
Total flight equipment and predelivery deposits, net
|
7,613
|
|
|
7,370
|
|
||
Other property and equipment
|
1,102
|
|
|
1,074
|
|
||
Less accumulated depreciation
|
494
|
|
|
461
|
|
||
Total other property and equipment, net
|
608
|
|
|
613
|
|
||
Total property and equipment
|
8,221
|
|
|
7,983
|
|
||
OPERATING LEASE ASSETS
|
998
|
|
|
1,056
|
|
||
OTHER ASSETS
|
|
|
|
||||
Investment securities
|
4
|
|
|
3
|
|
||
Restricted cash
|
61
|
|
|
59
|
|
||
Other
|
483
|
|
|
470
|
|
||
Total other assets
|
548
|
|
|
532
|
|
||
TOTAL ASSETS
|
$
|
11,236
|
|
|
$
|
10,959
|
|
|
|
|
|
||||
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
CURRENT LIABILITIES
|
|
|
|
||||
Accounts payable
|
$
|
504
|
|
|
$
|
437
|
|
Air traffic liability
|
1,290
|
|
|
1,035
|
|
||
Accrued salaries, wages and benefits
|
335
|
|
|
313
|
|
||
Other accrued liabilities
|
352
|
|
|
298
|
|
||
Current operating lease liabilities
|
133
|
|
|
133
|
|
||
Current maturities of long-term debt and finance leases
|
275
|
|
|
309
|
|
||
Total current liabilities
|
2,889
|
|
|
2,525
|
|
||
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS
|
1,217
|
|
|
1,361
|
|
||
LONG-TERM OPERATING LEASE LIABILITIES
|
753
|
|
|
798
|
|
||
DEFERRED TAXES AND OTHER LIABILITIES
|
|
|
|
||||
Deferred income taxes
|
1,158
|
|
|
1,112
|
|
||
Air traffic liability - loyalty non-current
|
470
|
|
|
447
|
|
||
Other
|
52
|
|
|
31
|
|
||
Total deferred taxes and other liabilities
|
1,680
|
|
|
1,590
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 7)
|
|
|
|
||||
STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Preferred stock, $0.01 par value; 25 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 900 shares authorized, 425 and 422 shares issued and 296 and 306 shares outstanding at June 30, 2019 and December 31, 2018, respectively
|
4
|
|
|
4
|
|
||
Treasury stock, at cost; 129 and 116 shares at June 30, 2019 and December 31, 2018, respectively
|
(1,503
|
)
|
|
(1,272
|
)
|
||
Additional paid-in capital
|
2,221
|
|
|
2,203
|
|
||
Retained earnings
|
3,974
|
|
|
3,753
|
|
||
Accumulated other comprehensive income (loss)
|
1
|
|
|
(3
|
)
|
||
Total stockholders’ equity
|
4,697
|
|
|
4,685
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
11,236
|
|
|
$
|
10,959
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
OPERATING REVENUES
|
|
|
|
|
|
|
|
||||||||
Passenger
|
$
|
2,031
|
|
|
$
|
1,858
|
|
|
$
|
3,833
|
|
|
$
|
3,549
|
|
Other
|
74
|
|
|
70
|
|
|
144
|
|
|
133
|
|
||||
Total operating revenues
|
2,105
|
|
|
1,928
|
|
|
3,977
|
|
|
3,682
|
|
||||
OPERATING EXPENSES
|
|
|
|
|
|
|
|
||||||||
Aircraft fuel and related taxes
|
484
|
|
|
491
|
|
|
921
|
|
|
908
|
|
||||
Salaries, wages and benefits
|
576
|
|
|
486
|
|
|
1,151
|
|
|
985
|
|
||||
Landing fees and other rents
|
121
|
|
|
122
|
|
|
237
|
|
|
230
|
|
||||
Depreciation and amortization
|
127
|
|
|
114
|
|
|
251
|
|
|
226
|
|
||||
Aircraft rent
|
25
|
|
|
24
|
|
|
50
|
|
|
48
|
|
||||
Sales and marketing
|
75
|
|
|
75
|
|
|
141
|
|
|
142
|
|
||||
Maintenance materials and repairs
|
168
|
|
|
188
|
|
|
324
|
|
|
329
|
|
||||
Other operating expenses
|
277
|
|
|
261
|
|
|
563
|
|
|
522
|
|
||||
Special items
|
2
|
|
|
319
|
|
|
14
|
|
|
319
|
|
||||
Total operating expenses
|
1,855
|
|
|
2,080
|
|
|
3,652
|
|
|
3,709
|
|
||||
OPERATING INCOME (LOSS)
|
250
|
|
|
(152
|
)
|
|
325
|
|
|
(27
|
)
|
||||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(19
|
)
|
|
(16
|
)
|
|
(38
|
)
|
|
(32
|
)
|
||||
Capitalized interest
|
3
|
|
|
3
|
|
|
6
|
|
|
5
|
|
||||
Interest income and other
|
2
|
|
|
3
|
|
|
1
|
|
|
5
|
|
||||
Total other income (expense)
|
(14
|
)
|
|
(10
|
)
|
|
(31
|
)
|
|
(22
|
)
|
||||
INCOME (LOSS) BEFORE INCOME TAXES
|
236
|
|
|
(162
|
)
|
|
294
|
|
|
(49
|
)
|
||||
Income tax expense (benefit)
|
57
|
|
|
(41
|
)
|
|
73
|
|
|
(18
|
)
|
||||
NET INCOME (LOSS)
|
$
|
179
|
|
|
$
|
(121
|
)
|
|
$
|
221
|
|
|
$
|
(31
|
)
|
|
|
|
|
|
|
|
|
||||||||
EARNINGS PER COMMON SHARE:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.60
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.73
|
|
|
$
|
(0.10
|
)
|
Diluted
|
$
|
0.59
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.73
|
|
|
$
|
(0.10
|
)
|
|
Three Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
NET INCOME (LOSS)
|
$
|
179
|
|
|
$
|
(121
|
)
|
Changes in fair value of derivative instruments, net of reclassifications into earnings (net of tax benefit/(expense) of $1 and $0 in 2019 and 2018, respectively)
|
2
|
|
|
—
|
|
||
Total other comprehensive income
|
2
|
|
|
—
|
|
||
COMPREHENSIVE INCOME (LOSS)
|
$
|
181
|
|
|
$
|
(121
|
)
|
|
|
|
|
||||
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
NET INCOME (LOSS)
|
$
|
221
|
|
|
$
|
(31
|
)
|
Changes in fair value of derivative instruments, net of reclassifications into earnings (net of tax benefit/(expense) of $1 and $0 in 2019 and 2018, respectively)
|
4
|
|
|
—
|
|
||
Total other comprehensive income
|
4
|
|
|
—
|
|
||
