Edward Barnes - Chief Financial officer and Executive Vice President David Barger - Chief Executive officer, President, Director and Member of Airline Safety Committee Robin Hayes - Chief Commercial Officer and Executive Vice President

William Greene - Morgan Stanley Kevin Crissey - UBS Investment Bank Garrett Chase - Barclays Capital Daniel McKenzie - Rodman & Renshaw, LLC Ray Neidl - Calyon Securities Duane Pfennigwerth - Evercore Partners Inc. Glenn Engel - BofA Merrill Lynch Jamie Baker - JP Morgan Chase & Co Michael Derchin - CRT Capital Group LLC James Higgins Helane Becker - Dahlman Rose & Company, LLC Hunter Keay - Wolfe Trahan & Co. Michael Linenberg - Deutsche Bank AG

Good morning, ladies and gentlemen, and welcome to the JetBlue Airways Second Quarter 2011 Earnings Conference Call. Today's call is being recorded. We have on the call today, Dave Barger, JetBlue's CEO; and Ed Barnes, JetBlue's CFO. Also on the call for Q&A is Robin Hayes, JetBlue's Chief Commercial Officer. As a reminder, 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 the company's annual and periodic reports filed with the Securities and Exchange Commission. At this time, I would like to turn the call over to Dave Barger. Please go ahead, sir.

Thank you, Kim, and good morning, everyone. Thank you for joining us today. We are pleased to announce another profitable quarter for JetBlue. Sabre reported a net income of $25 million or earnings of $0.08 per diluted share. Total revenues grew 22% year-over-year, reflecting the strong revenue environment and underscoring the progress we've made to strengthen our network and maximize revenues. Our strong revenue performance was offset by a 26% increase in operating expenses, driven primarily by $160 million of additional fuel expense as JetBlue's fuel price for the second quarter increased 44% versus last year. The sharp increase in the price of fuel has clearly had a negative impact on the entire industry. However, our efforts to diversify revenue during shoulder periods, and conservatively managed cost continue to pay off, helping mitigate the negative effects of escalating fuel prices. We ended the quarter with roughly $1.2 billion in unrestricted cash and in short-term investments or 28% of trailing 12-months revenue, among the best liquidity positions in the industry. We believe maintaining a strong liquidity position is especially important in this high fuel cost and uncertain economic environment. Our second quarter results reflect the hard work of JetBlue crew members and the strength of our business model. I'd like to thank our 13,500 crew members for their extraordinary efforts in delivering outstanding, safe and reliable service to our customers every day. As a testament to their efforts and the strength of our product and brand, we recently earned the highest customer service ranking among the low-cost carriers by J.D. Power and Associates for the 7th year in a row, a remarkable achievement. We're very pleased to be in the company of some of the most prestigious and respected brands in the world, who received this recognition. With a 13.2% year-over-year PRASM increase, we're among the top performers of the U.S. carriers, who have reported second quarter results. Our stronger fare environment contributed to the significant year-over-year unit revenue gains during the second quarter, even as our capacity increased 8.7%. We had an average one-way fare of $158, a 14% improvement over last year, and our highest quarterly average fare ever, reflecting the stronger fare environment, as well as our ability to attract higher-yielding customers. These strong results are clear evidence that our network strategy is working, which includes focusing on further penetration of the business traveler segment, particularly in Boston. The key objective of this strategy is to improve revenue performance during shoulder periods. As such, we are very pleased with our year-over-year domestic PRASM growth in May, traditionally an off-peak travel period, which outperformed the industry. JetBlue has continued to grow each year in Boston. We currently offer nonstop service to 42 destinations from Boston's Logan Airport, more than any other carrier. In fact, no airline has ever served as many destinations as JetBlue in the Logan Airport's entire history, further solidifying our position as the airport's leading carrier. We continue to benefit from competitive capacity trends and expect competitive capacity in our Boston markets to be down about 3% year-over-year in the third quarter of 2011. New destinations and increased frequencies, combined with our superior product have helped us build and grow a loyal base of Boston's business travelers. As we grow this relevance, we believe we are able to stimulate demand and quickly gain traction in new markets. Illustrate in the first month of our Boston-Newark service, which began in May, the market size have roughly doubled versus the same period a year ago. Boston to DCA, Washington Reagan National, another business oriented route, also continues to ramp up nicely. We currently operate approximately 100 daily flights in Boston and plan to grow to nearly 150 daily flights by 2015, that's a similar number of departures we currently operate at JFK. We will continue to partner with Massport and make investments at our airport facilities to improve the customers' ground experience. A new centralized security checkpoint opened at our terminal last week, which we expect to significantly improve the experience for our customers traveling in Boston. We also have plans to introduce an innovative flat-rate travel pass, designed for the business customer in the very near future, which we believe will drive additional revenue. During the quarter, we continue to benefit from investments in our Caribbean and Latin America markets as well. As we have discussed on our prior calls, our Caribbean markets are to mature to profitability very quickly. In fact, 2 of the best performing routes in our network over the past 12 months are Caribbean markets we opened just over a year ago. With an average of 35 daily departures, JetBlue is now the largest carrier in Puerto Rico, in terms of seats and available seat miles. San Juan has become an increasingly important focus for JetBlue and we plan to increase seats into San Juan by roughly 50% year-over-year, in the fourth quarter of this year. As previously announced, we plan to add intra-Caribbean service from San Juan to St. Maarten, St. Thomas and St. Croix later this year. We're also the largest carrier in the Dominican Republic. Being the largest carrier in these key growth regions increases our relevance to customers, which we believe builds customer loyalty, and thereby, driving revenue growth. We also continue to benefit from competitive capacity reductions in our Caribbean markets, as carriers reduce capacity in response to our growth. For example, we expect competitive capacity in our Fort Lauderdale to Caribbean markets to be down nearly 30% year-over-year in the fourth quarter. Overall, we expect competitive capacity in our Caribbean markets to be down nearly 15% in the third quarter. We continue to seize upon growth opportunities in the Caribbean and Latin America. To that end, we recently announced plans to begin service from New York to Liberia, Costa Rica, JetBlue's first nonstop service from JFK Airport to Central America. And this morning, we are pleased to announced plans to commence service between White Plains, New York and Nassau in the Bahamas, beginning in November. This will be the first regularly scheduled nonstop service from Westchester County to the Caribbean. By the end of this year, we expect roughly 25% of our capacity will be in the Caribbean and Latin America. Our balanced mix of leisure-driven markets such as Punta Cana in the Dominican Republic, and visiting friends and relatives or BFR markets such as Kingston, Jamaica, has helped us to better manage the seasonality of our business and improve overall revenues. As we grow in this region, we aim to continue to balance these important segments. During the quarter, we continue to expand the scope of our network through 2 additional airline partnerships, as we began connecting customers with Icelandair and Cutter [ph]. We now have 11 airline partners and expect to add 2 more partners by the end of the year. We continue to be very pleased with our open architecture approach to airline partnerships. With 70 international flag carriers operating at JFK, we believe we are well positioned to continue to leverage our valuable real estate and slot portfolio to pursue additional partnerships that flow incremental passengers and revenue through our network. Our crew members did a great job of keeping costs in line during the quarter, and we'll discuss our cost performance in more detail but I'd like to emphasize that cost control has been and continues to be a foundation of JetBlue's success. Our superior product, combined with our low-cost structure allows us to compete effectively and build relevance in key markets. Cost control becomes even more critical in an environment on high fuel cost. We're committed to delivering safe, reliable service to our customers while improving efficiency. To that end, we are pursuing a variety of operational initiatives designed to increase efficiency and reduce costs. In closing, I'd like to once again, thank our 13,500 crew members for all their hard work during the second quarter. We significantly increased revenue while containing on fuel cost and maintained a strong cash position. While we expect more challenges ahead, we remain confident in the strength of our business model and in our ability to navigate through this environment. And with that, I'd like to turn the call over to Ed, for a more detailed review of our financial results. Ed?

