JetBlue Airways Corporation (JBLU) Earnings Call Transcript & Summary

Good morning, everybody. Welcome to the 13th Wolfe Research Transportation & Industrials Conference. I'm Hunter Keay. I'm the airline and aerospace & defense analyst here at Wolfe, hosting the conference this year with my colleagues, Scott Group, who covers transports, and Nigel Coe, who covers multi-industry. And first, it's great working with you 2 guys. It's a real pleasure. You guys are fantastic analysts, and I feel very fortunate to have you as my colleagues. And all my coworkers here at Wolfe, this was a challenge getting this thing on and learning new technology. And so far, 30 seconds in, everything is going perfectly. So Tatjana and Brittany Amoroso, our coordinator, and everybody else at the firm, obviously took a lot of work, and really want to thank you guys for everything. And thank you all the companies and the panelists that are participating today, too. This is not an easy time for everybody, and your time is extremely valuable. I'm usually standing at a podium in front of hundreds of people in New York City nursing a mild hangover after our opening cocktail hour from the prior evening. So in that sense, I'm disappointed that I feel good this morning. But the fact is that COVID-19 has really flipped our normal lives upside down. A lot of us have seen recessions before, but this is unprecedented, and it's causing significant amounts of stress and anxiety in all of our lives in very unique ways. Everybody is working extremely hard, and we're trying to stay focused, and we're trying our best to figure out what happens next in the world. In terms of today, the only prediction for today is that I feel like I've got really any assurity on happening is that all of the panelists on our 9:45 a.m. are going to have clean haircuts even during quarantine, which, by the way, stands in contrast to my own. We feel very fortunate to have a lot of thoughtful people here at this event. By the way, somebody please mute your line. Thank you. We feel very fortunate to have so many thoughtful people here at this event, policy experts, labor union leadership, senior management teams from both public and private companies of all kinds. We have over 80 companies presenting and investor attendance is up over 100% from last year. There's a lot of people here, obviously, enabled by the virtual format, of course, makes things easier. But there's genuine interest in this space from the investment community and all the companies that are presenting here. Wolfe Research was founded on the idea of being an independent, objective and strong voice in research. And the value of that is as important now as it's ever been since we were founded in 2008. And more than ever, I hope we can all use this conference as a place to gather together, learn a thing or 2 from someone who probably knows something more than you do about something and leave smarter. That's certainly my objective. In terms of the airlines, obviously, airlines are feeling the impact of this as much as any industry in the world. I never thought I'd see 20% load factors with 90% capacity cuts. This is an absolute reckoning. And the airline industry, obviously, has its flaws, but years of challenges have made it pretty good at crisis management. And the airlines who can stay focused, stay together and think forward, they probably do have the ability to come out of this thing stronger in the long term. And government assistance has given the airlines time to make painful downsizing decisions in a thoughtful way. This money will not solve all of the industry's problems, but it may prevent rash and potentially regrettable decisions if things do improve later this year. And if they don't get better, the airlines are planning for scenarios for that, too. It seems to me that the airlines are putting all their options on the table, and I don't think investors can underestimate some of the long-term changes that these companies are contemplating. I'm challenging myself more than ever to think out of the box. It is my view that it's a little bit early to be optimistic on the sector here from the stock perspective. It does seem pretty clear that the sharp demand declines have stopped getting worse. Southwest Airlines just filed an 8-K about an hour ago, said that new bookings are now outpacing cancellations in May, and management modestly improved the revenue outlook for both May and June. It does seem like we're seeing some signs of life here with society, generally, with people trying to find some normalcy to the extent that it's okay, it's safe to do so. And while air travel was one of the first things to stop, it may sadly be one of the last things to come back. And it's up to the airline industry and to policymakers, frankly, to make sure that the more cautious people feel safe about getting back on planes again. I'm going to be hosting 9 fireside chats and panels today. This is just a fantastic lineup of key deciders in the airline world who will shape this recovery. And I'm excited to ask them questions. A lot of these questions you expect and some of them you probably don't. Scott, Nigel and I will be moderating these panels and fireside chats over the next few days. We're getting started here with JetBlue in about 5 minutes at 8:00 in the morning Eastern. So please type in your questions in the box on the right, and I'll read them anonymously. My preference is going to be to prioritize audience questions over my own. So try to submit something that you think I would feel okay asking and I will ask it. We're using GoToMeeting and GoToWebinar for our one-on-one meetings and for our fireside chats. And for those of you who have one-on-ones, feel free to wander around virtually between those one-on-ones and our panels that will be going on all day. These panels and fireside chats are scheduled literally back-to-back with 0 time in between. So just bear with me and Scott and Nigel if we're 30 seconds late to one of the panels. We're going to try very hard to stay on schedule. At the end of each panel or fireside chat on the webinar, you should find your agenda and click on the link, and that will get you into the next fireside panel or chat. So your agenda is your guide today. Those are links, use them to get into these panels and fireside chats. If you have any problems, don't bank on e-mailing me or anybody. That's going to be hard, but you can e-mail [email protected]. And obviously the contact number detail is shown here, but I'm not going to respond to any e-mails, not right now. Big thanks to everyone at Wolfe and our clients, especially our clients who support the boutique research concept and everyone else for helping to get this team off the ground and obviously all you companies and panelists who are here, too, just like I said, in this busy time. And time is super important these days. And I'm deeply thankful that you're sharing with us. We have a busy few days ahead of us. Look forward to talking to you about it when it's done. I'm going to sign off here for about 30 seconds and be back at 8 a.m., maybe 90 seconds or so. I'll be back at 8 a.m. for our fireside chat with JetBlue CFO Steve Priest. Thanks, everybody. See you in a minute.

