JBLU JetBlue Airways Corporation

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☑     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to__________

Delaware									87-0617894
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)
27-01 Queens Plaza North			Long Island City			New York			11101
(Address of principal executive offices)									(Zip Code)

Title of each class			Trading Symbol			Name of each exchange on which registered
Common Stock, $0.01 par value			JBLU			The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☑

			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			3
Consolidated Balance Sheets - March 31, 2023 and December 31, 2022			3
Consolidated Statements of Operations - Three Months Ended March 31, 2023 and 2022			5
Consolidated Statements of Comprehensive Loss - Three Months Ended March 31, 2023 and 2022			6
Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022			7
Consolidated Statements of Stockholders' Equity - Three Months Ended March 31, 2023 and 2022			8
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			36
Item 4. Controls and Procedures			36
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			37
Item 1A. Risk Factors			37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			37
Item 5. Other Information			37
Item 6. Exhibits			38
SIGNATURE			40

			March 31, 2023						December 31, 2022
			(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	1,333					$	1,042
Investment securities			204						350
Receivables, less allowance (2023-$3; 2022-$4)			331						317
Inventories, less allowance (2023-$30; 2022-$29)			76						87
Prepaid expenses and other			154						120
Total current assets			2,098						1,916
PROPERTY AND EQUIPMENT
Flight equipment			11,889						11,727
Predelivery deposits for flight equipment			398						415
Total flight equipment and predelivery deposits, gross			12,287						12,142
Less accumulated depreciation			3,689						3,578
Total flight equipment and predelivery deposits, net			8,598						8,564
Other property and equipment			1,309						1,314
Less accumulated depreciation			749						731
Total other property and equipment, net			560						583
Total property and equipment, net			9,158						9,147
OPERATING LEASE ASSETS			637						660
OTHER ASSETS
Investment securities			153						172
Restricted cash			146						146
Intangible assets, less accumulated amortization (2023-$469; 2022-$455)			310						298
Other			725						706
Total other assets			1,334						1,322
TOTAL ASSETS			$	13,227					$	13,045

			March 31, 2023						December 31, 2022
			(unaudited)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable			$	626					$	532
Air traffic liability			1,926						1,581
Accrued salaries, wages and benefits			543						498
Other accrued liabilities			554						486
Current operating lease liabilities			98						97
Current maturities of long-term debt and finance lease obligations			263						554
Total current liabilities			4,010						3,748
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS			3,316						3,093
LONG-TERM OPERATING LEASE LIABILITIES			616						639
DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes			692						770
Air traffic liability - non-current			731						738
Other			489						494
Total deferred taxes and other liabilities			1,912						2,002
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25 shares authorized, none issued			—						—
Common stock, $0.01 par value; 900 shares authorized, 487 and 486 shares issued and 328 and 327 shares outstanding at March 31, 2023 and December 31, 2022, respectively			5						5
Treasury stock, at cost; 159 shares at March 31, 2023 and December 31, 2022			(1,998)						(1,995)
Additional paid-in capital			3,139						3,129
Retained earnings			2,232						2,424
Accumulated other comprehensive loss			(5)						—
Total stockholders’ equity			3,373						3,563
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY			$	13,227					$	13,045

						Three Months Ended March 31,
						2023						2022
OPERATING REVENUES
Passenger						$	2,182					$	1,603
Other						146						133
Total operating revenues						2,328						1,736
OPERATING EXPENSES
Aircraft fuel and related taxes						765						571
Salaries, wages and benefits						741						688
Landing fees and other rents						160						132
Depreciation and amortization						151						143
Aircraft rent						32						26
Sales and marketing						76						57
Maintenance, materials and repairs						176						152
Other operating expenses						357						334
Special items						112						—
Total operating expenses						2,570						2,103
OPERATING LOSS						(242)						(367)
OTHER INCOME (EXPENSE)
Interest expense						(46)						(37)
Interest income						17						4
Gain on investments, net						3						2
Other income						2						—
Total other expense						(24)						(31)
LOSS BEFORE INCOME TAXES						(266)						(398)
Income tax benefit						(74)						(143)
NET LOSS						$	(192)					$	(255)
LOSS PER COMMON SHARE:
Basic						$	(0.58)					$	(0.79)
Diluted						$	(0.58)					$	(0.79)

