Good morning, my name is Fate [ph]. I would like to welcome everyone to the JetBlue Airways First Quarter 2021 Earnings Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. I would now like to turn the call over to JetBlue's Head of Treasury and Investor Relations, Ursula Hurley. Please go ahead.

Thank you, Fate [ph]. Good morning everyone and thanks for joining us for our first quarter 2021 earnings call. This morning we issued our earnings release and a presentation that we will reference during this call. All of those documents are available on our website at investor.jetblue.com and has been filed with the SEC. In New York to discuss our results are Robin Hayes, our Chief Executive Officer; Joanna Geraghty, our President and Chief Operating Officer; and Steve Priest, our Chief Financial Officer. Also joining us for Q&A are Scott Laurence, Head of Revenue and Planning; Dave Clark, VP of Sales and Revenue Management; and Andres Barry, President of JetBlue Travel Products. This morning's call includes forward-looking statements about future events. Actual results may differ materially from those expressed in the forward-looking statements due to many factors and therefore, investors should not place undue reliance on these statements. For additional information concerning factors that could cause results to differ from the forward-looking statements, please refer to our press release, 10-Q and other reports filed with the SEC. Also during the course of our call, we may discuss several non-GAAP financial measures. For a reconciliation of these non-GAAP measures to GAAP measures, please refer to the tables at the end of our earnings release, a copy of which is available on our website. And now I'd like to turn the call over to Robin Hayes, JetBlue's CEO.

Thank you, Ursula, and good morning everyone, and for those regulators on the call. You will notice that change of voice, so Ursula congratulations on your new position and assuming the Investor Relations portfolio, also my thanks to Juan Carlos and Scott here in the room with me who are of our IR team. And also, obviously, we have to say farewell to David Fintzen, he's not leaving JetBlue, but Dave has done an amazing job as the Head of our IR team for many years, and like many leaders in JetBlue, he's been doing double duty for the best part of the year. So David is now leading our efforts as a VP of NEA, which is the - our partnership with American Airlines and David single-mindedly focused on delivering the benefits of the NEA in terms of growth and low fares for JetBlue and our customers. So Dave the very best in your new role as well. And as I said, we also have Andres Barry joining us on the call today as a new addition President of JetBlue Travel Products. So with that let's get on with the call again. Good morning everyone. And as we've done since the start of the pandemic, I'd like to take a moment to remember another crew member, we have lost to COVID-19. Alexander [ph] was a member of our JetBlue family for nearly a decade. Alex, joined us in October 2011 as a ground ops crew member in Tampa and our hearts go out to Alex's family, friends, and the fellow crew members that he worked with, as it does to all of us who have been impacted by COVID-19. I would now like to thank start by thanking our amazing 20,000 crew members for their extraordinary work through the…

Thank you, Robin. I'll start with my deepest thanks to our crew members for ensuring a safe operation as we ramp up capacity in response to accelerating demand. We are pleased that more people in the US have been vaccinated and quarantines and testing requirements for travel have been removed in the Northeast and other key locations across our network. We are setting up our operation accordingly to serve a growing number of customers returning to JetBlue. Moving to slide 8, in the first quarter, our revenue declined 61% a year over two, a six-point sequential improvement from the prior quarter sitting at the better end of our latest planning assumption. While we initially anticipated trends improving during the quarter, we saw a bigger than expected step-up in demand for leisure travel beginning in mid-February. Our cash revenue increased from $6 million per day in early January to $15 million by the end of March. Additionally, the length of our booking curve is now largely back at pre-pandemic levels as customers increasingly plan further ahead for their travel with JetBlue as expected first quarter average load factors finished at 64% and we ended the quarter with load factors in the mid-'70s. We are pleased with the broad improvement and demand across all of our geographies. Our Latin and Caribbean franchise again proved resilient and recovered quickly from the setback that followed the CDC orders requiring testing for international arrivals. Demand to our Florida markets increased driving the quarter and our Transcon region also strengthened as quarter - as quarantine measures relaxed in our East and West Coast focus cities. For the second quarter of 2021, our planning assumption for revenue is a decline between 30% and 35% year-over-two, the largest sequential improvement in our revenue since the pandemic started. We…

