Good morning. My name is Levi and I would like to welcome everyone to the JetBlue Airways Fourth Quarter 2019 Earnings Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. I would now like to turn the call over to JetBlue's Director of Investor Relations, Mr. David Fintzen. Thank you. Please go ahead.

Thanks Levi. Good morning, everyone, and thanks for joining us for our fourth quarter 2019 earnings call. This morning, we issued our earnings release, our investor update and a presentation that we will reference during this call. All of those documents are available on our website at investor.jetblue.com and have been filed with the SEC. Joining me here in New York to discuss our results are Robin Hayes, our Chief Executive Officer; Joanna Geraghty, our President and Chief Operating Officer; Stephen Priest, our Chief Financial Officer. Also joining us for Q&A are Scott Laurence, Head of Revenue and Planning; and Dave Clark, VP of Sales and Revenue Management. This Morning 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 the statements. For additional information concerning factors that could cause results to differ from the forward-looking statements. Please refer to our press release, 10-Q and other reports filed with the SEC. Also during the course of our call, we may discuss several non-GAAP financial measures for reconciliation these non-GAAP measures to GAAP measures, please refer to the tables at the end of our earnings release, a copy of which is available on our website. And now, I'll turn the call over to Robin Hayes, JetBlue's CEO.

Thanks Dave. Good morning and thank you for joining us everyone. I'll start with my thanks to our amazing team of almost 23,000 crew members. Next month, we will celebrate our 20th birthday. And I could not be prouder of the accomplishments of the JetBlue family over two decades. Our spirit of teamwork and founding values continue to shine and in 2019 alone, we received 24 domestic and international awards. These include recognition from JD Power and TripAdvisor to name just two. None of this would be possible without our crew members, who deliver our mission to inspire humanity in everything they do. Over 20 years, we have become a force for good in our industry serving customers in some of the most important markets across the United States, the Caribbean and Latin America. We have worked hard to improve our balance sheet, expand and strengthen our network and have made investments in our fleet to improve margins and returns. More recently, we focused our efforts to reset our cost structure and return to our roots as the low-cost airline. Our low-cost structure enables us to continue to offer our differentiated products and service and low fares to our customers. Since our inception as an airline that JetBlue model has had a positive and lasting impact on the US airline industry, raising the bar for improving service while also benefiting customers with lower fares. In 2019, we took further strides towards making JetBlue a better and stronger airline. In bringing this year to a close, I'd like to highlight just a few of the accomplishments of our team. We beat the midpoint of our 2019 initial cost guidance and completed our structural cost program exceeding the original goal we established back in 2016. We rolled out Fare Options 2.0, the next iteration of fare bundling. We made significant progress in the cabin restyling program which is improving both customer satisfaction and returns. We took delivery of our first six A321neos, added our longest route ever and we are looking forward to taking our first A320 by the year end. We strengthened our focus cities and made some difficult but important changes to our network to add relevance to our leisure and business customers. We ramped up JetBlue travel products, laying the groundwork for the next period of growth. We added two new members to our Board of Directors and would like to take the opportunity to welcome Vivek Sharma who brings his extensive background in technology and digital leadership. We continue to invest in our most valuable assets, our crew members. I am proud that our crew members have earned a total of 250 college degrees through our JetBlue Scholars Higher Education program since launching in 2016. Last year, we also announced that we are expanding the program to include master's degrees. Lastly, we continue to protect our culture as we grow. And we are working on expanding JetBlue's University campus in Orlando and have some very exciting 20th anniversary celebrations planned. We remain committed to the touches that made us special for 20 years including our industry-leading crew member stock purchase plan, our community connection program and our peer-to-peer recognition programs. In 2019, our crew members reached an incredible milestone volunteering one million hours of service over the past eight years. Our crew members have given their time to help communities recovering from natural disasters and encourage stem education through the JetBlue foundation. Our crew members champion the causes they care about by volunteering with organizations they are passionate about. All of these accomplishments contribute to the building blocks as we look to deliver $2.50 to $3 earnings per share this year. Our progress towards our 2020 goal has not been without hard work. I'm humbled with how our crew members have risen to meet each obstacle we've encountered along the way. Just to mention a few examples. We successfully overcame the pressure from lower capacity headwinds on our unit costs. And cycled through our first pilot deal offset revenue challenges and still delivered on our 2019 cost goals. I'm pleased to say that as a small thank you, we'll be paying a $500 bonus to each crew member in recognition of their efforts towards meeting these important goals. And that expense is included in our fourth quarter results. 