			Three Months Ended March 31,
			2023						2022
NET LOSS			$	(192)					$	(255)
Changes in fair value of available-for-sale securities and derivative instruments, net of reclassifications into earnings, net of deferred taxes of $(1) and $— in 2023 and 2022, respectively			(5)						(1)
Total other comprehensive loss			(5)						(1)
COMPREHENSIVE LOSS			$	(197)					$	(256)

			Three Months Ended March 31,
			2023						2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss			$	(192)					$	(255)
Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes			(78)						(141)
Depreciation			137						130
Amortization			14						13
Stock-based compensation			10						11
Changes in certain operating assets and liabilities			520						499
Other, net			(6)						(10)
Net cash provided by operating activities			405						247
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures			(172)						(85)
Predelivery deposits for flight equipment			—						(49)
Purchase of held-to-maturity investments			(4)						(63)
Proceeds from the maturities of held-to-maturity investments			4						—
Purchase of available-for-sale securities			(102)						(290)
Proceeds from the sale of available-for-sale securities			267						153
Payment for Spirit Airlines acquisition			(33)						—
Net cash used in investing activities			(40)						(334)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale-leaseback transactions			38						—
Repayment of long-term debt and finance lease obligations			(109)						(83)
Acquisition of treasury stock			(3)						(6)
Net cash used in financing activities			(74)						(89)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH			291						(176)
Cash, cash equivalents and restricted cash at beginning of period			1,188						2,077
Cash, cash equivalents and restricted cash at end of period(1)			$	1,479					$	1,901
SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest			$	6					$	20
Cash payments for income taxes (net of refunds)			—						1
NON-CASH TRANSACTIONS
Operating lease assets obtained under operating leases			$	4					$	59
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
			March 31, 2023						March 31, 2022
Cash and cash equivalents			$	1,333					$	1,834
Restricted cash(2)			146						67
Total cash, cash equivalents and restricted cash			$	1,479					$	1,901
(2) Restricted cash primarily consists of funds held in escrow for estimated workers’ compensation obligations and other letters of credit.

						Common Shares						Common Stock						Treasury Shares						Treasury Stock						Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Loss						Total
Balance at December 31, 2022						486						$	5					159						$	(1,995)					$	3,129					$	2,424					$	—					$	3,563
Net loss						—						—						—						—						—						(192)						—						(192)
Other comprehensive loss						—						—						—						—						—						—						(5)						(5)
Vesting of restricted stock units						1						—						—						(3)						—						—						—						(3)
Stock compensation expense						—						—						—						—						10						—						—						10
Balance at March 31, 2023						487						$	5					159						$	(1,998)					$	3,139					$	2,232					$	(5)					$	3,373
						Common Shares						Common Stock						Treasury Shares						Treasury Stock						Additional Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Loss						Total
Balance at December 31, 2021						478						$	5					158						$	(1,989)					$	3,047					$	2,786					$	—					$	3,849
Net loss						—						—						—						—						—						(255)						—						(255)
Other comprehensive loss						—						—						—						—						—						—						(1)						(1)
Vesting of restricted stock units						1						—						—						(6)						—						—						—						(6)
Stock compensation expense						—						—						—						—						11						—						—						11
Balance at March 31, 2022						479						$	5					158						$	(1,995)					$	3,058					$	2,531					$	(1)					$	3,598

			Three Months Ended March 31,
			2023						2022
Passenger revenue
Passenger travel			$	2,026					$	1,490
Loyalty revenue - air transportation			156						113
Other revenue
Loyalty revenue			100						88
Other revenue			46						45
Total revenue			$	2,328					$	1,736

TrueBlue® is our customer loyalty program designed to reward and recognize our customers. TrueBlue® points earned from ticket purchases are presented as a reduction to Passenger travel within passenger revenue. Amounts presented in Loyalty revenue - air transportation represent the revenue recognized when TrueBlue® points have been redeemed and the travel has occurred. Loyalty revenue within other revenue is primarily comprised of the non-air transportation elements of the sales of our TrueBlue® points.