COMPREHENSIVE INCOME (LOSS)
|
$
|
225
|
|
|
$
|
(31
|
)
|
|
|
Common
Shares |
|
Common
Stock |
|
Treasury
Shares |
|
Treasury
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
||||||||||||||
Balance at March 31, 2019
|
|
423
|
|
|
$
|
4
|
|
|
122
|
|
|
$
|
(1,377
|
)
|
|
$
|
2,186
|
|
|
$
|
3,795
|
|
|
$
|
(1
|
)
|
|
$
|
4,607
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
179
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Vesting of restricted stock units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||||
Stock issued under Crewmember stock purchase plan
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
7
|
|
|
(125
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(125
|
)
|
||||||
Balance at June 30, 2019
|
|
425
|
|
|
$
|
4
|
|
|
129
|
|
|
$
|
(1,503
|
)
|
|
$
|
2,221
|
|
|
$
|
3,974
|
|
|
$
|
1
|
|
|
$
|
4,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Common
Shares |
|
Common
Stock |
|
Treasury
Shares |
|
Treasury
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
||||||||||||||
Balance at March 31, 2018
|
|
419
|
|
|
$
|
4
|
|
|
103
|
|
|
$
|
(1,021
|
)
|
|
$
|
2,134
|
|
|
$
|
3,654
|
|
|
$
|
—
|
|
|
$
|
4,771
|
|
Net (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(121
|
)
|
|
—
|
|
|
(121
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Stock issued under Crewmember stock purchase plan
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
24
|
|
||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
5
|
|
|
(100
|
)
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(125
|
)
|
||||||
Balance at June 30, 2018
|
|
421
|
|
|
$
|
4
|
|
|
108
|
|
|
$
|
(1,122
|
)
|
|
$
|
2,139
|
|
|
$
|
3,533
|
|
|
$
|
—
|
|
|
$
|
4,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Common
Shares |
|
Common
Stock |
|
Treasury
Shares |
|
Treasury
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
||||||||||||||
Balance at December 31, 2018
|
|
422
|
|
|
$
|
4
|
|
|
116
|
|
|
$
|
(1,272
|
)
|
|
$
|
2,203
|
|
|
$
|
3,753
|
|
|
$
|
(3
|
)
|
|
$
|
4,685
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|
—
|
|
|
221
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
||||||
Vesting of restricted stock units
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||||
Stock issued under Crewmember stock purchase plan
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
13
|
|
|
(225
|
)
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
||||||
Balance at June 30, 2019
|
|
425
|
|
|
$
|
4
|
|
|
129
|
|
|
$
|
(1,503
|
)
|
|
$
|
2,221
|
|
|
$
|
3,974
|
|
|
$
|
1
|
|
|
$
|
4,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Common
Shares |
|
Common
Stock |
|
Treasury
Shares |
|
Treasury
Stock |
|
Additional
Paid-In Capital |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
|
||||||||||||||
Balance at December 31, 2017
|
|
418
|
|
|
$
|
4
|
|
|
97
|
|
|
$
|
(890
|
)
|
|
$
|
2,127
|
|
|
$
|
3,564
|
|
|
$
|
—
|
|
|
$
|
4,805
|
|
Net (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(31
|
)
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock units
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||||
Stock compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||||
Stock issued under Crewmember stock purchase plan
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||||
Shares repurchased
|
|
—
|
|
|
—
|
|
|
11
|
|
|
(225
|
)
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
||||||
Balance at June 30, 2018
|
|
421
|
|
|
$
|
4
|
|
|
108
|
|
|
$
|
(1,122
|
)
|
|
$
|
2,139
|
|
|
$
|
3,533
|
|
|
$
|
—
|
|
|
$
|
4,554
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||
Available-for-sale securities
|
|
|
|
||||
Time deposits
|
$
|
290
|
|
|
$
|
190
|
|
U.S. Treasury
|
—
|
|
|
39
|
|
||
Debt securities
|
7
|
|
|
7
|
|
||
Total available-for-sale securities
|
297
|
|
|
236
|
|
||
Held-to-maturity securities
|
|
|
|
||||
U.S. Treasury
|
155
|
|
|
180
|
|
||
Total investment securities
|
$
|
452
|
|
|
$
|
416
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||
|
2019
|
2018
|
|
2019
|
2018
|
||||||||
Passenger revenue
|
|
|
|
|
|
||||||||
Passenger travel
|
$
|
1,981
|
|
$
|
1,820
|
|
|
$
|
3,733
|
|
$
|
3,471
|
|
Loyalty revenue - air transportation
|
50
|
|
38
|
|
|
100
|
|
78
|
|
||||
Other revenue
|
|
|
|
|
|
||||||||
Loyalty revenue
|
49
|
|
44
|
|
|
93
|
|
80
|
|
||||
Other revenue
|
25
|
|
26
|
|
|
51
|
|
53
|
|
||||
Total revenues
|
$
|
2,105
|
|
$
|
1,928
|
|
|
$
|
3,977
|
|
$
|
3,682
|
|
(in millions)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Contract liabilities
|
|
|
|
||||
Air traffic liability - passenger travel
|
$
|
1,133
|
|
|
$
|
892
|
|
Air traffic liability - loyalty program (air transportation)
|
617
|
|
|
580
|
|
||
Deferred revenue
|
10
|
|
|
10
|
|
||
Total contract liabilities
|
$
|
1,760
|
|
|
$
|
1,482
|
|
Balance at December 31, 2018
|
$
|
580
|
|
TrueBlue® points redeemed
|
(100
|
)
|
|
TrueBlue® points earned and sold
|
137
|
|
|
Balance at June 30, 2019
|
$
|
617
|
|
|
|
||
Balance at December 31, 2017