2019 saw some unexpected revenue headwinds, particularly with an unusually volatile year in our Latin and Caribbean markets. I want to pause for a moment on behalf of our crew members and leadership team our thoughts are with all of those impacted by the recent Puerto Rico earthquakes including some of our crew members, customers and their families. For the past three years, we've seen the hardships that followed Hurricane Maria and I'd like to thank those in our operation and support centers for volunteering your time helping in the relief efforts. As we have done in the past, we are working closely with the authorities and community to support short-term needs and help in the recovery. Following a natural disaster, it is common to see a lingering demand impact even in nearby areas that were not damaged. History suggests that bookings were normalized, where we expect a random impact in the first quarter. While events such as this one have masked some of the progress, we have made in our building blocks. We are confident in our plan to grow our revenues. We'll expect over two-thirds of our revenue initiatives to mature throughout the year and that progress is reflected in a significant sequential improvement in RASM growth in our first quarter's guidance. We are mindful that this year we anticipate facing heightened competition in both Boston and our Florida markets. But we believe Fare Options 2.0 will be a key contributor to support our RASM growth and [indiscernible] to compete more effectively. We again anticipate double-digit growth in ancillary revenue per customer as our loyalty program continues to mature and we expect to make some exciting announcements related to our travel product subsidiary in the near future. The continuing progress we've made in our cost base is the best evidence of our determination to deliver improve results in our building blocks. This year, we expect to deliver negative CASM Ex-Fuel growth and we will execute the final year of our [0% to 1%] [ph] CAGR growth commitments. We expect to deliver on our cost goals in 2020 once again even with the meaningful neo delays in our order book. I can't emphasize enough how challenging the delays have been to our crew members and customers during the past year. Our teams have been outstanding in adjusting plans and finding solutions to offset most of the negative impacts and lower capacities. We have put together a contingency plan to further protect our cost achievements from potential additional delays including an agreement for used aircraft. With regards to the trade dispute between the US and the European Union, we are working to address the impact of a 10% tariff imposed by the US government on new aircraft delivered from Airbus facilities in France and Germany. JetBlue has filed comments with the US Trade Representative noting the tariff and any increase or expansion of the scope of the goods covered by the tariff will negatively affect aircraft deliveries to the detriment of JetBlue, the airline industry and customers. JetBlue supports a fair international trading structure, but believe that tariffs would ultimately impacts our ability to grow our business, leads to higher fares for customers and drive less competition. We've urged the US government to reach a fair trade deal with the EU. Protecting our business requires us to act on climate change and ensure both the financially successful and more sustainable business. We are the first major US airline to announce carbon neutral domestic flights. We have also procured sustainable aviation fuel for flights out of San Francisco, giving us early access to this lower carbon fuel and we believe positioning us to move faster on supply in the future. We've also taken other actions to protect the long-term sustainability and future of our business. We continue to protect and diversify our talent pipelines, expanding our gateway select pilot program and extending our recruiting efforts with a hiring strategy that honors and supports our veterans. Our JetBlue Foundation also helps create a path for underrepresented students interested in a career in aviation. Our strategy on these issues is published annually using the SASB and TCFD standards. We are proud to be among the first companies worldwide to disclose using these standards, enabling stakeholders to better understand our long-term risk and return profile. Looking into 2020, we are thrilled to see our plan coming together. Despite some temporary headwinds and an evolving competitive environment, our improved operation and enhanced revenue tools are enabling us to compete more effectively in the future. We are pleased that our business is responding to the actions we've been taking in our network and this year we expect to continue to reaping the benefits of our commercial actions. This gives us confidence in our ability to achieve our full-year targets and deliver a pretax margin above industry average. Thank you again to our crew members for your passion over the past two decades. Over to you Joanna?