Good morning, and welcome to the Wolfe Research Global Transportation & Industrials Conference. This is the JetBlue Airways Corporation fireside chat with Wolfe Managing Director, covering airlines and A&D, Hunter Keay. [Operator Instructions] And now I hand the call over to Hunter.

Tatjana, thank you. I appreciate you joining us. Good morning, everybody. I'm Hunter Keay at Wolfe. I'm here with Steve Priest, who is the CFO of JetBlue. Steve, I appreciate you making the time and being here today, man. It's good to see you.

Yes. Good to see you too, Hunter, under these circumstances. Great to speak to you, and good morning to all of your guests who are listening in this morning.

So as you guys can see, you're already logged in, so you have some idea of how the software works. But go ahead and type in your questions there in the box. I will see your name. But Steve, I don't think you can see the questions, right?

No.

So Steve cannot see the questions. So I'll read them anonymously. Like I said in my opening remarks, if you ask me a question you think I can ask, I will ask it. And I'm going to get right into it, Steve. Before I do, Steve, do you have any opening remarks you want to make for a few minutes? And by the way, we have half an hour. So if you have any opening remarks you want to make, Steve, go for it; otherwise, we'll get right into the Q&A, it's up to you.

Yes. Again, thank you very much for having me this morning. It's a real privilege to be here. I suppose for all of us the last 2 months feels like an eternity. It is 2 short months since we were moving towards executing our financial goals for 2020 after a number of years of running our structural cost programs and our building blocks and focus on EPS. It's changed very, very significantly in a short period of time. And the teams at JetBlue, all of our 23,000 crew members, have done an outstanding job and really shoring up the company during this challenging time. I suppose we at JetBlue are focused on 3 fundamental themes at the moment: number one, really ensuring the safety of our crew members and our customers; number two, shoring up liquidity for the company as we weather this storm; and thirdly, strategizing and thinking about what JetBlue looks like as we come out of this crisis. So with that, Hunter, I'll hand over to you, and I look forward to taking your questions.

Okay. Great. Steve, the first thing I'm going to do today, I decided I wanted to ask one question, the same question of everybody today, just to get things started. And I thought of all the questions I could ask, this is by far and away and possibly the most useful and interesting. So the domestic load factor for the U.S. industry last year was 85%. That's an industry-wide number, okay? If I set the over-under at an industry level, so I'm not asking you for JetBlue's opinion of what your load factor is going to be. But if I set the over-under for 2021 at an industry level of 75%, would you take the over or the under?