Thank you, Dave. Good morning, everyone, and thanks again, for joining us today. We're very pleased with our results this quarter. We reported a profit of $25 million, with a 7.5% operating margin despite $160 million of higher fuel expense versus last year. A strong revenue performance helped offset the impact of rising fuel cost. I joined Dave and the entire leadership team in thanking our crew members for their hard work and taking care of JetBlue customers and delivering solid financial performance this quarter. Revenue results showed continued significant improvement year-over-year, as passenger unit revenues for the quarter increased 13.2% compared to a year ago. Yield during the second quarter, was up 13.9% and load factor was down 0.5 points on 8.7% more capacity. We benefited from a positive pricing traction across all markets as the impact of fare increases implemented during the first quarter fully materialized. The shift in the Easter Passover holiday travel driver period from late March, early April last year to the end of April this year also help revenue growth during the quarter. Given our BFR and leisure focus, along with strong Northeast Florida traffic, the Easter and Passover holidays tend to have a greater impact on us, compared to many of our peers. We were especially encouraged by our strong performance in May, as PRASM increased 19% year-over-year, reflecting our efforts to improve revenue performance during shoulder periods, by among other actions, better accommodating business traffic. As evidenced by this trend, we saw a significant improvement in both yields and load factor on our East Coast short haul markets, such as Boston-Raleigh and Boston-Chicago. Leisure demand unexpectedly and somewhat suddenly lost momentum at the end of June, pressuring industry revenues. Because we have a very compressed booking for all of the large percentage of our bookings coming inside of the month, this marked slowdown in demand negatively impacted our revenue performance. As a result, June PRASM came in below our expectations, and PRASM for the quarter was at the low end of the guidance we previously provided. Once again, we saw a solid improvement in ancillary revenues during the quarter. Total ancillary revenues in the second quarter was about $20 per passenger, a 10% year-over-year increase. This increase was driven primarily by the variable pricing optimization of our Even More Legroom offering, facilitated by our transition to Sabre last year. We continue to work to improve our ancillary revenues by offering expanded products and services on board and on the ground. To that end, we recently relaunched our Even More Legroom offering as Even More Space to better capture its additional features, early boarding and early access to overhead bin space. We plan to add up to 6 seats to the Even More Space inventory on our aircraft in the very near future, reflecting strong customer growth demand for this offering. We also launched and expedited security product called Even More Speed at 14 airports. Our customers are showing us that they are willing to pay for products and services, which enhance their travel experience and complement the superior core of JetBlue product. While revenue improvements have helped offset the rising fuel cost, fuel prices remain high and volatile. Fuel comprise roughly 40% of total operating expenses in the second quarter. During the quarter, we paid $134 million more for fuel than we would have paid at last year's price, an increase of more than 40% year-over-year. We believe that, that hedge against high fuel prices is better fuel efficiency. With an average fleet age of only 5.7 years, we have one of the most fuel efficient fleets among the major U.S. carriers. In addition, we continue to actively manage our fuel hedge portfolio to help mitigate price volatility. For the third quarter of 2011, we have hedged approximately 48% of our anticipated jet fuel requirements using swap arrangements, collars and caps. For the fourth quarter, approximately 38% of our projected fuel consumption is hedged, and we now have hedges in place through the end of 2012. The underlying details of our hedge positions are more specifically described in our investor update, which will be filed later today. Including the impact of hedges and taxes, we are planning on a price of $3.33 per gallon in the third quarter, a year-over-year increase of nearly 50%, and $3.24 for the full year, an increase of over 40%. We now expect our fuel expense for the year will increase by nearly $600 million. As will be indicated in the investor update file later today, these prices are based on the forward curve as of July 21, and exclude transportation and in the plane fees. Excluding fuel, our second quarter unit costs rose only 1.7% year-over-year. These results were better than our expectations as outlined in the guidance we provided last quarter, driven primarily by lower than expected salary expense as we deferred the addition of certain headcount positions. Looking at a few underlying items on the income statement. Sales and marketing expense increased about 8% per ASM year-over-year, driven primarily by increased advertising spent and higher credit card fees due to increase in average fares this quarter. Maintenance expense per ASM, increased 18% year-over-year. This was primarily attributable to the gradual aging of our fleet and more aircraft coming off of warranty. We expect to continue to experience cost pressures from