JETBLUE AIRWAYS CORP

You should read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included elsewhere in this Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part I. Item 1A, “Risk Factors” and other parts of this Report.

OVERVIEW

In 2023, we faced a challenging operating environment due to ATC delays, weather-related disruptions, industry cost pressures and engine issues. We also navigated disruptions in our supply chains and those of our business partners, which led to aircraft delivery delays and negatively impacted our ability to source spare parts and complete maintenance on a timely basis, as well as reliability challenges with certain of our aircraft engines. Despite these challenges, we saw revenue growth supported by leisure demand and loyalty program enhancements.

2023 Results

For the year ended December 31, 2023:

•System capacity increased by 6.2% year-over-year.

•We generated $9.6 billion in operating revenue, an increase of $457 million compared to 2022, primarily due to a 7.5% increase in revenue passengers.

•Operating revenue per available seat mile (“RASM”) decreased by 1.2% to 14.04 cents year-over-year.

•Operating expense increased by 4.1% year-over-year to $9.8 billion.

•Operating expense per available seat mile (“CASM”) decreased by 2.0% to 14.37 cents year-over-year.

•Our operating expenses in 2023 and 2022 included the effects of special items. Excluding fuel and related taxes, special items, and operating expenses related to our non-airline businesses, our 2023 adjusted operating expense(1) increased by 11.0% to $6.9 billion, year-over-year.

•Excluding fuel and related taxes, special items, and operating expenses related to our non-airline businesses, our cost per available seat mile (“CASM ex-fuel”)(1) increased by 4.5% to 10.02 cents year-over-year.

•Our operating margin was (2.4)% in 2023 and (3.3)% in 2022. Excluding special items, our adjusted operating margin(1) was (0.3)% in 2023 and (2.0)% in 2022.

•We reported a net loss of $310 million in 2023 compared to a net loss of $362 million in 2022. Excluding special items, adjusted net loss(1) for 2023 of $151 million compared to adjusted net loss of $260 million in 2022.

•Our reported loss per share for 2023 and 2022 was $0.93 and $1.12, respectively. Excluding special items, our adjusted loss per share(1)for 2023 and 2022 was $0.45 and $0.80, respectively.

•During 2023, we took delivery of seven Airbus A321neo aircraft and 10 Airbus A220 aircraft.

We expect our operating results to significantly fluctuate from quarter-to-quarter in the future as a result of various factors, many of which are outside of our control. For example, ATC shortages in the Northeast, which have forced us to cut back our capacity plans to help protect our operations, are expected to continue for at least the near-term and lead to further challenges in the operating environment. Consequently, we believe quarter-to-quarter comparisons of our operating results may not necessarily be meaningful; you should not rely on our results for any one quarter as an indication of our future performance. Except for uncertainty related to the cost of aircraft fuel, we expect our expenses to continue to increase as we acquire additional aircraft, as our fleet ages, and as we expand the frequency of flights in existing markets as well as enter into new markets.

2023 Developments

Network

During 2023, we began service to the following new destinations(“BlueCities”): Paris, France; Amsterdam, Netherlands; Belize City, Belize; St. Kitts and Nevis. In addition, we announced service to the following destinations which will begin service in 2024: Dublin, Ireland; Edinburgh, Scotland; Tallahassee, Florida; and Tulum, Mexico.

We remain focused on taking steps to match capacity with demand. In 2023, we announced the closure of two underperforming markets - Havana, Cuba and Burlington, Vermont.

Customer Experience

In 2023, we launched an updated TrueBlue® loyalty program, offering members more value and new opportunities to earn perks. New features include:

•Earn Tiles to Build Your Mosaic, Your Way: Tiles are the new way for TrueBlue® members to track progress toward Mosaic status while unlocking valuable perks along the way.

•More Perks for More Customers: The New TrueBlue® gives customers the ability to choose the rewards that are most valuable to them.

•Take Mosaic to the Next Level: The new and expanded Mosaic now contains four levels, each offering Mosaic Signature Perks to enjoy.

We expect these new value enhancements will strengthen customer engagement with the TrueBlue® loyalty program. We also announced new and improved perks for Mosaic members in JetBlue's TrueBlue® loyalty program starting in 2024, reflecting JetBlue's commitment to identifying new ways to add value to the program.

JetBlue continues its ongoing commitment to enhance the travel experience and promote a comfortable and stress-free journey. We recently announced, a formal family seating guarantee that children 13 years and younger can sit next to an adult traveling with them on the same reservation, for no additional fee.

Pratt and Whitney

In July 2023, Pratt & Whitney, a division of Raytheon Technologies, announced the requirement, mandated by the Federal Aviation Administration (“FAA”), for removal of certain engines for inspection due to contaminated powdered metal used in high-pressure turbine disks on the V2500, PW1100G, and PW1500G engine types. These engines power our Airbus A320, Airbus A220 and Airbus A321neo fleets. The contaminated powdered metal affects engines manufactured between October 2015 and September 2021. Engines are now required for inspection after they have reached a reduced number of cycles dependent on the fleet type. As of December 31, 2023, we had six aircraft and 12 engines grounded for required inspection. The Company currently expects each removed engine to take up to 360 days to complete a shop visit and return to a serviceable condition and expects the number of out of service aircraft to rise to between 13 and 15 by the end of 2024.

We reached a confidential settlement agreement with Pratt & Whitney, which is intended to address damages incurred by us in 2023 due to the grounding of the affected engines. However, into 2024 and beyond, we expect to have a certain number of engines grounded and, therefore, will continue to assess the resulting impact on our future capacity plans. We expect discussions with Pratt & Whitney for further compensation to be ongoing.

(1) Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for more information on this non-GAAP measure.

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