Thank you, Robin. First, I'd like to also recognize the hard work of our crew members who have delivered a safe and reliable operation this past year. Turning to Slide 6 in our capacity outlook. During the fourth quarter, our capacity grew 6% in the upper half of our guidance range of 4.5% to 6.5%. Our full year capacity grew 6.6% also in the upper half of our original growth plan of 5% to 7%. This was due to improve completion factor and shifting the timing of our cabin restyling program to make up for neo delays. We saw improvements in key operating metrics in 2019. I'd like to highlight our improvement in completion factor, where we are now among the best in the industry. A special thank you to our tech ops team for their tremendous efforts to strengthen our operation. In 2019, we had almost 70% fewer maintenance related cancellations compared to 2018. These are great accomplishments considering our high aircraft utilization model and the fact that almost three-quarters of our operation touches congested airspace more than any other US carrier. Turning to capacity growth. For the first quarter of 2020, we expect our year-over-year capacity growth between 1.5% and 3.5% with a full year capacity guidance range between 5.5% and 7.5%. Quarterly capacity growth in 2020 reflects our current expectations of Airbus deliveries, as well as additional seats from our cabin restyling program. Our forecasted first quarter growth is unusually low for us. And our annual growth is over two points lower than our plan from our 2018 Investor Day. By further controlling costs, we've been able to mitigate most of the impact from lower capacity. We've also identified opportunities to mitigate potential additional aircraft delays and recently signed an agreement to lease used A321 which we expect to begin flying later this year. Our capacity guidance for 2020 assumes that only 11 of our 14 contractual Neos will be delivered by Airbus in 2020. Moving to our network plan. We plan to continue taking targeted capacity actions to both strengthen relevance in our focus cities and adjust to revenue pressures in parts of our network. All of this work continues the reallocation efforts we started almost a year and a half ago. For our crew members, network changes include some difficult decisions to close not just routes but also blue cities. In doing so, we've been able to focus our growth plan on our focus cities. Some examples include adding relevance to our Boston customers with 15 daily flights to DCA and 10 daily flights to LaGuardia. We now offer the most nonstop flights between Metro New York and the LA basin. This year, we also expect to continue expanding our successful Mint cabin in our transcon markets. We are confident in our network action and are encouraged by the improving performance of our leisure and VFR international markets, which continue to produce strong margins for JetBlue. We anticipate tactical capacity adjustments will support a quarter-over-quarter improvement in Latin and Caribbean unit revenues. We are pleased with the performance of our business markets, driven by strong demand trends and we are happy with the progress in our transcon franchise. Turning to Slide 7 and the revenue outlook. Taking a step back, 2019 saw some unique challenges in our Latin and Caribbean markets. We made tactical adjustments and are seeing a sequential improvement from the fourth quarter into the first quarter of 2020. In our domestic markets, we are pleased to report that 2019 RASM meaningfully outperformed the industry on a stage adjusted basis. Regarding the fourth quarter, our RASM decreased 2.7% versus last year in line with our December update range of minus 3.5% to minus 1.5%. During the fourth quarter, close in bookings for the Thanksgiving peak were not as strong as we originally expected. By region, our international RASM reflected a sequential improvement from our early capacity actions despite competitive pressures in some markets. As expected, we saw sequential decline in our domestic RASM driven by added capacity. For the first quarter, we expect strong sequential improvement in RASM in both our domestic and Latin markets, resulting from our capacity actions, our revenue initiatives, easier comps and lower scheduled growth. Our first quarter guidance of 0% to 3% includes a headwind of approximately 0.5 point to our system RASM due to earthquakes in Puerto Rico. We remain committed to the island but given the most recent booking trends, we are temporarily reducing capacity to protect RASM. We would anticipate restoring this flying as demand recovers. I'd like to thank the various teams across JetBlue who were involved in executing and delivering fare options 2.0. We are pleased with the early performance and are seeing tangible benefits in the first quarter, which we expect will continue to ramp as the year progresses. We are also excited about further progress in our commercial building blocks. These include the maturation of our network reallocation efforts, JetBlue travel products and added growth from ancillaries including loyalty. At the end of 2019, our ancillary revenue per customer reached $34 growing 14% year-over-year. This accomplishment includes another outstanding year of growth in our co-brand credit card. We continue to see momentum from customers signing up for the card and earning and using true-blue points in our network and with our partners. Ancillary revenue performance was also driven by our efforts to optimize the pricing of checked bags and even more spaced seats. This year, we expect to continue optimizing the pricing of ancillary and adding initiatives that promote self-service such as change and cancel servicing fees. We also plan to make investments in our reservation platform and upgrade our revenue management system. We continue to work in each building block both to protect and to grow our revenue base. When normalized for Easter and Passover holiday shift, we expect that our network in pricing actions to strengthen our markets and it will result in our best quarter-over-quarter RASM acceleration since 2016. Looking beyond the first quarter, we anticipate that our initiatives will continue to ramp contributing to our earnings progression each quarter. In total, we believe that our revenue building blocks will add approximately three points of RASM growth throughout 2020. Again, a huge thank you to our amazing team across JetBlue for delivering a safe and solid operation and for continuing to deliver a great experience to our customers. With that, I will turn the call over to Steve.