maintenance expense through 2012. Other operating expenses, which include the bulk of our discretionary spending, decreased 2% per ASM. I am very proud of these results because they demonstrate our commitment to low-cost spending habits. Turning to the balance sheet. We ended the quarter with unrestricted cash and short-term investments of roughly $1.2 billion. During the second quarter, we made approximately $50 million in debt and capital lease payments. Scheduled principal payments from debt and capital leases are expected to be a very manageable $40 million in the third good quarter and $55 million on the fourth quarter. Turning to the fleet, year-to-date, we have taken delivery of 5 aircraft, 3 in the first quarter and 2 in the second quarter. We plan to take delivery of 4 more aircraft in 2011, 2 in the third quarter and 2 in the fourth quarter. With these deliveries, we expect to end 2011 with a fleet of 169 aircraft, 120 A320s and 49 E190s. With regard to CapEx, we spent approximately $20 million in non-aircraft CapEx and roughly $85 million in aircraft CapEx during the second quarter. We estimate capital expenditures of about $125 million in the third quarter and $505 million for the full year. $390 million of which, relates to aircraft. With minimal debt maturities and capital commitments for the rest of the year, we remain on track to generate positive free cash flow and maintain strong liquidity in 2011. We expect to end the year with cash as a percentage of trailing 12-months revenue of at least 25%. In June, we announced several significant changes to our fleet plan, which we believe will better position JetBlue to compete successfully over the long term. These changes included the deferral of 8 airbus A320 aircraft, the conversion of 30 A320 delivery positions to A321s, and plans to reduce the future size of our E190 fleet by up to 25 aircraft. These changes to reduce our aircraft purchase obligations by roughly $800 million through 2016, and will help us continue to generate positive free cash flow. In furtherance to these plans, we recently reached agreement in principle to sell a total of 11 of our 2013 and 2014, E190 deliveries to a third party. In addition, all of our A320 and A321 deliveries beginning in 2013 will have Sharklets, improving our fuel efficiency by roughly 3%. We anticipate that the improved fuel efficiencies in these aircraft will provide significant savings against our largest and most unpredictable cost. To put this in perspective, if we had Sharklets on our A320 fleet today at current fuel prices, we estimate we would save nearly $50 million in fuel for this year. We also announced plans to purchase 40 A320neo aircraft, a significant investment in the future of our company. The aircraft, which is expected to begin -- which we expect to begin taking delivery up in 2017, will reduce our fuel consumption and provide JetBlue with improved operating and performance economics. Turning to the revenue outlook. We are encouraged by the success of our initiatives to attract higher-yielding customers, including schedule optimization and product enhancements, such as Even More Space and Even More Speed. Bookings for July and August are shaping up nicely. That said, we are cautious about the revenue outlook given the slowdown and close in leisure demand we experienced at the end of June. In addition, we have seen significant volatility in booking trends making revenue more difficult to forecast. Based on the data collected thus far, we currently expect July PRASM to be up between 4% and 5% year-over-year. And we estimate August PRASM to increase between 4% and 6% year-over-year. We have limited visibility beyond August, ancillary revenues are holding up nicely, and we expect total ancillary revenues to increase 10% year-over-year in 2011. As discussed on prior calls, the bulk of our 2011 ASM growth is being driven by our expansion in Boston and the Caribbean, where we believe there are still plenty of profitable opportunities. The rest of the network is relatively flat in 2011 on a year-over-year basis. For the third quarter, we expect our ASM growth to be up between 9% and 11%. For the full year, we expect our capacity increase between 6% and 8%, unchanged from previous guidance. Given our success in Boston and the Caribbean, we believe our growth in these regions is good. However, we continue to carefully evaluate our capacity plans in light of the current fuel environment. We are currently in the process of tweaking our fourth quarter capacity plan to better mask capacity with demand. We continue to work hard at running an efficient operation and maintaining our low-cost culture. In the second half of last year, we incurred a few one-time operating expenses including a $6 million write-off related to the LiveTV, and a $5 million deferral payment to Airbus, which will positively impact this year's comparison. For the third quarter, we expect ex-fuel CASM to be down between 2% and 4%. Our previous ex-fuel CASM guidance for the full year of 0% to 2% remains unchanged. While fuel prices remain volatile, we currently expect CASM to increase 13% to 15% in the third quarter, and 14% to 16% for the full year. In closing, while many challenges lie ahead, we believe we are well positioned for success over the long term. We're making strategic investments in our product and network, which we believe will drive profitable growth and returns to our shareholders. And with that, we are happy to take your questions.

