Jetblue Airways Corp: Form 10-Q for the period ended Jun 30, 2025

Part I, Item 2 of this Report should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Report and our audited consolidated financial statements and related notes included in our 2024 Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A "Risk Factors" of our 2024 Form 10-K and in Part II, Item 1A "Risk Factors" and other parts of this Report.

We expect our operating results to fluctuate significantly from quarter-to-quarter in the future due to factors such as economic conditions, weather events, cost of aircraft fuel, and various other factors, many of which are outside of our control. Consequently, we believe quarter-over-quarter comparisons of our operating results may not necessarily be meaningful; you should not rely on our results for any one quarter as an indication of our future performance. Except for uncertainty related to the cost of aircraft fuel, we expect our expenses to continue to increase from wage rate cost pressures, as we acquire additional aircraft, and as our fleet ages.

OVERVIEW

Second Quarter 2025 Results

In the second quarter of 2025, we had operating income of $6 million, compared to operating income of $57 million in the 2024 period. The decline in operating income is primarily due to softening demand resulting from lower consumer confidence because of an uncertain macro economic environment. The decline in revenue was partially mitigated by lower operating expenses, primarily aircraft fuel costs, compared to the prior year.

Our second quarter 2025 highlights include the following:

• Second quarter 2025 system available seat miles ("ASMs" or "capacity") decreased by 1.5% year-over-year.
• Operating revenue for the second quarter of 2025 was $2.4 billion, a 3.0% decrease year-over-year.
• Operating expense for the second quarter of 2025 was $2.4 billion, a 0.9% decrease year-over-year.
• Operating expense, excluding special items, for the second quarter of 2025 was $2.3 billion, a 1.9% (1) decrease year-over-year.
• Operating expense per available seat mile ("CASM") for the second quarter of 2025 increased by 0.6% year-over-year to 14.13 cents compared to the second quarter of 2024.
• Excluding fuel, special items, and operating expenses related to our non-airline businesses, our cost per available seat mile ("CASM ex-fuel") (1) increased by 6.0% to 10.86 cents in the second quarter of 2025 compared to the second quarter of 2024.

(1) Refer to "Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 24

Recent Developments

JetForward

JetForward, our strategic framework, is focused on four priority moves: delivering reliable and caring service, building the best east coast leisure network, offering products and perks customers value, and providing a secure financial future. Our JetForward plan, which is designed to support our long-term profitability goals, reflects various assumptions regarding factors that may impact our operational and financial performance. For further information on potential factors that could affect the success of our strategic initiatives, including JetForward, see our 2024 Form 10-K.

The sections below highlight some additional changes made to support these priority moves during the quarter.

Reliable and Caring Service

On-time performance, as defined by the DOT, is arrival within 14 minutes of scheduled arrival time. In the three months ended June 30, 2025, our system-wide on-time performance was 77.3% compared to 74.8% for the same period in 2024. Our completion factor was 99.6% for the three months ended June 30, 2025 compared to 98.8% for the same period in 2024.

Best East Coast Leisure Network

We are focused on high-performing leisure, visiting-friends-and-relatives and transcontinental routes in core geographies like New York, New England, Florida, and Puerto Rico. In 2024, we made a number of network changes, which are ramping up throughout 2025.

In the second quarter, we continued to make adjustments to our business in response to the evolving macro economic environment and further realigned our network to our strengths. We are ending our service to Miami this fall and are shifting to seasonal service in Seattle this winter.

We announced new seasonal Mint® service from both Newark and Orlando to Las Vegas starting this winter. This announcement marks the first time JetBlue will bring Mint® service to Orlando. We also launched new service from Boston to two transatlantic locations, Madrid, Spain and Edinburgh, Scotland, as well as began new service to San Pedro Sula, Honduras; Wilmington, North Carolina; Norfolk, Virginia; and Traverse City, Michigan.

Products and Perks Customers Value

During the quarter, we continued to make enhancements to our customer experience by increasing the value of our product offerings and customer experience.

