JetBlue Airways Corporation ($JBLU)

Good morning. My name is Krista, and I would like to welcome everyone to the JetBlue Airways Fourth Quarter 2025 Earnings Conference Call. As a reminder, today's call is being recorded. [Operator Instructions] I would now like to turn the call over to JetBlue's Director of Investor Relations, Koosh Patel. Please go ahead, sir.

Thanks, Krista. Good morning, everyone, and thanks for joining us for our first quarter 2026 earnings call. This morning, we issued our earnings release and the presentation that we will reference during this call. All of those documents are available on our website at investor.jetblue.com, and on the SEC's website at www.sec.gov. In New York to discuss our results are Joanna Geraghty, our Chief Executive Officer; Marty St. George, our President; and Ursula Hurley, our Chief Financial Officer. During today's call, we will make forward-looking statements about our outlook, strategy and future performance. These statements are based on our current expectations and are subject to risks and uncertainties that cause actual results to differ materially. Please refer to our earnings release and SEC filings for information about factors that could cause those differences. We may also discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in our earnings materials and on our website. And now I'd like to turn the call over to Joanna Geraghty, JetBlue's CEO.

Thank you, Koosh. Good morning, and thank you for joining JetBlue's First Quarter 2026 Earnings Call. I want to begin by thanking our crew members for their continued dedication during what has been another challenging start to the year. And I also want to recognize the TSA agents for their commitment during this shutdown. This first quarter includes multiple winter storms and TSA disruptions, but through it all, we are grateful our teams remain focused on delivering a safe and reliable service for our customers. The conflict in the Middle East and its impact on fuel prices is the most significant headwind we faced as an industry since COVID. Given the sharp increase in the price of fuel and the expectation for elevated prices throughout this year, we are suspending our prior full year guidance, as we aggressively adjust to the evolving macro backdrop. I want to be clear. Suspending our full year guidance reflects external factors alone and not a change in the strong progress of JetForward. We have taken immediate action to offset fuel costs, with our ultimate focus on minimizing the financial impact and preserving our liquidity position. The 3 primary levers available to us are: adjusting fares to better align with input costs, operating on productive capacity and pursuing additional cost savings opportunities. We recognize that customers expect strong value from JetBlue, and we're continuing to carefully balance our path to restoring profitability with meeting those expectations. Importantly, demand remained strong. This backdrop allows us to recover some of the increase in fuel costs. And as such, we have adjusted fares along with the industry over the last 2 months. Bookings have remained resilient amidst these changes, which is an encouraging sign. However, the first quarter was already over 90% booked before fuel prices suddenly spiked, reducing the opportunity to immediately recapture the impact of this significant fuel increase. We expect 30% to 40% fuel recapture in the second quarter and plan to achieve 100% recapture by early 2027. Given the broader cost environment, we've also made targeted updates to ancillary fees, such as checked bags. This allows us to better cover costs while keeping our base fares competitive. We will continue looking for additional ways to strengthen revenue performance throughout the rest of the year. At the same time, we are aggressively reducing capacity, targeting adjustments in off-peak and shoulder periods. We've acted quickly, reducing capacity by nearly 1 point versus close-in expectations in the second quarter, with plans to reduce the second half by at least 2 to 3 points. While we are able to reduce capacity closer in, as we've done, these decisions are more beneficial when made at least 60 days in advance to take even greater advantage of cost savings opportunities. And with demand continuing to remain strong, it's important we take a flexible approach to trimming capacity as we head into the peak summer season. We plan to closely monitor market conditions and expect to reduce additional capacity after the summer peak, assuming fuel prices remain elevated. In addition to managing capacity, we have opportunities to reduce other expenses and better align our cost profile with capacity. This includes efforts to reduce controllable spending and hiring, and in a lower capacity environment, we also expect savings on maintenance and other variable costs, such as landing fees. As we meaningfully adjust capacity to address higher fuel, we are committed to pulling all levers available to mitigate potential upward pressure on unit costs. Alongside these efforts, we believe JetForward remains the right strategy to navigate us forward. Across each of our priority moves, reliable and caring service, best East Coast leisure networks, products and perks customers value and a secure financial future, we are seeing clear evidence that our strategy is working, and we remain on track to drive $310 million of incremental JetForward EBIT in 2026 and $850 million to $950 million in 2027. And as a reminder, we have transformational initiatives launching this year, including domestic first class, the continued implementation of our Blue Sky collaboration and our second BlueHouse, which are expected to drive significant value for years to come. In closing, demand remains intact. Our JetForward initiatives are performing, and we are actively managing levers within our control. I remain confident we have the right strategy and the right team to navigate yet another challenging year for the sector, even in the face of these macro factors. As we gain greater visibility into fuel and its impact on the macro environment, we will plan to provide an updated view on full year expectations. I'll now turn it over to Marty.