[Operator Instructions] And at this time, we have a question from Michael Linenberg from Deutsche Bank. Michael Linenberg - Deutsche Bank AG: I have 2 questions here. One, when you announced the order for the A320neos, I just saw that it was reported in Aviation Week that the airplane would have transatlantic capability from some of the East Coast cities. Is that accurate and if that's the case, is that something that you would consider?

We're really not looking at the A320neo as a transatlantic type of opportunity for us. I saw that as well in the trades and trust me, that's not how we're looking at that aircraft. Michael Linenberg - Deutsche Bank AG: Okay, that's helpful. And then just my second question, when you look at where PRASM is for July and August, and you kind of look at where you're oil in CASM is expected to be up 13% to 15%. You know obviously, we're going to see some pressure on margins year-over-year, and I realized that the September schedules or -- excuse me, the third quarter schedule is already baked, I know Ed had mentioned about tweaking the fourth quarter. But it would -- if that differential persists that type of gap, you would think that the tweaking would be pretty material tweaking. I mean, what's your thoughts on that?

You know Michael, we take a look at obviously, the color that we added to Q3 and today and specifically, how we're looking at July and August. Again, I would take you up to what we're really doing from a capacity perspective at a macro level in sell. This capacity additions, the 68% for the year and 9% to 11% in Q3, again, the opportunities that we're seeing in Boston is unprecedented. And we're going to continue to seize upon those opportunities. We're at 100 trips a day and as I mentioned in my prepared remarks, we're moving to 150 working with Massport, investment opportunities and likewise, the same type of opportunities, different type of customer based per se, but down in the Caribbean. And when I look at now 25% of our flying at end of the year at the Caribbean and Latin America, again, that's where this capacity is being deployed. The rest of the capacity or the rest of our network is flat. So I think, tweaking, I wouldn't read too much into it. Just at this point, it's not lost on us, that oil, the forward curve, the crack spread, it's not lost on us but we're investing in the long term with what's happening in Boston and the Caribbean.

Our next question comes from Jamie Baker from JPMorgan. Jamie Baker - JP Morgan Chase & Co: Ed, we'd estimate your daily benefit associated with the FAA shut down and cessation of tax collection to be somewhere around, I don't know, $800,000, $900,000 a day benefit. I'm curious obviously, that wouldn't book all into August at this late time, but I'm wondering if you've upwardly adjusted your mathematics or if the guidance you gave us was pretty shut down guidance?