Thank you, Joanna, and good morning everyone. I'd also like to thank our crew members and leaders. I could not be prouder of their resilience to overcome the challenges presented by the pandemic and to ensure the future success of JetBlue. I'll start on Slide 11 with a brief overview of our financial results for the quarter. Revenue was $733 million, down 61% year-over-two; operating expenses were down 43% year-over-two excluding the benefit from PSP2, operating expenses were down 26% year-over-two; adjusted EBITDA loss was $458 million and GAAP loss per share was $0.78 and adjusted loss per share was $1.48. As Robin mentioned in March, we reached breakeven cash from operations and we took the first step towards repairing our balance sheet. Starting with our operational performance, our first quarter adjusted EBITDA was ahead of the range we anticipated in mid-March. This was a result of improving revenue trends and continue to successfully manage our cost structure despite increasing fuel prices. For the second quarter, we estimate our EBITDA will range between negative $100 million and negative $200 million reflecting an acceleration of demand partly offset by cost pressures from fuel prices and airport rents and landing fees. On an EBITDA basis, we will believe that we will reach breakeven in the third quarter and expect to remain in positive territory through the end of the year. Turning to Slide 12, we are managing through the volatile demand environment with a laser focus on cost control as we bring that capacity to meet demand. During the first quarter, our adjusted operating expenses declined 26% year-over-two better than our initial assumptions and despite higher fuel prices. This excludes the payroll benefit of $299 million from PSP2. Our planning assumption for the second quarter is a reduction in our total operating…

Thank you, Robin, Joanna, and Steve. Fate, we're now ready for the question-and-answer session with the analysts. Please go ahead with the instructions.

Thank you. [Operator Instructions] Your first question is from Savi Syth from Raymond James, your line is open.

Hi, everybody. I'm just kind of curious as especially on the cost side, what the expectations are kind of embedded behind your EBITDA outlook for the second half of '21. Just wondering if there are some ramp-up costs that go away and generally, what you expect from a demand standpoint.

Hi, good morning, Savi, Steve here. It's a good question. I think the first thing I would say is obviously in a high fixed cost capital-intensive business with capacity down even 15% that continues to be inherent inefficiencies in the cost structure, but as you start to continue to grow capacity that alleviates over time, we are continuing from a, on a quarter-to-quarter basis, in terms of cost structure as we grow to drive more efficiency. So if you think about Q1 to Q2, our capacity is up 50% quarter-over-quarter, but our non-fuel costs are only going up 22%, so you have got those inherent efficiencies as you scale back, but I'm sure some of the essence of your question is regarding some of the headwinds that we've discussed. Obviously, as we embed the fixed cost initiatives that we are working through in 2021, we will continue to see efficiencies associated with that. Certainly, there are some material inefficiencies and will remain in the second quarter, until we scale back. Think about the likes of pilot minimums in terms of hours, which are obviously additionally impacted by the CARES Act, and thirdly as we get ready for the summer, we are incurring some costs as we ramp up the summer peak, think about some crew member cost associated labor and maintenance to make sure that we have, the fleet rather, and then as we've always talked about rents and landing fees. I think you'll start to see some alleviation in that when industry traffic continues to normalize because with them, particularly those cities that I've seen a precipitous drop in traffic, they have been impacted quite clearly and again when that normalizes, you'll see some sort of rationalization of costs. So there's a number of areas that I think will become more efficient as we navigate through the rest of the year and the business ultimately scales up.

That's helpful color, Steve. Thank you. And, Joanna, if I might quickly ask on the, you mentioned that the majority of the new markets are performing in line to better than expected. Just curious if there are any common trends or characteristics in the new routes that are working versus those, you have to kind of pull back on.

Yes, thanks Savi, great question. I think the two trends. I'd say leisure is obviously performing well in those jurisdictions and locations where there are travel restrictions in place and-or higher case counts tend to lag, some of the other markets that we're seeing performance in, but overall very pleased with the performance of the new markets that we've added, very encouraged there will be some that will be lasting markets, we've also, as we always do, we've been pretty disciplined in the markets in underperforming and making sure that we scale those back.

Thanks, all. Thank you.

Your next question is from Jamie Baker from JPMorgan. Your line is open.

Hey, good morning, folks. I assume you have pretty detailed financial forecasts, at least for the first year or two of the Transatlantic expansion. Can you compare how those forecasts are looking today to what they were in early 2020, obviously the Heathrow outcome might be different than what you had planned pre COVID, but I'm curious if your overall Atlantic forecasts have strengthened and if so, by how much?