Thank you, Joanna, and thanks again to our crew members. We delivered strong RASM performance for positive 6.5% in the first quarter, in line with our revised guidance and exceeding the midpoint of our initial RASM range by 4.5 points. The Caribbean base closure in January and winter storms Fern and Hernando combined to reduce capacity by nearly 4 points, which benefited our RASM performance by 2 points. The remaining 2.5 points of our RASM [ beat ] is a reflection of demand strength and the effectiveness of our JetForward initiatives. Demand trends strengthened as the quarter progressed. And importantly, that momentum is carried into the second quarter. We saw strength across the booking curve [ with ] close in demand and further out with improvements in both peak and trough periods. Premium continued to outperform core, with year-over-year premium RASM better than core by 9 points in the first quarter. We are encouraged by improvements in core demand and RASM, which is now strongly positive year-over-year, reflecting a more balanced demand environment across our offerings relative to what we experienced last year. Delivering the differentiated JetBlue experience across each unique customer offering meant even more in core remains a priority, reinforcing our commitment to all customers, not just select segments, even as fuel costs remain elevated. Lastly, while we saw strength in both domestic and international bookings, domestic has recovered meaningfully, and year-over-year RASM outperformed international. First quarter RASM was also benefited by about 1.5 points, a shift of upfront Easter traffic into late March. This was a historic quarter for our loyalty program, highlighting the investments we've made in our product and operations. Loyalty cash remuneration grew 19% year-over-year, driven by double-digit growth in spend on the JetBlue [ CADs ]. In addition to record levels of spend and a 45% increase in CAD acquisitions, we achieved all-time highs for TrueBlue active members and attach rates. Blue Sky is also driving corporate sign-ups in our non-focused city geographies, reflecting the broader reach the collaboration brings to our loyalty program. We continue to add utility and value for our members in other ways this quarter, including the ability to use points for ancillary purchases, which adopts by a very strong start. We also launched Family Tiles, an industry first that allows parents to earn status faster when traveling with children. Finally, customers are responding exceptionally well to our Blue House at JFK, with NPS trending well above expectations and driving premium credit card sign-ups beyond our initial targets. We believe the opening of our next launch in Boston later this summer, we have further catalysts for premium growth, alongside the launch of domestic first class expected in the second half. As these products and perks ramp and both new and existing members [indiscernible] now at engagement, we expect meaningful sequential growth in royalty revenue throughout the year. Strong customer response to our strategic growth in Fort Lauderdale drove first quarter RASM growth of 5%, even with capacity growth of 23%. In late March, we announced another run of additional service from Fort Lauderdale, one new destination to Cleveland, and added frequencies on [ 9 ] routes, where customers want more choices where they fly. With the addition of Cleveland, JetBlue will have launched nonstop service to 21 cities and increased frequency on over 20 high-demand markets from Fort Lauderdale over the past year, further strengthening our investment in building depth and connectivity in Florida's biggest premium market. Through our recent growth and competitive reductions, we've been able to take advantage of newly available gate space to build a schedule with 4 connecting banks beginning this summer, up from 2 banks previously. This provides our customers in the Northeast with significantly more opportunities to connect to our growing portfolio of destinations in the Caribbean and Latin America. We remain excited about the long-term opportunity in this focus city and continue to view it in addition to key leader destinations across state of Florida as an essential component of our network strategy. We've now grown to 11 destinations in Florida, following the launch of service to test in Fort Walton Beach from both New York and Boston in the first quarter. Blue Sky reached a new milestone in the first quarter with the launch of interline flight sales with United. We are encouraged by the early results we are already seeing, and are excited by the new opportunities we expect this collaboration to bring to our customers. This quarter, reciprocal loyalty benefits across Mosaic and miles plus tiers are expected to turn on, in addition to sales of [ rental cars ] through our Paisly platform. For the second quarter, we expect continued strength in RASM, supported by sustained demand trends and progress from our JetForward initiatives. This quarter is anchored by peak periods in early April, late May and June. The Easter outbound shift represents a second quarter headwind of about 1.5 points of RASM. As a result, we expect revenue to grow 7% to 11% year-over-year on 1.5% to 4.5% more capacity. Our investments in Fort Lauderdale now comprise all of our second quarter capacity growth. We are taking a similar approach to guiding RASM as we have in the past regarding to what we see today, which points to a sustained level of strong yield and lows for the remainder of the quarter. As we progress through the quarter, we plan to monitor the demand environment for opportunities to continue optimizing yields to help offset fuel costs. As of today, over 2/3 of the quarter's revenues on the books. And as Joanna mentioned, our second quarter RASM guidance implies to recapture 30% to 40% of the fuel cost increases versus our new plan for the quarter. We are encouraged by the demand trends we're seeing, and believe we are well positioned to generate significant RASM growth this quarter as we head into the summer peak travel season. Now I will turn it over to Ursula.

Thank you, Marty. As Joanna mentioned, the start to 2026 was marked by a dynamic operating environment and macro backdrop. The industry climate seems to be evolving every day, and we are responding quickly to position JetBlue to achieve our financial priorities. For example, we've actioned several capacity reductions across the second quarter and plan to stay nimble in the second half of the year. At the same time, we are prioritizing capacity investments in our Fort Lauderdale focus city, where customer response has been strong, and the resulting RASM is performing extremely well. Our underlying business is clearly improving, with a roughly 5-point spread between RASM and CASM ex expected at the midpoint of our guidance ranges this quarter. We haven't seen a gap like this in years, and it reflects strong demand for our product, better cost discipline and real momentum from our JetForward initiatives. During the first quarter, CASM ex-fuel growth finished up 6.6%, 4 points of which was due to close-in capacity reductions from the operational disruption. Without these impacts, CASM ex would have finished up 2.5% or 2 points better than our initial midpoint. One [ point ] of this beat was due to cost-saving efforts, while one point of spend is expected to shift into the remainder of the year. For the second quarter, we expect CASM ex fuel to increase in the range of 3% to 5% year-over-year. We continue to expect CASM ex-fuel growth to moderate down during the second half of the year, with over 2 points less unit cost growth in the first half, although this remains subject to how the price of fuel evolves in the coming months and our final capacity levels. Average fuel price for the first quarter was $2.96, 26% higher than the midpoint of our initial guidance. We expect second quarter fuel price to be in the range of $4.13 to $4.28, with the midpoint 75% higher year-over-year, which is derived from the forward Brent curve as of April 10. As a reminder, every $0.10 increase or decrease in fuel price is the equivalent to about $85 million of expense for the full year. To help offset a portion of fuel cost, we continue to focus on fuel efficiency programs, with 30% of our second quarter capacity powered by more fuel-efficient new engine technology, supporting a targeted 5% fuel efficiency improvement over the last 3 years. With oil and crack spreads expected to remain elevated for a sustained period, we are actioning incremental cost reductions beyond capacity cuts to mitigate the impact. These include reducing spend across both OpEx and CapEx and slowing hiring in some work groups to better align with our capacity expectations. At the same time, we are executing on our structural cost initiatives under JetForward, including rolling out new technology and AI to support improved planning for our crew and operation, launching a sourcing center of excellence to further optimize contract spend with business partners, and implementing more efficient in-sourcing and outsourcing opportunities across the business. Taken together, we expect our near-term cost reduction efforts and our JetForward cost initiatives to support strong cost control this year. While we did suspend our full year CASM ex-fuel guidance, we expect its historical relationship to capacity to continue this year, which implies roughly flat CASM ex-fuel on mid- to high single-digit capacity growth. Turning to our fleet and capital expenditures. In the first quarter, capital expenditures totaled $141 million, $59 million lower than our initial guidance due to timing shift of deliveries. Looking ahead, we expect approximately $275 million of capital expenditures in the second quarter and approximately $800 million in 2026. There has been a slight shift to our A220 deliveries, and we now expect 12 total aircraft deliveries this year, down from our January guidance of 14 aircraft. And as previously discussed, we expect CapEx to remain below $1 billion annually through the end of the decade. Shifting to our balance sheet. We believe our unencumbered asset base and liquidity help us successfully manage through industry shocks like these, and I am pleased with the runway we've built for JetBlue. We've raised over $3 billion back in 2024 to secure our financial future and give JetForward a runway to perform. And the cash we have on hand as a result is a valuable cushion in this volatile high fuel environment. We ended the quarter with $2.4 billion of liquidity or 26% of trailing 12-month revenue, above our liquidity target of 17% to 20%. This excludes our $600 million undrawn revolving credit facility. Earlier this month, we raised $500 million secured by aircraft collateral with an accordion feature that allows us to upsize to $750 million. We plan to reassess our funding needs as the year progresses. We also recently repaid the remaining $325 million of our 2021 convertible notes. Lastly, following this month's capital raise, our unencumbered asset base remains over $6 billion, with approximately a quarter intangible collateral. Our priority remains maintaining a strong liquidity position and ensuring JetForward has the runway to perform. To wrap up, the environment we are operating in is challenging and volatile. We are focused on taking swift action and executing on our JetForward strategy to put JetBlue in a position to restore operating profitability when the environment has normalized. We have taken meaningful action across the 3 main levers we control: fares, capacity and costs, and we are pleased with the early results of these actions. We remain encouraged by the underlying performance of the business, and are confident that JetForward is the right plan to navigate this challenging environment and deliver value for our shareholders. With that, we will now take your questions.