|
$
|
502
|
|
TrueBlue® points redeemed
|
(78
|
)
|
|
TrueBlue® points earned and sold
|
112
|
|
|
Balance at June 30, 2018
|
$
|
536
|
|
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||
|
Carrying Value
|
|
Estimated Fair Value
|
|
Carrying Value
|
|
Estimated Fair Value
|
||||||||
Public Debt
|
|
|
|
|
|
|
|
||||||||
Fixed rate special facility bonds, due through 2036
|
$
|
42
|
|
|
$
|
45
|
|
|
$
|
42
|
|
|
$
|
44
|
|
Non-Public Debt
|
|
|
|
|
|
|
|
||||||||
Fixed rate enhanced equipment notes, due through 2023
|
140
|
|
|
147
|
|
|
151
|
|
|
153
|
|
||||
Floating rate equipment notes, due through 2028
|
223
|
|
|
225
|
|
|
245
|
|
|
245
|
|
||||
Fixed rate equipment notes, due through 2028
|
988
|
|
|
1,054
|
|
|
1,125
|
|
|
1,135
|
|
||||
Total(1)
|
$
|
1,393
|
|
|
$
|
1,471
|
|
|
$
|
1,563
|
|
|
$
|
1,577
|
|
|
|
Classification on Balance Sheet
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|
|
||||
Operating lease assets
|
|
Operating lease assets
|
|
$
|
998
|
|
|
$
|
1,056
|
|
Finance lease assets
|
|
Property and equipment, net
|
|
174
|
|
|
181
|
|
||
Total lease assets
|
|
|
|
$
|
1,172
|
|
|
$
|
1,237
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||||
Current:
|
|
|
|
|
|
|
||||
Operating lease liabilities
|
|
Current operating lease liabilities
|
|
$
|
133
|
|
|
$
|
133
|
|
Finance lease liabilities
|
|
Current maturities of long-term debt and finance leases
|
|
18
|
|
|
18
|
|
||
Long-term:
|
|
|
|
|
|
|
||||
Operating lease liabilities
|
|
Long-term operating lease liabilities
|
|
753
|
|
|
798
|
|
||
Finance lease liabilities
|
|
Long-term debt and finance lease obligations
|
|
81
|
|
|
89
|
|
||
Total lease liabilities
|
|
|
|
$
|
985
|
|
|
$
|
1,038
|
|
|
|
|
|
|
|
|
||||
|
|
June 30,
2019 |
|
December 31,
2018 |
||||||
Weighted-average remaining lease term (in years)
|
|
|
|
|
||||||
Operating leases
|
|
11
|
|
|
11
|
|
||||
Finance leases
|
|
3
|
|
|
4
|
|
||||
Weighted-average discount rate
|
|
|
|
|
||||||
Operating leases
|
|
5.96
|
%
|
|
5.95
|
%
|
||||
Finance leases
|
|
4.79
|
%
|
|
4.73
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Operating lease cost
|
$
|
46
|
|
|
$
|
44
|
|
|
$
|
92
|
|
|
$
|
89
|
|
Short-term lease cost
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
||||
Finance lease cost:
|
|
|
|
|
|
|
|
||||||||
Amortization of assets
|
2
|
|
|
2
|
|
|
4
|
|
|
4
|
|
||||
Interest on lease liabilities
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Variable lease cost
|
99
|
|
|
101
|
|
|
194
|
|
|
188
|
|
||||
Sublease income
|
(4
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
(7
|
)
|
||||
Total net lease cost
|
$
|
145
|
|
|
$
|
145
|
|
|
$
|
286
|
|
|
$
|
277
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
|
|
|
|
||||||||
Operating cash flows for operating leases
|
$
|
35
|
|
|
$
|
44
|
|
|
$
|
75
|
|
|
$
|
80
|
|
Operating cash flows for finance leases
|
1
|
|
|
1
|
|
|
3
|
|
|
3
|
|
||||
Financing cash flows for finance leases
|
2
|
|
|
2
|
|
|
9
|
|
|
8
|
|
|
As of June 30, 2019
|
||||||
|
Operating Leases
|
|
Finance Leases
|
||||
2019
|
$
|
66
|
|
|
$
|
11
|
|
2020
|
132
|
|
|
35
|
|
||
2021
|
127
|
|
|
39
|
|
||
2022
|
118
|
|
|
10
|
|
||
2023
|
109
|
|
|
10
|
|
||
Thereafter
|
678
|
|
|
5
|
|
||
Total minimum lease payments
|
1,230
|
|
|
110
|
|
||
Less: amount of lease payments representing interest
|
(344
|
)
|
|
(11
|
)
|
||
Present value of future minimum lease payments
|
886
|
|
|
99
|
|
||
Less: current obligations under leases
|
(133
|
)
|
|
(18
|
)
|
||
Long-term lease obligations
|
$
|
753
|
|
|
$
|
81
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income (loss)(1)
|
$
|
179
|
|
|
$
|
(121
|
)
|
|
$
|
221
|
|
|
$
|
(31
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average basic shares
|
300.3
|
|
|
315.0
|
|
|
303.1
|
|
|
318.0
|
|
||||
Effect of dilutive securities
|
1.5
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
||||
Weighted average diluted shares
|
301.8
|
|
|
315.0
|
|
|
304.6
|
|
|
318.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.60
|
|
|
$
|
(0.39
|
)
|
|
$
|
0.73
|
|
|
$
|
(0.10
|
)
|
Diluted
|
0.59
|
|
|
(0.39
|
)
|
|
0.73
|
|
|
(0.10
|
)
|
|
Jet fuel call option spread agreements
|
|
Total
|
||
Third Quarter 2019
|
—
|
%
|
|
—
|
%
|
Fourth Quarter 2019
|
10
|
%
|
|
10
|
%
|
First Quarter 2020
|
10
|
%
|
|
10
|
%
|
Second Quarter 2020
|
10
|
%
|
|
10
|
%
|
Fuel derivatives
|
June 30,
2019 |
|
December 31,
2018 |
||||
Asset fair value recorded in prepaid expense and other(1)
|
$
|
5
|
|
|
$
|
—
|
|
Longest remaining term (months)
|
12
|
|
|
6
|
|
||
Hedged volume (barrels, in thousands)
|
1,572
|
|
|
756
|
|
||
Estimated amount of existing (gains) losses expected to be reclassified into earnings in the next 12 months
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Fuel derivatives
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Hedge effectiveness (gains) losses recognized in aircraft fuel expense
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