In May 2025, we announced a collaboration with United Airlines, referred to as Blue Sky. This collaboration, once implemented, is structured to give customers of both airlines even more options to find flights that fit their plans as well as new opportunities to earn and use MileagePlus® miles and TrueBlue® points across both airlines. Once in place, Blue Sky is anticipated to provide members of each airline's loyalty program with similar benefits over time. It will also provide reciprocal revenue-based miles and points accrual and redemptions when members use and earn miles or points on the partner airline. In connection with the Blue Sky collaboration, DOT has concluded its regulatory review. JetBlue and United may now begin implementing the collaboration.

In June 2025, we announced the rebranding of JetBlue Travel Products to Paisly, LLC ("Paisly"). The rebranding marks a strategic milestone in JetBlue's broader JetForward strategy, as Paisly evolves from an internal travel platform into a full-service, tech-enabled managed travel services company. With a mission to deliver personalized, human-first experiences, Paisly is positioned to serve not only JetBlue customers but also those of other airlines, starting with a new collaboration with United Airlines, and is expected to support a growing range of partners across the broader travel landscape. The collaboration will contribute to our high-margin, high-growth Paisly business, which is JetBlue's independently-led white label platform, for the distribution of hotels, rental cars, cruises, travel insurance and packages under United's brand.

During the quarter, we also announced the expansion of our partnership with Japan Airlines, to include TrueBlue® point redemptions. This milestone marks the first time JetBlue's TrueBlue® members can redeem points for travel with an airline partner in East Asia.

We were also awarded the top airline for first and business class customer satisfaction in the J.D. Power 2025 North America Airlines Satisfaction Study. Additionally, our core product rose to second place for both economy and premium economy categories.

A Secure Financial Future

To secure our financial future and navigate near-term demand volatility, we are focused on maintaining a strong liquidity position and evaluating opportunities to reduce our controllable costs. We continue to make progress on the JetForward cost program by executing technology driven initiatives focused on AI and data science adoption to increase customer self service, disruption management, and fuel consumption reductions.

In May 2025, as part of efforts to return focus to our core business, SKY Leasing ("SKY"), a leading aviation investment manager, acquired certain assets of JetBlue Technology Ventures LLC ("JBV"), JetBlue's venture capital subsidiary. JetBlue continues to serve as a strategic partner to SKY and its portfolio companies. JetBlue retained ownership of its fund portfolio, disclosed in Note 8 to our condensed consolidated financial statements included in Part I, Item 1 of this Report, and SKY has assumed management of the investments, subject to an agreed upon management fee. Certain other conditions exist in the agreement, but are not expected to have a material impact on the companies' operations or financial condition.

Liquidity

At June 30, 2025, we had $3.4 billion in liquidity, which included unrestricted cash, cash equivalents, short-term investments, and long-term marketable securities. In addition, we had a $600 million Citibank undrawn line of credit.

Pratt & Whitney

In July 2023, Pratt & Whitney, a division of RTX Corporation, announced the requirement, mandated by the FAA, for removal of certain engines for inspection due to a rare condition involving powdered metal used in the production of certain engine parts on the PW1100G and PW1500G engine types. These engines power our Airbus A321neo and Airbus A220 fleets. The powdered metal affects engines manufactured between October 2015 and September 2021. Those engines are now required to be inspected after they have reached a reduced number of cycles dependent on the fleet type. As a result of these required inspections and other engine reliability deficiencies, as of June 30, 2025, we had eight aircraft grounded due to lack of engine availability. The Company currently expects each removed engine to take approximately 300 days to complete a shop visit and return to a serviceable condition.

We expect to average fewer than 10 aircraft groundings in 2025 and believe this year represents the peak. We expect the number to reduce as we progress into 2026 and fully resolve by the end of 2027. We are currently working with Pratt & Whitney on a commercial resolution and any potential remediation steps remains uncertain.