[Operator Instructions] And your first question comes from Mike Linenberg with Deutsche Bank.

Two questions here. With respect to your domestic first class, have you actually started selling that for the back part of the year? And if you are, can you just give us a sense of what the initial uptake looks like?

Thanks for your question, Mike. No, we have not begun selling it yet. We want to wait until we understand fully the implementation time line. As you said, it was going to come in second half of 2026, and we're still on track for that to happen. But we will announce the over for sale date when we know the first plan to be there for sales.

It is currently going through the certification process.

Okay. Great. And then just my second question, probably to you, Joanna, there appears to be like a subset of the industry that, among other things, is requesting a suspension of the ticket tax. And given that, that is a user fee to fund the system, could we be in a situation where half the industry is, I don't know, subsidizing the use of the system for the benefit of the other? Is that even -- is something like that even possible? I'm just curious about your thoughts about that.

Yes, not entirely from maybe the fuel excise tax you're speaking about. But -- yes. No, I mean, at the end of the day, if it were to apply to one carrier, we presumably need to apply to everybody. The numbers associated with that, we looked at that early on, aren't significant. I mean every dollar counts, but it ultimately was somewhere in the area of $20 million, $25 million annually for JetBlue.

I look at what we want to add in there, which is the ticket tax, is we, as an industry view this as a very unfair tax because we way overpay versus private aviation. So I would love for it to be reformed for other reasons, but I'm not sure this is the reason.

Your next question comes from the line of Conor Cunningham with Melius Research.

I'm trying to understand the comment that you were 90% booked in 1Q when jet fuel started to move up and just what that means to sequentials? Again, I realize you expect 30% to 40% recapture. But I would think that the fact that I think there's been, what, 6 industry fare increases, that the uplift in revenue would have been a little bit better in the 2Q. So if you could just talk about what's going on there on a sequential step-up? I realize the capacity is stepping up with it, but just any thoughts?

Yes. Conor, thanks -- the question -- the comment was we're not [indiscernible] for the second quarter. So we're -- we've got another 10% of revenue to come. That was not the number -- that was not the number on March 31 or March 30 whenever the fuel spiked. Do I have that right? Wait.

No. 1Q, we were -- 1Q, we were 90% booked because remember, fuel spiked in early March. We were 90% already booked for 1Q. So you aren't able to recapture with those fare increase, some of the bookings because they were booked in January and February at a lower price. So everybody would have been largely in the same position as us because there were already bookings that have taken place for 1Q. So headline. I don't think there's no news there. It's just saying we aren't able in 1Q to take advantage of the fare increases because people had already bought fares at the lower prices. Going forward, once those fares started going in very different stories.

Okay. Helpful. And then Ursula, maybe you could -- I mean, I think you have $6 billion of unencumbered assets. I realize you probably don't want to touch that quite yet. But if you could just talk about the accordion that you have within that current structure? What scenarios you would see yourself looking to tap at $250 million just in general.

Thanks for the question, Conor. So extremely pleased with where we ended the quarter in terms of liquidity. Our target is the 17% to 20%. We ended the quarter at 26%. So we still have a cushion. Our original 2026 plan assumed that we would raise $500 million this year. We executed a deal in utilizing aircraft to lock that in. We've drawn on a portion of that already, and we'll draw on the second portion later this year. We obviously did build in that flexibility in the accordion. So we do have an incremental $200 million and $50 million that we can draw on. Given the magnitude of the fuel price impact that we're seeing in the business, we will most likely draw down on that in order to maintain our 17% to 20% liquidity target.

Your next question comes from the line of Dan McKenzie from Seaport Global.

Just Ursula, following up on that last question, what additional cash could potentially be raised from expecting equity from deliveries or just aircraft financing? And under what scenarios might you want to raise additional capital beyond that accordion?

Yes. Thanks for the question, Dan. So our target is 17% to 20% liquidity. So I feel comfortable staying within that range. The aircraft that we're purchasing this year, there's 12 of them that are coming. We're assuming we purchase those with cash. So if we are at risk of falling below our liquidity level, we could decide to lever up those new deliveries. But as I mentioned in my script, we also have -- we currently have a healthy unincumbered base of the $6 billion. So of the $6 billion, about 30% is incremental aircraft and engines that we currently have on property. And then we also have our slot gates and routes, we have our brands, we have incremental loyalty that we can do. So we have options. And so if we're at risk of falling below our liquidity target, we'll assess all markets and look at all of our collateral and decide what would be the most effective.

Yes. And then second question here, I think maybe for Dave or Marty, just going back to the script here, 2 points of RASM be from stronger-than-expected demand and demand that sort of accelerated at the end of the quarter. So I suspect demand at the end of the quarter was worth more than 2 points of RASM beat. But my question really is, what's driving that? How sustainable is it? And at what point would you expect demand to be more elastic?