I don't think you're far off, Hunter. While you pick 75%, I think if you think about a classic L-shaped recovery, whether it's a standard L or an extended L -- I think you got a bit of background noise or something there, Hunter, your guests are on mute.

That's a weed-wacker. My neighbor's weed-wacker. Sorry.

No problem. I don't think you're far off. I think with the shelter-in-place lifting, the very, very, very early green shoots that we're seeing from largely TSA data and ARC data. We'll keep our fingers crossed. Nobody really knows, but this is my sort of personal view, not the sort of JetBlue perspective. But I think from an industry standpoint, I'm hopeful that, that's a sort of level that you're getting to.

Okay. Yes, that's why I picked that number. It really felt like it was a good sort of median point. All right. So I guess we'll just start with Southwest, they did note -- I don't know if you saw that release, just came out an hour ago. They did note. And I think United about 5 minutes ago put out a release. They updated some data, too. You guys talked about it in your own call, a little bit of room for optimism. It's still obviously terrible. But has anything changed with regard to what you're seeing because this is a day-to-day thing we're in right now. What's the latest you can say on bookings and demand that you can share with us since you guys had your call last?

Yes, I mean, the answer is no. We had our earnings call last week. We've seen, as everybody else has, a precipitous drop in the whole landscape. You talked a little bit about running 10% the capacity of the industry, load factors in the sort of 15% to 20% mark. Again, I would refer you to the public data, which is showing like the TSA data sort of 20%, 25% off the bottom. You are starting to see a little bit of that bouncing off the bottom, particularly in relation to the shelter-in-place getting lifted. I suppose the advantage of JetBlue, we're a leisure carrier, right? So if you think about -- just a comment of what comes back first, is it leisure or business, we're 80% leisure. The other thing is, we're over-indexed on visiting friends and relatives traffic. And so there is a bit of a pent-up demand, as you can imagine, for sort of family traffic. And I suppose one of the hotspots we're starting to see is sort of some of that sort of northeastern seaboard down to Florida traffic as the last of the Florida shelter-in-place gets lifted. But I do want to emphasize, Hunter, we're coming off an extraordinary low base. And so I don't want anybody to get carried away. We are sort of in an unprecedented time and coming from an incredibly low starting point.

For sure. One thing that I'm sort of wondering about here is, and I plan on asking a bunch of these questions to a bunch of these airlines today. So this is not necessarily specific to JetBlue, but I certainly think it applies. How are people booking? I mean I think the media coverage about how customer -- you guys, as an industry, have said, book now, no hassle and no change fee, through '21, and you've made it seem very easy. But the media coverage will imply that it's very difficult for customers to get their money back from an airline even if under these relaxed booking circumstances. So one of the hypothesis that I have is people are going to start booking, but they're going to be using points very early for travel. And they're booking travel for maybe, say, this fall or maybe even next spring, I think they'll be more inclined to use their existing point balance to book travel as opposed to cash. So the first question today, is that happening? Because it's easier to go back online and cancel and get their points back, right, than having to sit on hold for a long time to kind of get their money back. Are you seeing more of a point mix book, like relative to usual? And is it fair to assume that, that is not really that useful for you because it's obviously not cash in the door immediately like a normal booking would be. I mean that goes in the ATL. But how do I think about that dynamic of how people are booking with points and the benefit to cash relative to the benefit in the revenue?

I think there's a balance. I mean everything else is a balance between the changes that we're seeing. I think what you saw in terms of customer behavior was an element of like concern about travel. And I think it's all about showing confidence in the industry and confidence when customers start traveling again. As a result of that concern about travel, you did see a number of customers start to cancel and reschedule their trips that they had planned. And therefore, it's not so much about miles, Hunter, but probably more about travel credits and the mix between sort of travel credits and cash. And so needless to say, if you look at the industry's ATL, I think you're going to see a higher proportion of credits in the ATL across the industry, and we're not sort of immune to that. And so as the recovery starts to happen, as customers start to come back, you're going to see a higher proportionality both between credit and cash as that sort of unwinds off the ATL. I don't see this as much about mile play more than a travel credit and cash flow.

