JETBLUE AIRWAYS CORP

Historically, our cost structure has allowed us to price fares lower than many of our competitors. Our cost advantage relative to some of our competitors was due to, among other factors, high aircraft utilization, new and efficient aircraft, relatively low distribution costs, and a productive workforce. Because our network initiatives and growth plans require a low cost platform, we strive to stay focused on our competitive costs, operational excellence, and efficiency improvements. Due to post-pandemic labor shortages and subsequent collective bargaining agreement renewals, labor costs across the industry have increased significantly.

As of December 31, 2025, we had an operating fleet of 288 aircraft. Refer to Part I, Item 2 "Properties" for additional information on our fleet.

Route Structure

JetBlue's point-to-point network is designed to optimize costs as well as accommodate customers' preference for nonstop itineraries. A vast majority of our operations are centered in the heavily populated Northeast corridor of the U.S., which includes the New York and Boston metropolitan areas. This airspace is some of the world's most congested and drives certain operational constraints. The majority of our flights touch at least one of our six focus cities:

(1)Reflects JetBlue's seat share in each focus city as of December 31, 2025, which includes regional jet flying compared to the industry as a whole.

(2)Reflects JetBlue's nonstop routes served in each focus city as of December 31, 2025.

(3)Includes JFK, Newark, LaGuardia, Westchester County Airport and Long Island MacArthur Airport.

Our peak levels of traffic over the course of the typical year vary by route. Generally speaking, many of our areas of operations in the Northeast experience ATC delays and weather-related disruptions resulting in increased costs associated with de-icing aircraft, canceling flights, accommodating displaced customers, and crewmember interrupted trip costs. Many of our Florida and Caribbean routes experience bad weather conditions in the summer and fall due to thunderstorms and hurricanes. As we enter new markets, we could be subject to additional seasonal variations along with competitive responses by other airlines.

Fleet Maintenance

Consistent with our core value of safety, our Federal Aviation Administration ("FAA") approved maintenance programs are administered by our technical operations department. We use qualified maintenance personnel who receive comprehensive training. We maintain our aircraft and associated maintenance records in accordance with, if not exceeding, FAA regulations.

Fleet maintenance work is divided into four categories: line maintenance, heavy maintenance, engine maintenance and component maintenance.

The bulk of our line maintenance is handled by JetBlue technicians and inspectors. It consists of service checks, interior maintenance, weekly checks, phased "A" checks and "B" checks, along with periodic diagnostics, routine repairs, departure checks on our transatlantic flights and non-routine component replacements.

Heavy maintenance checks, or base maintenance, consist of a series of more complex maintenance, modification, and inspection tasks taking from one to six weeks to complete and are typically performed once every 36 months. All of our aircraft heavy maintenance work is performed by third-party FAA-certified repair stations and are subject to direct oversight by JetBlue personnel. We contract out heavy maintenance as the costs are lower than if we were to perform the tasks internally.

Engine maintenance is performed by the original equipment manufacturer of the engines themselves or by their approved network providers. Some of our Airbus aircraft engines are serviced under fixed price flight hour agreements for the repair, overhaul, modification, and logistics, while others are covered under time and material contracts.

Component maintenance on equipment such as auxiliary power units, landing gears, pumps, avionic computers, and in-flight entertainment equipment are all performed by a number of different FAA-certified repair stations that are surveilled and approved by JetBlue. Many of our maintenance service agreements are based on a fixed cost per flight hour. These fixed costs vary based upon the age of the aircraft and other operating factors impacting the related component. Required maintenance not otherwise covered by these agreements is performed on a fixed event price or time and materials cost basis. All other maintenance activities are sub-contracted to qualified maintenance, repair, and overhaul facilities.

Pratt & Whitney

In July 2023, Pratt & Whitney, a division of RTX Corporation, announced the requirement, mandated by the FAA, for removal of certain engines for inspection due to a rare condition involving powdered metal used in the production of certain engine parts on the PW1100G and PW1500G engine types. These engines power our Airbus A220 and Airbus A321neo fleets. The powdered metal affects engines manufactured between October 2015 and September 2021. Those engines are required to be inspected after they have reached a reduced number of cycles dependent on the fleet type. As a result of these required inspections and other engine durability deficiencies, as of December 31, 2025, we had four aircraft grounded due to lack of engine availability. The Company currently expects each removed engine to take approximately 200 days for the PW1500G engines and approximately 300 days for the PW1100G engines to complete a shop visit and return to a serviceable condition.