No, thanks for the question, Jamie. It would all be pre-shutdown. I don't think anyone's assured as to how long that will actually last, so I wouldn't bake it in the guidance.

Our next question comes from Gary Chase from Barclays Capital. Garrett Chase - Barclays Capital: I wanted to ask just a little bit further on, I think the question that Mike was asking a few minutes earlier. I mean, I understood that you got these opportunities in Boston that you want to pursue. I guess the question is just given the results and given the environment, is there really nothing else in the core network that doesn't make sense to revisit from a capacity perspective. So I understood you’re not growing it, but is there may be an opportunity to pull down some of the extraneous flying in other parts of the network to help fund that growth?

This is Dave, I'll also team with Robin up for commentary. As we take a look at now several years into this focus on our focus cities, right? Our core touching Boston, New York, Orlando, Fort Lauderdale, Southern California, L.A. and it's not lost on us what's happening down in San Juan, as well. Really, that which is in the network today is contributing, and so I think those opportunities end up being more doomed, the weak opportunities as you start to get into the seasonality of certain markets and those type of opportunities, but we now have -- we are either flying to or announced up to 70 cities that are all contributing as part of the network. Robin, additional commentary from your perspective?

Thanks for the good question, Gary. Clearly, it's something that we look at all the time. I think something we continue to be very pleased with, is the impact of competitive capacity change into the markets that we are growing. So we look at competitive capacity in markets like San Juan, and the Caribbean, Boston and even Fort Lauderdale, where we've seen actually as we look into quarter 4, some of the biggest competitive capacity reduction. And our network, to Dave's point, we think these are very good opportunities and strategic opportunities for JetBlue. In terms of revenue environment, yes, we really don't have much visibility past the end of August, at this point. And we are being relatively cautious, we feel confident about the revenue environment but we are being relatively cautious since we provided guidance given that what we saw in June. But as we look at Boston, as we look at executing our strategy then we continue to see clearly our better months being sufficiently some are off-peak months, as we start to see the impact of Boston. And the last point I'd make is, some of the markets that we've historically struggled with some of the sort of short haul East Coast market out of New York, those are markets that we continue to see very strong performance. And definitely, as we look to increase the amount of business travel that we -- as we look to increase number of business travelers we fly, we continue to see those markets benefit from that, and so to Dave's point, I think we feel very confident and very good about the overall shape of the network. Garrett Chase - Barclays Capital: And Robin, if I could just follow up with one of the points you made. If I recall correctly, I mean, it was last year in the fall, beginning in the September time frame if I'm not mistaken, where you started to really highlight the differential between peak months and off-peak months and you described a lot of this process that would have been driven the positive comp in May. Should we be thinking that, that trend accelerated or are we getting to the point where -- because I would think that as we head into this fall, the contrast between peak and off-peak performance is going to be less than what we've been seeing, unless that trend has really accelerated in a way, I don't understand externally.

Obviously, we're not giving specific guidance past the end of August. I mean, I'll just leave it at a very macro comment that we continue to believe that we will see better year-on-year performance in our off-peak months compared to our peak months as we fill in the trough.

Our next question comes from Glenn Engel from Bank of America. Glenn Engel - BofA Merrill Lynch: Couple of questions. One, when you look at the deceleration of your PRASM from second quarter to third quarter. Are there any markets that are leading the way down and how is the transcon doing well to the markets as a whole?

Glenn, it's Robin again. I think a lot of what we – the sudden drop-off that we saw in June, which I think is something that the industry experienced. The business markets held up well. We really thought out most impacted on some of our core leisure markets and particularly, Florida, which has been a market where we continue to grow PRASM, but at a slower rate than in the past. And I think transcon's actually held up pretty this summer. Some of the spare levels have been good. Garrett Chase - Barclays Capital: And you mentioned that you were going to increase the amount of seats in the More Legroom product, will that reduce the number of seats per plane overall?

No, unchanged.

Our next question comes from Duane Pfenningwerth from Evercore partners. Duane Pfennigwerth - Evercore Partners Inc.: It doesn't sound like you're in the mode of shrinking your fleet today. But wondering if you've done the analysis with respect to the market ability of 320s and the 190s. And specifically, how the market values look like today, relative to the debt you have against those aircraft, and are the 190s more marketable today than the 320s?

Duane, it's Dave. A couple of comments and I'll key up Ed for a little bit more specifics there. I think this recent announcement about a month ago, tied into what's happening with our A320 order book, the A320neos, the A321 plus the EMBRAER 190. As we take a look at -- your specific question is are we looking to reduce our fleet plan? I think we're actually just looking to smooth our skyline, and I think that Ed and Mark Powers in the team, really considerable efforts over the last several years and now with this recent announcement, this smoothing with all 3 fleet types, not only to take advantage of new technology but also to be prudent, the ability to dial it up or dial it back as necessary. So I think, again, specific to your question about looking to trim it. Our work has taken place, I mean it's really smoothing. Ed specific to you, A320 market ability, our EMBRAERs more specifics?