Your Chairman recently said in an interview that the government grants are Band-Aid, his words, and that JetBlue has to figure out a new way of doing things. That's what he said. Obviously, everybody has to do that. I think that goes without saying, but I thought that was an intriguing comment given what you have been trying to do with the cost transformation program at JetBlue. And kind of curious to get your opinion on what you think he was talking about when he said that.

I think it's exactly what it is, which is, I mean, first of all, I'd say a huge thank you to Secretary Mnuchin and PJT, the partners that helped the Treasury sort of put the PSP program together. And also, a big thank you to Joel Peterson for serving JetBlue for many, many years as a fantastic Chairman. We miss him very much. I think where he's basically coming from is, the CARES Act is a Band-Aid. It's something that helps shore up the industry as we sort of navigate through this unprecedented crisis. And you need to sort of think about self-help. You need to think about what you look like as an organization, what the industry looks like as we emerge from this crisis. And I think there's 2 things I think about with that. Number one is driving sort of customer confidence in the industry as a whole and taking the necessary steps to get the U.S. public and the global public flying again. And we've been a leader in terms of driving some of that stuff very early in terms of thinking about flexibility in tickets, being the first airline to come out about facial coverings. So that's really about one element, which is really in the short to medium term really thinking about driving customer confidence. The other thing, Hunter, I think you made a point of is on the self-help side, the tremendous work that we've been working on for the last 3 years to reconstitute and reset our cost structure. So that as we come out of this crisis, we're in the best position to compete and to be successful. But really, that's why our job was done in terms of the temporary Band-Aid, it was essentially through the PSP program.

Yes. I'm just wondering, as it relates to the sort of cost crusade that you have been on, and you and I have talked about over the years on calls. I mean how can you use this? And I'd love an example or 2. I mean how do you use this situation to sort of change the culture of cost at JetBlue and maybe drive a little bit more sort of organizational accountability from top to bottom? I'm just meeting with the people doing the budget and the people out the frontline out of your stations. How do you drive that cost discipline? How do you use this crisis to change the way that this company has historically thought about spending money?

I mean candidly, we already have. I mean there was a lot of naysayers, a number of analysts included, when I first came into sort of JetBlue. And the leadership team across the company and the 23,000 crew members have done an incredible job. And I'd like to remind sort of your guests this morning, on a year-over-year unit cost basis, we beat the industry. We're #1 in the industry last year from a base of, again, a lot of perspective. So I think over the last 2 to 3 years, there's been an incredible focus on cost consciousness across the whole of the organization. And as we've come into this crisis, everyone has really leveled up. I think about our cash flow, and we talked about this on earnings last week. Our cash burn in the last sort of 2 weeks of March was $18 million a day. And now that's down to $10 million. And that assumes like basically 0 revenue. So that's the result of tremendous amounts of work across the whole organization. And to give you some specific examples, Hunter. It's across all of our sort of cost areas of the business. Our crew members have been incredible in terms of sort of standing up to do voluntary time off programs. Over 60% of our crew members have volunteered to do that. Our business partners, because we've negotiated really, really hard over the last 2 years. And I think one of the key things you have to do is maintain relationships as you do that. And a lot of our really big business partners have come to the table to extend payment terms and give additional discounts and things like that. And so we've really looked at taking a hammer to our fixed cost structure as well as including our variable cost structure. And again, we can weather the storm, maintain liquidity and come out of this as a stronger airline in a relative basis to the competitive set.

In the 10-K, you have $1.5 billion of aircraft commitment obligations in 2021. How low can you take that? And are you making PDPs on those deliveries right now?

Yes. I mean the first thing I want to say is, again, going back to my previous point, the fantastic support we've seen from our business partners. We took $1.3 billion of CapEx out of our plan between now and the end of 2020. And obviously, fleet is a big part of that. Our key focus, as you can imagine, was rationalizing the order book for sort of 2020. And that's been a really good first step for us in terms of looking at our capital commitments as we sort of go forward. And that's really pulled down our sort of CapEx burn as we go forward. So I'm pleased with the progress that we've made on that. We're obviously looking at sort of financing in the market. And for me, there's now a much higher bar in terms of the cost of capital that we have in the business going forward to make sure that we can sustain that. But teaming up with the business partners, and we've been successful in commercial negotiations. Sorry, excuse me. And it's really about making sure that all the capital that we spend in JetBlue earns its way back, and we're in a position to sustain this going forward. But very pleased with the focus that we've made and continuing to sort of look at deliveries sort of 2021 as we go forward.