Thank you, Joanna. I'll start on Slide 9 with some highlights from the fourth quarter. Revenue is $2 billion, up 3% year-over-year. Adjusted pretax margin was 10.9%, up 50 basis points from the fourth quarter of last year. Both GAAP and adjusted earnings per diluted share were $0.56. Our effective tax rate this quarter was 27% and 26% for the full year. Before going to details on our cost execution, I'd like to acknowledge the outstanding job of our crew members, who helped us exceed that cost saving initiatives in 2019. Despite a number of meaningful headwinds, the efforts of our teams over the past couple of years are helping reset our cost base and we'll set up JetBlue to success in 2020 and beyond. This year, we delivered adjusted EPS growth of 23% higher than our peer average. This accomplishment has set us up nicely to deliver even on current consistent estimates, the best EPS growth in our industry in 2020, significantly outperforming our peer groups. Moving to Slide 10, CASM Ex-Fuel for the fourth quarter was flat in line with the midpoint of our guidance range. Our reported figure includes a special bonus for our crew members as an acknowledgment of their outstanding efforts in 2019. If we exclude the bonus expense, our underlying CASM Ex-Fuel declined 0.9% year-over-year beating our guidance. In 2019, CASM Ex-Fuel grew 0.8% beating the midpoint of our initial full-year guidance of 0% to 2%. Again excluding the bonus, CASM Ex-Fuel grew just 0.5% for the year, well ahead of our plan. I could not be prouder of the determination of our crew members and leaders to deliver our cost targets as we return to our low-cost routes. For the first quarter of 2020, we expect CASM Ex-Fuel growth to range between 1.5% and 3.5%. For perspective, the year-over-year progression in unit cost this quarter is mainly driven by unusually low scheduled capacity growth given a timing of 2019 delivers. In addition, we have scheduled maintenance events during the trough period, the result of expenses shifting into the quarter. Heading to our outlook for the remainder of the year. Our updated 2020 CASM Ex-Fuel guidance is now between minus 2% and 0%. We are pleased that despite the capacity constraints tied to the Neo delays, our 2020 goal is very much in line with the original CASM Ex-Fuel goal we announced at our last Investor Day. Furthermore, our 2020 plan reflects our commitment to deliver on our three-year CAGR goal of 0% to 1%. Moving to Slide 11. Since 2018, we have communicated CASM Ex-Fuel guidance for the first and second half. In both 2018 and 2019, we either delivered or exceeded our guidance even at a time of expenses shifted within the year. For either perspective, we finished 2019 with one of our best CASM Ex-Fuel performances in a decade even while cycling to our first pilot contract. In 2020, we expect to deliver negative CASM Ex-Fuel caring for the achievements in 2019. The shape of the CASM Ex-Fuel for the first and second half of the year is driven by three factors. First, structural cost savings manifesting through the P&L. Second, the timing of maintenance expense. Finally, our most impactful is simply the cadence of capacity growth throughout 2020 as you work through neo delays and the cabin restyling program. Moving to Slide 12. During our progress, this will be our last semiannual update on our structural cost program. We are pleased to report cumulative run rate savings of $314 million above the high end of our $250 million $300 million targets that we set at 2016 Investor Day. As expected, this quarter we made further progress across the four pillars ranging from additional improvements in contractual terms with our business partners, technology deployments and efforts to further increase productivity across JetBlue. I'm thrilled to report that we're in the final contracting stage of the V2500 select one engine maintenance IFP following the neo and V2500 pre-select maintenance agreements and asked previously. This rounds out our efforts to reshape our long-term engine maintenance contracts which have been instrumental and exceeding our structural cost savings targets. Looking forward, structural cost is now a way of life for JetBlue. And our work is obviously never done. We expect to continue to offset inflationary pressures on our cost structure and look forward to the benefits of our neo and A220 fleet programs as we move into the next decade. Turning to Slide 13. We ended the fourth quarter with 259 aircrafts taking ownership of our sixth A321 neo in late December. We now anticipate a maximum of 11 neo deliveries in 2020 and are expecting our first A320 delivery by the year end. We have restyled 53 A320 as of today and aim to restore the balance of the fleet by early 2021. We continue to manage our restyling schedule to minimize the impact of low capacity resulting from timing of aircraft deliveries. Turning to Slide 14. Our balance sheet continues to be one of the strongest in our industry. Our debt-to-cap ratio sits well within our target range of 34% at the year-end. And we are proud to manage JetBlue to investment-grade metrics. During the fourth quarter, we repaid $65 million in debt and issued a public WTC for $772 million. Our approach to diversify our debt sources is opportunistic and takes full advantage of our strong balance sheet as we reinvest in our business and return excess cash to our owners. In the fourth quarter, we entered into an agreement to repurchase $160 million of shares as part of the current $800 million authorization from the board. This authorization is part of the capital allocation building block discussed at Investor Day. We closed the year with $1.3 billion in cash, cash equivalents and short-term investments, equating to 16.4% of trailing 12-month revenues. Our cash position at the end of the quarter is temporarily higher than our 10% to 12% target given that fewer aircraft delivers in 2019 resulted in some CapEx shifting to 2020. Moving to Slide 15 for an overview of our guidance for the quarter and 2020. We expect another outstanding year on cost execution to support margin improvement as we execute our commercial building blocks. As we move towards the annual EPS goal of $2.50 to $3, our guidance for the first quarter ranges between $0.10 and $0.20 in earnings per share. Before we begin the Q&A session, I'd like to highlight some changes we will be making to our guidance process. Starting this quarter, we will no longer file monthly traffic reports. I'm sure you've noticed a reformatted investor update this morning and starting in April we plan to provide an update ahead of each earnings call as normal course of business, we anticipate providing the markets and update on RASM during the quarter. I'd like to again thank our crew members for helping create further value for our customers and our owners. The fruit of their hard work and engagement is showing in our cost progression. We believe that keeping our momentum will allow us to continue to drive up our margins and benefit all of JetBlue. We remain absolutely committed to delivering our EPS goals. I look forward to executing what we believe is the best earnings growth story in our industry during 2020. We will now take your questions.