I think the comment I would make to that Duane, is that, what we've intended to use in the past to smooth that out or sale is -- what I think we'll use going forward, is probably lease returns. And so as we've had the ability to return A320s, we've actually renewed those leases as the network was suggesting that they wanted a higher percentage of A320s. I don't know that, that will -- going forward, we'll continue to renew those or not, but we have lease returns that can help us offset capacity into the future, and the 190, I think we're going to resolve that with the sales of delivery positions, as we announced on this call, 11 positions that we sold in 2013 and 2014. Duane Pfennigwerth - Evercore Partners Inc.: A detail, and then just a quick little one. In your $3.33 fuel guidance, can you just comment what the hedge impact is on that?

I'm not sure that we're giving guidance specifically on our hedge position. You could probably calculate that from the investor guidance. I will you that for this quarter, we had a $5 million offset related to hedging in the second quarter.

Our next question comes from Bill Greene from Morgan Stanley. William Greene - Morgan Stanley: I know you just renegotiated with Airbus and EMBRAER and what not. But in light of the AMR deal is there any reason to go back to Airbus or do you have a most favored nation status in that contract that would allow you to change the pricing terms on your order?

Hi, Bill, it's Ed. We're very happy with the terms that we came to with Airbus. I don't see any reason to go back and revisit those. William Greene - Morgan Stanley: Okay. And then if we look at kind of, folks obviously, look at the slowing RASM, the CASM, sort of growth that we're going to face here. Do you think the revenue is maximized by not having a first bag fee at this point?

Interesting, Bill, I think the -- we're not -- when you look at the first bag free on JetBlue, but it's absolutely a core to our brand, and we know that customers book us because they're aware of that, and by the way, very much aware of it as we start to get into the Caribbean/Latin America with our baggage policy as well. So it's something that's core of who we are, and we have not had discussions about turning it on. Robin, additional commentary?

No. I don't think so. Until today's point, we continue to see good chairship because of the not having a bag fee. And also, the point I've made before, that the way either we run our operations in a very low cost and lead way, and you start adding bag fees and you start getting more cabins bulk out and you start adding turn points that we just did recently, reduced our turn time and take some more time off. And also there's many of us here at JetBlue which again freeze our aircraft time into the network. And as soon as you start adding some of these outlets, product contextures you start to lose other gain, and I think you just pay for it in a different way. William Greene - Morgan Stanley: Okay. Dave, just one quick question on timing of the pilot election. Do you have some milestones we should watch for?

Sure, you got it, Bill. It's full transparency. So we're in election period that begin earlier today that runs through the August 16 time frame. And so I will be advised on the 16th of the company's continued relationship with the pilots. Obviously, it's -- I'm very hopeful and the team is that our pilots continue to seek the direct relationship, probably all of our crew members, 13,000 plus strong, that we've seen over the 10-plus years that we've been flying as opposed to candidly having third party representation and paying for their voice to be heard. So look at the 16th of August is when we've been advised by the National Mediation Board. That's an interesting topic all on its own, as for the results of the election.

Our next question comes from Jim Higgins from Ticonderoga Securities.

You mentioned some operational initiatives underway to lower cost. Is there anything noteworthy enough there to give us some more color on?

Hi, Jim, it's Ed. I don't think there's anything that I would bake into a forecast. I would think it's just a continuous process at JetBlue where we try to get more efficient. Some of the things that we're looking at is the ground time, the amount of time an aircraft spends on the ground, improving turn times, that type of thing, but it's more of a continuous process.

And Jim, it's Dave. I just want to add on to Ed's commentary is you'll start to see it. Analysts will see it. Customers will see it. For example, like Kennedy, we now have 7 gates, weather permitting that we're using the two-door operation. And Terminal 5, by the way, was designed to allow for that type of opportunity for us. It was designed for A321s to be candid as well. So we do this where we can. We're doing this throughout our network where we can, and let's face it. At the end of the day, you get the airplane back quicker, have the ability to clean it and dispatch it as well, so and customers absolutely love it. So that's just a little bit of the color behind Ed's comments.

Our next question comes from Dan Mackenzie from Rodman & Renshaw. Daniel McKenzie - Rodman & Renshaw, LLC: I appreciate the commentary on competitive capacity. JetBlue has done quite well in this regard. So the ability to execute has been there. Looking ahead Southwest, and they announced that is planning to go year international sooner rather than later. And Southwest, of course, has a sizable presence in both of JetBlue's focus cities, in particular Orlando and Fort Lauderdale. And who knows what they will ultimately do? But it does seem logical to conclude that both cities would be natural launch cities for the carriers. So I guess my first question is really a two parter. First, where we at relative to the endgame of the Florida focus cities? And then related to that, as you think about what network footprint is going to deliver the best thing for the bulk, in terms of revenues, does it make sense to continue focusing on both or does it make sense to focus on one or the other?