—
|
|
Hedge (gains) losses on derivatives recognized in comprehensive income
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Percentage of actual consumption economically hedged
|
7
|
%
|
|
—
|
%
|
|
7
|
%
|
|
—
|
%
|
|
June 30, 2019
|
||||||||||||||
Assets
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents
|
$
|
136
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
136
|
|
Available-for-sale investment securities
|
—
|
|
|
297
|
|
|
—
|
|
|
297
|
|
||||
Aircraft fuel derivatives
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
December 31, 2018
|
||||||||||||||
Assets
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents
|
$
|
198
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
198
|
|
Available-for-sale investment securities
|
39
|
|
|
197
|
|
|
—
|
|
|
236
|
|
||||
Aircraft fuel derivatives
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Aircraft Fuel Derivatives(1)
|
|
Total
|
||||
Balance of accumulated (losses) at March 31, 2019
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
Reclassifications into earnings, net of tax benefit $1
|
1
|
|
|
1
|
|
||
Change in fair value, net of tax benefit $0
|
1
|
|
|
1
|
|
||
Balance of accumulated income at June 30, 2019
|
$
|
1
|
|
|
$
|
1
|
|
|
|
|
|
|
|
||
Balance of accumulated income at March 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
Reclassifications into earnings, net of tax benefit $0
|
—
|
|
|
—
|
|
||
Change in fair value, net of tax benefit of $0
|
—
|
|
|
—
|
|
||
Balance of accumulated income at June 30, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
Aircraft Fuel Derivatives(1)
|
|
Total
|
||||
Balance of accumulated (losses) at December 31, 2018
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
Reclassifications into earnings, net of tax benefit $1
|
3
|
|
|
3
|
|
||
Change in fair value, net of tax benefit $0
|
1
|
|
|
1
|
|
||
Balance of accumulated income at June 30, 2019
|
$
|
1
|
|
|
$
|
1
|
|
|
|
|
|
||||
Balance of accumulated income at December 31, 2017
|
$
|
—
|
|
|
$
|
—
|
|
Reclassifications into earnings, net of tax benefit $0
|
—
|
|
|
—
|
|
||
Change in fair value, net of tax benefit $0
|
—
|
|
|
—
|
|
||
Balance of accumulated income at June 30, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Special Items
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Embraer E190 fleet transition costs(1)
|
$
|
—
|
|
|
$
|
319
|
|
|
$
|
9
|
|
|
$
|
319
|
|
Union contract costs(2)
|
2
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Total
|
$
|
2
|
|
|
$
|
319
|
|
|
$
|
14
|
|
|
$
|
319
|
|
•
|
We had a $177 million increase in revenue compared to the second quarter of 2018 primarily due to a 5.9% increase in capacity and an increase in average fares.
|
•
|
Operating revenue per available seat mile (RASM) for the three months ended June 30, 2019 increased by 3.1% to 13.14 cents.
|
•
|
Operating expense and operating expense per available seat mile (CASM) for the three months ended June 30, 2019 decreased by 10.8% to $1.9 billion and by 15.7% to 11.58 cents, respectively. Our operating expense for the three months ended June 30, 2018 included a $319 million impairment charge related to our decision to transition the Embraer E190 fleet which contributed 2.11 cents to our unit cost in the prior year. 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) increased by 1.8% to 8.46 cents.
|
•
|
Our reported earnings per diluted share for the second quarter of 2019 were $0.59. Special items, principally related to one-time costs incurred to implement the provisions of the collective bargaining agreement into our systems, reduced our reported earnings per share by $0.01.
|
•
|
We generated $968 million in cash from operations and $498 million in free cash flow for the six months ended June 30, 2019.
|
(Revenues in millions; percent changes based on unrounded numbers)
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
||||||||||||
2019
|
|
2018
|
|
$
|
|
%
|
|||||||||
Passenger revenue
|
$
|
2,031
|
|
|
$
|
1,858
|
|
|
$
|
173
|
|
|
9.3
|
|
|
Other revenue
|
74
|
|
|
70
|
|
|
4
|
|
|
5.3
|
|
|
|||
Total operating revenues
|
$
|
2,105
|
|
|
$
|
1,928
|
|
|
$
|
177
|
|
|
9.2
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Average Fare
|
$
|
184.24
|
|
|
$
|
170.08
|
|
|
$
|
14.16
|
|
|
8.3
|
|
|
Yield per passenger mile (cents)
|
14.74
|
|
|
14.24
|
|
|
0.50
|
|
|
3.5
|
|
|
|||
Passenger revenue per ASM (cents)
|
12.68
|
|
|
12.27
|
|
|
0.41
|
|
|
3.3
|
|
|
|||
Operating revenue per ASM (cents)
|
13.14
|
|
|
12.74
|
|
|
0.40
|
|
|
3.1
|
|
|
|||
Average stage length (miles)
|
1,147
|
|
|
1,088
|
|
|
59
|
|
|
5.4
|
|
|
|||
Revenue passengers (thousands)
|
11,026
|
|
|
10,923
|
|
|
103
|
|
|
0.9
|
|
|
|||
Revenue passenger miles (millions)
|
13,782
|
|
|
13,043
|
|
|
739
|
|
|
5.7
|
|
|
|||
Available Seat Miles (ASMs) (millions)
|
16,029
|
|
|
15,138
|
|
|
891
|
|
|
5.9
|
|
|
|||
Load Factor
|
86.0
|
%
|
|
86.2
|
%
|
|
|
|
(0.2
|
)
|
pts.