Thanks everyone. Levi, we're now ready for the question-and-answer session with the analyst. Please go ahead with the instructions.

[Operator Instructions] Your first question comes from Duane Pfennigwerth with Evercore. Your line is now open.

Hey, good morning. Thank you. I wanted to ask you firstly on sort of your revenue forecasting process and how you grade your own execution over the second half of 2019. Can you just let us know how you back tested and to what extent does the revenue forecasting process change based on what you learn along the way?

Sure, Great. I'll have Dave Clark to answer that question for us.

This is Dave. Good morning. Thanks for the question. We've done a lot of work focusing on our guidance accuracy and part of that's been studying the accuracy back to 2017 versus the rest of the industry. Our analysis showed we're doing quite well versus the industry until the summer of 2019. Clearly, we are not satisfied with the forecast performance of the last six months. And we've been putting significant focus on process improvement including how to account for some of the changes our network and our mix of competitors. We're doing some things like adding additional variables and being more granular where we need to. For example, we're no longer treating every ASM of competitive capacity the same. Lastly, we're also running in parallel a new forecast using machine learning. It's not ready for primetime yet but it's something we're working on we envision implementing in the future. So it's been a focus and we look forward to improvement.

Thanks for that color and just for my follow-up. Could you summarize the fee increases or the fee changes that you rolled out in the fourth quarter and how much of this impacted the fourth quarter? In other words when do we hit sort of true run rate on the fee changes you announced? Thanks for taking the questions.

And just for clarity, we rolled out fee changes last week on optimizing bank fees with self-service as well as change cancel service fee. In the fourth quarter, we rolled out Fare Options 2.0 which will ramp significantly during the quarter. We got a little bit of the benefit in the fourth quarter. We'll get a good bit in the first quarter. It's quite a ramp up but then that will continue to progress throughout the course this year. If you look at the initiatives as a whole which might be the most helpful way, we expect three points of RASM during the year, the full year and that breaks down to low to mid two points in the first half and then mid to high three points in the second half of the progression.

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

Hey, thanks. It looks like a three more A321 are pushed out of 2020. Obviously, you guys - you know what you know and you give it your best guess based on what you know now. But what's your conviction level, Robin, around actually getting those 11 and if you were to sort of say, hey, 50:50, it could go down. I don't know, how would you kind of bracket and the rest of that? And then just to be clear are you leasing three used A321s or more and is Airbus paying for that? Thanks.

Good morning, Hunter. Thanks the question. Steve is very close to, so I'm going to throw that one over to him.

Hi, Hunter. Good morning. And as you aware from our materials, the Airbus post agreement outlines 14 neos for 2020. You're right with - we're planning the business on 11. And we have, as you can imagine an extensive relationship with Airbus and continue to be in close cooperation with them to understand their production delays. So that we can go forward and understand that. So as it stands at this point in time, we have confidence in the guide that can obviously evolve as things go forward. I reflect back to 2019, we had exactly the same conversations with Airbus. We anticipated a maximum of six aircraft in 2019 and we got six aircraft in 2019. Specifically with regards to additional [prudent] [ph] contingencies that we've put in place, as you heard in our prepared comments, we have gone ahead with an agreement to lease four used aircraft to go forward for 2020 to help us with any contingency plans should things move. I am obviously not going to get into any details of commercial agreements with Airbus, but I'm pleased, (a) with the dialogue we're having with them, (b) the transparency going forward and (c) that we have put good mitigant in place should anything change.

Okay, Steve. Thanks. That's helpful. Sorry, I didn't hear this before if you'd said it. Then just another one on the 321, how are the production delays potentially impacting your expansion plans to Europe? Is there a need, is there potential circumstance where you would need to use those planes domestically? And can you update us and where you are on obtaining slots? Thank you.

Again, I'll pick up the aircraft side of things. And then I'll get Joanna to give an update on the wider perspective with regard to slots. We remain confident in our plans to continue to grow relevance in both New York and Boston with the European expansion. Great amount of planning underway and again because of the close cooperation with Airbus we are confident with the delivery timeframes around the A321. So I'm going to Johanna to give a better perspective in terms of - our perspectives in terms of slots et cetera.

Great. Thanks, Steve. Good morning. We continue to work multiple paths around slots and a number of London area airports were confident that our London plans can work in any number of airports. And we'll update you when we have a bit more information to share.

Your next question comes from Jamie Baker of J.P. Morgan. Your line is now open.

Hey, good morning, everybody. Joanna, I'm sorry to ask modeling question and I know you talked about sequential RASM improvement and revenue initiatives going forward as the year progresses. But the revenue growth rate and I'm shifting from RASM to revenue here. In the first quarter you're guiding to kind of a 4% plus top line outcome. But this rate needs to more than double in the second half to hit $2.50. I know you've seen that sort of revenue growth in the past, but could you better break it down into the buckets that helped you get there? I mean like truly material pickup that's required?

Yes. So I think I'll first start with capacity. If you look at capacity throughout the year, you should expect stronger revenue in the first half naturally because capacity is lower. Capacity coming in the second half will pressure revenue. As you think about the revenue building blocks, so Dave mentioned we have three points of contribution associated with our revenue initiatives. We started off the year strong with good improvement from Q4 into Q1. And as we think about the rest of the year, we have good momentum on those initiatives. Dave mentioned about three points of benefit with low to mid 2s in the first half and then further ramping into the second half of the year with high to mid-3 for a total of - a total of three points. So if you think about that in their broader context, we started strong and we're on track to continue throughout the year to deliver that $2.50 to $3 of EPS.

Okay. That's so - so that implies from revenue growth rate second quarter is your peak year-over-year.

First, I'd say the first half is stronger than the back half of the year.

Okay and Steve just a quick one on the revised guidance standards. How come and don't get me wrong, I'm not critical of the decision. I'm just curious if it was something you heard from your owners. If it's just about kind of going with the flow, just wondering what the thought process was.

Yes. Thank you and good morning, Jamie. I'll just cover a couple of items. The first thing is we've reviewed this as we continue to shift towards an EPS guide as we sort of go through this and considered where we are. The core reason behind this is to drive more alignment in our guidance process with the cadence of the industry. We will obviously continue to bring the same level of transparency to analysts and our owners. And maybe just saw this opportunity just to give a little bit more clarity on the new cadence. You can expect this morning as you've probably noticed, we reformatted our Investor update which includes EPS guide. And we will give an update on RASM in the mid quarter, which is an example may come like for this court in early March. We will continue to give a final update on RASM but with broader investor update for the quarter that is actually closing. So we'll package that up together. So on the following earnings call, we can spend more time thinking about forward-looking guidance. And then as a result of that the overall traffic report ends. But investors and analysts are not losing any information. So primarily, Jamie, it's ensuring alignment with regard to the cadence of the rest of the industry.