Good morning, Dan, Dave. Couple of comments and then Robin will add in as well. I mean specific to your questions regarding Southwest and the integration with AirTran but my response of you with regard to our plan and our success, and there's been plenty of competitive pressures in that part of the world, whether it's down in Fort Lauderdale, whether it's in Miami, whether it's international flag carriers and taking our success, by the way, throughout Caribbean and Latin America, from Boston, from New York, from Orlando, from Fort Lauderdale, intra-Caribbean as well, first-time routes like Bogota to Orlando or the new Liberia route for us as well, so when I look at really our commitment, it's really now 25% of our ASMs and growing, and so specific to Orlando, Fort Lauderdale, these are nice opportunities. Orlando today has 60 departures in the peak summer time frame. Fort Lauderdale is just under 50. Made some recent facility moves to allow for the greater facilitation of international connections through both of those opportunities. So I look at our product and its relevance to the VFR Traffic, to the business traffic. By the way, Puerto Rico, 8 -- less than 10% of the traffic is tourism. There's plenty of business traffic to and from the Commonwealth of Puerto Rico and let alone, the VFR traffic as well. So our product, the relevance, multiple cities, let's face it. There's always going to be, and they're going to continue to be competitive pressures in that part of the world, and I feel really good about our opportunities in Orlando and Lauderdale in addition to our current footprint. Robin, anything else you want to add there.

Okay. Great. Dan, back to you. Daniel McKenzie - Rodman & Renshaw, LLC: And I guess, related to that, I appreciate that you are executing. There's no question about that. But I wonder if maybe I can approach the season from another perspective, and that is I'm wondering if you can revisit your thoughts about M&A and in particular, we now have a precedent from 2 major low-cost carriers merging. And I guess what I'm wondering in particular, is if M&A could be a path for helping JetBlue to deliver better returns?

Dan, I appreciate the question, and our path forward is organic growth, our own airplanes, our own people and a strategic partnerships with this open architecture. Now 11 carriers, we announced that regarding guidance that there'll be 2 more announced this year. We believe that's the path forward, just work for this company for the first 10-plus years and that's our plan on a go forward basis.

Our next question comes from Helane Becker from Dahlman Rose. Helane Becker - Dahlman Rose & Company, LLC: So, Dave, it seems like you need another city like Boston or New York. Have you given that any thought? Are there any other markets that would measure up?

And I'll also have Robin chime in. I think really taking Boston from 100 to 150, it's -- you could almost take a look at our order book in the next 5 years and all of the aircraft could be dedicated almost to Boston. Let alone these Caribbean opportunities that we have, the occasional opportunities announced today from Westchester County down to Nassau in the Bahamas. So when we look at our current network in Boston, there's still a lot of growth. Robin, additional color on Helane's question.

Good question, Helane. I think as we discussed many times before, we've made some significant investments in market like Boston and San Juan, and we're really here to stay, of course. We're really here to finish the job. We're really here to make sure that it's something that is sustainable and profitable for the longer term, and I think important that we're not distracted by chasing sort of new dreams and opportunities. We certainly have a lot of ideas going forward, as the future growth potential for JetBlue, but I think in terms of the Boston and Caribbean, New York, Orlando, Fort Lauderdale, Long Beach, we have enough to keep it busy for the next 3 to 4 years. Helane Becker - Dahlman Rose & Company, LLC: Okay. And then, can I just ask an unrelated question? Your fuel cost. See even with the hedges seems to be higher than the peer group. Is there some reason that's accounting for that?

Hi, Helane, it's Ed. I think it's our concentration in the Caribbean, so if you look at about 25% of our capacity being in the Caribbean, we tend to pay a higher fuel cost down there.

Our next question comes from Kevin Crissey from UBS. Kevin Crissey - UBS Investment Bank: Let me post this. It's a little bit difficult question, but I think it needs to be asked. If someone invested that could care less where you fly, what you fly and the products onboard, and I'm just focusing purely on the financial returns overtime, why would I buy your stock given that you're earning about the same amount of money today as you were 10 years ago with 3x as many ASM?

Hi, Kevin. Good morning, it's Dave. When I look at where we're positioned in the industry today, and we're investing and we're growing our footprint in relative to other companies, I believe that investors should be looking at not just what's happening with New York and our franchise, but what we're doing in Boston, what we're doing down in the Caribbean over the last several years. And so we get it as a management team, return on invested capital, and I think that some would say that we shouldn't take another airplane, and as I look at it as a young company into our second decade, but still investing with new aircraft and then our franchise, that this is absolutely a story that should be followed and an investment that is very, very good for the future. And so when we're compared to other carriers that have been around for 70 years or the product of M&A activity and bankruptcies, I think you have to look through that. I candidly do. And are we the proper investment for everybody? Maybe not. But I certainly think a prudent and smart investor who knows what we're doing, we're absolutely a very good investment.

