JetBlue Airways Corp (JBLU) 2024 Q2 法說會逐字稿

Good morning.

My name is Brittany, and I would like to welcome everyone to the JetBlue Airways second-quarter 2024 earnings conference call.

As a reminder, today's call is being recorded.

(Operator Instructions)

I would like to turn the call over to JetBlue's Director of Investor Relations Koosh Patel.

Please go ahead, sir.

Thanks, Brittany.

Good morning, everyone, and thanks for joining us for our second-quarter 2024 earnings call.

This morning, we issued our earnings release and the presentation that we will reference during this call.

All of those documents are available on our website at investor dot jetblue.com and on the SEC's website at www.sec.gov.

In New York to discuss our results Joanna Geraghty our Chief Executive Officer; Marty St. George our President, and Ursula Hurley our Chief Financial Officer.

During today's call, we'll make forward-looking statements within the meaning of the Safe Harbor provisions of the products Private Securities Litigation Reform Act of 1995.

Such forward-looking statements include, without limitation, statements regarding our third-quarter and full year 2024 financial outlook and our future results of operations and financial position, including long-term financial targets, industry and market trends, expectations with respect to tailwinds and headwinds, our ability to achieve operational financial targets, strategy, plans for future operations and associated impacts on our business.

All such forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in these statements.

Please refer to our most recent earnings release as well as our fiscal year 2023, 10-K and other filings for a more detailed discussion of risks and uncertainties that could cause the actual results to differ materially from those contained in our forward-looking statements.

And the statements made during this call are made only as of the date of the call and other than as may be required by law, we undertake no obligation to update information.

Investors should not place undue reliance on these forward-looking statements.

Also, during the course of our call, we may discuss certain non-GAAP financial measures.

For an explanation of these non-GAAP measures and a reconciliation of corresponding GAAP measures.

Please refer to our earnings release, a copy of which is available at our website and and sec.gov. Now I'd like to turn the call over to Joanna Geraghty, JetBlue CEO.

Thank you, Josh, and good morning, everyone, and thanks for joining our second-quarter 2024 earnings call.

Please standby, we are experiencing a technical difficulty.

Once again, we ask that you please stand by.

Good morning.

So some technical difficulties, apparently our cost pillar is in full swing on was only pay the phone bill for one of our conference rooms in the office.

So I will I will start over.

Good morning, everyone, and thank you for joining our second-quarter of 2024 earnings calls.

I'm happy to report that we generated adjusted $34 million of Pre-tax income for the second quarter.

This performance would not be possible without our 23,000 crewmembers.

And I would like to thank them for delivering a safe and reliable operation and for living our JetBlue values every day.

Turning to slide 4 for a few remarks on our second quarter performance, our team has been hard at work, ensuring we deliver the best experience from our customers over the busy summer travel season.

As part of our refocused long-term strategy, which I will touch on later in my remarks, we've made significant investments to improve our reliability and deliver more of our customers to their destinations on time, despite some challenges from weather and persistent air traffic control staffing issues.

If we still have room to improve, we are off to a solid start.

And for the first six months of the year, we've exceeded our 2023 performance for key operational metrics.

This improvement helped us beat or exceed our second quarter guidance ranges.

In addition to reliability, our second quarter performance was aided by continued strength in our premium product offerings with even more space unit revenue up double digits year over year.

We are also pleased with the progress of our $300 million (technical difficulty).

We realized approximately $140 million of top line benefit in the first half of this year.

We also delivered strong progress from our cost savings programs in the second quarter, while fuel prices continued to moderate.

And as a result, we were able to keep costs low in order to generate a positive Pre-tax profit for the quarter.

Moving to slides 5 through 7.

As I mentioned last quarter, even as we were implementing these near-term performance improvement initiatives, our full new leadership team coalesced around refining our long-term strategy, and we are now pleased to share additional details with you.

With more announcements still to come in the second half of the year.

Our plan is rooted in thorough analysis of the near and longer-term competitive landscape as well as extensive customer research.

As a result, we feel confident in our refocused strategy, which we are calling jet forward and are confident it's the right framework to position JetBlue for success.

JetBlue at its core is a back-to-basics strategy to the loved and to be profitable again in order to deliver value to our customers, our crewmembers and our owners.

This framework is designed to enhance our inherent strengths and effectively overcome the current challenges of our business and industry.

Our challenges are clear.