|
(in millions; per ASM data in cents; percent changes based on unrounded numbers)
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|
Cents per ASM
|
||||||||||||||||||
2019
|
|
2018
|
|
$
|
|
%
|
|
2019
|
|
2018
|
|
% Change
|
|||||||||||
Aircraft fuel and related taxes
|
$
|
484
|
|
|
$
|
491
|
|
|
$
|
(7
|
)
|
|
(1.4
|
)%
|
|
3.02
|
|
|
3.24
|
|
|
(6.9
|
)%
|
Salaries, wages and benefits
|
576
|
|
|
486
|
|
|
90
|
|
|
18.5
|
|
|
3.59
|
|
|
3.21
|
|
|
11.9
|
|
|||
Landing fees and other rents
|
121
|
|
|
122
|
|
|
(1
|
)
|
|
(0.6
|
)
|
|
0.75
|
|
|
0.80
|
|
|
(6.2
|
)
|
|||
Depreciation and amortization
|
127
|
|
|
114
|
|
|
13
|
|
|
11.3
|
|
|
0.79
|
|
|
0.76
|
|
|
5.1
|
|
|||
Aircraft rent
|
25
|
|
|
24
|
|
|
1
|
|
|
4.8
|
|
|
0.16
|
|
|
0.16
|
|
|
(1.1
|
)
|
|||
Sales and marketing
|
75
|
|
|
75
|
|
|
—
|
|
|
(0.4
|
)
|
|
0.47
|
|
|
0.50
|
|
|
(5.9
|
)
|
|||
Maintenance materials and repairs
|
168
|
|
|
188
|
|
|
(20
|
)
|
|
(10.1
|
)
|
|
1.05
|
|
|
1.24
|
|
|
(15.1
|
)
|
|||
Other operating expenses
|
277
|
|
|
261
|
|
|
16
|
|
|
6.1
|
|
|
1.74
|
|
|
1.72
|
|
|
0.2
|
|
|||
Special items
|
2
|
|
|
319
|
|
|
(317
|
)
|
|
(99.3
|
)
|
|
0.01
|
|
|
2.11
|
|
|
(99.3
|
)
|
|||
Total operating expenses
|
$
|
1,855
|
|
|
$
|
2,080
|
|
|
$
|
(225
|
)
|
|
(10.8
|
)%
|
|
11.58
|
|
|
13.74
|
|
|
(15.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total operating expenses excluding special items(1)
|
$
|
1,853
|
|
|
$
|
1,761
|
|
|
$
|
92
|
|
|
5.3
|
%
|
|
11.57
|
|
|
11.63
|
|
|
(0.6
|
)%
|
(Revenues in millions; percent changes based on unrounded numbers)
|
Six Months Ended June 30,
|
|
Year-over-Year Change
|
||||||||||||
2019
|
|
2018
|
|
$
|
|
%
|
|||||||||
Passenger revenue
|
$
|
3,833
|
|
|
$
|
3,549
|
|
|
$
|
284
|
|
|
8.0
|
|
|
Other revenue
|
144
|
|
|
133
|
|
|
11
|
|
|
8.3
|
|
|
|||
Total operating revenues
|
$
|
3,977
|
|
|
$
|
3,682
|
|
|
$
|
295
|
|
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Average Fare
|
$
|
180.89
|
|
|
$
|
170.61
|
|
|
$
|
10.28
|
|
|
6.0
|
|
|
Yield per passenger mile (cents)
|
14.46
|
|
|
14.25
|
|
|
0.21
|
|
|
1.5
|
|
|
|||
Passenger revenue per ASM (cents)
|
12.18
|
|
|
12.17
|
|
|
0.01
|
|
|
0.1
|
|
|
|||
Operating revenue per ASM (cents)
|
12.64
|
|
|
12.63
|
|
|
0.01
|
|
|
0.1
|
|
|
|||
Average stage length (miles)
|
1,150
|
|
|
1,093
|
|
|
57
|
|
|
5.2
|
|
|
|||
Revenue passengers (thousands)
|
21,191
|
|
|
20,804
|
|
|
387
|
|
|
1.9
|
|
|
|||
Revenue passenger miles (millions)
|
26,516
|
|
|
24,909
|
|
|
1,607
|
|
|
6.5
|
|
|
|||
Available Seat Miles (ASMs) (millions)
|
31,466
|
|
|
29,162
|
|
|
2,304
|
|
|
7.9
|
|
|
|||
Load Factor
|
84.3
|
%
|
|
85.4
|
%
|
|
|
|
(1.1
|
)
|
pts.
|
(in millions; per ASM data in cents; percent changes based on unrounded numbers)
|
Six Months Ended June 30,
|
|
Year-over-Year Change
|
|
Cents per ASM
|
||||||||||||||||||
2019
|
|
2018
|
|
$
|
|
%
|
|
2019
|
|
2018
|
|
% Change
|
|||||||||||
Aircraft fuel and related taxes
|
$
|
921
|
|
|
$
|
908
|
|
|
$
|
13
|
|
|
1.5
|
%
|
|
2.93
|
|
|
3.11
|
|
|
(6.0
|
)%
|
Salaries, wages and benefits
|
1,151
|
|
|
985
|
|
|
166
|
|
|
16.8
|
|
|
3.66
|
|
|
3.38
|
|
|
8.3
|
|
|||
Landing fees and other rents
|
237
|
|
|
230
|
|
|
7
|
|
|
2.6
|
|
|
0.75
|
|
|
0.79
|
|
|
(4.9
|
)
|
|||
Depreciation and amortization
|
251
|
|
|
226
|
|
|
25
|
|
|
11.4
|
|
|
0.80
|
|
|
0.77
|
|
|
3.2
|
|
|||
Aircraft rent
|
50
|
|
|
48
|
|
|
2
|
|
|
3.1
|
|
|
0.16
|
|
|
0.17
|
|
|
(4.5
|
)
|
|||
Sales and marketing
|
141
|
|
|
142
|
|
|
(1
|
)
|
|
(1.0
|
)
|
|
0.45
|
|
|
0.49
|
|
|
(8.3
|
)
|
|||
Maintenance materials and repairs
|
324
|
|
|
329
|
|
|
(5
|
)
|
|
(1.8
|
)
|
|
1.03
|
|
|
1.13
|
|
|
(9.0
|
)
|
|||
Other operating expenses
|
563
|
|
|
522
|
|
|
41
|
|
|
8.1
|
|
|
1.78
|
|
|
1.78
|
|
|
0.2
|
|
|||
Special items
|
14
|
|
|
319
|
|
|
(305
|
)
|
|
(95.6
|
)
|
|
0.04
|
|
|
1.10
|
|
|
(95.9
|
)
|
|||
Total operating expenses
|
$
|
3,652
|
|
|
$
|
3,709
|
|
|
$
|
(57
|
)
|
|
(1.6
|
)%
|
|
11.60
|
|
|
12.72
|
|
|
(8.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total operating expenses excluding special items(1)
|
$
|
3,638
|
|
|
$
|
3,390
|
|
|
$
|
248
|
|
|
7.3
|
%
|
|
11.56
|
|
|
11.62
|
|
|
(0.6
|
)%
|
|
Three Months Ended June 30,
|
|
Year-over-Year Change
|
|
Six Months Ended June 30,
|
|
Year-over-Year Change
|
||||||||||||||||
(percent changes based on unrounded numbers)
|
2019
|
|
2018
|
|
%
|
|
2019
|
|
2018
|
|
%
|
||||||||||||
Operational Statistics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue passengers (thousands)
|
11,026
|
|
|
10,923
|
|
|
0.9
|
|
|
|
21,191
|
|
|
20,804
|
|
|
1.9
|
|
|
||||
Revenue passenger miles (RPMs) (millions)
|
13,782
|
|
|
13,043
|
|
|
5.7
|
|
|
|
26,516
|
|
|
24,909
|
|
|
6.5
|
|
|