Your next question comes from Savi Syth of Raymond James. Your line is now open.

Hey, good morning. Just a first question is just some clarification around the fleet. When did you expect those kinds of A321s that were delayed in kind of 2019 and 2020? Is it going to show up? And also just on the used aircraft is that beyond kind of the fleet plan that you have on the presentation? And are those kind of short-term leases there or should we expect them to be in the fleet for kind of more than a couple of years?

I'll take that. Good morning, Savi. So specifically, we look at this with Airbus on a year-by-year basis. And going to the next level of quarter-by-quarter basis as we walk through this. And so as a reminder we had 85 Airbus neo orders in the other book and we go through our neo progression and so Airbus to continue to deal with their production challenges. But as I said, it's good that we continue to get the visibility and we can forecast accordingly. So for me at the moment is about working this year-by-year versus worrying about when will they ultimately come because obviously certain things are moving to the right. What we've actually done in terms of our plan, as I mentioned in the prepared remarks, we have assumed delivery of 11 of the 14 neos in 2020. But it is right of us to be prudent and look around the corner and think about what's happening and so we have put these agreements in place for the four leased used aircraft which if we see further delays or further challenges to our business, it gives us some contingency as we go forward. So that's really how you should think about that. And I hope that's clear.

And just to - so is becoming the four that coming that's coming that's in addition to what's in the fleet plan in the slide deck, correct?

That is correct.

Okay. And then just say another fleet question just on the cabin refresh. Could you provide an update on how many works completed at the end of 2019 and just how you're thinking about it for the rest of the year?

So as of now we've completed 53 of our cabin restyling plans. As you think about the overall plan, we expect to complete the entire plan by, I'd say, early 2021. The original goal was the end of 2020 but due to the Airbus delays we've had to adjust the restyling schedule to partially backfill those delays so that we can maintain our capacity commitments.

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

Hey, good morning, everyone and thanks for taking my question. So, Joanna, I want to come back to your response a couple earlier where I think you said first half revenue trends should actually be stronger than second half. Are you referring to RASM or yields or were you talking about top-line?

I was talking about RASM.

Okay. And not to be too nuanced here but it does seem like to hit the EPS range which is significantly higher than your earnings level, let's call it in the first quarter, you do need to see likely favorable yield contribution even with that higher growth. So I think you were talking about three points of tailing in the first half and maybe closer to two points of tailing in the back half. How much contingency have you built in there for delays? It seems like price [Tech Difficulty]

Sorry you were just bringing up a little bit, but I think I copy you were saying, so I think we, I think I'd point you back to the initiatives as we step into 2020. They continue to ramp through the year. You should think about them in terms of the network reallocation which remains on track with benefits continuing to come in. Our Fare Options 2.0 and remember that launched system-wide in early December. So that will continue to ramp through the year and then obviously growth in ancillaries.

Your next question from Catherine O'Brien of Goldman Sachs. Your line is now open. CatherineO'Brien: Hey, everyone. Good morning. So quiet there's another question on the restyling efforts. I guess, obviously, there could potentially be some risk if there were further delays, but I guess how confident are you in that current schedule. And then can you help us frame the benefit of those modifications to CASM Ex-Fuel efficient this year? Thanks.

Hello, Catherine. I'll pick that up. Just to sort of reiterate Joanna's comments earlier. So we are 53 today, we continue to sort of ramp up. We've increased a number of lines that we have on the restyling program, which is great. The other thing I would say is that we consciously decided to try and align the restyling effort with heavy maintenance checks on the airframes as best as we could. And so obviously if you're doing a full heavy check on the aircraft and doing restyling, the amount of mod time is higher. So what we've seen is we cycle through some of that is a physical mod time per restyling effort has reduced and a number of lines that we're pushing through is increased. So we continue to get such a good momentum. I think the one thing I would say about the great work that team has done is we've been reduced, we thought strategically about how we've continued to approach restyling and with the neo delays we've sort of taken a little bit of a pause, a short pause in 2019 as we go forward. And we'll continue to reassess that as we go forward, but we remain confident in the plans we have in place. The momentum that's going because it's great both not only for our customers but also for driving margin for JetBlue. Specifically thinking about CASM Ex and the dynamics of the numbers, you should think about restyling providing about two points of capacity for 2020 when you do - when you look at your models in terms of the ASM so that will provide in addition to the incremental shelves that come into the business. CatherineO'Brien: Great. Thanks. And then is there a point where you will seek compensation some Airbus on the ongoing delivery delays? I guess like if that's true is there any downside risks for CapEx figures? Thanks.

Yes, Catherine, obviously, it'll be inappropriate for me to comment on any sort of commercial discussions that we have with Airbus on an earnings call. We continue to engage them. Our continues priorities is to make sure we maintain the integrity of our schedule. We deliver for our customers and we get the aircraft onto JetBlue property but at the same time obviously this has been an incredible challenge for JetBlue as we've navigated this over the last couple of years. And we continue the commercial discussions with Airbus.