Dan, thanks for the question. I'd say 2 things. I mean I think if you look at the fourth quarter, when we get our fourth quarter call 3 months ago, we did call out that we had [indiscernible] performance accelerating through the end of 2025. So I think what we saw in early '26 is just consistent with what we've seen in general. With respect to the current revenue environment, I think it's clear that the revenue environment has been extremely robust even in the face of pretty high fare increases. And frankly, I think that what you see in the industry right now is that air travel is still a really, really good value. The A4A put out a document last couple of months or so, looking at price changes from 2019 until 2026. But they're looking at 20, 30 different commodities. Air travel was the only one where prices are actually down from 2019. [ Egg ] is up 96%, air travel down 3%. And frankly, I look at this, and I realize we still offer a really good value, and especially Jet Blue, who's focused on the more lower fare part of the business. And I'll use the metaphor that we use here all the time, which is it is very common that you can fly. In fact, we just looked at a little bit ago, you could fly -- I think the first couple of weeks of June, you can fly from Orlando to JFK for cheaper than it takes to take an Uber from JFK to Midtown. So air travel is still a fantastic good value. And honestly, with the quality of JetBlue, I think demand has held up very, very well for us. So we're very happy. But back to the point I made earlier, even with the price increases, we still see economy demand strong and actually positive unit revenue in the economy cabin. I think it's actually very good for us.

Maybe I'll just add, our JetForward initiatives, we do see them contributing to this. When you think about product, loyalty and merchandising. They're driving stronger engagement and yield performance. Our co-brand acquisitions are up. So elements of the strategy are also contributing to the stronger environment specific to JetBlue.

Your next question comes from the line of Jamie Baker with JPMorgan.

So Marty, JetBlue ordinarily generates less revenue in the third quarter relative to the second quarter. And of course, there's a positive Easter benefit in this year's second quarter. So I guess that makes the comparison even tougher. But there's significant yield momentum right now, fuel recapture improves over time. What probability would you ascribe -- I'm not asking for a guide, but what probability would you ascribe the third quarter revenue being higher than that of second quarter? Or is that simply off the table? No way.

I'd say a couple of things. First of all, if you -- someone not asking for guide, you see to be asking for a guide. And you...

I'm asking for a probability. If you want to give me a number. I'm just asking for probability.

No, we've not guided third quarter. We're not going to guide third quarter. But I will say that based on what we're seeing in the demand environment right now, we remain optimistic that we will continue as the year progresses, to start recovering more and more of the increased price of fuel. Now obviously, we need to be covered more than that because so many of our other inputs have gone up. But I think we feel very optimistic of what we're seeing the demand. Second thing is, certainly for the last month of the third quarter, we've talked about capacity cuts. I mean we've -- as far as our internal planning, we've taken 2 to 3 points out of our second half supply, very much focused and concentrated more on the September through December period. We're assuming fuel prices at the current curve. And because of that, there's certainly capacity that we think will not be economical. And I think that's also very much contributory to a good revenue environment. So I will not go as far as give you a guide or probability or any sort of percentages. But I'd say that as of now, we are very happy with the demand environment we're seeing, and not just the premium cabin but also in coach.

So you're saying there's a chance -- sorry. And then second, Joanna, you're not an official member of this association for [ Value ] Airlines, but I've seen very impressed reports that maybe you did participate in the recent $2.5 billion bailout request. Can you just clarify and kind of bring us up to speed in general, your thoughts as to selective government bailouts?

Yes, thanks. I think maybe high level, it's no secret that, I think the last administration definitely contributed to a disadvantage in the industry, whether it's Spirit, JetBlue's purposed merger or the blocking of the NEA. And I think that's obviously contributing to a sector that is less resilient compared to some of the larger carriers. We're in a bit of a different position because we have, obviously, a very healthy unincurred asset base and strong liquidity. So never say never. We're open to anything and everything, assuming the terms would make sense for JetBlue. But at this point, we're focused on continuing to execute that forward, continuing to control the pieces of the business that we can control to offset the impact of elevated fuel prices, and we'll watch, just like you're watching the news, and see how that shapes out the Spirit and the value of carriers and whether anything comes their way.

Your next question comes from the line of Duane Pfennigwerth with Evercore ISI.

Maybe just a follow-up right there. Joanna, in the scenario where Spirit gets support that nobody else does, would this influence your thinking about consolidation?

No. At the end of the day -- gosh, there's enough people out there that are commenting on every little piece of the business right now. And again, we're focused on executing the plan. Even in the situation where there is a potential Spirit bail out, we're going to continue to execute our Fort Lauderdale strategy. I mean as I think was mentioned in the script, we're -- Q1, ASMs were up 23%, RASM is up 5%. Customers are clearly picking JetBlue because it's a better product, a better service, and we're going to fly. And they're not afraid flights are going to get canceled. We've got a great plan regardless of the outcome of Spirit. I feel for their people. We're hiring a number of them to try to make sure that they have a soft landing. It's a really, really, really tough situation. And there continues to be this balance of scale in the industry. We're doing what we can with Blue Sky, but it is full steam ahead in Fort Lauderdale, and we look forward to continuing to bring the great step with the product and service there. We're now the #1 carrier for Lauderdale, bigger than when we were pre-COVID, and we look forward to continuing to grow.

And then, Marty, as you think about dialing down your schedule in the second half, what is your focus? What types of flights are most under the microscope?

That's a simple one. I mean, fundamentally, we are assuming the fuel price for the rest of the year will match what the forward curve is saying. And at that level, there are certainly a small percentage of flights that we believe will not actually be accretive during that time period. So again, the economics of reducing capacity are very much biased towards reducing it further out in advance because you can save a lot of expense when you do that. We did do a little bit of pulling from the May schedule, and I say we do much lower for that, for example, because the crews are already bid, they're going to get paid one way or the other. But when we make decisions this early to the fall, it's actually very effective for us to save some specific expenses. So when you see where the pulls are happening, it generally is off-peak periods, Tuesday, Wednesday, stuff like that, nothing really unusual. Although we did say and we are seeing good strength in the troughs, there still troughs in comparison to the peak period. So I think it's just the math exercise rather than strategic exercise. And our goal -- always our goal is to try to get to the best top [ manager ] we can get to. So if we see stuff that will not be contributed to that, we would start and take action.

Your next question comes from the line of Savi Syth with Raymond James.

Marty, maybe just on Fort Lauderdale, given all the changes that you've done and the significance and the investment there over the last years, I was curious kind of post this summer, rebanking, where are you in kind of the innings of really building up Fort Lauderdale outside of maybe kind of the opportunity if you get more gates?