Embraer E190 Fleet Transition

In the second quarter of 2025, as part of the Company's fleet transition plan, the Company entered into definitive agreements to sell our remaining owned Embraer E190 fleet, which include 25 airframes and 59 engines. We received $9 million in cash proceeds for the deposits for the aircraft sales. The aircraft are expected to be sold beginning in the third quarter of 2025 through the second quarter of 2026. In July 2025, prior to the filing date, we sold four airframes and six engines.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2025 vs. 2024

Overview

We reported a net loss of $74 million, operating income of $6 million and an operating margin of 0.3% for the three months ended June 30, 2025. This compares to a net income of $25 million, an operating income of $57 million and an operating margin of 2.3% for the three months ended June 30, 2024. Our loss per share was $0.21 for the second quarter of 2025 compared to a earnings per share of $0.07 for the same period in 2024. Net loss increased $99 million year-over-year primarily due to lower revenue driven by softening demand and higher interest expense due to the financing of the TrueBlue® loyalty program in August 2024.

Our reported results for the three months ended June 30, 2025 and 2024 included the effects of special items and certain gains and losses on investments. Adjusting for these items, our adjusted net loss (1) was $58 million, adjusted operating income (1) was $30 million, adjusted operating margin (1) was 1.3%, and adjusted loss per share (1) was $0.16 for the three months ended June 30, 2025. This compares to an adjusted net income (1) of $26 million, adjusted operating income (1) of $58 million, adjusted operating margin (1) of 2.4%, and adjusted earnings per share (1) of $0.08 for the three months ended June 30, 2024.

(1) Refer to "Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 26

Operating Revenues

(Revenues in millions; percent changes based on unrounded numbers)

Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More®. Passenger revenue decreased 3.8% for the three months ended June 30, 2025 compared to the same period in 2024. This was mainly driven by a 1.5% reduction in capacity and a 3.9% reduction in revenue passengers.

Other revenue increased $14 million, or 8.1%, primarily due to higher customer spend related to loyalty revenue from the non-transportation elements of the sale of TrueBlue® points. Other revenue also includes revenue from the sale of vacation packages, airport concessions and advertising revenue.

We measure capacity in terms of available seat miles, which represents the number of seats available for passengers multiplied by the number of miles the seats are flown. Yield, or the average amount one passenger pays to fly one mile, is calculated by dividing passenger revenue by revenue passenger miles. We attempt to increase passenger revenue by increasing our yield and also increasing our load factor of flights, when possible. Our objective is to optimize our fare mix to increase our overall revenue per available seat mile while continuing to provide our customers with competitive fares.

Operating Expenses

In detail, our operating costs per ASM, were as follows:

(in millions; per ASM data in cents; percent changes based on unrounded numbers)

(1) Not meaningful or greater than 100% change.

Aircraft Fuel

Aircraft fuel decreased by $122 million, or 19.4%, for the three months ended June 30, 2025 compared to the same period in 2024. The average fuel price decreased by 16.2% to $2.40 per gallon and fuel consumption decreased by 3.8%, or 8 million gallons.

Salaries, Wages and Benefits

Salaries, wages and benefits increased by $68 million, or 8.5%, for the three months ended June 30, 2025 compared to the same period in 2024, driven by a pilot union contract wage rate increase of 9% effective August 2024.

Aircraft Rent

Aircraft rent decreased by $5 million, or 21.2%, in the three months ended June 30, 2025 compared to the same period in 2024, as a result of fewer leases for Airbus A320 aircraft and Embraer E190 aircraft. The Company purchased certain Airbus A320 aircraft off lease and certain Embraer E190 aircraft leases reached their lease expiration and were returned to the lessor as part of the Company's fleet transition plan.

Sales and Marketing

Sales and marketing decreased by $11 million, or 11.8%, in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to lower credit card fees as a result of the reduction in passenger revenue.

Maintenance, Materials and Repairs

Maintenance, materials and repairs increased by $48 million, or 31.9%, in the three months ended June 30, 2025 compared to the same period in 2024, primarily due to the timing of Airbus A320 engine repairs. This increase is partially offset by an increase in engine shop visit credits received.

Special Items

For the three months ended June 30, 2025, special items included $24 million relating to voluntary opt-out costs, compared to $1 million for the same period in 2024.

Other Operating Expenses

Other operating expenses decreased by $24 million, or 6.6%, in the three months ended June 30, 2025 compared to the same period in 2024, due to net gains of $27 million principally from three engine sale-leaseback transactions, the sale of seven V2500 engines, and the contracted sale of two Airbus A321neo XLR aircraft.

