How will the initial Pratt agreement (covering 2024-2025) impact the P&L, specifically regarding D&A and maintenance expense, and how much is included in the 2026 guide?

The settlement closes out 2024 and 2025. 80% will be a reduction in operating expense (between now and end of 2027), and 20% a reduction to CapEx. About 25% of the settlement will impact 2026 and is included in the guide, with the remainder hitting 2027. “80% of the settlement will be a reduction in operating expense between now and the end of 2027. And 20% of it will be a reduction to CapEx. At a high level, about 25% of the settlement will impact 2026 and obviously is included in our guide.”

How quickly will BlueFirst monetize compared to industry trends, and can it be monetized before most retrofits are complete?

JetBlue expects a quicker ramp given 15 years of industry experience monetizing first-class cabins. While the first aircraft won't be monetized, sales will begin once two aircraft are retrofitted. Full run rate will be late 2028 or 2029, with the majority of planes done by end of 2027. “We're probably the first one will not be monetized, but the minute we get to 2, we're going to start selling this product on the fleet as it flush.”

How will JetBlue manage liquidity given delayed positive cash flow, current cash burn, and what are the assumed costs for additional liquidity options?

JetBlue's liquidity is strong at 23% of TTM revenue (above 17-20% target). A $500M aircraft-backed financing was done at 6.5%, with a $250M accordion feature as the first priority for additional liquidity. The weighted average cost of debt is 6.8%. A meeting with lenders next week is normal course, discussing publicly available info. “If we need liquidity in the second half of this year, our #1 priority will be pulling on the accordion. If we need liquidity above and beyond that, given oil we will look to do additional aircraft financing.”

JBLU

JetBlue (JBLU) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Jul 28, 2026

Source: earnings call transcript

Executive summary

JetBlue Q2 FY26 — JetForward Drives H2 Profitability Inflection & 2028 EPS Target

JetBlue's Q2 FY26 results demonstrate the effectiveness of its JetForward initiatives, driving a significant inflection towards profitability in the second half of the year despite operational challenges and volatile fuel prices. The company achieved strong revenue performance and fuel recapture, while strategically expanding its Fort Lauderdale hub and preparing for the launch of its premium BlueFirst product. Management expressed confidence in achieving sustained operating profitability by 2027 and an EPS of at least $1 per share by 2028, underpinned by continued execution of its strategic plan.

Highlights

Q2 RASM increased 10.9% year-over-year, beating the midpoint of revised and previously raised guidance.
Achieved nearly 50% fuel recapture in Q2, exceeding the expectation of 40% or more.
JetForward delivered $165 million of incremental EBIT in H1 2026, bringing the cumulative benefit to $470 million.
Fort Lauderdale RASM was up 11% even with capacity growth of nearly 40%.
Loyalty program saw nearly 40% growth in acquisitions and 21% higher remuneration for the quarter.

Concerns

Full year operating margin is expected to be approximately negative 2% to negative 5%, reflecting a challenging first half and recent fuel volatility.
July was operationally challenging due to extremely difficult, unpredictable weather coupled with ongoing ATC staffing constraints.
Fuel prices remain very volatile, necessitating a widened operating margin range for the full year.