Yes. So that's a great question. I think the real question is what happens with our biggest competitor there. Now first of all, we have now added significant capacity down there. We're double the size of our next biggest competitor. We did not go into this with any expectation of Spirit going away. What we have done is we've taken advantage of availability that they rated with some of their programs. So we have been lucky enough to be able to take advantage of the gates to add more international service and have a more formal bank structure down there, which we're very excited about. To the extent that they keep pulling down, we will backfill that capacity. And frankly, when you think about us adding a 1/4 of our capacity and still having RASM that's basically 1 point of the system RASM, that is outstanding performance. And I think what it shows is that the JetBlue value proposition resonates in South Florida. And I think, frankly, it's a market we're extremely excited about the arrival of the domestic first class product later on in 2026. So my view is that success should breed success, and we'll absolutely continue to build Fort Lauderdale to the extent we can. I think when we first talked about Fort Lauderdale, we said we thought it would be -- our goal is to get it to the size of Boston. And I'd say, when capability happens, it will absolutely be at that point. So instead of being focused on 2 focus cities sort of holding us up, we'll have a third leg of the stool in Fort Lauderdale. But again, a lot of that is going to be predicated on datability.

Makes sense. And maybe just a follow-up. You sort of board it up, like the other focus when you kind of [indiscernible] back was really building the New England strength back up. Just where are you kind of on that front?

I mean, fundamentally, I'm very comfortable with what we've [indiscernible]. I think the addition of service in a place like [ Bradley ] Providence in addition to what we've done in Boston, I think we're really excited about and happy how the markets have responded. We're not doing Fort Lauderdale at the expense of those markets. We do continue to have deliveries coming, which they will help fund Fort Lauderdale a lot. But frankly, I think the most important -- the most important thing to focus on is that the airplanes are going to follow whether [indiscernible]. We've been very happy with the demand that we've seen in the Northeast. We're sort of in year 2 of the ramp of these markets. And in general, more or less ahead of where we expected they would be. And frankly, I'd say, Fort Lauderdale's way ahead of the ramp than we had expected. And I think that's how Fort Lauderdale can attract more supply as we go forward. We're sort of coming into the summer period, which is a somewhat lower demand period to Fort Lauderdale, but I think once we get to the fall, sort of the November time period, I think we should expect significant additional growth Fort Lauderdale to the extent that we have gates available.

Your next question comes from the line of Michael Goldie with BMO Capital Markets.

You're seeing healthy card spend in acquisitions. Can you unpack this by region? Like is this really JFK driven right now? And how does that influence your thinking for the opening of Boston and as well as how things are trending for Lauderdale?

Well, Michael, thanks for the question. I think first thing, the -- I would not say there's any significant regional differences at the card spend. There's certainly regional differences in where the cards are. And the cards are basically New York, New Jersey, New England. That's the majority of our card business. And frankly, one of the things we're focused on for 2026 is to increase our base in South Florida. I think we've done well with the credit card, but I would say we're under indexed in South Florida versus where we should be. We already have efforts that are going on in South Florida to try to improve our card base. And frankly, I think as we've added some capacity down there, -- and then plus the addition of the United capacity into the Blue Sky redemption opportunities so that customers can fly anywhere in the world with the TrueBlue points, we're really bullish about our ability to have a really broad offering from South Florida, and that will translate into credit cards. Clearly, given the location of the BlueHouse, you can tell that New York and Boston are the focal points for the credit card business right now. And as we said this publicly and I'll say it again, we are looking at find a fine space for a BlueHouse facility in Fort Lauderdale. For those of you who know Terminal 3, it is a tough terminal as far as finding enough space for a lounge, but we are working with our partners at [indiscernible] Airport division trying to find a place for lounge on there. No news to report because we haven't found the right solution yet that's right for everybody. But I do think that's sort of the natural next third step, and it will be a very good help for things like [indiscernible] acquisition.

And on Paisly, you continue to ramp BlueSky. Can you talk about the pipeline and initiatives to add additional partners to scale this platform?

I say patents over and above United.

Yes.

So for Paisly, we have talked to single-digit number of other entities, some airlines, some nonairline partners or actually the RFP process right now with one partner, which we're very excited about. Nothing to report now as far as details, but I think to the extent that airlines and other partners are looking at opportunities for -- looking for a partnership beyond some of the sort of traditional patterns, I think we'll certainly be there for it. We are really, really excited about the technology platform that the Paisly team has built, and I'm looking forward to finally getting our first RFP and our first evaluation after United because I think we're going to be very competitive in this marketplace. I think it's also worth noting that we are now, just now trying to get some of the United content into Paisly. Today, you can buy JetBlue vacation package that actually has United Air in it. And we have JetBlue locations has sold packages to United destinations. We have rental cars coming very, very soon, hotels coming beginning of the third quarter, and we'll continue to go through the implementation for packages through things like that later in the year. So relationship with United has been very strong so far. They are great partners. And more than anything, we're excited to get their customer base experience the best of Paisly.

Your next question comes from the line of Tom Fitzgerald with TD Cowen.

Just wanted to stick with Blue Sky for a minute. I think it was on this call a year ago, you talked about a [ triple ] person who -- or customers who might need to be -- go to Omaha or [ Boise ] and just the value prop for them. Are you seeing the response from those type of customers that you hope for? And like what -- just like -- I know it's early days, what type of response have you seen from MileagePlus customers under your own network?

That's a great question. And we watch this very, very closely. We had put together a forecast of where we would expect United customers to book on us and exactly what we expected. It's things like L.A.-New York, Boston-New York. I see the L.A.-New York, San Fran-New York, San Fran-Boston, we've had surprisingly good results at DCA. DCA to Florida, DCA to Boston given United's large presence in [ Dallas ]. This is exactly what we were hoping for in this partnership. The ability to have JetBlue flights within the United Distribution channel, I think, is extremely helpful for us because as strong as JetBlue is, we don't have the same sort of share of mind in places like Washington on the West Coast, places like that. So it's doing exactly what we thought it would. We're very much looking forward to actually expanding this. We're still working on plans to create what we're calling mixed metal connections, which is special fly JetBlue into, let's just say, example, we just went back into New York-Houston, which we've been out here for a while. That will be in the United banks and customers can fly New York-Houston on JetBlue and then fly Houston to El Paso or somewhere on United going forward. We don't have a date for that yet because that's actually a bit of a technology challenge, but we are optimistic that, that will be coming as well. Overall, at the core, this is like the other 50-something interline relationships we have with a lot of partners. It just as with a very big airline that has really great distribution strength that complements that network really well.