Other Income (Expense)

(in millions; percent changes based on unrounded numbers)

Interest Expense

Interest expense increased by $84 million, for the three months ended June 30, 2025 compared to the same period in 2024. This increase was primarily due to the financing of our TrueBlue® program, the issuance of new equipment notes, and incremental failed aircraft sale-leaseback transactions.

Interest Income

Interest income increased by $15 million, or 86.8%, for the three months ended June 30, 2025 compared to the same period in 2024. This increase was primarily driven by an increase in short term investments due to the proceeds received from the TrueBlue® Financings.

Other

Other income decreased by $9 million, or 53.6%, for the three months ended June 30, 2025 compared to the same period in 2024. This decrease was primarily due to lower income recorded related to our share of equity method investees' financial results compared to the prior year.

RESULTS OF OPERATIONS

Six Months Ended June 30, 2025 vs. 2024

Overview

We reported a net loss of $282 million, an operating loss of $168 million and an operating margin of (3.7)% for the six months ended June 30, 2025. This compares to a net loss of $691 million, an operating loss of $663 million and an operating margin of (14.3)% for the six months ended June 30, 2024. Loss per share was $0.79 for the six months ended June 30, 2025 compared to a loss per share of $2.02 for the same period in 2024. Net loss decreased $409 million year-over-year primarily due to the March 2024 write off of Spirit-related costs for $532 million as a result of the termination of the Merger agreement. This decrease was partially offset by lower revenue from softening demand and higher interest expense due to the financing of the TrueBlue® loyalty program in August 2024.

Our reported results for the six months ended June 30, 2025 included the effects of special items and certain gains and losses on investments. Adjusting for these items, our adjusted net loss (1) was $267 million, adjusted operating loss (1) was $144 million, adjusted operating margin (1) was (3.2)%, and adjusted loss per share (1) was $0.75 for the six months ended June 30, 2025. This compares to an adjusted net loss (1) of $119 million, adjusted operating loss (1) of $100 million, adjusted operating margin (1) of (2.2)%, and adjusted loss per share (1) of $0.35 for the six months ended June 30, 2024.

Operating Revenues

(Revenues in millions; percent changes based on unrounded numbers)

Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More® Space. Passenger revenue decreased $170 million, or 4.0%, for the six months ended June 30, 2025 compared to the same period in 2024. This was mainly driven by a 2.9% reduction in capacity and a 3.6% reduction in revenue passengers.

Other revenue increased $29 million, or 9.5%, primarily due to higher customer spend related to loyalty revenue from the non-transportation elements of the sale of TrueBlue® points. Other revenue also includes revenue from the sale of vacation packages, airport concessions and advertising revenue.

We measure capacity in terms of available seat miles, which represents the number of seats available for passengers multiplied by the number of miles the seats are flown. Yield, or the average amount one passenger pays to fly one mile, is calculated by dividing passenger revenue by revenue passenger miles. We attempt to increase passenger revenue by increasing our yield and also increasing our load factor of flights, when possible. Our objective is to optimize our fare mix to increase our overall revenue per available seat mile while continuing to provide our customers with competitive fares.

(1) Refer to "Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 30

Operating Expenses

In detail, our operating costs per ASM, were as follows:

(in millions; per ASM data in cents; percent changes based on unrounded numbers)

Aircraft Fuel

Aircraft fuel decreased by $236 million, or 18.9%, for the six months ended June 30, 2025 compared to the same period in 2024. The average fuel price for the six months ended June 30, 2025 decreased by 14.9% to $2.48 per gallon and fuel consumption decreased by 4.7%, or 21 million gallons.

Salaries, Wages and Benefits

Salaries, wages and benefits increased by $107 million, or 6.7%, for the six months ended June 30, 2025 compared to the same period in 2024, driven by a pilot union contract wage rate increase of 9% effective August 2024.

Depreciation and Amortization

Depreciation and amortization increased by $17 million, or 5.4%, for the six months ended June 30, 2025 compared to the same period in 2024. This increase was primarily driven by the induction of new aircraft and engines.