||||
Available seat miles (ASMs) (millions)
|
16,029
|
|
|
15,138
|
|
|
5.9
|
|
|
|
31,466
|
|
|
29,162
|
|
|
7.9
|
|
|
||||
Load factor
|
86.0
|
%
|
|
86.2
|
%
|
|
(0.2
|
)
|
pts
|
|
84.3
|
%
|
|
85.4
|
%
|
|
(1.1
|
)
|
pts
|
||||
Aircraft utilization (hours per day)
|
12.1
|
|
|
12.1
|
|
|
—
|
|
|
|
11.9
|
|
|
11.7
|
|
|
1.7
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average fare
|
$
|
184.24
|
|
|
$
|
170.08
|
|
|
8.3
|
|
|
|
$
|
180.89
|
|
|
$
|
170.61
|
|
|
6.0
|
|
|
Yield per passenger mile (cents)
|
14.74
|
|
|
14.24
|
|
|
3.5
|
|
|
|
14.46
|
|
|
14.25
|
|
|
1.5
|
|
|
||||
Passenger revenue per ASM (cents)
|
12.68
|
|
|
12.27
|
|
|
3.3
|
|
|
|
12.18
|
|
|
12.17
|
|
|
0.1
|
|
|
||||
Operating revenue per ASM (cents)
|
13.14
|
|
|
12.74
|
|
|
3.1
|
|
|
|
12.64
|
|
|
12.63
|
|
|
0.1
|
|
|
||||
Operating expense per ASM (cents)
|
11.58
|
|
|
13.74
|
|
|
(15.7
|
)
|
|
|
11.60
|
|
|
12.72
|
|
|
(8.8
|
)
|
|
||||
Operating expense per ASM, excluding fuel(1)
|
8.46
|
|
|
8.32
|
|
|
1.8
|
|
|
|
8.56
|
|
|
8.44
|
|
|
1.4
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Departures
|
93,040
|
|
|
93,688
|
|
|
(0.7
|
)
|
|
|
182,276
|
|
|
179,734
|
|
|
1.4
|
|
|
||||
Average stage length (miles)
|
1,147
|
|
|
1,088
|
|
|
5.4
|
|
|
|
1,150
|
|
|
1,093
|
|
|
5.2
|
|
|
||||
Average number of operating aircraft during period
|
253.0
|
|
|
245.5
|
|
|
3.1
|
|
|
|
253.0
|
|
|
244.7
|
|
|
3.4
|
|
|
||||
Average fuel cost per gallon, including fuel taxes
|
$
|
2.16
|
|
|
$
|
2.28
|
|
|
(5.5
|
)
|
|
|
$
|
2.10
|
|
|
$
|
2.19
|
|
|
(3.9
|
)
|
|
Fuel gallons consumed (millions)
|
224
|
|
|
215
|
|
|
4.3
|
|
|
|
438
|
|
|
414
|
|
|
5.6
|
|
|
||||
Average number of full-time equivalent crewmembers
|
|
|
|
|
|
|
|
18,454
|
|
|
17,677
|
|
|
|
|
|
Payments due in
|
||||||||||||||||||||||||||
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||||
Debt and finance lease obligations(a)
|
$
|
1,723
|
|
|
$
|
159
|
|
|
$
|
327
|
|
|
$
|
305
|
|
|
$
|
272
|
|
|
$
|
245
|
|
|
$
|
415
|
|
Operating lease obligations
|
1,230
|
|
|
66
|
|
|
132
|
|
|
127
|
|
|
118
|
|
|
109
|
|
|
678
|
|
|||||||
Flight equipment purchase obligations
|
8,715
|
|
|
871
|
|
|
1,196
|
|
|
1,433
|
|
|
1,289
|
|
|
1,694
|
|
|
2,232
|
|
|||||||
Other obligations(b)
|
2,853
|
|
|
250
|
|
|
314
|
|
|
341
|
|
|
324
|
|
|
325
|
|
|
1,299
|
|
|||||||
Total
|
$
|
14,521
|
|
|
$
|
1,346
|
|
|
$
|
1,969
|
|
|
$
|
2,206
|
|
|
$
|
2,003
|
|
|
$
|
2,373
|
|
|
$
|
4,624
|
|
Year
|
|
Airbus A220
|
|
Airbus A321neo
|
|
Total
|
2019
|
|
—
|
|
12
|
|
12
|
2020
|
|
1
|
|
14
|
|
15
|
2021
|
|
6
|
|
17
|
|
23
|
2022
|
|
8
|
|
15
|
|
23
|
2023
|
|
19
|
|
14
|
|
33
|
2024
|
|
22
|
|
12
|
|
34
|
2025
|
|
12
|
|
—
|
|
12
|
2026
|
|
2
|
|
—
|
|
2
|
Total
|
|
70
|
|
84
|
|
154
|
Reconciliation of Operating Expense per ASM, excluding fuel
|
|||||||||||||||||||||||||||||||
(in millions; per ASM data in cents; percentages based on unrounded numbers)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|||||||||||||||||||||||||
$
|
|
per ASM
|
|
$
|
|
per ASM
|
|
$
|
|
per ASM
|
|
$
|
|
per ASM
|
|||||||||||||||||
Total operating expenses
|
$
|
1,855
|
|
|
$
|
11.58
|
|
|
$
|
2,080
|
|
|
$
|
13.74
|
|
|
$
|
3,652
|
|
|
$
|
11.60
|
|
|
$
|
3,709
|
|
|
$
|
12.72
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Aircraft fuel and related taxes
|
484
|
|
|
3.02
|
|
|
491
|
|
|
3.24
|
|
|
921
|
|
|
2.93
|
|
|
908
|
|
|
3.11
|
|
||||||||
Other non-airline expenses
|
12
|
|
|
0.09
|
|
|
11
|
|
|
0.07
|
|
|
23
|
|
|
0.07
|
|
|
20
|
|
|
0.07
|
|
||||||||
Special items
|
2
|
|
|
0.01
|
|
|
319
|
|
|
2.11
|
|
|
14
|
|
|
0.04
|
|
|
319
|
|
|
1.10
|
|
||||||||
Operating expenses, excluding fuel
|
$
|
1,357
|
|
|
$
|
8.46
|
|
|
$
|
1,259
|
|
|
$
|
8.32
|
|
|
$
|
2,694
|
|
|
$
|
8.56
|
|
|
$
|
2,462
|
|
|
$
|
8.44
|
|
Reconciliation of Free Cash Flow
|
||||||||
|
|
Six Months Ended June 30,
|
||||||
(in millions)
|
|
2019
|
|
2018
|
||||
Net cash provided by operating activities
|
|
$
|
968
|
|
|
$
|
722
|
|
Less: Capital expenditures
|
|
(328
|
)
|
|
(368
|
)
|
||
Less: Predelivery deposits for flight equipment
|
|
(142
|
)
|
|
(38
|
)
|
||
Free Cash Flow
|
|
$
|
498
|
|
|
$
|
316
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
|
||||
April 2019
|
|
—
|
|
|
|
|
—
|
|
|
$
|
250
|
|
May 2019
|
|
1.3
|
|
|
(1)
|
|
1.3
|
|
|
$
|
250
|
|
June 2019
|
|
5.2
|
|
|
(2)
|
|
5.2
|
|
|
$
|
125
|
|
Total
|
|
6.5
|
|
|
|
|
6.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JETBLUE AIRWAYS CORPORATION
|
||||
|
|
|
|
|
|
(Registrant)
|
||
|
|
|
|
|||||
Date:
|
|
July 26, 2019
|
|
|
|
By:
|
|
/s/ Alexander Chatkewitz
|
|
|
|
|
|
|
|
|
Vice President, Controller, and Chief Accounting Officer
(Principal Accounting Officer)
|
1
|