Our next question comes from Hunter Keay from Wolfe Trahan. Hunter Keay - Wolfe Trahan & Co.: Just a quick one, Ed, for you. I know we talked about the FAA suspension and the impact on revenue. But is it true, how can I verify this? Is it true you're also paying $0.15 less per gallon for your jet fuel during the shutdown?

I have to tell you, Hunter, I am unaware of that if that's the case. Hunter Keay - Wolfe Trahan & Co.: Okay. That was some sort of tax of the FAA levy which is not being collected on jet fuel but I could be mistaken. Just want to verify that. Okay. Well I can follow up later on. And on your growth a little bit, two-part question, I guess. I hope you can just maybe take a second and walk us through how you evaluate growth? Is it -- do you grow if it's profitable? Do you grow if it's earnings accretive? Do you grow if it's ROIC accretive? What are the steps you look at? And second part, it seems to me that you guys view positive free cash flow as kind of a green light to grow. If given CapEx increases next year, fuel continues to increase and looks like 2012 is a free cash flow negative year, how would you justify growth at that point in time?

Hunter, I think we've been pretty clear that we're going to plan each year to have positive free cash flow. So I think the thing that we're really concentrating on is not diluting shareholders while continuing to invest in JetBlue. If you look at the fact that I don't think that we could be a successful airline if we just focus on JFK, so over those past few years, you've seen us look for other opportunities to invest in, additional focus to these, which will give us both operational efficiencies as well as the ability to have a pricing power within the market. And so those markets that we've chosen to invest in are Boston and the Caribbean, as well as in Florida. And we believe that, that's the right path forward. It is going to require some investments to accomplish. I think a longer term business plan and at that -- while we continue to grow and others are shrinking, we're probably not going to have the same financial results as they do from an ROIC perspective but that doesn't mean that we don't have the same targets long term that they do. Hunter Keay - Wolfe Trahan & Co.: I guess, what drives the decision to not grow? What drives the decision to shrink? That's the question and I guess, not shrink but grow at a slower clip, I guess.

I think we have to obviously watch the economy overall and whether something fundamentally has happened that would suggest that there's going to be longer term, slower growth rates, competitive pressures in particular markets. Yes, those would suggest that you should maybe change your focus longer term, but we have a very long-term perspective versus reacting to things that are happening in the market this quarter or next quarter.

Our next question comes from Michael Derchin from CRT Capital Group. Michael Derchin - CRT Capital Group LLC: As part of the Delta-US Air slot swap, there's going to be some divestiture of slots at LaGuardia, and I was just wondering would that be of any interest to you guys?

Yes, Michael. Both the opportunities to acquire a slot swap of that value is a great interest to JetBlue.

Our next question comes from Ray Neidl with Maxim Group. Ray Neidl - Calyon Securities: Just looking at your capital structure. Your free cash flow seems adequate. Your cash levels are more than adequate going forward. Your debt-to-capitalization ratio seems a little bit on the high side. What's -- in some certain environment that we're in heading into the fall, what do you feel would be the best capital structure? You're going to be working on that to try and pay down some debt or increase your debt-to-capitalization ratio?

Yes, thanks for the question, Ray. I think what we'll be focus on, and we tend to look at our liquidity as being a good thing, so we have relatively high liquidity in relative to competitors, $1.2 billion in cash that we talked about in the script. If we felt like there was a need to invest some of that liquidity, we are most likely purchase aircraft. And over the longer term, we're very focused on continuing to delever the company to some extent, but I think that would be more or less paying off debt as it becomes due. Ray Neidl - Calyon Securities: Okay. Great and just with all the uncertainty going on with the banks and so forth, how do you find the barring rate, the leasing rates for aircraft going forward since you've been pretty aggressive in taking aircraft?

The lease rates, obviously, on used aircraft are very favorable. We tend not to look at leasing new aircraft, so I really couldn't comment on that. Ray Neidl - Calyon Securities: Okay. Great. And one last thing, if EMBRAER does as they said they'd go with the larger aircraft, which I think they will, will that have any bearing on your decision on your fleet mix?

I think right now we're pretty committed to the fleet mix that we signed up for. Obviously, we would continue and evaluate any new aircraft that came out, but I would probably air on the side of keeping things simple.

At this time, I'll now turn the conference back to Mr. Barger.

Great. Thank you very much, Kim. I appreciate everybody's time and the questions over the course of today's call. To our crew members, thanks for an excellent job in the second quarter. We look forward to talking to you in approximately 3 months. Have a great day. Thank you.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.