Aircraft Rent

Aircraft rent decreased $13 million, or 25.3%, in the six months ended June 30, 2025 compared to the same period in 2024, as a result of fewer leases for Airbus A320 aircraft and Embraer E190 aircraft. The Company purchased certain Airbus A320 aircraft off lease and certain Embraer E190 aircraft leases reached their lease expiration and were returned to the lessor as part of the Company's fleet transition plan.

Sales and Marketing

Sales and marketing decreased by $17 million, or 10.4%, in the six months ended June 30, 2025 compared to the same period in 2024, primarily due to lower credit card fees as a result of the reduction in passenger revenue.

Maintenance, Materials and Repairs

Maintenance, materials and repairs increased $106 million, or 37.6%, for the six months ended June 30, 2025 compared to the same period in 2024 primarily due to the timing of Airbus A320 engine repairs. This increase is partially offset by an increase in engine shop visit credits received.

Special Items

For the six months ended June 30, 2025, special items included $24 million relating to voluntary opt-out costs.

For the six months ended June 30, 2024, special items included the following:

• $532 million million relating to Spirit-related costs;
• $16 million relating to voluntary opt-out costs; and
• $15 million relating to Embraer E190 fleet transition costs.

Other Operating Expenses

Other operating expenses decreased by $50 million, or 6.9%, in the six months ended June 30, 2025 compared to the same period in 2024, due to net gains of $49 million principally from five engine sale-leaseback transactions, the sale of seven V2500 engines, and the contracted sale of two Airbus A321neo XLR aircraft.

Other Income (Expense)

(in millions; percent changes based on unrounded numbers)

Interest Expense

Interest expense increased by $180 million, for the six months ended June 30, 2025 compared to the same period in 2024. This increase was primarily due to the financing of our TrueBlue® program, the issuance of new equipment notes, and incremental failed aircraft sale-leaseback transactions.

Interest Income

Interest income increased by $34 million, or 90.6%, for the six months ended June 30, 2025 compared to the same period in 2024. This increase was primarily driven by an increase in short term investments from the proceeds received from the TrueBlue® Financings.

Gain (loss) on investments, net

Gain (loss) on investments, net resulted in a $4 million gain for the six months ended June 30, 2025. This gain primarily relates to realized gains from maturities of available-for-sale securities. For the six months ended June 30, 2024, gain (loss) on investments resulted in a $23 million loss on certain equity securities. This loss primarily relates to a mark-to-market adjustment on our preferred shares of one of our JBV equity investments.

Operational Statistics

The following table sets forth our operating statistics for the three and six months ended June 30, 2025 and 2024:

(2) This table includes aircraft that have been temporarily removed from service, including eight aircraft impacted by the Pratt & Whitney engine groundings. All aircraft temporarily removed from service are expected to return to operation in the future.

(1) Refer to "Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure. 33

LIQUIDITY AND CAPITAL RESOURCES

The airline business is capital intensive. Our ability to successfully execute our growth plans is largely dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business depends on maintaining sufficient liquidity. We believe we have adequate resources from a combination of cash and cash equivalents, investment securities on hand, and available lines of credit. Additionally, our unencumbered assets could be an additional source of liquidity, if necessary.

In the future, we may decide to seek additional financing or to further increase our capital resources by issuing shares of our capital stock, offering debt or other equity securities or refinancing outstanding debt or securities. Issuing additional shares of our capital stock, other equity securities or additional securities convertible into equity may dilute the economic and voting rights of our existing stockholders, reduce the market price of our common stock, or both. Our debt agreements contain various affirmative, negative and financial covenants and complying with certain of these covenants, or entering into agreements with additional covenants, may restrict our ability to pursue our strategy or otherwise constrain our operations. Failure to comply with these covenants could lead to an event of default under the agreements, which may result in, among other things, an acceleration of outstanding obligations under such agreements. Our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, which may adversely affect the availability, amount, timing, or nature of our future offerings. As a result, holders of our common stock bear the risk that our future offerings may reduce the market price of our common stock and dilute their percentage ownership.

At June 30, 2025, we had unrestricted cash, cash equivalents, short-term investments, and long-term marketable securities of $3.4 billion. We also have a $600 million Citibank undrawn line of credit. We believe this will be sufficient to satisfy our liquidity needs for at least the next 12 months from the date of this Report, and we expect to meet our long-term liquidity needs with our projected cash from operations, available lines of credit and debt financing.