Aircraft fuel continues to be one of our largest expenses. Prices have been extremely volatile due to global economic and geopolitical factors, which we can neither control nor accurately predict. Our 2025 fuel consumption decreased by 3.2% due to lower capacity and increased fuel efficiency, and our average price per gallon decreased 9.3% compared to 2024. Our historical fuel consumption and costs for the years ended December 31 were:

(1)Total cost and average price per gallon each include the cost of jet fuel, related taxes, into-plane, transportation, airport fuel flowage, and storage fees. It also includes effective fuel hedging gains and losses.

We attempt to protect ourselves against the volatility of fuel prices by entering into a variety of derivative instruments with underlyings of jet fuel, crude, and heating oil. In 2024 and 2023, we effectively hedged a portion of exposure to price fluctuations by utilizing call spread options with an underlying of jet fuel. As of December 31, 2025 and 2024, we did not have any outstanding fuel hedging contracts.

Cost Discipline

In 2025, to secure our financial future and navigate near-term demand volatility, we focused on executing cost discipline and managing our fleet to drive future capital light growth. We continued to make progress on the JetForward cost program by implementing AI and data science technology to optimize planning, better manage disruptions, and enable greater customer self-service. We are modernizing fuel processes and are unlocking cost savings through technology, process, and operational initiatives. Additionally, we streamlined product costs and strengthened efficiencies on our fixed support center costs. We remain focused on maintaining a healthy liquidity balance, ending the year with $2.5 billion of cash and cash equivalents, short-term investments and long-term marketable securities.

The net book value of our assets pledged, or committed to be pledged, as security under various financing arrangements remained the same for 2025 and 2024 at $7.3 billion.

JetBlue Ventures

JetBlue Technology Ventures, LLC, ("JetBlue Ventures" or "JBV") is a wholly owned subsidiary of JetBlue. JBV was formed to invest in and partner with early-stage startups with goals of improving the travel, hospitality, and transportation industries. As of December 31, 2025 and 2024, our JBV equity investments had an aggregate carrying value of $89 million and $84 million, respectively, included in other assets on the consolidated balance sheets.

In May 2025, as part of efforts to return focus to our core business, SKY Leasing ("SKY"), a leading aviation investment manager, acquired certain assets of JBV. JetBlue continues to serve as a strategic partner to SKY and its portfolio companies. JetBlue retained ownership of its fund portfolio, disclosed in Note 14 to our consolidated financial statements included in Part II, Item 8 of this Report, and SKY has assumed management of the investments, subject to an agreed upon management fee. Certain other conditions exist in the agreement, but are not expected to have a material impact on the companies' operations or financial condition.

Paisly

Paisly, formerly known as JetBlue Travel Products, is a wholly owned JetBlue subsidiary encompassing the JetBlue Vacations® brand, which offers integrated travel packages combining JetBlue flights with hotels and cruises, and TrueBlue Travel TM, which sells non-air travel products such as insurance, hotels, car rentals, and activities on a stand-alone basis, whether connected to a JetBlue flight or not, leveraging the TrueBlue® point earning and redemption opportunities and JetBlue Card benefits.

In June 2025, we announced the rebranding of JetBlue Travel Products to Paisly, marking a strategic milestone within JetBlue's JetForward strategy. The rebrand reflects Paisly's evolution into a full-service, tech-enabled managed travel services company, positioned to serve not only JetBlue customers but also those of other partners, beginning with a new collaboration with United Airlines. Over time, Paisly expects to support a growing range of partners across the broader travel landscape. We believe the collaboration with United Airlines, under United's brand, will contribute to Paisly's high-margin, high-growth business for the distribution of hotels, rental cars, cruises, travel insurance, and vacation packages.