			March 31, 2023						December 31, 2022
Air traffic liability - passenger travel			$	1,624					$	1,291
Air traffic liability - loyalty program (air transportation)			998						1,000
Deferred revenue(1)			525						530
Total			$	3,147					$	2,821

(1) Deferred revenue is included within other accrued liabilities and other liabilities on our consolidated balance sheets.

During the three months ended March 31, 2023 and 2022, we recognized passenger revenue of $858 million and $693 million, respectively, that was included in passenger travel liability at the beginning of the respective periods.

Balance at December 31, 2022			$	1,000
TrueBlue® points redeemed			(156)
TrueBlue® points earned and sold			154
Balance at March 31, 2023			$	998
Balance at December 31, 2021			$	891
TrueBlue® points redeemed			(113)
TrueBlue® points earned and sold			134
Balance at March 31, 2022			$	912

During the three months ended March 31, 2023, we made principal payments of $109 million on our outstanding debt and finance lease obligations.

At March 31, 2023, we had pledged aircraft, engines, other equipment, and facilities with a net book value of $6.0 billion as security under various financing arrangements.

Year			Total
Remainder of 2023			$	216
2024			237
2025			204
2026			943
2027			189
2028 and thereafter			1,790
Total			$	3,579

			March 31, 2023												December 31, 2022
			Carrying Value						Estimated Fair Value(2)						Carrying Value						Estimated Fair Value(2)
Public Debt
Fixed rate special facility bonds, due through 2036			$	42					$	43					$	42					$	43
Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032			505						360						504						345
2019-1 Series A, due through 2028			157						128						157						124
2019-1 Series B, due through 2027			82						88						82						87
2020-1 Series A, due through 2032			547						473						546						457
2020-1 Series B, due through 2028			135						144						135						142
Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023			—						—						61						60
Fixed rate equipment notes, due through 2028			409						343						447						422
Floating rate equipment notes, due through 2028			48						43						56						49
Sale-leaseback transactions, due through 2034			378						295						341						329
Unsecured CARES Act Payroll Support Program loan, due through 2030			259						130						259						126
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031			144						70						144						68
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031			132						65						132						62
Convertible senior notes due 2026			740						551						739						534
Total(1)			$	3,578					$	2,733					$	3,645					$	2,848

(1) Total excludes finance lease obligations of $1 million and $2 million at March 31, 2023 and December 31, 2022, respectively.

(2) The estimated fair values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair value of our non-public debt are estimated using a discounted cash flow analysis based on our borrowing rates for instruments with similar terms and therefore classified as Level 3 in the fair value hierarchy. Refer to Note 7 for an explanation of the fair value hierarchy structure.

We have financed certain aircraft with Enhanced Equipment Trust Certificates ("EETCs"). One of the benefits of this structure is being able to finance several aircraft at one time, rather than individually. The structure of EETC financing is that we create pass-through trusts in order to issue pass-through certificates. The proceeds from the issuance of these certificates are then used to purchase equipment notes, which are issued by us and are secured by our aircraft. These trusts meet the definition of a variable interest entity ("VIE"), as defined in Topic 810, Consolidation of the FASB Codification, and must be considered for consolidation in our financial statements. Our assessment of our EETCs considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks in each. The main purpose of the trust structure is to enhance the credit worthiness of our debt obligation through certain bankruptcy protection provisions and liquidity facilities, and also to lower our total borrowing cost. We concluded that we are not the primary beneficiary in these trusts because our involvement in them is limited to principal and interest payments on the related notes, the trusts were not set up to pass along variability created by credit risk to us, and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our financial statements.

