Form 8-K JETBLUE AIRWAYS CORP For: Jan 28
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 28, 2016
JETBLUE AIRWAYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 000-49728 | 87-0617894 | ||
(State of Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
27-01 Queens Plaza North, Long Island City, New York 11101
(Address of principal executive offices) (Zip Code)
(718) 286-7900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 7.01 Regulation FD Disclosure.
On January 28, 2016 we provided an update for investors presenting information relating to our financial outlook for the first quarter ending March 31, 2016 and full year 2016, and other information regarding our business. The update is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number | Description | ||
99.1 | Investor Update dated January 28, 2016 of JetBlue Airways Corporation. | ||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
JETBLUE AIRWAYS CORPORATION | ||||||||
(Registrant) | ||||||||
Date: | January 28, 2016 | By: | /s/ Alexander Chatkewitz | |||||
Vice President, Controller, and Chief Accounting Officer (Principal Accounting Officer) | ||||||||
EXHIBIT INDEX
Exhibit Number | Exhibit | |
99.1 | Investor Update dated January 28, 2016 of JetBlue Airways Corporation. | |
Investor UpdateInvestor Update: January 28, 2016
This investor update provides JetBlue’s investor guidance for the first quarter ending March 31, 2016 and full year 2016. The guidance provided below does not include the impact of Winter Storm Jonas, which caused over 900 flight cancellations to our schedule within the last week.
Recent Announcements
JetBlue has recently announced service between the following city pairs:
City Pair | Frequency | Start Date |
Fort Lauderdale (FLL) - Barbados (BGI) (*) | 1x Daily | April 28, 2016 |
Fort Lauderdale (FLL) - Aguadilla (BQN) | 1x Daily | May 5, 2016 |
Boston (BOS) - Salt Lake City (SLC) | 1x Daily | May 12, 2016 |
Fort Lauderdale (FLL) - San Diego (SAN) | 1x Daily | June 16, 2016 |
(*) subject to Government approval
Capacity
Full year 2016 ASMs are estimated to increase 8.5% to 10.5% year-over-year, with a higher growth rate in the first half of the year. First quarter 2016 available seat miles (ASMs) are estimated to increase 14.0% to 16.0% year-over-year. Severe winter weather caused significant flight cancellations in the first quarter of 2015, which increases JetBlue’s 2016 capacity growth rate compared to a scheduled versus scheduled basis by about 2.5% in the first quarter and 0.5% for the full year.
Year-over-year capacity growth rate
First Quarter 2016 | Full Year 2016 | ||||
Scheduled (**) | Planned (***) | Difference | Scheduled (**) | Planned (***) | Difference |
12.3% | 14.0-16.0% | 1.7-3.7% | - | 8.5-10.5% | ~0.5% |
(**) Based on Diio Mi Data as of January 18, 2016. JetBlue has published its flight schedule until Sep 6, 2016.
(***) Planned capacity uses actual data for 2015 and the Jan 1-Jan 15 2016 period, and forecast for the remainder of 2016
JetBlue estimates the following distribution as a percentage of total ASMs by aircraft type:
First Quarter 2016 | Full Year 2016 | |||||||
A320 | A321 All-Core | A321 Mint | E190 | A320 | A321 All-Core | A321 Mint | E190 | |
68.4% | 10.4% | 7.8% | 13.4% | 67.7% | 10.3% | 9.3% | 12.7% | |
Average stage length is projected to increase year-over-year by approximately 1% both in the first quarter and the full year 2016.
1
JetBlue Airways Investor Relations • (718) 709-2202 • [email protected]
Investor UpdateOperational Outlook
First Quarter | Full Year | |||
2016 | 2016 | |||
Operating Expense Year-Over-Year Percentage Change | ||||
Unit Operating Expense Excluding Fuel and Profit Sharing (CASM Ex-Fuel and Profit Sharing) | (2.0) - 0.0% | 0.0% - 2.0% | ||
First Quarter | Full Year | |||
2016 | 2016 | |||
Fuel Expense | ||||
Estimated Consumption (gallons) | 186 million | 764 million | ||
Estimated Fuel Price per Gallon, Net of Hedges ¹ | $1.12 ² | |||
¹Includes fuel taxes. ²JetBlue utilizes the forward Brent crude curve and the forward Brent crude to heating oil crack spread to calculate the unhedged portion of its prompt quarter. As of January 15, 2016, the forward Brent crude per barrel price was $30 and the crack spread averaged $10 per barrel for the First quarter of 2016 | ||||
Fuel Hedges
As of January 15, 2016 JetBlue’s advanced fuel derivative contracts are as follows:
Gallons | Estimated Percentage of Consumption | Price | ||||
1Q16 | - | - | ||||
2Q16 | - | - | ||||
3Q16 | 19 million | 10% | 10% in USGC jet fuel swaps at an average of $1.30/gal | |||
4Q16 | 19 million | 10% | 10% in USGC jet fuel swaps at an average of $1.34/gal | |||
Other Income (Expense)
JetBlue estimates total Other Income (Expense) to be between ($25) and ($30) million in the first quarter and between ($105) and ($115) million for the full year.