SCOPE
|
1.1
|
The Buyer wishes to [***], to convert thirteen (13) Aircraft into thirteen (13) Converted A321 LR Aircraft.
|
1.2
|
[***]
|
2.1
|
[***], the Buyer and the Seller hereby irrevocably convert six (6) 2018 Converted NEO Aircraft, two (2) Additional A321 NEO Aircraft and five (5) A321 NEO Aircraft; into thirteen (13) Converted A321 LR Aircraft as detailed in the following table:
|
CAC ID
|
Original Aircraft
|
Revised Aircraft
|
Original
Scheduled Delivery Month / Quarter
|
Revised
Scheduled Delivery Month / Quarter
|
402144
|
2018 Converted A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2020
|
[***] 2020
|
10054126
|
Additional A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2020
|
[***] 2021
|
10054127
|
Additional A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2021
|
[***] 2021
|
402151
|
2018 Converted A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2021
|
[***] 2021
|
402152
|
2018 Converted A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2021
|
[***] 2021
|
402156
|
2018 Converted A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2021
|
[***] 2021
|
402149
|
2018 Converted A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2022
|
[***] 2022
|
402150
|
2018 Converted A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2022
|
[***] 2022
|
10002765
|
A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2022
|
[***] 2022
|
10002768
|
A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2022
|
[***] 2022
|
10002773
|
A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2022
|
[***] 2022
|
10002774
|
A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2022
|
[***] 2022
|
402127
|
A321 NEO Aircraft
|
Converted A321 LR Aircraft
|
[***] 2022
|
[***] 2022
|
2.2
|
Schedule 1 to the Agreement is deleted in its entirety and replaced by the Amended and Restated Schedule 1 (the “Amended and Restated Schedule 1”) attached hereto as Appendix 1.
|
2.3
|
It shall be the Buyer’s sole responsibility to ensure, without any intervention necessary from the Seller, that all of the BFE Suppliers are notified of and accept the rescheduling and conversion set forth in Clauses 2.1 to 2.2 above without the Seller incurring any costs, losses, expenses, additional obligations, penalties, damages or liabilities of any kind by reason of such rescheduling or conversion, and the
|
2.4
|
The Buyer shall enter into discussions directly with the relevant Propulsion System manufacturer to amend the relevant propulsion systems agreement(s) in order to reflect the rescheduling and conversion set out in Clauses 2.1 to 2.2 above and will indemnify and hold the Seller harmless against any and all costs, losses, expenses, additional obligations, penalties, damages or liabilities so incurred by the Seller in the event that the Buyer fails to perform its obligations as set out under this Clause 2.4 unless such costs, losses, expenses, additional obligations, penalties, damages or liabilities are a result of the Seller’s gross negligence or willful misconduct.
|
2.5
|
Any and all Predelivery Payments [***] described in Clauses 2.1 to 2.2 herein [***].
|
3.1
|
With respect to the A321 LR Aircraft, any reference made in the Agreement to A321 NEO Standard Specification shall be deemed to be a reference to the A321 NEO ACF standard specification number [***], a copy of which has been annexed hereto as Exhibit A.
|
3.2
|
The definition of “Aircraft” set out in Clause 0 of the Agreement shall be deleted in its entirety and replaced by the following quoted text:
|
3.3
|
The definition of “A321 LR Aircraft” set out in Clause 0 of the Agreement, as further described in Paragraph 1 of Amended and Restated Letter Agreement No. 3 to the Agreement, shall be deleted in its entirety and replaced by the following quoted text:
|
3.4
|
The definition of “Converted A321 LR Aircraft” set out in Clause 0 of the Agreement, as further described in Paragraph 1 of Amended and Restated Letter Agreement No. 3 to the Agreement, shall be deleted in its entirety and replaced by the following quoted text:
|
4.1
|
The Base Price of the A321 LR Airframe shall be as set forth in Clauses 3.1.13 and 3.1.14 of the Agreement as further described in Paragraph 4 of Amended and Restated Letter Agreement No. 3 to the Agreement.
|
4.2
|
The Predelivery Payments for the Converted A321 LR Aircraft shall be as set forth in Clause 5.3 of the Agreement as modified by Paragraphs 1.7 and 2 of the Amended and Restated Letter Agreement No. 2 to the Agreement.
|
4.3
|
The purchase incentives applicable to the Converted A321 LR Aircraft shall be as set forth in Paragraph 12 of the Amended and Restated Letter Agreement No. 1 to the Agreement.
|
4.4
|
The Buyer hereby confirms that it [***].