And are you making PDPs on those '21 deliveries at this point?

Yes. I mean we are completely in line with our sort of contractual commitments with Airbus, as you would imagine, and completely in line with that as you would expect us to be.

Can you line up financing for those PDPs or is it all coming from cash?

Yes. I mean it's not just about PDPs. It's about all of our sort of obligations as we look at JetBlue. As you mentioned, we came into this crisis with $1.3 billion of liquidity at the end of sort of 2019. As at the end of April, we got $3.1 billion in the bank. We've got a nice set of unencumbered assets sitting on the balance sheet. We have been very, very active in numerous financing schemes. So I'm very comfortable with the progress we're making in, a, raising liquidity, using the fortress balance sheet that we came to this crisis with and absolutely making all of our commitments to our business partners.

Okay. On the call, I think you guys talked about London service as being pushed, not canceled but pushed. And I think, if I'm not mistaken, I think Robin previously said you wouldn't pay for access to, I believe he said Heathrow, but I wasn't sure if he was talking about any slots in a London area airport. But look, things are happening, especially in Gatwick right now. Gatwick is opening up very quickly. I'm wondering how you're thinking about that in the context of paying for access to Gatwick in the event that if something should come on sale, what is it you need to see to launch service there? And does this change the math in terms of, I know you said you weren't going to do it, maybe push it up. Is there a scenario you actually accelerate the service to London if the opportunity should pop up with really Gatwick?

Yes. First of all, I sort of do want to sort of recognize just how sort of challenged the overall sort of industry is in. And no one would have ever sort of thought that it could look like this a few months ago. Obviously, the European carriers have been significantly impacted with this. And the slots across Europe have, I know the sort of slot service levels in place, but the slot dynamic for me has changed pretty dramatically over the recent month or so. We're always going to do the right thing for our owners. And we're always going to do the right thing as we think about our capital deployment. And we're never going to be positioned, as we've always said, to pay exorbitant fees for landing slots in constrained airports. I'm delighted that we've got the A321LR arriving at JetBlue. It's a fundamental part of our Boston and New York strategy. We're very focused on continuing our growth as we've seen that and the accretive growth that goes forward, and we continue to see the opportunity. You're right, Robin talked on earnings last week. We're still progressing. But as you would expect in this environment, it's nudged a little bit to the right. In terms of specific access to specific airports, I think the current environment does offer further opportunities. But you're not going to see us pay exorbitant fees for landing slots at airports if we don't need to. And the other point I would make is obviously the CMA, the competition authorities in the U.K. ruled last week in terms of some of the slot divestitures, which continues to offer opportunities. So watch this space. I think this will present a number of opportunities for JetBlue and are focused on growing New York and Boston and our European operations.

When will we know about the CMA slot divestitures in terms of how they're going to be allocated out? Are they going to give them away? Are they going to make you pay for them? And when are we going to know about that?

It's still sort of a work in progress. And obviously, there's a lot of dialogue that has to continue to happen. We welcome the ruling. We welcome the focus. We've always said this. We like the opportunity to have fair and open competition. The opportunity to offer lower fares to customers, which is absolutely important. And carriers like JetBlue with our low-cost structure, ability to offer better fares for customers and stimulate demand is going to be a great thing. So I'm pleased with the ruling, and we'll see how this progresses as time goes on.

Okay. We have a lot of people on the webcast, and no one's asked a question. So go ahead and type that in. If you guys want, I've got plenty more, seeing there's no questions in the queue. Here's another one for me. When the industry can start looking forward a little bit more and things are stabilizing, people get on airplanes again, what financial metric will you prioritize as a management team? I'm not talking about executive compensation metrics or drivers, I'm talking about just as you think over the next 6, 12 months, what's going to be the most important thing for you guys to get right to drive to?