Your next question comes from Helane Becker of Cowen. Your line is now open.

Hey, guys. It's actually Corner calling in for Helane. Just on Puerto Rico, I know it's early days there. Can you talk about a 50 basis point headwind occurring in 1Q? Just curious if your expectation is for that to linger into at least 2Q at this point? I'm just trying to get a sense that for how long it may be impactful. And I know that you talked about making capacity adjustments, just curious on the - their incremental capacity is going? Thanks.

Thanks. So let me just start with Puerto Rico remains an important part of our network. It's been a significant margin contributor and we see these pressures from time to time in Puerto Rico and the rest of the industry. I think if you look at last year and some of the changes we made in Punta Cana, we've demonstrated that we will not shy away from taking temporary capacity adjustments to right size the current market and demand conditions. That said we remain very committed to Puerto Rico. We do expect to make temporary capacity adjustments in the short term. It's difficult to forecast the impact of Puerto Rico. If you look at history with NASA enduring, it would tell you that this could linger. Other examples have these situations coming off much sooner. So we're watching it closely. We're doing our best to forecast what we think the impact is. And taking tactical adjustments to mitigate the demand environment as needed.

Okay. And then just on the network may be able to continue that just so you made a lot of adjustments tonight. And I know you made some more in Long Beach just curious if like if that's been rationalized enough at this point. Or maybe you can kind of talk to your process and to how you adjust your network longer term. Thank you.

Sure. So every city and every route has to earn its way into our network. The reallocations that we have done over the last year and a half are on track. And we continue to see the benefits of those changes coming in. Our focus is on growing out our key focus cities including Boston and Fort Lauderdale. And we will adjust the network to ensure that we are meeting not only our capacity commitments but also our strategic focus city plan.

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

Yes. Thanks. Good morning. Steve or Robin, you guys have clearly had the earnings guide for this year out there for a while. And you stuck by it despite a lot of changes. Can you just talk about given that we're a little bit closer to it is the high end or the low end more within reach for you all? Thanks.

Yes, Joe. I'll take that as another chance to answer a question yet really. But, no, look, I think that I'm very pleased. There were a lot of skeptics a few years ago about our delivery on our cost commitment. And I think that we have continued to demonstrate that we have laid out exactly what we said was that we were going to do. I think the benefits on restyling and network are on track. Fair Options, it's very early but we're very pleased with what we're seeing and as Dave mentioned, we have a team in revenue management and our data science team who are sort of monitoring that daily to make sure that we are getting all the benefits we expect on Fare Options and more. I'm very pleased with the sequential change in the RASM from Q4 to Q1, actually I hadn't seen a number like that at JetBlue in terms of the change other than the Easter or Passover holiday since 2016. And again, if it wasn't for the Puerto Rico impact which has been very significant, we would be looking at a two point guide into Q1. And we continue to see the revenue initiatives ramped up. And so I think that gives me a lot of optimism. Now obviously there are risks that we don't control or we can do when those risk emerges, do it and we can to mitigate them. I think we talked about that today on some actions that we've taken in Puerto Rico. And I also - we've seen some of our initiative outperform as well. So as we sit here, all of those things together it gives us confidence in the $2.50 to $3 number. There are some tailwinds that will help us. There also some headwinds that could create some pressure. So industry capacity growth has been something that has been talked about. We've talked a lot about the macro revenue environment. I mean, again, there were a lot of question on that on the last call. We believe our revenue initiatives will allow us to deliver positive RASM even if the macro number is negative. But clearly there's a risk there. So as we go through the year and we get a better line of sight on some of those things that we don't control, both the headwinds and tailwinds. We will tighten the range, we will adjust the range to keep everyone sort of up to date. But I'm very confident where we are now and even a consensus which everyone knows is below to $2.50 to $3, we're going to have industry-leading earnings growth in 2020 by some miles. And so everyone here - I can tell everyone here is very, very focused on the $2.50 to $3. And we're giving everything we've got. And I think we've seen that on many of initiatives that we've rolled out today.

That's helpful, Robin. And then maybe just a question for Dave or Scott. If I exclude the revenue initiatives from the first quarter guide, it's pretty weak even with low capacity growth. So why isn't underlying just kind of core pricing power given what seems to be kind of healthy demand. The fact that your own capacity growth is pretty low. Industry growth is relatively modest. It kind of suggests that this underlying presence isn't great or there's some erosion or that the accretion from these initiatives isn't as great as maybe you think.

Yes. I mean, I think I'd just say that there is sequential improvement as you look at Q4 to Q1 and the profits we are making there, and then Q1 into Q2, we're pleased with the improvements and the revenue initiatives just add to that. And as they ramp up through the year they will contribute to that sequential improvement.

Your next question comes from Michael Linenberg of Deutsche Bank. Your line is now open.

Hey. Two quick ones here. I guess maybe, Robin and Steve, I want to say, Robin, it's admirable that JetBlue as a company is planning to be carbon neutral for 2020. And I'm just curious it would seem that there is some cost associated with that. And yet you are maintaining the $2.50 to $3. So one, any sort of a sense that you can give on what the potential cost of being carbon neutral? Even round numbers. And then from a CASM Ex perspective, I presume anything that's tied to carbon fuel et cetera finds its way into the Ex part of the cost equation. Is that equation - is that the right way to look at it?