Hey, Jamie. Good morning, it's Robin and I'm going to ask Scott to take that one.

Great.

Hey, Jamie. I appreciate the question. And obviously, the Transatlantic has seen quite a bit of change here. I think the first thing I would say is that we have a strong fundamental offering here and the ability to disrupt the premium cabin is something that we feel very confident that we're going to be able to do. I think if you sort of look at the Transatlantic vis-a-vis what we expected pre-COVID, it's clear that the initial portion of this is still going to be in a recovery mode. I think for us, we had based our business plan around the concept of people actually paying their own money to sit in business class rather than, people looking at the fares that historically been somewhat extortionate with corporate discounting in the front-cabin. So again, I think if you look overall at our forecast and our potential as we move forward, I think it is, continues to be very strong and it continues to be very similar to what we initially expected and we look to move forward confidently as we begin Transatlantic service.

Okay, that's helpful. And then second, a few years ago the LaGuardia perimeter rule was a topic, JetBlue publicly objected to a potential relaxation of the rule, if I recall, but if we fast forward to today, I mean your fleet capabilities have obviously expanded, you've got the relationship at LaGuardia with American, I mean is perimeter something you've discussed with American. Are you permitted to and could it be part of the evolution in the relationship at LaGuardia?

Thanks, Jamie, I'll take that. And first of all, as is the tradition on our April call that we are very happy about the week.

Thank you, Robin.

But, no-look, our view on that hasn't changed. I mean, whilst our alliance with American has allowed us to make some positive changes in our LaGuardia footprint, it's still a very, very fraction of our largest competitor there, the new airports work as an ecosystem and we are talking about making some significant investments through our partners at JFK and as such that if the appointment of Woolworths to ever be modified or changed, it's our view that would need to come with a significant slot divestiture, to make sure that sort of new ecosystem, continue to work together.

Okay, fair enough. Thanks for the update. Appreciate it. Take care.

Your next question comes from Joseph DeNardi of Stifel. Your line is open.

Hi, thanks, good morning. Joanna, you talked about co-brand economics improving, and I think you said, closing the gap between your earnings and peer earnings over the next few years. I just want to understand kind of what the expectations are, in 2019 you guys reported about $200 million in fee revenue from the card, Alaska reported $465, is it your expectation that you can close that gap within a few years.

Hi, Joe, thanks for the question. Yes, I mean we're very encouraged by what we're seeing with the results of the co-brand RFP as Robin mentioned in his opening remarks, we are in the middle of contract negotiations with the finalist and I describe it as a meaningful improvement over existing economics of our deal and we'll be prepared to discuss more in the coming weeks.

Okay, that's helpful. And then, Steve, just on the CASM expectation for improving CASM on the same level of capacity, can you talk about maybe what's working against you and you take into account that structural cost initiatives, and just kind of having that capacity production with a leaner organization. What are some of the headwinds kind of moving against you all? Thank you.

Yes. Thank you and good morning, Joe. It really just goes back to a couple of the things in the relatively short-term, I just discussed with Savi. I think that in an industry like ours, high fixed cost capital intensive even short levels of capacity reductions, so of have a headwind. I think as we sort enter 2022, undoubtedly rents and landing fees are sorts of a key aspect, in terms of a headwind that needs to sort of normalized, general labor and price inflation of other items that we need to sorts of think about as we sort of go through and on the assumption that we continue to get the fleet and we work forward as we go through 2021, by making sure that our maintenance is in good shape as we sort of get through the year, but obviously outside of those three areas, as we get into 2022, there is a whole host of work that we completed coming into the 2020 year around the structural cost program that will meaningfully change the paradigm from a variable standpoint and the $150 million to $200 million of fixed cost initiatives, which I have outlined in our prepared comments, which will also offset some of those cost pressures.

Helpful. Thank you.

Thanks, Joe.

Your next question is from Brandon Oglenski of Barclays. Your line is open.

Hey, good morning, and thanks for taking my questions. I guess for Robin or Steve or Joanna. Can you talk to your ability to get back to 2019 profitability levels or not or maybe even exceed it like you had in the prior plan, what are the proper threshold here, do you guys need to get back to where you were from a capacity standpoint, then see value recover, are there other levers that you guys can pull?