Guidance & targets

Category	Target	Timeline	Confidence
Full year operating margin	approximately negative 2% to negative 5% high materiality	FY26	Medium
JetForward incremental EBIT	at least $310 million high materiality	2026	High
Return to sustained operating profitability	2027 high materiality	2027	High
Annual incremental JetForward EBIT	approximately $1.2 billion high materiality	2028 and beyond	High
2028 EPS	at least $1 per share high materiality	2028	High
Fuel recapture	100% medium materiality	early 2027	High
Third quarter capacity growth	3% to 6% year-over-year medium materiality	Q3 · FY26	High
Third quarter RASM growth	12.5% to 16.5% year-over-year medium materiality	Q3 · FY26	High
Full year capacity growth	1.5% to 3.5% year-over-year medium materiality	FY26	High
Full year RASM growth	10% to 12.5% year-over-year medium materiality	FY26	High
Third quarter CASM ex fuel growth	2.5% to 4.5% year-over-year medium materiality	Q3 · FY26	High
Full year CASM ex fuel growth	2% to 4% year-over-year medium materiality	FY26	High
Fuel price per gallon	$3.49 high materiality	Q3 · FY26	High
Full year 2026 CapEx	approximately $850 million medium materiality	FY26	High
Third quarter CapEx	approximately $300 million medium materiality	Q3 · FY26	High
Annual CapEx	below $1 billion medium materiality	through the end of the decade	High
Liquidity target range	17% to 20% of trailing 12-month revenue medium materiality	ongoing	High
Positive operating margin	2027 high materiality	2027	High
Meaningful progress towards positive free cash flow	2027 high materiality	2027	High
BlueFirst full revenue and margin contribution	building in 2028 and beyond high materiality	2028 and beyond	High
BlueFirst retrofit completion	majority by the end of 2027 medium materiality	end of 2027	High
JetForward incremental EBIT	$850 million to $950 million high materiality	end of 2027	High
Capacity growth	low to mid-single digits medium materiality	2027, 2028 and beyond	High
RASM growth	mid-single-digit medium materiality	2027, 2028 and beyond	High
CASM ex fuel growth	low single-digit medium materiality	2027, 2028 and beyond	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Fort Lauderdale RASM was up 11% even with capacity growth of nearly 40%, showing strong customer demand and capitalizing on Spirit's exit. RASM is slightly above system average for this time period. Working with Broward County Aviation Department on additional gate leases. Capacity growth: nearly 40%	—	11%	—	—

Product announcements

Product	Type	Timeline	Details
BlueFirst	launch	in the fall
Simpler shopping experience	update	yesterday

Deals & partnerships

Barclays Co-brand credit card issuer

Barclays is the only major co-brand issuer without a competing proprietary travel card, uniquely aligned with JetBlue and focused on growing the long-term value of the portfolio.

BlueSky Partnership for reciprocal loyalty benefits and product distribution

Reached a milestone in May with the introduction of reciprocal loyalty benefits for members. Recently began distributing products through the page powered miles travel site.

Broward County Aviation Department Working to formalize additional gate leases

Partnership to build a stronger and more diversified portfolio of destinations for South Florida travelers, supporting JetBlue's Fort Lauderdale expansion.

Capital programs

BlueFirst retrofit underway

Period spend: initial spend

Benefit:meaningful unit revenue and margin expansion, including nearly 5 points of RASM growth

Initial spend associated with retrofitting aircraft for BlueFirst is a primary driver of Q3 and full year 2026 CapEx. The entire fleet is expected to be done by late 2028 or 2029.

Risks & headwinds

Challenging operating environment Q2 FY26, July

particularly challenging July

Mitigation:Investments in technology and process improvement are driving better performance despite extremely difficult weather and ongoing ATC staffing constraints.

Elevated and volatile fuel prices Q2 FY26, ongoing

elevated fuel prices

Mitigation:Adjustments to pricing and capacity, along with resilient customer demand, enabled nearly 50% fuel recapture in Q2, with a target of 100% by early 2027.

Fluid geopolitical backdrop ongoing

geopolitical backdrop remains fluid

Mitigation:Maintaining a conservative capacity profile given the external environment.

Industry capacity / competitive capacity next few years

low to mid-single digits

Mitigation:JetBlue's own capacity plan remains highly disciplined, concentrating growth in Fort Lauderdale where strongest returns are seen.

What to watch in Q3 FY26

Fuel recapture rate

Q3 FY26

Current nearly 50% (Q2 FY26)

Target meaningfully step change beyond 50%

Why it matters

Indicates the company's ability to offset volatile fuel costs through pricing and capacity adjustments.