In connection with the entry into the Merger Agreement as defined in Note 12, JetBlue entered into a Second Amended and Restated Commitment Letter (the “Commitment Letter”), dated July 28, 2022, with Goldman Sachs Bank USA; BofA Securities, Inc.; Bank of America, N.A.; BNP Paribas; Credit Suisse AG, New York Branch; Credit Suisse Loan Funding LLC; Credit Agricole Corporate and Investment Bank; Natixis, New York Branch; Sumitomo Mitsui Banking Corporation; and MUFG Bank, Ltd. (collectively, the “Commitment Parties”), pursuant to which the Commitment Parties have committed to provide a senior secured bridge facility in an aggregate principal amount of up to $3.5 billion to finance the acquisition of Spirit Airlines, Inc. (“Spirit”).

Basic earnings per share is calculated by dividing net loss by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from restricted stock units, the crewmember Stock Purchase Plan, convertible notes, warrants issued under various federal payroll support programs, and any other potentially dilutive instruments using the treasury stock and if-converted methods. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts were 1.6 million and 2.9 million for the three months ended March 31, 2023 and 2022, respectively.

			Three Months Ended March 31,
			2023						2022
Net loss			$	(192)					$	(255)
Weighted average basic shares			327.6						320.5
Effect of dilutive securities			—						—
Weighted average diluted shares			327.6						320.5
Loss per common share
Basic			$	(0.58)					$	(0.79)
Diluted			$	(0.58)					$	(0.79)

Another component of the Plan is a Company discretionary contribution of 5% of eligible non-management crewmember compensation, which we refer to as Retirement Plus. Retirement Plus contributions vest over three years and are measured from a crewmember's hire date.

Certain Federal Aviation Administration ("FAA") licensed crewmembers receive an additional contribution of 3% of eligible compensation, which we refer to as Retirement Advantage.

Our pilots receive a non-elective Company contribution of 16% of eligible pilot compensation per the terms of the finalized collective bargaining agreement between JetBlue and the Air Line Pilots Association ("ALPA"), in lieu of the above 401(k) Company matching contribution, Retirement Plus, and Retirement Advantage contributions. The Company's non-elective contribution of eligible pilot compensation vests after three years of service.

Our non-management crewmembers are eligible to receive profit sharing, calculated as 10% of adjusted pre-tax income before profit sharing and special items up to a pre-tax margin of 18% with the result reduced by Retirement Plus contributions and the equivalent of Retirement Plus contributions for pilots. If JetBlue's resulting pre-tax margin exceeds 18%, non-management crewmembers will receive 20% profit sharing on amounts above an 18% pre-tax margin.

Total 401(k) company match, Retirement Plus, Retirement Advantage, pilot retirement contribution, and profit sharing expensed for the three months ended March 31, 2023 and 2022 was $66 million and $62 million, respectively.

Flight equipment commitments(1)
Year			Total
Remainder of 2023			$	1.5
2024			2.2
2025			1.7
2026			1.3
2027			1.0
Total			$	7.7

Year			Airbus A321neo						Airbus A220						Total
2023			11						17						28
2024			13						30						43
2025			11						24						35
2026			12						14						26
2027			14						—						14
Total			61						85						146

The amount of committed expenditures stated above represents the current delivery schedule set forth in our Airbus order book as of March 31, 2023. Due to Airbus delivery delays, our 2023 capacity planning assumes delivery of 11 A220, four A321neo, and four A321neo LR aircraft.

Under Topic 820, Fair Value Measurement of the Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (the "Codification") disclosures are required about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs as follows:

Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - quoted prices in active markets for similar assets and liabilities, and other inputs that are observable directly or indirectly for the asset or liability; or

Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

			March 31, 2023
			Level 1						Level 2						Level 3						Total
Assets
Cash equivalents			$	599					$	—					$	—					$	599
Available-for-sale investment securities			—						157						13						170
Equity investment securities			11						—						—						11
Aircraft fuel derivatives			—						8						—						8

			December 31, 2022
			Level 1						Level 2						Level 3						Total
Assets
Cash equivalents			$	665					$	—					$	—					$	665
Available-for-sale investment securities			—						324						13						337
Equity investment securities			8						—						—						8
Aircraft fuel derivatives			—						3						—						3

Refer to Note 3 for fair value information related to our outstanding debt obligations as of March 31, 2023 and December 31, 2022.

Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC ("JBV"), has equity investments in emerging companies that do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the FASB Codification, we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for identifiable or similar investments of the same issuer.

			March 31, 2023									December 31, 2022
			Carrying Value			Fair Value						Carrying Value			Fair Value
Held-to-maturity investment securities			$	177		$	171					$	177		$	170

Available-for-sale investment securities. We did not record any material gains or losses on these securities during the three months ended March 31, 2023 and 2022. Refer to Note 7 for an explanation of the fair value hierarchy structure.

Held-to-maturity investment securities. We did not record any material gains or losses on held-to-maturity investment securities during the three months ended March 31, 2023 and 2022.

			March 31, 2023						December 31, 2022
Available-for-sale investment securities
Time deposits			$	150					$	285
Commercial paper			7						39
Debt securities			13						13
Total available-for-sale investment securities			170						337
Held-to-maturity investment securities
Corporate bonds			177						177
Total held-to-maturity investment securities			177						177
Total investment in debt securities			$	347					$	514

Investments in which we can exercise significant influence are accounted for using the equity method in accordance with Topic 323, Investments - Equity Method and Joint Ventures of the FASB Codification. The carrying amount of our equity method investments was $37 million and $38 million as of March 31, 2023 and December 31, 2022, respectively, and is included within other assets on our consolidated balance sheets. We did not record any material gains or losses on these investments during the three months ended March 31, 2023. We recognized a gain of $3 million on one of our equity method investments related to its issuance of additional shares upon the closing of a subsequent financing round in other income on our consolidated statement of operations during the three months ended March 31, 2022.

JBV has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the FASB Codification, we account for these investments using a measurement alternative that allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. The carrying amount of these investments, which is included within other assets on our consolidated balance sheet, was $87 million and $83 million as of March 31, 2023 and December 31, 2022, respectively. We did not record any material gains or losses on these investments during the three months ended March 31, 2023 and 2022.

As part of our risk management techniques, we periodically purchase over the counter energy derivative instruments to manage our exposure to the effect of changes in the price of aircraft fuel. Prices for the underlying commodities have historically been highly correlated to aircraft fuel, making derivatives of them effective at providing short-term protection against sharp increases in average fuel prices. We do not hold or issue any derivative financial instruments for trading purposes.

We attempt to obtain cash flow hedge accounting treatment for each fuel derivative that we enter into. This treatment is provided for under the Derivatives and Hedging topic of the FASB Codification which allows for gains and losses on the effective portion of qualifying hedges to be deferred until the underlying planned aircraft fuel consumption occurs, rather than recognizing the gains and losses on these instruments into earnings during each period they are outstanding. The effective portion of realized fuel hedging derivative gains and losses is recognized in aircraft fuel expense in the period during which the underlying fuel is consumed.

Ineffectiveness occurs, in certain circumstances, when the change in the total fair value of the derivative instrument differs from the change in the value of our expected future cash outlays for the purchase of aircraft fuel. If a hedge does not qualify for hedge accounting, the periodic changes in its fair value are also recognized in interest income and other. When aircraft fuel is consumed and the related derivative contract settles, any gain or loss previously recorded in other comprehensive income is recognized in aircraft fuel expense. All cash flows related to our fuel hedging derivatives are classified as operating cash flows.

Our current approach to fuel hedging is to enter into hedges on a discretionary basis. We view our hedge portfolio as a form of insurance to help mitigate the impact of price volatility and protect us against severe spikes in oil prices, when possible.

The following table illustrates the approximate hedged percentages of our projected fuel usage by quarter as of March 31, 2023 related to our outstanding fuel hedging contracts that were designated as cash flow hedges for accounting purposes.