Hi, Brian and good to hear from you this morning, Steve here. I would sort of go back a little bit in the way back time machine and think about how we were coming into 2020 with our $2.50 to $3 of EPS and the five building blocks that would be high in the whole of our business from a commercial cost fleet, capital allocation perspective and as we've gone through the pandemic, not only have we looked from a defensive standpoint, but we've also been on the offense. So, I've talked extensively about our cost structure both in the structured cost standpoint really focusing around the variable efficiencies, but also on the fixed side, so also put that to one side. The fleet initiatives very much stand in good stead. And as Robin referred to, we took our first A220 yesterday, incredibly excited about the potential economics being added to JetBlue, as we go forward from a margin standpoint, in addition to the 321neos which are going to continue to ramp in the fleet. And then, as a whole host of revenue initiatives that we're driving forward with, Joanna talked about the co-brand RFP, we've talked about the Northeast alliance that we are incredibly excited about which will continue to drive lower fares and growth for the Northeast with American Airlines partnership, you think about the revenue management initiatives that we sort of are driving in place and then incredibly exciting travel confident we're developing with JetBlue Travel Products and the great work that Andres is going for. So when you think about costs, you think about commercial, you think about fleet and the acceleration that we've taken place with regards to balance sheet repair and capital allocation, I feel very optimistic about the future margin capabilities of JetBlue, as we evolve into next year and beyond.

I appreciate that was. And I guess, Joanna, as a quick follow-up. I think the restrictions in the Northeast and specifically in New York have been lifted in fact, I don't think get addressed by the government anymore getting off a plane. So have you seen any pent-up demand in these regions and could revenue be exceeding to the upside here as people realize that it's a lot easier now?

Yes. I mean, it's a great question. We were very pleased to see the Northeast restrictions come off and I think that's giving us some wind in our sales, as we step into the summer timeframe. Overall, the network is performing well across multiple geographies, which has been fantastic for us particularly step into the summer in our peak travel period, so very encouraged by New York, we are encouraged by Massachusetts, also encouraged by the Caribbean, frankly and what we're seeing down there the Bahamas updated their guidance last week. So, that's all the news and we continue to encourage the islands to kind of work in a coordinated fashion to reopen in a safe thoughtful way that makes it easier for customers to travel there.

Thank you.

Your next question is from Helane Becker - sorry, Helane Becker from Cowen. Your line is open.

Thanks very much, operator. Hi, everybody and thanks for the time. on the new guidance that you're giving for the second quarter, I know this is a short-term question, but how should we think about the percentage that traffic improvement versus the percentage that's fares improvement, in other words, is there opportunity to raise fares as demand increases here through the summer.

Thanks, Helane. A great question, if you think about it, in terms of 50-50. I think the good news for the summer is we're growing TRASM while we're growing ASMs and that's being driven by double-digit improvements in both load factor and in yield. I'll also point out that the booking curve is normalizing which is giving Dave, Clark and his team and ability to better yield manage our flights. So that's been a great change as well.

Okay, thank you. I think - I think that with that. Those were my like two questions. Thanks.

Your next question is from Duane Pfennigwerth from Evercore. Your line is open.

Hey, thank you. Good morning. A question for Robin, if you're still around or maybe more of an industry question. The EU commentary on letting vaccinated US passengers travel to Europe, what did we actually learn, I guess this weekend, what do you view as the next steps from a US perspective and how would you handicap the odds of this getting implemented in time to book summer travel.

Yes, Duane, thanks. Where do you think, I went, know by the way, do you think?

You're doing a good job of deferring and delegating.

Well, it's a team sport, isn't it?

Fair enough.

Anyway, no, no, look it was a positive development and I think it's, I just want to build on what Joanna just said because I think we are seeing this now in more and more markets. We started seeing in the domestic market as states are starting to move some of the restrictions, we started to see it in some of the Caribbean markets as they sort of figure out what works and doesn't work and trying to strike that right balance between public health and making markets accessible and there's a number of EU countries as you know where tourism is a significant driver and so I'm confident, look I think it ultimately depends on the country's ability to bring down their case count and vaccinate people because that's what gives you a sense that sort of from the case count reductions are permanent. What we've seen here in the US and other markets as case count start to come up again restrictions go back in, that definitely impacts traffic and so I think providing the EU and the countries in EU can kind of catch-up with their vaccination program, hopefully that makes the summer open and accessible and if I look at the UK because obviously, that's the top of our list they've done a terrific job with the vaccines and I think they are really on track to some form of opening up here for the summer.