We believe a healthy liquidity position is a crucial element of our ability to weather any part of the economic cycle while continuing to execute on our plans for profitable growth and increased returns. Our goal is to continue to be diligent with our liquidity, maintain financial flexibility, and be prudent with capital spending.

Analysis of Cash Flows

Operating Activities

We use operating cash flows to provide working capital for current and future operations. Cash flows from operating activities were $(1) million and $190 million for the six months ended June 30, 2025 and 2024, respectively. The decrease in operating cash flow is primarily due to operating losses and net change in working capital.

Investing Activities

During the six months ended June 30, 2025, flight equipment capital expenditures included $358 million related to the purchase of aircraft and spare engines as well as aircraft interior modifications. Flight capital expenditures also included $44 million in spare part purchases. Other property and equipment capital expenditures included ground equipment purchases and facilities improvements for $71 million. Investing activities for the current year also included $804 million in net proceeds from investment securities, $121 million of proceeds primarily from five sale-leaseback transactions and the sale of flight equipment, including seven V2500 engines. Investing activities also included $23 million in aircraft pre-delivery deposit payments.

During the six months ended June 30, 2024, flight equipment capital expenditures included $766 million related to the purchase of aircraft and spare engines as well as aircraft interior modifications. Flight capital expenditures also included $45 million in spare part purchases. Other property and equipment capital expenditures included ground equipment purchases and facilities improvements for $43 million. Investing activities also included $277 million in net proceeds from investment securities, $63 million in aircraft pre-delivery deposit payments, and $22 million in Spirit shareholder payments.

Financing Activities

Financing activities for the six months ended June 30, 2025 primarily consisted of $228 million in payments on our outstanding debt and finance lease obligations and issuance of common stock of $30 million related to our crewmember stock purchase plan.

Financing activities for the six months ended June 30, 2024 primarily consisted of proceeds from failed sale-leaseback transactions of $470 million, issuance of $281 million in equipment notes to finance certain aircraft and issuance of common stock of $31 million related to our crewmember stock purchase plan. These proceeds were partially offset by $166 million in payments on our outstanding debt and finance lease obligations.

Working Capital

We had a working capital deficit of $512 million at June 30, 2025 and working capital of $377 million at December 31, 2024, respectively. Our working capital decreased by $889 million due to several factors, including fewer investment securities, higher current air traffic liability, and an increase in current maturities of long-term debt. The higher current air traffic liability is due to seasonal fluctuations and the increase in current maturities of long-term debt is due to the Company's 0.5% convertible senior notes, with a principal amount of $325 million, becoming current in the second quarter of 2025.

We expect to meet our obligations as they become due through available cash, investment securities, and internally generated funds, supplemented, as necessary, by financing activities which may be available to us. However, we cannot predict what the effect on our business might be from future developments related to the extremely competitive environment in which we operate, or from events beyond our control, such as volatile fuel prices, economic conditions, weather-related disruptions, airport infrastructure challenges, the spread of infectious diseases, the impact of other airline bankruptcies, restructurings or consolidations, U.S. or international military actions, acts of terrorism, or other external geopolitical events and conditions. We believe there is sufficient liquidity available to us to meet our cash requirements for at least the next 12 months.

Other

On February 27, 2025, we filed an automatic shelf registration statement with the SEC. This registration statement replaces the previous one, which expired in February 2025. Under this shelf registration statement, we may offer and sell from time to time common stock, preferred stock, debt securities, depository shares, warrants, stock purchase contracts, stock purchase units, subscription rights, and pass-through certificates. We may utilize this shelf registration statement, or a replacement filed with the SEC, in the future to raise capital to fund the continued development of our products and services, the commercialization of our products and services, to repay indebtedness, or for other general corporate purposes. The warrants issued in connection with the various federal government support programs were made, and any issuances of our underlying common stock are expected to be made, in reliance on the exemption from the registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), for transactions not involving a public offering.

Contractual Obligations

Our material cash requirements for known contractual and other obligations includes the following (in millions):

The amounts stated above do not include additional obligations incurred as a result of financing activities executed after June 30, 2025 except as otherwise noted.