						Aircraft fuel call option spread agreements
Second Quarter 2023						30.5		%
Third Quarter 2023						30.1		%
Fourth Quarter 2023						20.0		%

The table below reflects quantitative information related to our derivative instruments and where these amounts are recorded in our financial statements (dollar amounts in millions):

						March 31, 2023						December 31, 2022
Fuel Derivatives
Asset fair value recorded in prepaid expense and other current assets						$	8					$	3
Longest remaining term (months)						3						3
Hedged volume (barrels, in thousands)						4,380						450
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months						$	4					$	2

						Three Months Ended March 31,
						2023						2022
Fuel Derivatives
Hedge effectiveness gains recognized in aircraft fuel expense						$	1					$	—
Hedge losses on derivatives recognized in comprehensive income						$	(5)					$	—
Percentage of actual consumption economically hedged						9		%				—		%

Any outstanding derivative instrument exposes us to credit loss in connection with our fuel contracts in the event of nonperformance by the counterparties to our agreements, but we do not expect that any of our counterparties will fail to meet their obligations. The amount of such credit exposure is generally the fair value of our outstanding contracts for which we are in a receivable position. To manage credit risks we select counterparties based on credit assessments, limit our overall exposure to

			Aircraft Fuel Derivatives						Available-for-sale securities						Total
Balance of accumulated income (loss), at December 31, 2022			$	1					$	(1)					$	—
Reclassifications into earnings, net of deferred taxes of $— (1)			(1)						—						(1)
Change in fair value, net of deferred taxes of $(1)			(4)						—						(4)
Balance of accumulated loss, at March 31, 2023			$	(4)					$	(1)					$	(5)
Balance of accumulated income (loss), at December 31, 2021			$	—					$	—					$	—
Reclassifications into earnings, net of deferred taxes $—			—						—						—
Change in fair value, net of deferred taxes of $(1)			—						(1)						(1)
Balance of accumulated loss, at March 31, 2022			$	—					$	(1)					$	(1)

(1) Reclassified to aircraft fuel expense.

			Three Months Ended March 31,
			2023						2022
Special Items
Union contract costs (1)			$	95					$	—
Spirit acquisition costs (2)			17						—
Total			$	112					$	—

(1) As discussed in Note 6, we incurred and recognized $95 million for a ratification payment and adjustments to paid-time-off accruals resulting from pay rate increases for the three months ended March 31, 2023.

(2) We incurred and recognized $17 million in Spirit acquisition costs, primarily related to professional fees for the three months ended March 31, 2023.

•First quarter system capacity increased by 9.0% compared to the first quarter of 2022.

•Revenue for the first quarter of 2023 increased by 34.1%, or $592 million year-over-year, to $2.3 billion compared to the first quarter of 2022.

•Operating revenue per available seat mile ("RASM") for the first quarter of 2023 increased by 23.0% year-over-year to 13.88 cents compared to the first quarter of 2022.

•Operating expense for the first quarter of 2023 increased by 22.2% year-over-year to $2.6 billion compared to the first quarter of 2022.

•Operating expense per available seat mile ("CASM") for the first quarter of 2023 increased by 12.1% year-over-year to 15.32 cents.

•Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our cost per available seat mile ("CASM ex-fuel")(1) increased by 1.2% year-over-year to 10 cents for the first quarter of 2023.

•Our reported loss per share for the first quarter of 2023 and 2022 were $(0.58) and $(0.79), respectively. Excluding mark-to-market and certain net gains on our investments, our adjusted loss per share(1) for the first quarter of 2023 was $(0.34). Excluding special items, our adjusted loss per share(1) for the first quarter of 2022 was $(0.80).

Destination						Service Expected to Commence
Paris, France						Summer 2023
Amsterdam, Netherlands						Summer 2023
Tallahassee, Florida						Early 2024

•In February 2023, we announced a partnership with climate tech company CHOOOSE which focuses on sustainability and advancing the use of sustainable aviation fuel ("SAF"). This partnership allows JetBlue customers to estimate the CO2 emissions of their flights and address their own emissions by allowing customers to make contributions into a fund dedicated to covering the cost of SAF.