And then if you're willing to comment on it, a question for the team, what percent of capacity would you envision pointed at Europe in the fourth quarter and then how do we think about that balance of growth longer term. So in other words, is it, is domestic a priority, until you get back to full 2019 levels or how should we be thinking about it kind of '22, '23 that balance of growth between domestic in Europe.

Well, I'm going to deflect that to Scott, do I need I could think - I could give you a very good answer.

Thank you.

Team sport indeed. So again, I think if you look at Europe, for us it's going to be de minimis. In terms of the ASMs as a percent of the system, it really is limited. So I think that's the first thing that I would lay out there, again in the near future you're looking at six LRs that are coming in, they just do not produce enough ASMs to be to really push up the chart. In terms of domestic versus international, I think this continues to evolve for us, we were very concerned when we saw the testing come in for international, we've seen particularly in the Caribbean region that has recovered nicely, and so as we go forward, I think you're going to see a balance of growth for domestic versus international that has looked kind of like it has historically for us. So again, we're in the midst of a leisure-oriented recovery, I think that we are built for leisure, we're excited about that. I think that actually plays right into our strengths and as we allocate growth going forward, I think that mix of domestic, international is going to be what's optimal for us in the short to medium term.

Maybe if I could sneak one more in, can you speak to start-up costs that you're incurring here in June quarter, September quarter for the Europe launch, and thanks for taking the questions.

So again, I think as we look at this, as we went through the crisis, we did not lay people off and I think while we want to make sure that we are leading the burden and what is optimal as possible. I don't think you're going to see a significant impact from that as we go forward, and I think again as we look at the summer and the fall, we look forward to getting airplanes up in the air and doing so in a way that has our customers happy.

Thank you.

Your next question is from Catherine O'Brien from Goldman Sachs. Your line is open.

Good morning everyone, thanks for the time. So, maybe first a question for Joanna just about the RASM drivers, you laid out. Completely understand you'll need to wait to give more details on the co-brand agreement until the contract is finalized, but just high-level, should we think about that as the largest of the three RASM drives versus the additional fare option uptick and the JetBlue Travel Products impact.

Thanks. Great question, Cath, sorry my mic was off, apologies. Thanks for your question. So, I would, we're going to go out with firm numbers as we start seeing a more stable revenue environment. Clearly, the co-brand card is a significant contributor, their options 1.0 2.1, we've already communicated is one point of unit revenue and then some of the work in the Travel Products world we're calling about 100 EBIT based upon what we said in 2018 investor meetings and so that is on track, I mean, we're optimistic that we are going to hit those numbers. I would not underestimate the contribution of the American Airlines NEA agreements or frankly some of the smaller initiatives, the 331 scheduled changes or the new revenue management changes. So overall, we're encouraged by the momentum behind these initiatives, they are unique to JetBlue, we will be prepared to give greater detail in the coming months, as the revenue environment stabilizes. Co-brand is a significant contributor in line with some of the other larger initiatives.

Okay, got it. And then, maybe a second question for Steve. So you guys noted that the first priority for cash flow when it turns positive is paying down high-cost debt, can you talk about what opportunities you have to delever over the next couple of years, maybe bolstered scheduled payments or any opportunities to prepay that and then how do you think about pacing those opportunities. Thanks.

Yes, good morning, Caty. It's a good question. We've been very measured and strategic as we've gone through the last sort of 12 to 15 months going through and not only have, we had an eye on bringing liquidity and cash into JetBlue, but based on the facilities that we have used to bring cash into JetBlue, we saw very much in terms of not only rates but sorts of China as well as we've gone through it. So we do have a number of opportunities based on how we go forward. I mean, I'm delighted that we are generating positive cash from ops in March and going forward bring that in a good position, we obviously have the PSP2 to top up and PSP3 coming. And so we are going to take every opportunity to pay down the debt and ultimately reduce the weighted average cost of debt. Coming into the pandemic, our weighted average cost of debt was in the high threes, it's sitting around four now, and as I mentioned in my prepared comments, we expect our weighted average cost of debt over the forthcoming months to actually be at a level that's lower than where it was coming into the pandemic. So, I feel not only incredibly comfortable with where our liquidity sits and the strength of the balance sheet, but also in terms of driving down financing costs as JetBlue goes forward.