(1) Includes actual interest and estimated interest for floating-rate debt. Estimated floating rate is equal to Secured Overnight Financing Rate ("SOFR") plus a margin based on June 30, 2025 rates.

(2) Primarily relates to JFK Terminal 5, aircraft and spare engines, and our corporate office in Long Island City.

(3) Includes obligations for two Airbus A321neo XLR variant aircraft that have been contracted to sell upon delivery of the aircraft. One aircraft is anticipated to deliver in the fourth quarter of 2025 and the second aircraft in the first quarter of 2026.

(4) Amounts primarily include non-cancelable commitments for flight equipment maintenance, infrastructure and information technology.

As of June 30, 2025, we were in compliance with the material covenants of our debt and lease agreements.

In August 2024, JetBlue co-issued with Loyalty LP, the TrueBlue® Notes and TrueBlue® Term Loan Facility. The agreements governing the TrueBlue® Notes and TrueBlue® Term Loan Facility contains affirmative, negative and financial covenants including compliance with certain debt service coverage ratios and minimum liquidity requirements. These agreements also contain events of default, including a cross-default to other material indebtedness.

We have $57 million of restricted cash pledged under standby letters of credit related to certain leases that will expire at the end of the related lease terms. Approximately 64% of our owned property and equipment and intangible assets at net book value were pledged or committed to be pledged as security under various loan agreements.

Aircraft

As of June 30, 2025, our operating fleet consisted of (1):

(1) This table includes aircraft that have been temporarily removed from service, including eight aircraft impacted by the Pratt & Whitney engine groundings. All aircraft temporarily removed from service are expected to return to operation in the future.

(2) Excludes one Airbus A320 permanently parked owned aircraft.

(3) Excludes two Airbus A321neo aircraft with Mint® not yet entered into service.

(4) Total managed fleet of Embraer E190 aircraft as of June 30, 2025 was 32 aircraft, of which 25 are owned and seven are leased. Of the nine operating aircraft in the table above, six are owned and three are leased. This table excludes 23 permanently parked aircraft, of which 19 are owned and four are awaiting lease return. In the second quarter of 2025, as part of the Company's fleet transition plan, the Company entered into definitive agreements to sell our remaining owned Embraer E190 fleet, which include 25 airframes and 59 engines. These aircraft are expected to be sold beginning in the third quarter of 2025 through the second quarter of 2026. In July 2025, prior to the filing date, we sold four airframes and six engines.

Of our operating fleet, 266 are owned by us, 19 are leased under operating leases, and one is leased under finance leases. Our owned aircraft include aircraft associated with sale-leaseback transactions that did not qualify as sales for accounting purposes, also referred to as failed sale-leasebacks. As of June 30, 2025, the average age of our operating fleet was 12 years.

Flight Equipment Deliveries

Our committed aircraft deliveries include the following aircraft (1):

(1) Our committed future aircraft deliveries are subject to change based on modifications to the contractual agreements or changes in the delivery schedules.

(2) Includes two Airbus A321neo XLR variant aircraft which have been contracted to sell upon delivery of the aircraft. One aircraft is anticipated to deliver in the fourth quarter of 2025 and the second aircraft in the first quarter of 2026.

(3) In addition, we have options to purchase 20 A220-300 aircraft in 2027 and 2028.

Committed expenditures for our firm aircraft and spare engines include estimated amounts for contractual price escalations and pre-delivery deposits. We expect to meet our pre-delivery deposit requirements for our aircraft by paying cash or by using short-term borrowing facilities for deposits generally required six to 24 months prior to delivery. Any pre-delivery deposits paid by the issuance of notes are fully repaid at the time of delivery of the related aircraft.

Depending on market conditions, we may use a mix of cash and debt financing for aircraft scheduled for delivery in 2025. Although we believe debt and/or lease financing should be available to us, we cannot give any assurance that we will be able to secure financing on attractive terms, if at all. To the extent we cannot secure financing on terms we deem attractive, we may be required to pay in cash, further modify our aircraft acquisition plans, or incur higher than anticipated financing costs.