I'll just add, I mean the whole point is to not provide customers with any chance to choose anybody other than JetBlue, particularly in Boston, where we have a very robust schedule and network likewise in New York. And we were with an investor who was telling us the story about how he was looking to fly to Asia, would typically have chosen one of our competitors that's large in Boston for that trip. But because we have this partnership with United, he booked on JetBlue, the United flight, earn TrueBlue points and was able to fly to Asia and pick us over the competitor because we have that connectivity. So this is the goal of Blue Sky and the point about delivering more scale and a broader network to our customers given that we do have a bit of a scale challenge in the markets that we're in.

That's really helpful color. And then just as a follow-up for Ursula, just curious -- just like you guys have had -- obviously, it's been a pretty fluid environment the last few years coming out of COVID. So just like some lessons learned on pulling controllable spend out kind of last minute or closer than maybe you were expecting. And I just think some levers you're looking to pull in the second half of the year.

Yes. Thanks, Tom. I mean, this is one area where I'm just super proud of the team and the way in which they've managed controllable costs. I mean we pulled a significant amount of capacity out of the network last year given the lack of demand. And the team found $40 million that then allowed us to maintain our full year guide. We get creative, there's everything from better aligning, hiring. We revised maintenance schedules. We reduced all discretionary spending. The team has made great progress on our fuel efficiency initiatives. We have driven 5% savings over the last 3 years. And so super proud of the team. They are in the process of also ramping up all the cost initiatives associated with JetForward. So creating a sourcing center of excellence. We're leveraging data science and AI to build tools so that we can drive better operating efficiency and put in place a more effective planning. And as a reminder, we've gone through and simplified the fleet, right, by exiting the E190. And so we've got a multitude of levers at our disposal, and I'm confident that this year, our cost profile definitely improves in the second half of the year versus the first half. Q1 is kind of the high watermark. Obviously, it was also impacted by disruptions. But as JetForward cost initiatives ramp through the rest of the year. And as and as capacity grow slightly in the second half of the year, we'll continue to see efficiencies. So we're going to do everything we possibly can to come as close as possible to the original full year controllable cost guidance.

Your next question comes from the line of Brandon Oglenski with Barclays.

Joanna, I mean, it's another frustrating year, right, because we have volatility in oil markets and it's fifth or 6 years here of not turning a profit or potentially not turning to profit, I should say. And you mentioned it earlier, just the lack of scale versus maybe some of your larger competitors where there's objectively better balance sheet, better profitability. I mean, how do you structurally address the lack of scale in your business relative to those of your competitors that are doing better and have done better in this whole time period? Is there something you need to think about maybe strategically?

Yes. Thanks for the question. I think -- maybe let me start with -- I mean, I'll get to your question, I want to start maybe first with JetForward. And we are seeing JetForward working and driving underlying performance in the business. If you look at our operating margins for Q1 and adjust for fuel, it would have actually been 5 points better than the -- it would actually would have been 5 points better than the actual operating margin, 3 points better than [ implied guide ]. So negative 10 down to a negative 5 if you adjust with fuel, and the implied guide was actually negative 8. So some nice progress there. Year-over-year, there was a 3-point expansion when you adjust for fuel. So as you think about sort of those early proof points, we are seeing JetForward working. We're seeing the gain from NPS. We're back to top of the industry, nice progress in Fort Lauderdale. Obviously, a 5-point RASM CASM spread in Q2 of this year, which is the most we've seen since the start of JetForward. We've got a whole series of initiatives. It's a big year for JetForward this year, including the Blue Sky implementation, [indiscernible], lounges, and the list goes on. And so the strategy is working. Obviously, the challenge is the macro environment and these -- the volatility that we just -- we keep seeing. So while the macro factors do impact the timing of our return to profitability, the goal is when those subside, that we're going to see all the benefits of JetForward come to fruition. And so we're just going to keep executing, trying to control what we can, probably the most underused -- most overused expression lately, but control what we can and continue to execute those initiatives. Regarding scale, we recognize the importance of scale. That's why we tried to do the NEA. That's why are we trying to do the Spirit merger. Now we've pivoted more focus on Blue Sky. And the early points we're seeing with Blue Sky are we are giving more utility and more relevance to customers and giving them a reason to choose JetBlue even though we maybe don't serve a particular destination because we're a bit smaller. That said, we continue to raise these concerns in Washington, continue to focus on what are the things this government can do to help with that imbalance. But we're not focused on relying on the government. We're focused on what we can control, and that's where BlueSky comes. Our network and our loyalty platform and how we continue to accelerate those, deepening relevance in the places where people know them of our brand, the Northeast, Fort Lauderdale. So while scale will continue to be a challenging thing for all midsize and small carriers, we're controlling what we can. We think Blue Sky is an important part of helping with that. And then Paisly is the other piece of the puzzle. That's a very low capital business, one that should drive nice earnings over time, and gives us sort of an independent revenue stream, that should help propel us back to profitability over time. So the hope is and the macro subside, the plan will produce and those early signs are it is producing, it's just being masked by some of these macro headwinds.

I appreciate the very thorough answer, Joanna. And Ursula, I guess as you think about capital needs, I mean, is taking potentially more debt, the right path here as well?

Yes. Listen, I'm cognizant that the balance sheet isn't where we want it to be. It's clearly been strained post-COVID. Our #1 priority is ensuring we maintain adequate liquidity to obviously navigate volatile times, such as what we're in at the moment. I acknowledge the level of interest expense is material. And so we don't take that raises, that decision lightly. We need to maintain our liquidity target of 17% to 20%, and we try to be super thoughtful and cognizant. I mean our #1 priority, as Joanna mentioned, is continuing to execute on JetForward and get to a breakeven or better op margin. That was the goal this year. Clearly, we're now facing material headwinds, which makes that exceptionally challenging. But the goal is positive operating margin, number one. Number two is delivering free cash flow. And then number three is delevering the balance sheet. So we need to focus on the things we can control and execution. And in terms of liquidity in the back half of this year, if there's risk that we fall out of our 17% to 20% target, we will assess all markets, and we've got $6 billion of unencumbered assets. So we have some flexibility to choose how we raise on a go-forward basis.

Your next question comes from the line of Atul Maheswari with UBS.

I want to circle back on the second quarter recapture of 30% to 40%. It does seem a little lower than some of your larger peers who are, say, about 10 points ahead on the recapture. So your booking curve is probably a bit shorter than them since you have more of a domestic business. And by that, it would imply that more of the second quarter would be booked at higher fares for you? So any color on why the lower recapture rate versus the legacy peers would be helpful.