Hi, Mike. Appreciate the question and I will get to it, but I'd like to just maybe use this as an opportunity to kind of explain what we've done and why we've done it. I mean we do look at sustainability through a lens of long-term shareholder value creation. And I think that but the airline industry this issue presents a clear and present danger, if we don't get on top of it. And I seem to be out ahead of it. We've seen that in other geographies and we should not assume that those sentiments won't come to the US. And so it's very important that airlines get on the front foot of this which is why we did - what we did. And frankly, it's part of sort of our border ESG commitment across many areas. And I talked about some of those in my comments. So that's why we did it. I do think it's going to become a cost of doing business for the industry. In terms of specifically you're at - actual question around the offsets then I'm not going to get into that. I will say that it's fully factored into our EPS guide. And in terms of where it sits in the line, it's treated as part of our fuel cost, so it won't be in the Ex-Fuel CASM line. It'll be in the fuel guidance. So as we roll, continue to roll out quarterly fuel guidance then it will be included in that. But again the cost and the investment of this is factored into the EPS guide that we provided.

Great and then just quick my second question just if you were to sort of characterize how do you think about your relationship with Norwegian? Are they just another sort of inter line partner? Are they something more than that? The reason I ask is because when they announced that they had teamed up with you with a full-page press release lots of superlatives about JetBlue, it looked like it was something big and yet I'm not sure if it is all that big. So I'm just curious about how you characterize that relationship. Thank you.

I like press releases, Mike, that are brought on [Indiscernible]. No, Scott, do you want to take that part of the question?

Sure. This is Scott. So we did move forward with an LOI and we are in discussions about a partnership but we have over 50 partners. And we look forward to working more closely with Norwegian.

Your next question comes from Myles Walton of UBS. Your line is now open.

Thanks. Good morning. Stephen, I think you talked about finalizing the engine contract and I just wanted to be clear is it a full-year benefit to 2020 or is going to be signed sometime in the first half and annualized into 2021?

Yes. Good morning, Myles. Firstly, I wanted to say a big thank you to the team at JetBlue particularly the fleet Treasury and tech op teams who did a magnificent job over the last two and a half years in terms of aligning and renegotiating for the last pending contract. This was the final piece of the jigsaw in terms of both our airframe and engine maintenance contracts to help JetBlue navigate through the next few years. This contract specifically covering half of our engines on our existing co fleet, and will bring benefits throughout 2020 year, and so you should think about that when you're sort of baking in your models.

And just a clarification on the 190 retirement. I guess if not retiring any in 2020 should we think about them ratably retiring though as the 220s come in into 2021?

Yes. I think the way that you should think about this is a sort of one for one replacement as A220 is coming. And based on our discussions with Airbus particularly Airbus Canada and how we take things forward, we remain confident in the delivery of our first A220 at the end of this year. Obviously, it would take a couple of months to get into service. As you saw we go through the first aircraft coming to the fleet, but then you're going to have a short transition time between an A220 coming in and an E190 going out for a number of months. So as they come in, we've shared with you the order book that we have. And you can sort of think of that as a one for one replacement as A220 coming in, the E190 go out.

Your last question comes from Dan McKenzie of Buckingham Research. Your line is now open.

Hi. Good morning. Thanks. Two questions here. First of all, Fare Families 2.0 based on what I'm seeing the segmentation component, it doesn't look like it's being dynamically priced at this point. So the question is, are there IT limitations from that prevent you from doing that?

Sure. Thanks for the question. Maybe I'll just start with Fare Option 2.0 and what we're seeing in terms of the progress so far. So as I mentioned rolled out in December, 95% of the blue basic fare are now available across our network. We are off to a good start. Benefits will continue to ramp and we are, as we see it so far exceeding expectations in terms of the upsell and the buy up rates. It will continue to evolve as we step through the next few months in terms of a variety of factors around just dynamic pricing, but also as we learn more around how Fare Options works in different markets. The team will get smarter in terms of how we offer the different bundles. Dave, is there anything you'd like to add?

Just that we're very pleased with the rollout. And this year the big focus will be how do we optimize all the Bi ops, the BI ops2 Blue Bibler flew extra, all the seat pricing, looking at both traditional and new methods to optimize those as we go through the year.

I see. Okay. And then going back to one of the big revenue drivers for this year is $34 per passenger and so your revenue growing double digits. And please correct me on that but what are the components that are driving that growth exactly? I mean, bag fees of course but what are the other big drivers that are in there?

Yes. Sure. So maybe I'll set these in loyalty is the largest driver behind the double-digit growth then you can think of bag fees. We'll see an increase in bag fee this year largely associated with fare options and the unbundling of bags fees. And then there's a contribution from JetBlue travel products as well into our ancillary revenue numbers. So, overall, very pleased with the growth. Yes, it's 34 customer up 14% year-over-year, we expect as we step into 2020 to see strong growth throughout the year as well.

And that concludes our fourth quarter 2019 conference call. Thanks for joining us. Have a great day everyone.

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