•In March 2023, we announced a new collaboration with Shell Aviation to provide 10 million gallons of blended SAF at Los Angeles International Airport ("LAX") over the next two years starting in the first half of 2023, with the option to purchase up to five million gallons more in the third year either for LAX or other airports in the network.

We expect CASM Ex-Fuel(1) for the second quarter of 2023 to increase between 1.5% to 3.5%. The increase is primarily attributed to increased maintenance expense due to the timing of maintenance activity and growth in sales and distribution costs

Our reported results for the three months ended March 31, 2023 included the effects of special items and certain net gains on our investments. Adjusting for these items, our adjusted net loss(1) was $111 million, adjusted operating loss(1) was $130 million, adjusted operating margin(1) was (5.6)%, and adjusted loss per share(1) was $(0.34) for the three months ended March 31, 2023.

Our reported results for the three months ended March 31, 2022 included mark-to-market and certain gains and losses on our investments. Adjusting for these items, our adjusted net loss(1) was $256 million, adjusted operating loss(1) was $367 million, adjusted operating margin(1) was (21.1)%, and adjusted loss per share(1) was $(0.80) for the three months ended March 31, 2022.

(Revenues in millions; percent changes based on unrounded numbers)			Three Months Ended March 31,												Year-over-Year Change
			2023						2022						$						%
Passenger revenue			$	2,182					$	1,603					$	579					36.1		%
Other revenue			146						133						13						9.4
Total operating revenues			$	2,328					$	1,736					$	592					34.1		%
Average Fare			$	214.07					$	195.99					$	18.08					9.2		%
Yield per passenger mile (cents)			16.31						14.67						1.64						11.2
Passenger revenue per ASM (cents)			13.01						10.42						2.59						24.9
Operating revenue per ASM (cents)			13.88						11.29						2.59						23.0
Average stage length (miles)			1,199						1,231						(32)						(2.6)
Revenue passengers (thousands)			10,192						8,177						2,015						24.6
Revenue passenger miles (millions)			13,375						10,927						2,448						22.4
Available Seat Miles (ASMs) (millions)			16,769						15,383						1,386						9.0
Load Factor			79.8		%				71.0		%										8.8			pts.

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. The increase in passenger revenue of $579 million, or 36.1%, for the three months ended March 31, 2023 compared to the same period in 2022, was primarily driven by the return in demand for travel as revenue passengers increased by 24.6%. In addition, average fares increased 9.2% year-over-year.

Other revenue is primarily comprised of the marketing component of the sales of our TrueBlue® points. It also includes revenue from the sale of vacation packages, ground handling fees received from other airlines, and rental income. The year-

over-year increase in other revenue of $13 million, or 9.4%, was principally driven by an increase in marketing revenue associated with our TrueBlue® program due to higher customer spend and acquisitions.

(in millions; per ASM data in cents; percent changes based on unrounded numbers)			Three Months Ended March 31,												Year-over-Year Change												Cents per ASM
			2023						2022						$						%						2023						2022						% Change
Aircraft fuel and related taxes			$	765					$	571					$	194					34.1		%				4.56						3.71						23.0		%
Salaries, wages and benefits			741						688						53						7.7						4.42						4.47						(1.2)
Landing fees and other rents			160						132						28						21.1						0.95						0.86						11.1
Depreciation and amortization			151						143						8						5.6						0.90						0.93						(3.2)
Aircraft rent			32						26						6						24.4						0.19						0.17						14.1
Sales and marketing			76						57						19						32.8						0.45						0.37						21.9
Maintenance, materials and repairs			176						152						24						15.2						1.04						0.99						5.7
Other operating expenses			357						334						23						6.9						2.13						2.17						(1.9)
Special items			112						—						112						NM						0.68						—						NM
Total operating expenses			$	2,570					$	2,103					$	467					22.2		%				15.32						13.67						12.1		%
Total operating expenses excluding special items(1)			$	2,458					$	2,103					$	355					16.9		%				14.64						13.67						7.2		%

Depreciation and amortization increased by $8 million, or 5.6%, for the three months ended March 31, 2023 compared to the same period in 2022 primarily driven by the addition of 10 new aircraft that were placed into service since March 31, 2022.