The Pratt & Whitney engine related aircraft groundings, which are significantly impeding our growth rate and pressuring our profitability as well as industry wide cost inflation and persistent air traffic control issues, all of which are headwinds.

We are working hard to overcome.

At the end of the day, our revenue growth has not been enough to outpace our cost challenges and we need to fix that, which is why the goal of our strategy is set a foundation to lead us back to generating positive operating margin in the near term and driving sustainable earnings over the long term.

We believe achieving these targets and executing on our strategy will be rooted in enhancing our strengths and focusing on what we can control.

We have high-value geographies, a unique culture with a trusted brand, a low cost structure and a differentiated product and service that has set JetBlue apart from its peers, all of which we believe can be enhanced to drive even more value and delivering that value is our ultimate goal.

Turning to slide 8.

We expect jet forward to deliver an incremental $800 million to $900 million of EBITDA contribution in 2027 versus year end 2024, helping to guide our path back to sustained profitability.

We expect to realize this benefit evenly over 2025 to 2027 with incremental upside beyond 2027 as several underlying initiatives ramp to their full potential.

$800 million to $900 million of EBIT contribution in 2027 is in addition to the $300 million of revenue initiatives we've already announced for 2024.

We plan to turbocharge our strength with four priority moves, which you can see on slide 9, all designed to drive our path forward.

They are number one, delivering reliable and caring service.

Number two, building the best East Coast leisure network, number three, offering products and perks that customers value.

And number four a secure financial future enabled by maintaining our cost advantage and restoring our balance sheet.

These four move may sound familiar given we began actioning on them back in the first quarter and we've already seen encouraging results from several underlying initiatives in the first half of the year.

In particular, our investments to deliver reliable service are showing early indications of driving value across the airline.

Operational reliability is essential to the success of our strategy, and it's a top priority for our customers.

We've lagged our peers in on-time performance, partially driven by our high concentration of flying in some of the most crowded air spaces in the world and our outsized exposure to air traffic control issues.

While we are always working to improve on-time performance and recognizing the reality of our particular Aerospace, we are aiming to significantly improve our relative ranking in the coming years.

This will be a multiyear initiative with many phases of investment, and we've already begun taking action on optimizing the operability of our fleet, delivering a reliable product and service and providing a consistent customer experience.

Initiatives, we rolled out this year include adding more scheduled time for maintenance scheduling, greater buffers for VFR flights and introducing new tools such as automated tracking and enhanced customer facing self-service and disruption management tools.

We expect that over time, these investments will improve customer satisfaction and save on costs, helping to contribute about $100 million of incremental EBIT in 2027.

Next, we are refocusing our network to build the best East Coast leisure network.

Our network sits in some of the most valuable geographies in the world.

We have a leading position in three of the five largest markets on the East Coast, including New York City, which is the highest GDP producing metro area in the United States.

We've already taken significant action in the first half of the year to refocus our network around our core strengths in these geographies, leisure, VFR and transcons, especially along the East Coast and in Puerto Rico, where JetBlue is a household name for many customers.

As we've emphasized, our actions are guided by our focus on profitability, and we expect these changes will drive close to $175 million of incremental EBIT contribution in 2027.

Marty will provide more specifics on our actions.

JetBlue has a long history as a beloved brand in our core geographies, our attractive value proposition offering at affordable yet differentiated experience is well known by customers.

We recognize that to be profitable and loved.

We need to meet the evolving preferences of our customers, including an increased desire for premium experiences.

Our strategy is more focused than ever on offering customers the products and the perks the value today.

We believe that delivering on that brand promise will also enable us to ensure our customers feel rewarded for their loyalty.

This in turn would help us specifically expand our share of premium customers, customers who want a higher quality experience, but may feel forgotten by our competitors.

In addition to the product changes we've already implemented this year, including adding new loyalty partners and products and enhanced during, enhancing our Blue basic offering we plan to announce additional exciting improvements to our product later this year.

So stay tuned.

While the financial benefits of our product changes will take time to realize, we expect them to contribute over $400 million of incremental EBIT benefit in 2027 with additional upside into the remainder of the decade.

Finally, touching on our last priority.

When you move a secure financial future.

While we believe this will be an output of our efforts, we must also better manage what is in our control.

And this starts with maintaining our cost advantage.

It is imperative.

We keep our costs low so we can continue offering customers the most value when they fly.