Okay, thank you.

Your next question is from Ravi Shanker from Morgan Stanley. Your line is open.

Thanks, good morning everyone. Joanna, if I can just follow up on the previous response on RASM, I completely appreciate that the current environment is really messy. But given the initiatives you have with international and ventures and core bank card nevertheless, kind of much like the detail, you've given us on the CASM side in terms of thinking about '22 related to '19, can you comment or do you have really good confidence that '22 RASM can be in comfortably above 2019 given that idiosyncratic advantage that you have.

Yes, so good question. We're not in a position right now specifically to the revenue initiatives to break out exactly where they are. As we said, we'll do that at a later date. What I would say about 2022 however is we are encouraged by what we're seeing this summer and if we believe that carries into the fall and into the winter, we are optimistic that 2022 has the potential to be a strong recovery year, leisure has led the recovery, we believe there is still pent-up demand for travel that will carry into the fall. If you look at GDP growth in 2022 versus 2019, it's four points higher and frankly, we think travelers have extra savings and with the access to the vaccine there will be additional locations opening up, you add that to our series of revenue initiatives and we think that 2022 could be a strong recovery year. The other piece, I'll mention is, if you think about JetBlue and how we're positioned, a trusted brand, unbelievable crew members committed to our success, a great product, largely domestic leisure with a history of serving these markets is what we do to coastal markets, our network, we think this is going to serve us very well for our recovery year.

Got it, thank you. And maybe as a follow-up, a longer-term question on the venture side, obviously you are a leader and kind of investing in NSA and coming to be using that for your ESG targets, but the hydrogen investment was pretty interesting, it kind of caught my eye, can you share a little more light on, kind of what you're thinking there, kind of what you are thinking there, kind of how you think hydrogen fits into your long-term fuel plans.

Great question, maybe I'll take that. I'll try and be brief because I could talk about this topic of ours. I think certainly JetBlue takes the view that the sustainability of our industry as we come out of the pandemic will be an extremely critical topic and something that we need to demonstrate and our continued commitment to reduce our carbon emissions in order to continue to earn the right to grow. So over the short to medium term, we are very focused on areas like sustainable aviation fuel and continuing to try to work with the US government on more efficient air traffic control procedures, as you know, JetBlue is investing billions of dollars in more fuel-efficient airplanes. We are aggressively replacing our ground equipment with much greener, electric ground equipment. But for airlines to make a reach some of the longer-term aspirations around zero net carbon and do it in a way that doesn't rely on offsets, which we clearly just view as a bridging strategy, we have to consider alternative types of aviation - alternative ways of powering aviation, so we stay close to the electric plant industry, I think we will recognize that. I think over at least over the next couple of decades is going to be confined to smaller airplanes over shorter distances, but we are intrigued Airbus has made similar comments as well about the ability for hydrogen to provide a sort of a longer-term cleaner fuel option. And so this is why we have our Tech Ventures, a subsidiary, it's allowed us to get smarter on these things, and we have a real focus at JT at the moment on considering investments in the sustainable aviation space.

Great, thank you.

Your next question is from Hunter Keay from Wolfe Research. Your line is open.

Good morning, everybody. Thank you. How are you guys thinking about the fall after kids get back into school, obviously not looking for any revenue or capacity guidance or anything like that, but how do you think about a good case scenario and a bad case scenario in terms of just sort of how your consumers behave.

Yes, thanks Hunter and then I'll let Dave, Clark add some color. So I think we're still in a pandemic, and so we're very mindful of that. While we are - as we've said we are encouraged by what we're seeing stepping into the summer. We also don't know what we don't know. And so that's sort of at the heart of our comments around remaining nimble and flexible with how we manage capacity stepping into the fall timeframe. We do believe based upon what we're seeing that there will continue to be pent up leisure demand and Dave will get into a bit on what we're seeing on the corporate side, but we're cautiously optimistic that assuming there aren't any increase in travel restrictions, that the vaccine continues to take a hold on the case counts, stabilize or come down. The fall has the potential to be good for JetBlue, it's obviously a trough period historically for us. As we think about the holidays and customers that have not had a chance to visit their families over the Christmas Hanukkah holidays, Thanksgiving we think that has an opportunity to be a very strong, strong period for us. Dave, do you want to add some color on the corporate side?