Yes. Thanks, Atul. I'm thinking about some of the things we've heard in other calls. I don't think we're dramatically lower than what I remember hearing. The one thing I would say is I think the recapture rate is different at different fare levels. And back to the point we've made about JetForward, like the biggest goal we have in JetForward is to improve our penetration in the premium market. I'm guessing that the airlines that have the $6,000 business class fares to Asia may have a different recapture profile than we do. And again, that will be resolved or certainly gets significantly better as we finish JetForward in the next 18 months or so. But I don't look at our -- when I look at our own internal calculation to describe our recapture, they may be a slightly different shape curve, but end of '26, early '27 and sort of what we've heard from other airlines as well. So I'm not sure I agree with that.

I mean I think we think it's maybe premium and corporate mix, which we're addressing through JetForward and our first class product launching at the end of the year. So a little bit delayed, maybe relative to that, but not meaningfully.

Got it. That's helpful. And then as my second question, on the capital raise plan that you have, the [ 7 50 ] in total, what fuel recapture and demand scenarios did you use to come up with that number? That [ 7 50 ] that you have secured for now? I think just understanding that would be helpful as we try to assess whether or not you might need to raise more capital later in the year.

Yes. I mean, listen, at the highest level, our plan for 2026, our original budget had [ Brent ] at [ $63 ]. Clearly, we're in an environment where it's severely elevated. The original budget for this year assumes we would raise $500 million in liquidity to maintain our 17% to 20% liquidity target. So we locked in that $500 million. As a reminder, we have an accordion, that we can pull out accordion, and that's an incremental $250 million. It's too early to tell given the volatility of oil in the back half of this year, what the impact is going to be. I mean this is part of the reason we pulled our full year guidance is just the volatility has been so extreme. We don't have clear line of sight in the second half of this year. So we will assess as we press forward if we need to raise more liquidity to maintain that 17% to 20% target.

I think the headline is we are planning for multiple scenarios at different fuel prices, and we're maintaining a level of flexibility so that we can tie things and take advantage of our unencumbered asset base in the most favorable way possible. But if anybody's guess where fuel is going to be for the remainder of the year into next year. So we're trying to be [indiscernible] there.

Your next question comes from the line of Chris Stathoulopoulos with SIG.

I will keep it to one question. So as we think about a response to demand, demand elasticity or potentially demand destruction, I prefer more of the former as far as terminology. But if you could perhaps frame potential resiliency around yields, you have a lot of initiatives out here at Blue House, JFK, Boston, domestic first class, of course, Blue Sky. Could you speak to that in a scenario where we do start to see some pushback or potential pressure bubbling up for more price-sensitive travelers against these initiatives that you have rolling out this year? As we think about your resiliency and things like that.

Yes. Maybe I'll start, and then I'll go over to Marty. I think just first and foremost, we're not seeing any meaningful elasticity. Demand is strong across the booking curve. We are focused on yield. This is consistent with the broader industry trends, load factor. It's holding up well. And we are focused on cutting flights that don't make economic sense with the current fuel environment. When you think about unique things as part of JetBlue in terms of where we have resilient RV of our customers are an extremely resilient -- extremely resilient part of the franchise. And then obviously, all the things we're doing to try to increase our premium share, which remain more resilient when inflation goes up, are all the right move. So domestic first are even more base of the cabin, seeing really nice progress, really nice progress there. And then frankly, the locations we fly. I mean, Fort Lauderdale is where we're growing. The only place we're growing right now is the largest area in Florida with the highest income book. So it's much more premium than some of the other locations that we have. So we're happy with what we're doing to try to make sure we're taking advantage of those more resilient customers. And inherently, in our model, we do have various conversion that with customers [indiscernible] do go home to their family and friends over the holidays and for vacations, and they've always been very loyal to JetBlue and a group that is resilient. I don't know, Marty, if there's anything you want to add?

No. I think the only thing I'd mention, what Joanna said was, we've already taken action as far as reducing capacity in the second half of the year. And I'd say when we hit those windows of making significant cost commitments, we will clearly look at the market demand environment at that time. And if it makes sense for us to pull additional capacity, we certainly know. I mean, again, our #1 goal is to make sure to get op back where we want it to be. So I think being very flexible and open on capacity changes is an important part of that.

Your next question comes from the line of Catherine O'Brien with Goldman Sachs.

So a bit of a follow-up to an earlier question. You noted a really strong 45% increase in credit card acquisitions in the quarter, and it sounds like Blue House is one of the drivers of that. Can you give us some color on how much the JetBlue Premier Card growth was underling that system number? And then if you're able to share if there's a notable difference in annual credit card spend between the Premier Card and some of your other cards?

Catie, thanks. I'd say a couple of things. We don't [indiscernible] make a lot of detail, but I'll give you some color that I think should help. Our first thing is we only lapped the premier card in the first quarter. So there's really no basic -- for half quarter, there was no basic comparative. So it was really only March that we had year-over-year numbers. For the first year, we had put a -- what I would consider to be a conservative prudent forecast in knowing the launch is not open until later on in the year, and we significantly exceeded that number. When you go to the 45%, yes, the premier card is definitely a contributor, but a lot of that is just the base plus card that we offer every single day. And I think that -- I want to go back to the point we made earlier about Blue Sky. The secret sauce of Blue Sky is utility [indiscernible] to TrueBlue. The value, you should say utility [indiscernible] point dramatically changed when you got the ability to earn and burn anywhere in the world on the United network. And I will throw into that -- we didn't mention this in this call, but I'll throw it down here again. Later on this year, we will have full elite benefits between the 2 airlines as well. So if you're a multi-x [indiscernible] 4, you'll have an experience like you get on JetBlue when you fly on United later on this year. So our goal is to make sure that our customers feel like that the TrueBlue program will bring them anywhere in the world they might potentially want to go, which is something we have not had for a while. So to me, when I see the acceleration like we're seeing it, there's no change in approval rate as far as credit standards. It's just a lot more interest in the JetBlue path. And then to me, that is something that really, really excites me about Blue Sky. I think people get very focused on comparing to other programs. But frankly, this ability to have worldwide access for our customers to fly places that JetBlue could never imagine flying, I think that to me is the game changer. And I think that's translating into credit card acquisitions. I'll also mention that we're very lucky that the core of our customer base is basically New York, New Jersey, New England. And if you look at the economic status of those customers, it's generally a more affluent group and a high spending group. So having the spend up as much as it did in the base case, I think it's also huge for us as well and also better than some of the numbers to our competitors talking about spending.