Other operating expenses increased $23 million, or 6.9%, for the three months ended March 31, 2023 compared to the same period in 2022, primarily due to an increase in airport services resulting from an 11.6% increase in departures.

•Expenses of $17 million relating to our acquisition of Spirit Airlines; and

•Expense of $95 million related to a pilot union contract ratification payment and adjustment to other benefit-related items.

			Three Months Ended March 31,												Year-over-Year Change
(percent changes based on unrounded numbers)			2023						2022						%
Operational Statistics
Revenue passengers (thousands)			10,192						8,177						24.6
Revenue passenger miles (RPMs) (millions)			13,375						10,927						22.4
Available seat miles (ASMs) (millions)			16,769						15,383						9.0
Load factor			79.8		%				71.0		%				8.8			pts
Aircraft utilization (hours per day)			11.1						9.9						12.1
Average fare			$	214.07					$	195.99					9.2
Yield per passenger mile (cents)			16.31						14.67						11.2
Passenger revenue per ASM (cents)			13.01						10.42						24.9
Operating revenue per ASM (cents)			13.88						11.29						23.0
Operating expense per ASM (cents)			15.32						13.67						12.1
Operating expense per ASM, excluding fuel(1)			9.99						9.87						1.2
Departures			87,481						78,393						11.6
Average stage length (miles)			1,199						1,231						(2.6)
Average number of operating aircraft during period			278.2						282.0						(1.3)
Average fuel cost per gallon, including fuel taxes			$	3.50					$	2.90					20.8
Fuel gallons consumed (millions)			219						197						11.1
Average number of full-time equivalent crewmembers			20,167						19,304						4.5

(in millions)
Selected Balance Sheet Data:			March 31, 2023						December 31, 2022						$ Change						% Change
ASSETS
Cash and cash equivalents			1,333						1,042						291						27.9		%
Investment securities			357						522						(165)						(31.6)		%

(in millions)
Selected Balance Sheet Data:			March 31, 2023						December 31, 2022						$ Change						% Change
Inventories, less allowance (2023-$30; 2022-$29)			76						87						(11)						(11.7)		%
Prepaid expenses and other			154						120						34						29.0		%
LIABILITIES
Accounts payable			626						532						94						17.6		%
Air traffic liability			1,926						1,581						345						21.8		%
Other accrued liabilities			554						486						68						14.2		%

Cash and cash equivalents increased by $291 million, or 27.9%, to $1.3 billion as of March 31, 2023. Notable inflows during the three months ended March 31, 2023 included net proceeds from the sale of investment securities of $165 million and proceeds from a sale leaseback transaction of $38 million.

			Payments due in
			Total						2023						2024						2025						2026						2027						2028
Debt and finance lease obligations(1)			$	4.1					$	0.3					$	0.3					$	0.3					$	1.0					$	0.2					$	2.0
Operating lease obligations			1.0						0.1						0.1						0.1						0.1						0.1						0.5
Flight equipment purchase obligations(2)			7.7						1.5						2.2						1.7						1.3						1.0						—
Other obligations(3)			2.2						0.4						0.4						0.4						0.5						0.5						—
Total			$	15.0					$	2.3					$	3.0					$	2.5					$	2.9					$	1.8					$	2.5

(1) Includes actual interest and estimated interest for floating-rate debt based on March 31, 2023 rates.

(2) Amounts represent obligations based on the current delivery schedule set forth in our Airbus order book as of March 31, 2023.

(3) Amounts include non-cancelable commitments for the purchase of goods and services.

Year			Airbus A321neo						Airbus A220						Total
2023			11						17						28
2024			13						30						43
2025			11						24						35
2026			12						14						26
2027			14						—						14
Total			61						85						146

(1) Our aircraft order book is subject to change based on modifications to the contractual agreements or changes in the delivery schedules.