JETBLUE AIRWAYS CORP

RESULTS OF OPERATIONS

The following discussion is a comparison of the 2023 to 2022 results of operations. Refer to Part II. Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Annual Report on Form 10-K for the year ended December 31, 2022 for detailed discussions comparing the 2022 to 2021 period.

2023 Compared to 2022

Overview

We reported a net loss of $310 million, an operating loss of $230 million and operating margin of (2.4)% for the year ended December 31, 2023. This compares to net loss of $362 million, operating loss of $298 million, and operating margin of (3.3)% for the year ended December 31, 2022. Our loss per share was $0.93 for 2023 compared to a loss per share of $1.12 for 2022.

Our 2023 and 2022 reported results included the effects of special items. Adjusting for these one-time items, our adjusted net loss(1) was $151 million, adjusted operating loss(1) was $33 million, and our adjusted operating margin(1) was (0.3)% for 2023. This compares to an adjusted net loss(1)of $260 million, adjusted operating loss(1)of $185 million, and an adjusted operating margin(1) of (2.0)% for 2022. Excluding one-time items, our adjusted loss per share(1) was $0.45 for 2023 compared to an adjusted loss per share of $0.80 for 2022.

Operating Revenues

Passenger revenue accounted for 93.7% of our total operating revenue for the year ended December 31, 2023 and is our primary source of revenue which includes seat revenue and baggage fees. In addition, passenger revenue includes revenue from our ancillary product offerings such as Even More® Space. Revenue generated from international routes, including Puerto Rico and excluding Canada, accounted for 36.8% of our total operating revenues in 2023. Passenger revenue, including certain ancillary fees directly related to passenger tickets, is recognized when the transportation is provided. Passenger revenue from unused tickets and passenger credits are recognized in proportion to flown revenue based on estimates of expected expiration or when the likelihood of the customer exercising his or her remaining rights becomes remote. Other revenue is primarily comprised of the marketing component of the sales of our TrueBlue® points. It also includes revenue from the sale of vacation packages, commissions revenue, airport concessions and advertising revenue.

We measure capacity in terms of available seat miles, which represents the number of seats available for passengers multiplied by the number of miles the seats are flown. Yield, or the average amount one passenger pays to fly one mile, is calculated by dividing passenger revenue by revenue passenger miles. We attempt to increase passenger revenue primarily by increasing our yield per flight which produces higher revenue per available seat mile. Our objective is to optimize our fare mix to increase our overall average fare while continuing to provide our customers with competitive fares.

Operating Expenses

Aircraft Fuel and Related Taxes

Aircraft fuel and related taxes represented 27.6% of our total operating expenses in 2023 compared to 32.8% in 2022. The average fuel price decreased 17.9% in 2023 to $3.03 per gallon. Our fuel consumption increased by 6.5%, or 55 million gallons, due to higher capacity increases as demand for travel grew.

We recognized fuel hedge gains of $7 million and losses of $7 million in 2023 and 2022, respectively, which are recorded in aircraft fuel and related taxes in our consolidated statement of operations.

Salaries, Wages and Benefits

Salaries, wages, and benefits increased $308 million, or 11.2% in 2023, driven by higher wage rates. The wage rate increase was primarily due to the new pilot union contract effective March 1, 2023, which included an initial pay rate increase of 14% and an additional 3% pay rate increase in August 2023. An increase in full-time equivalent (“FTE”) crewmembers also contributed to the increase. The average number of FTEs increased by 2.8% compared to the same period in 2022.

Landing Fees and Other Rents

Landing fees and other rents increased $113 million, or 20.7%, in 2023 primarily due to rate increases at certain BlueCities, higher landing fees and a 4.4% increase in departures compared to 2022. Other rent primarily consists of airport rent at our BlueCities, many of which contain a mix of both variable and fixed rent. We are subject to premium landing fee rates in our focus cities, which are primarily located in the Northeast corridor of the United States, due to heavy traffic.

Depreciation and Amortization

Depreciation and amortization primarily includes owned and finance leased aircraft and spare engines, in-flight entertainment systems, airport leasehold improvements and software development. Depreciation and amortization increased $36 million, or 6.1%, compared to the 2022 period. This increase was primarily driven by 17 aircraft and 12 spare engines delivered and placed into service in 2023. In addition, one aircraft was delivered in 2022 and placed into service in 2023.

Aircraft Rent

Aircraft rent increased $12 million, or 10.4%, in 2023. This increase was driven primarily by incremental engine leases and lease return costs.

Sales and Marketing

Sales and marketing increased $27 million, or 9.2%, in 2023 primarily driven by higher credit card fees, driven by an increase in demand for air travel. Revenue passengers increased by 7.5% in 2023 to 42.5 million compared to 39.6 million in 2022. Advertising and marketing fees also contributed to this increase.

Maintenance, Materials and Repairs

Maintenance, materials, and repairs are generally expensed when incurred unless covered by a long-term flight hour services contract. The average age of our aircraft in 2023 was 12.3 years. As our fleet ages our maintenance costs will increase significantly, both on an absolute basis and as a percentage of our unit costs, as older aircraft require additional, more expensive repairs over time.

In 2023, maintenance, materials and repairs increased by $63 million, or 10.9% compared to 2022. The increase was primarily due to timing and the type of maintenance events that occurred during the period as well as increased repairs due to the aging of our fleet.

Special Items

In 2023, special items included the following:

•$105 million relating to union contract costs; and

•$92 million relating to Spirit costs.

In 2022, special items included the following:

•$52 million relating to an impairment as well as engine exchanges as part of the retirement of our Embraer E190 fleet;

•$33 million relating to union contract costs; and

•$28 million relating to Spirit costs.

Other Operating Expenses

Other operating expenses consist of the following categories: outside services, airport expenses (including expenses related to fueling, ground handling, skycap, security, and catering services), personnel expenses, professional and legal fees, onboard supplies, shop and office supplies, bad debts, communication costs, and taxes other than payroll and fuel taxes.

In 2023, other operating expenses increased by $131 million, or 9.6%, compared to 2022 primarily due to a 6.2% increase in capacity, costs associated with ATC delays and weather-related disruptions during the year.