That's really interesting. And maybe just final question for Ursula, appreciate with just the full year guidance, there's a lot of moving pieces. But on my math, based on the color you've given on the capacity cuts versus original land and taking into account the first quarter, it looks like your capacity will be up low single-digit territory as of now. I guess first, correct me if I'm wrong, but if that -- if that's correct, is it reasonable to assume that low single-digit capacity growth for CASM-ex will be kind of mid-single-digit range for the year based on your commentary and the relationship between capacity and CASM? And I guess anything we should be aware of when thinking about the cadence over 3Q and 4Q?

Yes. Thanks, Catie, for the question. I think the historical relationship still stands between capacity and CASM ex. So if capacity is at mid- to high single digits, CASM ex fuel would be flat. So I think your example is roughly in that ballpark. As mentioned, in my script, we definitely expect CASM ex fuel growth to moderate down during the second half of this year. So based on what we know in pulling 2 to 3 points of capacity in the second half of the year, our unit cost will be over 2 points less in 2H versus 1H. So that's directionally where we sit today. I mean, I do acknowledge this is all dependent on the oil backdrop. So clearly, if we start to get some relief or further pressure, we will adjust capacity as necessary. And then I mentioned earlier in the Q&A, I mean the team has done historical -- historically a great job at executing on controllable costs, and I have a lot of confidence that we can get as close as we can to the prior guide, given what we know today.

Your next question comes from the line of Ravi Shanker with Morgan Stanley.

This is Madison on for Ravi. I was just wondering if you could guys could give us some more color. I know you've talked about it, but just your thoughts on international in light of potential fuel shortages in Europe and kind of resource allocation across the company. And if there's kind of like any opportunity to cut back there? Or do you think you need to defend the slots you have?

Yes, I appreciate the question. We serve 8 different countries over in Europe. I think our frequency this summer will be about 14 daily flights. It's only 6% of our ASMs as we navigate through the summer. So the point being, it is a small part of our network. Obviously, there continues to be supply concerns over in Europe. We're watching it very closely. We're working with A4A and our peers to advocate for certain operating procedures so that we can consume as much fuel as possible. We're also hopeful given our flying is all long haul, that, that will be more protected versus the short-haul flying. So we're watching it very closely, and we're engaged and involved, but the exposure is minimal for us.

Your next question comes from the line of John Godyn with Citigroup.

I just wanted to better understand the philosophy behind the capacity cuts in the back half. I think it's fantastic that you guys are making some changes in response to fuel. And it's not just you, but across the board, companies have been a little bit reluctant to cut to levels that seem to more directly offset what's going on in the fuel environment. What is your guiding like as you contemplate 2% to 3% being appropriate and maybe the next cut behind it? Is it trying to get to 100% pass-through? Because 2% to 3% doesn't get you there. It doesn't seem to be free cash flow because you're not -- you're targeting free cash flow positive by the end of '27. It's not margin neutrality. I'm just trying to understand like when you're running these scenarios, what is the output that you are managing to?

John, thanks for the question. I mean I would say that it kind of is to free cash flow. It's just basically the EBIT overall. Our goal is to contribute as much to a deposit and EBIT as we can with the assets we have. And to the extent that we make decisions early and we have the ability to save more of the expenses. And we think that with the fuel price that we're assuming for the rest of the year and demand we're expecting, especially in tough periods, I think it's actually very important that we take action soon to make sure that we do what we can to maximize our EBIT. I would say that I do think I've seen -- I see a lot more talk of capacity cuts than I see in actual action in the rest of the industry. So I'm not sure that I'm as positive about what you said the other [ ones ] are doing, but I'll be clear that we are taking action. As we -- as you go back to the pre-war guide that we did, our goal is to get to positive up margin this year. We've suspended that guidance obviously, but our goal is to get -- do everything we can to make sure we get as close to that number as possible. And frankly, my view is given the fuel curve we're seeing right now, it would be imprudent to make decisions that would put -- that would not be profit maximizing. Now we do have some constraints with our slot base at JFK. I think it's worth mentioning that this is a long-term asset for the company. And unfortunately, we probably could cancel a little bit more, if we were able to take the risk on slots, but that's actually not a risk we want to take because frankly, this is a transitory situation. And I do think we'll eventually get back to normal, and we want to make sure that we will absolutely be in a position to maintain our franchise at JFK, and I think giving up slots would be a very bad idea in the short term. And the last issue is we are so happy with what we're seeing at Fort Lauderdale. I'd say there'd be fewer cuts in Fort Lauderdale and elsewhere, just because the demand is coming in as well as it is. But clearly, with fuel up 75% -- it's not quite 75% in the fourth quarter, but with fuel up as much as it is for the rest of the year, they are absolutely going to be flight through will not be cash contributors, and those flights have to go.

Yes. And that makes sense. But if I look at the fuel curve today, RASM numbers, it seems to imply like a 30% reduction in fuel from current spot by the end of the year. So I know that we need some basis for an estimate, and I appreciate that you guys are using the fuel curve, but you've got a very large embedded fuel tailwind kind of making the math work from here. It seems like you could hit the pass-through numbers that you're describing even if the demand environment didn't improve at all. And I'm not quite sure that that's like a reasonable framework. I don't know. It feels like you do, but maybe we can just talk about that a little bit.

I think it's a great question. And frankly, we look at the fuel curve and wonder how realistic it is during that time period. And that's one of the reasons why the comment earlier in the answer. When we hit those windows of making commitments and costs with respect to things like bidding pilots and things like that, before we get to that point, we will reevaluate the capacity plan we're offering. And it turns out the fuel curve ends up being better than we expected. Maybe we put the flights back if the fuel curve was worse than we expected. We will make sure to do the valuation when we can pull more with the goal of saving as much of the money as possible. So my view of this is, this is just prudent business and we will continue to watch that curve. I think if you think about that time frame of 90-ish days out when we have a pretty good handle on say, some of the costs, I think we'll have a much, much better view of the fuel -- of the fuel cost 90 days out than we have right now for 6 months out.

And we're going to maintain as much flexibility as possible. And I think that's the headline. If you could tell me where fuel is going to be in September, then I could tell you closer to what my capacities look like in September. But at the end of the day, given where the demand environment is right now and the investments in Fort Lauderdale on the slot portfolio in New York, we want to be mindful, but we fully appreciate. I mean we need to be aggressive in capacity cuts, to the extent that fuel remains in a highly elevated state for the rest of the year.

Yes. I mean I follow the logic. I can't tell you where fuel prices are going to be, but it's a plausible they could just be flat from here. And it doesn't seem like that's being contemplated in a serious way.

Yes, it's possible. So thanks, but thanks. Thank you. Appreciate it.

Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.