However, our Pratt & Whitney GTF engines continue to challenge our ability to plan our business over the long term, and we now expect aircraft on the ground to significantly increase in 2025.

First of all, I will provide more detail on this.

In order to be profitable in this uncertain environment, we must transform our cost base in an aggressive manner.

Similar to the approach we've taken with our network changes.

We'll be biased towards action and making bold decisions required to get our business back to profitability and through investments in data science and staffing optimization, we expect cost savings will contribute about $175 million worth of incremental EBIT through 2027.

Restoring our balance sheet health is also critical to a secure financial future and returning to profitable growth we simply cannot continue to invest in capital intensive assets that must be financed upon delivery and that are subsequently unable to produce a return because they have to be parked due to required maintenance and lengthy wait times.

With that in mind, we come to an agreement with Airbus o defer 44 Airbus A321neo aircraft, which are the fleet most impacted by the Pratt & Whitney GTF issues.

This will reduce our upcoming capital expenditures by $3 billion, helping us to improve our free cash flow outlook and restore our balance sheet health.

While many parts of our business will be evolving with Jet forward.

Maintaining our unique culture is core to its success.

In the second quarter, we checked in with our entire organization through pulse survey, which showed a number of improvements that indicate crewmembers are optimistic about our refreshed strategy.

Our people are critical to the execution of our strategy and we will continue investing in them to ensure our success as we navigate through the remainder of 2024 and beyond.

You can expect a number of additional announcements that will help fill in the remaining gaps in our strategy, and we will regularly share updates on the progress towards our $800 million to $900 million EBITDA target.

With that over to Marty to provide more detail on our commercial progress.

Thank you, Joanna.

I would like to extend my thanks to our crew members for their service and dedication to JetBlue of the amount of change we've implemented in my first six months has been significant, and I appreciate crewmembers for supporting our rollout of Jet forward.

At the beginning of this year, we announced a package of initiatives that we expected to drive $300 million of incremental revenue in 2024.

We are pleased with the progress of those initiatives thus far and remain on track to achieve the $300 million this year.

These initiatives captured an additional $100 million of revenue in the second quarter and have now generated a total of $140 million of top line benefit in the first half of 2024.

For Jet forward, we will continue this high rate of activity and progress through 2027 and beyond.

While project forward priority moves included include the 2024 revenue initiatives, the $800 million to $900 million of EBIT.

We expect Jet forward to generate in 2025 to 2027 is entirely incremental to the $300 million we announced earlier this year.

Refocusing our network is one of the key priority moves of Jet forward.

And as Joanna mentioned, we've made significant network changes this year in support of building the best East Coast leisure network, which we expect will drive about $175 million of incremental EBIT uplift between 2025 and 2027.

So far in 2024, we've announced four tranches of network changes, collectively driving 15 Blues City closures and over 50 route closures and redeployed.

Every route and station needs to earn its way into our network.

And our push for profitability has lessened our patients for underperforming routes.

Our focus now is squarely on what we call our core franchises.

These have long been the profit engine for JetBlue, leisure, VFR and transcon routes to and from our core East Coast geographies that know and love JetBlue like New York, New England, Florida and Puerto Rico and the Caribbean.

Our value proposition resonates well with customers in these geographies, given our long history serving those areas and deep entrenchment on these costs.

Many of the changes we made to our network are driven by the strong recovery and quicker ramp of leisure travel as a result and specifically in New York, we've shifted capacity out of corporate focused routes it into leisure and VFR routes.

In New England, we remain committed to being the number one value carrier serving leisure and business customers alike and continuing to grow our presence across the region across our other core geographies, such as Florida and the Caribbean.

Our strategy remains the same with the team to invest in high-value leisure destinations and expand our product offering to ensure our customer value proposition remains attractive to the full spectrum of leisure guests, for example, we recently announced adding a complementary carry-on bag to our Blue basic offering for travel beginning September 6.

Our change to Blue basic have allowed us to remain competitive.

And since launching about a month ago, we've seen promising early results.

Not only is this a meaningful addition to the value proposition of our most affordable fare option.

We believe it's a necessary step on our path to profitability.

Stay tuned in 2024 for additional announcements on Jet forward plan to offer more products and products that our customers value, including enhancements to our premium offering.

Shifting to our second quarter performance on slide 11.

Second quarter capacity finished down 2.7% higher than the midpoint of our revised guidance of down 3%.

Completion factor was 98.8% for the quarter, one full point better than 2023, driven by our investments in reliability and better managing weather related disruptions.