I mean and you heard us talk about this on the earnings call. The absolute #1 metric at the moment is the operating cash flow and stemming the cash losses in the organization. I think that's the first thing out of the block. And we are ruthlessly focused at looking at every dollar that we spend at JetBlue and seeing the opportunity to do that. The second thing in parallel, which you would absolutely expect us to be doing, is focus on our balance sheet metrics. Liquidity and cash is king at the moment, as you can imagine. Liquidity is the key focus. But overall our balance sheet metrics, as we sort of continue through 2020 and through '21, will be about getting through the crisis, shoring up liquidity, keeping a very close eye on the balance sheet, but then thinking about balance sheet repair. I think, again, as you've gone through this period and having to sort of lever up, thankfully, we ran into this managing the balance sheet to investment-grade metrics, but we've got to really continue to focus on that. And I think as you sort of come off the back of '21 and into '22, you start to think more about the classic P&L metrics that we've been thinking about, cash flow, cash burn, balance sheet metrics and then closely followed by the P&L as we sort of get to the sort of further back end of this crisis and we're thinking forward into '22.

Okay. How do you think about -- thank you. A couple of questions just came in. And before I get to them, there's one more for me. So as you think about cash after this crisis, what is the minimum level? And it's early. But as you think sort of on a preliminary basis, how are you going to think about a minimum amount of cash that you feel comfortable having on the balance sheet? I'm not talking about the next 6 months, I'm talking about 2023, 2024.

Yes. Yes. I mean the way -- I think it's sort of dynamic. I can't tell you the number of times people have pushed me before about, why don't you sort of lever up more, why you're holding this cash, why is your debt-to-cap where it is? And then you look at where we are at the moment, and thank goodness that we took that approach. I think the first thing I'd say, I'm delighted with the level of cash we've got in JetBlue at the moment to sort of weather this storm. I think people will naturally become sort of more conservative as one goes forward to think about those metrics. We've generally thought about 10% to 12% of trailing 12 months of cash in terms of revenue. You can assume that's going to get bumped up. We've always talked about the 30% to 40% debt-to-cap. I'll always be sort of comfortable with that. I think in terms of minimum cash levels, I mean, at this point, predicting where our sort of focus on cash balance is going to be in 2023, I don't want to get ahead of the game. But I sort of think in terms of absolute minimums as we are at the moment, I'd start to sort of get worried when we're sort of hitting the sort of $700 million to $800 million mark as it stands now. But thanks to the level of liquidity we have today and the liquidity levers that we have with the balance sheet that we're not getting anywhere near that level.

It's maybe not a question of what the number is, but how you would measure it. Are you going to take a -- it used to be cash as a percentage of LTM revenues, which everyone kind of agree was a little bit silly, but people did it anyway. Credit rating agencies cited it, but is it now maybe a function of the air traffic liability or the amount of interest expense that you have due over the next 12 months? I mean it's really not about the number, but what metrics are you going to use to measure what that number should be.

I mean it's a proxy for whatever. I think having gone through this experience and having like 24 years’ experience in the industry and gone through these seismic shocks, you are naturally more conservative. I mean we've already moved away from like cash associated over the last 12 months because the last 3 months have seen a precipitous drop. So that would give you a false sense of comfort. So at the moment, we continue to focus it as a proportion of 2019, right? And so I don't know, Hunter, I mean, you look at it going forward, there's going to be some form of proxy. The key thing is, do you have enough cash on the balance sheet to weather this storm? And do you have enough assets, unencumbered assets on the balance sheet to raise liquidity in short order if you get another sort of once in a 100-year phenomenon like we're going through at the moment.

Actually, there's a question that just came in from the audience. It actually even said, what's the size of the unencumbered asset pool and what is it comprised of? So...

Yes. We sort of talked about this on the earnings call a couple of weeks ago. We're still approaching $2 billion worth of unencumbered assets. And I'd sort of describe those as the hard assets in the company. That excludes the likes of any IP that JetBlue has or any in terms of the brand or the loyalty program or anything like that. So again, thank goodness we came into this with a significant position of strength, with a good asset base so that we can continue to weather this storm, depending on whatever shape of recovery that we see as we go forward.