|
4.5
|
[***]
|
4.6
|
[***]
|
5
|
EFFECT OF THE AMENDMENT
|
6
|
CONFIDENTIALITY
|
7
|
ASSIGNMENT
|
8
|
COUNTERPARTS
|
9
|
INTERPRETATION AND LAW
|
1
|
SCOPE
|
1.1
|
The Buyer wishes to [***], to convert thirteen (13) Aircraft into thirteen (13) Converted A321 XLR Aircraft.
|
1.2
|
[***]
|
2.1
|
[***], the Buyer and the Seller hereby irrevocably convert two (2) Converted A321 NEO Aircraft, five (5) Incremental A321 NEO Aircraft, four (4) Additional A321 NEO Aircraft and two (2) 2018 Converted A321 NEO Aircraft; into thirteen (13) Converted A321 XLR Aircraft as detailed in the following table:
|
CAC ID
|
Original Aircraft
|
Revised Aircraft
|
Original Scheduled Delivery Quarter
|
Revised Scheduled Delivery Quarter
|
402 132
|
Converted A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2023
|
[***]/2023
|
10054137
|
Additional A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2023
|
[***]/2023
|
10002779
|
Incremental A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2023
|
[***]/2023
|
402 139
|
Converted A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2023
|
[***]/2023
|
10002789
|
Incremental A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
10002790
|
Incremental A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
402 148
|
2018 Converted A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
10054131
|
Additional A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
402 159
|
2018 Converted A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
10002791
|
Incremental A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
10002793
|
Incremental A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
10054129
|
Additional A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
10054132
|
Additional A321 NEO Aircraft
|
Converted A321 XLR Aircraft
|
[***]/2024
|
[***]/2024
|
2.2
|
The scheduled delivery month of each Converted A321 XLR Aircraft [***].
|
2.3
|
Notwithstanding anything to the contrary in the Agreement, for the Converted A321 XLR Aircraft scheduled for delivery [***].
|
2.4
|
Schedule 1 to the Agreement is deleted in its entirety and replaced by the Amended and Restated Schedule 1 (the “Amended and Restated Schedule 1”) attached hereto as Appendix 1.
|
2.5
|
It shall be the Buyer’s sole responsibility to ensure, without any intervention necessary from the Seller, that all of the BFE Suppliers are notified of and accept the rescheduling and conversion set forth in Clauses 2.1 to 2.2 above without the Seller incurring any costs, losses, expenses, additional obligations, penalties, damages or liabilities of any kind by reason of such rescheduling or conversion, and the Buyer will indemnify and hold the Seller harmless against any and all of such costs, losses, expenses, additional obligations, penalties, damages or liabilities so incurred by the Seller unless such costs, losses, expenses, additional obligations, penalties, damages or liabilities are a result of the Seller’s gross negligence or willful misconduct.
|
2.6
|
The Buyer shall enter into discussions directly with the relevant Propulsion System manufacturer to amend the relevant propulsion systems agreement(s) in order to reflect the rescheduling and conversion set out in Clause 2.1 above and will indemnify and hold the Seller harmless against any and all costs, losses, expenses, additional obligations, penalties, damages or liabilities so incurred by the Seller in the event that the Buyer fails to perform its obligations as set out under this Clause 2.6 unless such costs, losses, expenses, additional obligations, penalties, damages or liabilities are a result of the Seller’s gross negligence or willful misconduct.
|
2.7
|
Any and all Predelivery Payments [***] described in Clause 2.1 herein [***].
|
3.1
|
With respect to the A321 XLR Aircraft, any reference made in the Agreement to A321 NEO Standard Specification shall be deemed to be a reference to the A321 NEO ACF standard specification number [***], a copy of which has been annexed hereto as Exhibit A.
|
3.2
|
The definition of “A321 XLR Aircraft” set out in Clause 0 of the Agreement, as further described in Paragraph 1 of Amended and Restated Letter Agreement No. 3 to the Agreement, shall be deleted in its entirety and replaced by the following quoted text:
|
3.3
|
The definition of “[***]” set out in Clause 0 of the Agreement, as further described in Paragraph 1 of Amended and Restated Letter Agreement No. 3 to the Agreement, shall be deleted in its entirety and replaced by the following quoted text:
|
4.1
|
The Base Price of the A321 XLR Airframe shall be as set forth in Clauses 3.1.15, 3.1.16, 3.1.17 and 3.1.18 of the Agreement as further described in Paragraph 4.3 of Amended and Restated Letter Agreement No. 3 to the Agreement.
|
4.2
|
The Predelivery Payments for the Converted A321 XLR Aircraft shall be as set forth in Clause 5.3 of the Agreement as modified by Paragraphs 1.8 and 2 of the Amended and Restated Letter Agreement No. 2 to the Agreement.
|
4.3
|
The purchase incentives applicable to the Converted A321 XLR Aircraft shall be as set forth in Paragraph 13 of the Amended and Restated Letter Agreement No. 1 to the Agreement.
|
4.4
|
[***]
|
4.4
|
The Buyer hereby confirms that it [***].
|
4.5
|
[***]
|
4.6
|
[***]
|
5
|
ADDITIONAL COMMERCIAL TERMS
|
6
|
[***]
|
7
|
EFFECT OF THE AMENDMENT
|
7.1
|
[***]
|
7.2
|
The Agreement will be deemed amended to the extent herein provided, and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment contains the entire agreement between the Buyer and the Seller with respect to the subject matter hereof and supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment.
|
7.3
|
Both parties agree that this Amendment will constitute an integral, nonseverable part of the Agreement and will be governed by its provisions, except that if the Agreement and this Amendment have specific provisions that are inconsistent, the specific provisions contained in this Amendment will govern.
|
7.4
|
This Amendment will become effective upon its execution [***].
|
8
|
CONFIDENTIALITY
|
9
|
ASSIGNMENT
|
10
|
COUNTERPARTS
|
11
|
INTERPRETATION AND LAW
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of JetBlue Airways Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
July 26, 2019
|
By:
|
/s/ ROBIN HAYES
|
|
|
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of JetBlue Airways Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
July 26, 2019
|
|
By:
|
/s/ STEVE PRIEST
|
|
|
|
|
|
Chief Financial Officer
|
|
Date:
|
July 26, 2019
|
|
By:
|
/s/ ROBIN HAYES
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
July 26, 2019
|
|
By:
|
/s/ STEVE PRIEST
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|