Revenue down 6.9%, beating the midpoint of our revised guidance by about one point.

This was supported by strength in our premium offerings was even more space resin continued to grow double digits and net unit revenue growth up low single digits on about 30% more capacity.

We saw trust performing slightly better than expectations, with peaks in line and in month bookings improving over the course of the quarter.

Unit revenues remained challenged in our Latin leisure markets where additional supply increases continue to wane performance.

However, as we look to the third quarter, we are optimistic about the capacity evolution.

We have seen take shape since the start of the year as competitor capacity in our overlap markets has come down modestly and is now two points lower than the second quarter.

As you predicted, it's still elevated compared to demand growth, but it is coming more into balance.

We are also taking self-help measures and reducing truck capacity to better match supply and demand as we've optimized our network to focus more on our cost leader geographies.

Our exposure to leisure travel has increased prompting us to adjust capacity to a seasonality curve with more pronounced peaks and troughs than we've historically thought.

Accordingly, we reduced trough flying throughout the second half of 2024.

Most significantly in September, where we are scheduled to fly about 10% fewer ASMs year over year.

We are also reducing aircraft utilization during peak months as part of our efforts to improve reliability.

As a result of these efforts, we expect third quarter capacity to be down 6% to down 3% year-over-year.

Our capacity contraction provides a constructive backdrop for unit revenue to improve year over year.

And we forecast year-over-year revenue growth to be down 5.5% to down 1.5% in the third quarter at the midpoint of our ranges, we are expecting positive year-over-year resin and healthy sequential improvement.

We expect our unit revenue trajectory will be supported by competitive capacity improvements in our Latin leisure marketing the continued ramp of our revenue initiatives and the lapping of the wind down of the Northeast alliance in the third quarter of 2023.

For the full year, we expect revenue growth to be down 6% to down 4% on 5% to 2.5% plus capacity and closing, which at forward we've built a solid strategic framework that we are focused on and excited about.

And though we've seen initial improvements to our business as a result of the strategy, there is still work to do to deliver on our multiyear targets, including ensuring our crew members, understand how pivotal they argue with success.

Our product is not truly differentiated without the incredible service they provide our customers.

And I want to thank them again for their service to JetBlue, especially as a Jet forward path to profitability.

With that, over to you Ursula.

Thank you, Marty.

And thanks again to our crew members for helping to deliver a profitable second quarter.

We delivered on our targets this quarter with revenue beating the midpoint of our original and revised guidance ranges and CASM ex outperforming the low end of our revised range, which was half a point better than our original guidance.

While we generated $34 million of adjusted Pre-tax profit for the quarter, it won't be enough to offset projected losses generated in the other three quarters, and we remain steadfast in our urgency to return to full year of profitability.

With jet forward, we are setting our financial priorities for the coming years with the goal to restore profitability as soon as possible.

As secures financial future, one of our four priority moves is underpinned by sustaining our cost advantage, driving operating margin improvement, restoring our balance sheet, health and practicing capital discipline.

So we can generate positive free cash flow.

We are taking steps to achieve each of these priorities and meeting our $800 million to $900 million EBIT target will be key to our strategy success and overcoming our challenges.

Before I get into the details from the quarter I want to provide an update on the status of our Pratt & Whitney GTF engines.

We take full responsibility for addressing and overcoming challenges within our control, and we recognize the need to address and plan for even those outside of our control like weather and ATC staffing.

The magnitude and multitude of availability challenges we are experiencing with the GTF engine are something we are working hard to mitigate, but they continue to have a significant impact on our business and on our long-term planning ability.

In addition to Powder Metal related inspections, challenging our engine availability.

We've experienced a number of other unscheduled engine maintenance visits that are resulting in GTF engines coming off wing much sooner than anticipated.

And after just a year of flying.

In fact, a majority of the 11 average aircraft grounded this year are due to inspections outside of powder metal.

Based on the latest numbers provided by Pratt & Whitney, we are now expecting the average number of grounded aircraft in 2025 to be in the mid to high 10s with greater uncertainty in 2026 and beyond.

This will drive roughly flat year over year capacity in 2025.

In order to reach flat growth, we'll need to continue investing to extend the lives of our A320 fleets well, it comes at a cost to buy out leases and extend the lives of aircraft.

The return profile is more attractive than investing in new aircraft.