Our fuel recapture number in the third quarter is definitely going to meaningfully step change beyond the 50%.

Find out whether JBLU delivers this. Inve re-checks your case every morning.

Q&A highlights

How large can JetBlue get in Fort Lauderdale, and what is the current/future connectivity mix (local vs. connecting)?

JetBlue expects to operate over 150 daily flights by winter, with potential for further growth. Connectivity will be well under 50% as local demand is strong, but the banking structure will significantly expand access to Caribbean and Latin America destinations for customers from northern markets like Albany.

“We're going to be over [ $150 million ] at the end of 2026 or '27. We do think there's another tranche of growth to get come in.”

asked by Michael Linenberg · answered by Martin St. George

3 min read 6 chapters

Detailed narrative

JetForward Program Success and Future Outlook

The JetForward program continues to deliver on its objectives, achieving $165 million of incremental EBIT in the first half of 2026, bringing the cumulative benefit to $470 million. The company is on track to deliver at least $310 million of incremental EBIT for the full year 2026.

Looking ahead, JetBlue expects to deliver $850 million to $950 million of incremental EBIT by the end of 2027, with BlueFirst and other initiatives driving approximately $1.2 billion in annual incremental EBIT by 2028, supporting a return to positive pretax margin and an EPS target of at least $1 per share in 2028.

Fort Lauderdale Hub Expansion and Performance

JetBlue is significantly expanding its presence in Fort Lauderdale, capitalizing on strong local demand and the strategic opportunity presented by Spirit's exit. The company expects to operate over 150 daily flights by winter, making it their largest schedule ever from the airport.

Fort Lauderdale RASM increased 11% in Q2, despite nearly 40% capacity growth, demonstrating the market's strength. JetBlue is actively working with the Broward County Aviation Department to formalize additional gate leases this fall to support continued growth.

BlueFirst Premium Product Launch

JetBlue is preparing to launch its new domestic first-class product, BlueFirst, with sales planned to begin in the fall. This initiative represents a significant step in evolving JetBlue's product offering, aiming to serve customers seeking a premium experience while strengthening unit revenue over time.

The majority of aircraft retrofits for BlueFirst are expected to be completed by the end of 2027, with full revenue and margin contribution building in 2028 and beyond, projected to support nearly 5 points of RASM growth at run rate.

Liquidity and Balance Sheet Management

JetBlue ended Q2 with a strong liquidity position, holding $2.2 billion in cash and investment securities, representing 23% of trailing 12-month revenue, which is above its target range of 17% to 20%. The company executed a $500 million aircraft-backed financing transaction in Q2 at an average rate of 6.5%, which includes a $250 million accordion feature.

This disciplined approach aims to maintain liquidity, optimize the cost of capital, and support JetForward initiatives, with the weighted average cost of debt across the capital structure at 6.8%.

Fuel Cost Management and Recapture Strategy

Despite elevated and volatile fuel prices, JetBlue demonstrated effective fuel cost management, achieving nearly 50% fuel recapture in Q2, exceeding its expectation of 40% or more. The company anticipates a meaningful step change in fuel recapture in Q3 and aims to achieve 100% fuel recapture by early 2027.

This strategy relies on strong customer demand and the ability to adjust pricing and capacity in response to market conditions, with the full year fuel price per gallon expected to be $3.49 based on July 10 forward curves.

CASM ex Fuel Performance and Cost Initiatives

JetBlue delivered Q2 CASM ex fuel growth of 2.4% year-over-year, outperforming its guidance midpoint by 1.5 points due to strong execution and expense timing shifts. The company expects nonfuel unit cost growth to moderate meaningfully in the second half of 2026 as JetForward cost savings initiatives take hold.

These initiatives include new digital tools for task automation, modernization of technology infrastructure for cloud optimization, and leveraging data science across operational teams to improve efficiency and utilization.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.