Off-Balance Sheet Arrangements

There have been no material changes to off-balance sheet arrangements from the information provided in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Off Balance Sheet Arrangements included in our 2024 Form 10-K.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates included in our 2024 Form 10-K.

REGULATION G RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

We report our financial results in accordance with GAAP; however, we present certain non-GAAP financial measures in this Report. Non-GAAP financial measures are financial measures that are derived from the condensed consolidated financial statements, but that are not presented in accordance with GAAP. We present these non-GAAP financial measures because we believe they provide useful supplemental information that enables a meaningful comparison of our results to others in the airline industry and our prior year results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies. The information below provides an explanation of each non-GAAP financial measure used in this Report and shows a reconciliation of certain non-GAAP financial measures to its most directly comparable GAAP financial measure.

Operating Expenses, excluding Fuel, Other Non-Airline Operating Expenses, and Special Items ("Operating Expenses ex-fuel") and Operating Expense ex-fuel per Available Seat Mile ("CASM ex-fuel")

Operating Expense per Available Seat Mile ("CASM") is a common metric used in the airline industry. Our CASM for the relevant periods are summarized in the table below. We exclude aircraft fuel, operating expenses related to other non-airline businesses, such as Paisly (f/k/a JetBlue Travel Products) and JetBlue Technology Ventures (JBV), and special items from total operating expenses to determine Operating Expenses ex-fuel, which is a non-GAAP financial measure, and we exclude the same items from CASM to determine CASM ex-fuel, which is also a non-GAAP financial measure. We believe the impact of these special items distorts our overall trends and that our metrics are more comparable with the presentation of our results excluding such impact.

For each of the three and six months ended June 30, 2025, special items included voluntary opt-out costs.

For the three months ended June 30, 2024, special items included voluntary opt-out costs. For the six months ended June 30, 2024, special items included Spirit-related costs, voluntary opt-out costs, and Embraer E190 fleet transition costs.

We believe Operating Expenses ex-fuel and CASM ex-fuel are useful for investors because they provide investors the ability to measure our financial performance excluding items that are beyond our control, such as fuel costs, which are subject to many economic and political factors, as well as items that are not related to the generation of an available seat mile, such as operating expense related to certain non-airline businesses and special items. We believe these non-GAAP measures are more indicative of our ability to manage airline costs and are more comparable to measures reported by other major airlines.

The table below provides a reconciliation of our total operating expenses (GAAP measure) to Operating Expenses ex-fuel, and our CASM to CASM ex-fuel for the periods presented.

NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE AND OPERATING EXPENSE PER ASM (CASM), EXCLUDING FUEL

(in millions; per ASM data in cents; percent changes based on unrounded numbers)

(1) Not meaningful or greater than 100% change.

Except as described below, there have been no material changes in market risks from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our 2024 Form 10-K.

Aircraft Fuel

Our results of operations are affected by changes in the price and availability of aircraft fuel. Market risk is estimated as a hypothetical 10% increase in the June 30, 2025 cost per gallon of fuel. Based on projected fuel consumption for the next 12 months, an increase would result in an increase to aircraft fuel expense of approximately $189 million. As of June 30, 2025, we did not have any outstanding fuel hedging contracts.

Interest

Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments and on interest income generated from our cash and investment balances. The interest rate is fixed for $6.8 billion of our debt and finance lease obligations, with the remaining $1.7 billion having floating interest rates. As of June 30, 2025, if interest rates were on average 100 basis points higher year-over-year, our annual interest expense would increase by approximately $17 million. This amount is determined by considering the impact of the hypothetical change in interest rates on our variable rate debt.

If interest rates were to average 100 basis points lower in 2025 than they were during 2024, our interest income from cash and investment balances would decrease by approximately $16 million. This amount is determined by considering the impact of the hypothetical change in interest rates on the balances of our money market funds and short-term, interest-bearing investments for the trailing twelve-month period.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer ("CEO"), and our Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2025.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part I, Item 1A "Risk Factors" of our 2024 Form 10-K includes a discussion of our risk factors which are incorporated herein. There have been no other material changes from the risk factors associated with our business previously disclosed in our 2024 Form 10-K.