Sure. Thanks, Joanna. And I agree, I think the fall is actually the trickiest period to forecast right now. We know leisure is holding up well, but the leisure demand base in general in the fall is lowest compared and at the time of the year. So your question is, how quickly will business and corporate ramp back up, just we've been seeing good growth in these areas, but off a quite low base early in January, our year over two corporate travel is still down about 95%. It's been improving, we're now down minus 80% or so in terms of bookings, so good improvement but off a low base, as we stay close and talk with our largest customers, we do expect to see a phased approach as we go through the summer especially returning to office in late summer, early fall and we expect to really accelerate travel. I mean the September-October timeframe, but exactly when that occurs and how robust comes back is something that we're still looking at very closely as we think about fall revenue and capacity.

All right, thank you. And then, Steve, just, just to flush out the cost commentary, a little more for '22, as we think about CASM. On the P&L, as you guys reported what do you think, which single line item on a unit cost basis has the best prospects of being below 2019 and which one you think is going to be the toughest.

Thanks, Hunter, good morning. I think the toughest and the one that we're keeping at as the cases control on, the case its focused on should I'd say is really around rents and landing fees because that has continued to be one of the headwinds for the industry and as we've mentioned that specifically, we'll have to see how that evolves. I think from a positive standpoint I would suggest distribution, I think the commercial team has done some tremendous work over the last few years in terms of driving our direct strategy, also looking through the lens of the business partners in terms of how we think about the cost of sale, not only in terms of sales but also servicing for our customers and really using automation and driving our direct proposition. So, on the negative side and the positive side we've got running phase and on the positive side to being our cost of sales and distribution.

Thank you.

Your next question is from Andrew Didora from Bank of America. Your line is open.

Hi, good morning, everyone. Steve, just in terms of your 30% to 40% debt to cap goal what timeframe do you think you can achieve that in, and just more importantly, do you think this is a goal that you can get to organically or do you think there needs to be some other form of capital raise to get there.

Hey, Andrew, good, good morning and great question. So we talked about it there. I'm really, again, very pleased and delighted that we started generating positive cash from operations in March and also, we've sort of taken the momentum as we've gone through this and been very appreciative of the administration for the support, they've given the industry. We've always said it, we expected it to be between the 2023 year and the 2024 year. So that's why we sort of thinking about getting back into that situation. We came into the pandemic with the second strongest balance sheets in the industry, we continue to be in that place. We continue - I mean, we'll see how things evolve, but I would anticipate based on generating positive cash from ops, also going through the position that we've been through, I've been happy with the market transactions we've done, I expect this to be through organic means, but I won't get ahead of myself and 2023, 2024 is quite a way off, but that's I can't be working and planning assumption at the moment.

Great, thank you. And then just my second is just a quick follow-up. Apologies, if I missed this, but just your comments on getting back to 2019 or better CASM levels in 2022, have you said what level of capacity you're assuming next year relative to 2019. Thanks.

Yes, so it's back at sort of '29ish levels of capacity, so that's a level that we talked about.

2019, okay, thank you. So you've got 2019 behind.

I'm sorry, 2019.

Understood. Thank you.

It must be the British accent, apologize for that.

Your next question is from Mike Linenberg from Deutsche Bank. Your line is open.

Hey, good morning everyone. Joanna, you brought this up and maybe you or Dave just about the move to 331 days in the booking window, what was it before. And presumably, this is graduations, weddings, family reunions, maybe people who book cruises out nine, 10 months, a less price-sensitive segment. Is that's the pickup there or is there something else related?

Hi, Mike, this is Dave Clark. I'll take that one.

Hi, Dave.

Previously, we were selling between seven to 10 months of schedule sort of on a seasonal block basis and now we're consistently at 20, 21 days, and you're right on the type of traffic that books 10 or 11 months in advance, these are big events either family events, big milestones, things, where the trip and getting the reservation booked is important, getting it booked ahead of time, the most important parts of the customer, so we're happy to be able to take more of that traffic, put some revenue on earlier in the booking curve and generally, yes, it's not as price-sensitive as closer in traffic.