2
JetBlue Airways Investor Relations • (718) 709-2202 • [email protected]
Investor UpdateTax Rate
JetBlue expects an effective annual tax rate of approximately 39%. However, the actual tax rate in the first quarter and full year 2016 could differ due to a number of factors.
Capital Expenditures
(In millions)
First Quarter 2016 | Full Year 2016 | |||||
Aircraft | Non-aircraft | Total | Aircraft | Non-aircraft | Total | |
$190 | $40 - $50 | $230 - $240 | $670 - $720 | $150 - $200 | $820 - $920 | |
Aircraft Delivery Schedule
As of December 31, 2015 JetBlue’s fleet comprised 130 Airbus A320 aircraft, 14 Airbus A321 All-Core aircraft, 11 Airbus A321 Mint aircraft, and 60 EMBRAER 190 aircraft. 91 aircraft were on order from Airbus and 24 aircraft were on order from Embraer.
Airbus A320 | Airbus A321 | EMBRAER 190 | ||||||||||
Aircraft | Mortgage | Lease | Aircraft | Mortgage | Lease | Aircraft | Mortgage | Lease | ||||
1Q16 | — | — | — | 3 | — | — | — | — | — | |||
2Q16 | — | — | — | 1 | — | — | — | — | — | |||
3Q16 | — | — | — | 3 | — | — | — | — | — | |||
4Q16 | — | — | — | 3 | — | — | — | — | — | |||
Total at Year End | 130 | 45 | 24 | 35 | 8 | — | 60 | 30 | 30 | |||
Cabin Restyling Program
The program is expected to generate $100 million of annual incremental operating income upon completion
Fleet Type | Seat Count per Aircraft | Number of Aircraft Impacted | Timeline | ||
Current | After Restyling | Difference | |||
A320 | 150 | 162 | +12 | ~130 retrofits | Retrofit starting at the beginning of 2017 Completion expected in 2019 |
A321 All-Core | 190 | 200 | +10 | 15 retrofits 3 new deliveries in 2016 All new deliveries beyond | New Deliveries starting in July 2016. Retrofit starting in the third quarter of 2016. Completion expected by the end of 2016 |
A321 Mint | 16 Mint 143 Core | 16 Mint 143 Core | - | - | Not part of the program |
E190 | 100 | 100 | - | - | Not part of the program |
3
JetBlue Airways Investor Relations • (718) 709-2202 • [email protected]
Investor UpdateHistorical Revenue Performance
(year-over-year unit revenue growth)
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | |||||
PRASM | RASM | PRASM | RASM | PRASM | RASM | PRASM | RASM | |
2014 | 0.9% | 1.1% | 6.0% | 5.6% | 2.4% | 1.4% | (0.1)% | (1.0)% |
2015 | 4.5% | 3.0% | 1.4% | 0.4% | (0.6)% | 0.0% | (1.9)% | (0.2)% |
Share Count
Share count estimates for calculating basic and diluted earnings per share are as follows:
First Quarter 2016 | ||||||
Basic Share Count | Diluted Share Count | Interest Add-back | ||||
Net Income Range | (in millions) | (in millions) | (in millions)* | |||
Zero - $10 million | 321.6 | 324.1 | $— | |||
$10 million or greater | 321.6 | 341.7 | $1 | |||
Full Year 2016 | ||||||
Basic Share Count | Diluted Share Count | Interest Add-back | ||||
Net Income Range | (in millions) | (in millions) | (in millions)* | |||
Zero - $23 million | 327.1 | 329.3 | $— | |||
$23 million or greater | 327.1 | 342.9 | $1 | |||
* Net of taxes
These share count estimates assume 20% annual stock price appreciation and that all of the holders of the 6.75% convertible debentures due 2039 (Series B) will be converted to shares during the fourth quarter of 2016. These share count estimates do not include any share repurchases that may occur throughout 2016 under JetBlue’s share buyback program. The number of shares used in JetBlue’s actual earnings per share will likely be different than those stated above.
This Investor Update contains statements of a forward-looking nature which represent our management's beliefs and assumptions concerning future events. When used in this document, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; volatility in fuel prices, maintenance costs and interest rates; our ability to implement our growth strategy; our significant fixed obligations and substantial indebtedness; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on high daily aircraft utilization; our dependence on the New York metropolitan market and the effect of increased congestion in this market; our reliance on automated systems and technology; our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our reliance on a limited number of suppliers; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches; changes in or additional government regulation; changes in our industry due to other airlines' financial condition; global economic conditions, or an economic downturn leading to a continuing or accelerated decrease in demand for domestic and business air travel; the spread of infectious diseases; and external geopolitical events and conditions. Further information concerning these and other factors is contained in the Company's Securities and Exchange Commission filings, including but not limited to, the Company's 2014 Annual Report on Form 10-K and 2015 Quarterly Reports on Form 10-Q. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that may arise after the date of this release.
4
JetBlue Airways Investor Relations • (718) 709-2202 • [email protected]
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