Here's another question that came in. I'm just going to read it. It's a long one, so bear with me. Talk about network planning and how the first few months of demand recovery resembles a period when JetBlue and LCCs, in general, were just starting to establish themselves. Is the managerial talent, specifically around network planning and product development, thinking about the next few years like they did that period? Is there talent available that has experience with that time period? Specifically, would you be amenable to Marty returning back to JetBlue?

I love Marty. He's a great guy. It's nice to be reminded and I hope he's well. I haven't spoke to him for a little while, as we go forward. Listen, Hunter, I think we've got a serious bench at JetBlue. If you look at the many, many years of experience at JetBlue in terms of a leadership level, we miss Marty, but at the same time, he had a very, very strong bench. And the bench is very, very adept and experienced at sort of managing through this crisis with many years of experience. I would sort of point back to sort of 2009 to 2011 period, where you saw JetBlue sort of come out and go, okay, what's next, how do we emerge in a strong position from this crisis? It's a little different in terms of, number one, focusing on sort of retaining customer confidence that I've talked about. So that's the first thing out the block. But the second thing is how do you exploit opportunities. Thinking back to 2009 to 2011, we were very, very effective at sort of transforming transcon and think about how that evolved and in terms of going forward with Mint. Think about what we did in Puerto Rico and then ultimately sort of the Caribbean franchise. All of those things came to us as an opportunity, and we've used them well and have driven good margins for JetBlue. I don't think this situation is going to be any different. And the advantage that we have, particularly from your earlier comments about our focus on our cost structure for the last 3 years. Coming out of this with a lower cost structure than competition, the opportunities that present themselves give us a great opportunity to sort of take things forward. So yes, we have the experience. Yes, we have the right talent. And yes, we believe that we're going to see opportunities for JetBlue to go from strength to strength as opportunities sort of arise as other carriers also start looking at their network footprint in a sort of lower demand sort of environment because it's going to take a while to get back to 2019 levels as you can well imagine.

Yes. Another question just came from the audience. How do you think about used aircraft values and CapEx decisions, buy new or buy used? And I'll just add on my own question to this, too, Steve, what is a reasonable range or low end range for CapEx for JetBlue over the next 2 to 3 years?

Yes, I mean, as you can imagine, we're entirely focused on this. I think about getting the balance right as we sort of go forward. You will recall, when we sort of looked at the E190s and an incredibly compelling business case to bring the A320s into the fleet to replace the E190s. They will bring great opportunities for our margins as we go forward. It's definitely the right thing to do. And as you would imagine, in this scenario, we're looking at some of our older aircraft, what's the right thing to do with them, how do we balance potential sort of retirements versus new aircraft coming in. And so our focus in the immediate time now is really around raising liquidity, but we started to pivot, as I've talked about, about thinking about as we evolve through the crisis and what the future size and shape of JetBlue looks like, and that includes the fleet and in terms of how we sort of drive that forward. In terms of the sort of CapEx, as I mentioned earlier, we have been very aggressive at reducing the levels of CapEx in 2020. The dialogue has been very effective. I'm not going to get into the essence of some commercial discussions that we're having. But the big thing about CapEx is, a, what is the right level of CapEx in terms of returns. And having a higher hurdle rate in terms of the cash generation that comes off the back of it and the speed at which that capital drives a return for JetBlue. And we'll continue to work through that, as you can expect, as we think particularly about the fleet going forward.

Okay. Well, look, I'm going to end it there so we can stay on time, but we're going to hop over to the Air Canada meeting now. We have Mike Rousseau in the other room. So Steve, it's great to see you. I'm glad you're doing well. A question just came in. I'm sorry, but it's too late. So I'll pass it along to you privately, okay, Steve? I appreciate you joining us. All right, have a nice day.

Thanks, Hunter. Thanks to the audience this morning. It's great to speak to you all. Thank you very much, indeed. Have a good day.

You, too. Thank you. I'll see you guys over in the next panel.

See you. Bye-bye.

Thanks.