Dave, have you thought, I know there is at least one carrier, I can think of that's now gone beyond the 331 and with the cruise industry saying that people are now booking out more than a year, have you and because you guys are big in Fort Lauderdale, have you thought about actually extending it so that type of passenger or is it just too far out?

I think for now, we're really pleased with where we are, it's only been a couple of months and the municipal results are good. So, we'll keep our eyes in the future, no short-term plans.

Okay. And then, just a quick follow-up on the fleet. I think it was mentioned that this summer, you only have 10 aircraft in storage, but if we look at the fleet that's operating through the summer. How does the utilization compare versus what it was back in 2019, I mean if you have sort of a block hour per day in summer '21 versus 2019? Thank you.

Yes, thanks for the question. So we're slightly below 2019 levels at this point, we expect them to approach closer to 2019 as we step into the summer time frame, a little bit lower but getting back there.

Okay, great.

Thanks.

Thanks, Joanna. Thanks, Dave.

Your next question is from Myles Walton from UBS. Your line is open.

Thanks, good morning. I was wondering if you could comment in the context of the down 15% capacity and down 30% to 35% year-over-two what LatAm Caribbean looks like versus 2019, I mentioned, those are probably trending above 2019 levels. And if you think you are disproportionately benefiting from lockdowns elsewhere in the world, if these kinds of gains become more sustainable on a go-forward basis in leisure destinations that you currently serve.

Hi, Myles, this is Dave Clark. I'll take that one. The LatAm and Caribbean region has been at the very top end of our strong performing regions both from a revenue and a capacity standpoint. If you look ahead of our selling schedules, we actually have capacity to that region up year-over-two in July and August reflecting the strong demand and performance there.

Okay. And then could you give a little bit more specific on the PSP3 cash that you're going to get in this current quarter, Steve. Thanks.

Yes, so thanks to sort of the administration. If you think about it from a US industry standpoint, PSP2 was around $15 billion, PSP3 is $14 billion for the industry. So you're talking low 90% versus the PSP2 numbers. So should be in the ballpark for JetBlue around $500 million and obviously...

Thank you.

There is a blend of grants and loans embedded in that.

Yes.

Our last question is from Dan McKenzie from Seaport Global. Your line is open.

Thanks for squeezing me in here. A couple of questions. I appreciate the corporate demand is pretty depressed right now, but regarding the relationship with American, are there any examples of accounts that you've already talked to jointly and whether or not you've seen any corporate wins and so I guess I'm just trying to get some perspective on - are these smaller fortunate accounts or are they say Fortune 100 accounts, the bigger ones and just related to that, what is the cumulative collective corporate spend that you've been blocked from historically that you could potentially tap into for the first time.

So, this is Scott. I will say that we're early enough and that we're still sort of working through the process to handle joint sales and again I think the goal here is to make sure that we're providing competition in our case lower fares and a great experience to customers in the NEA market. So, I think it's something we're going to be rolling out here in the short term and we look forward to working jointly with our partner on that and I think again providing appropriate competition in a number of the markets, particularly in New York that we haven't played in previously.

And that collective spend is at $10 billion, $15 billion potentially that you could, the wallet you're looking to tap into.

So we're kind of looking at each other here, I think we'll follow up on that. I have a good answer for you.

Okay. Second question here. The new flying in the first quarter I think it was 15% of the total flying, what percent of that flying was in support of the new American partnership and what percent of the overall network does the American relationship cover.

So the relationship itself covers about 66% of our network which touches sort of any airports and that number has grown a little bit as we move forward. So you're going to see as we're able to enter LaGuardia based upon the NEA that number comes up a bit. So a big chunk of what we added, it was either added associated with the NEA or in anticipation of the NEA. So a number of the markets we're able to provide competition, whether that's in New York with the dominant carrier there, at LaGuardia with the dominant carrier there. I think what we're doing is sort of enjoying the benefits of breaking up a number of monopolies here and I think that's something that can work for us as we're playing the role of a disrupter.

Very good, thanks.

And that concludes our first quarter 2021 conference call. Thank you all for joining us this morning and we hope you all have a great day.

And again, that will conclude today's conference. Thank you for your participation.