At this stage, we simply can't afford to continue taking delivery of costly new aircraft that may need to be parked due to engine availability issues, especially if we must raise financing to support these deliveries.

Our focus going forward will be on driving greater returns from our existing asset base so we can improve our free cash flow outlook.

As a result, we've come to an agreement with Airbus to defer A321 neo aircraft from our current order book to 2030 and beyond, reducing our 2025 to 2029 planned capital expenditures by approximately $3 billion and reducing Airbus aircraft commitments over the next five years from $5.3 billion to approximately $2.3 billion.

This, along with the capital light extension of approximately 30 A320s, allows us to efficiently reduce our capital expenditures and get us closer to our free cash flow goals.

Turning to the second quarter cost performance on slide 13, our investments in reliability resulted in solid operational performance, allowing us to complete more flights than planned and helping to spread our fixed costs over more capacity.

Second quarter CASM ex fuel grew 3.7% year over year, beating our revised guidance midpoint by more than two points, driven by one point of incremental cost savings from our structural cost program.

One point from completion of additional flight and operational efficiencies and a timing shift of expenses to the second half of the year.

Our current cost savings programs are on track to hit our previously communicated targets of $175 million to $200 million for our structural cost program and $100 million of cost avoidance from our fleet modernization program.

Our Structural Cost Program realized an additional an additional $45 million of benefit this quarter, resulting in cumulative realized benefits of $145 million when this program hit full run rate expected at the end of this year.

We'll transition our focus to a cost transformation program as part of Jet forward, which I will touch on shortly.

Through our fleet modernization program.

We've avoided $83 million of costs to date due to continued optimization of engine maintenance.

This program will continue until our E190s are fully retired in 2025.

We also benefited from the moderation of fuel prices over the quarter.

As we saw an 18% decline in fuel prices between mid April and the end of the quarter.

We remain opportunistic with our fuel hedging strategy.

And as a result, we have entered into hedges for 20% of our volume in the third quarter and 20% in the fourth quarter.

In the third quarter, we expect chasm ex-fuel to grow 6% to 8%, primarily resulting from wage rate step-ups in our labor agreements impacting CASM ex fuel by two points in each the third and fourth quarter and the shift of expenses from the first half from this into the second half worth an additional half a point of impact to each quarter.

As we communicated our initial full year chasm ex-fuel guidance of mid to high single digits in January, we faced several headwinds, including the change in Pratt & Whitney compensation recognition, a reduction in scheduled trust capacity and unplanned investments in the extension of our A320 fleet, all of which pressured our unit cost by 2.5 points for the full year.

Despite these challenges, we've solidly executed on our controllable costs, and we expect to maintain our guidance of mid to high single digits with chasm ex-fuel up 6.5% to 8.5%.

Now turning to slide 14.

As we implement our four priority move, we believe sustaining our cost advantage, especially when faced with flat growth in 2025 is imperative to our success.

It's important we make transformational changes to the way we plan our business, and we're taking it back to basics with our approach as we ask ourselves, how would restructure JetBlue today, if we were just starting an airline.

We will evaluate all cost categories that we see specific opportunity in data science driven planning optimization and better aligning our business to peaks and troughs.

The focus of our structural cost program has evolved over the years.

Our 2018 program drove savings from business partner contracts while our current program focuses on enterprise-wide efficiencies, Jet forward cost transformation will focus on implementing next generation technology across the airline, and we'll continue to build on the learnings from our past structural cost programs to sustain our cost advantage and transform our cost structure.

We forecast this transformation will add about $175 million to EBIT in 2027 through cost savings, and we look forward to revealing more of our long-term plan for costs over the next few quarters.

Transitioning now to fleet and our balance sheet.

Slide 15 provides an update on our fleet plans.

In the second quarter, we took delivery of six aircraft and we expect to take delivery of six aircraft in the third quarter, driving $365 million of forecasted CapEx for the third quarter.

For the full year, we plan to take a total of 27 deliveries and expect full year capital expenditures to remain around $1.6 billion.

As announced this quarter, we are deferring 44 A321 neos into 2030 and beyond that were previously scheduled to be delivered between 2025 and 2029.

We now expect to take 60 deliveries during that timeframe, down from 104 previously with 56 of the remaining deliveries being A220.

We continue to prioritize reinvesting in our current asset base and today have successfully extended the lives of 12 A320s of the 30 aircraft.

We have been evaluating.

These aircraft will remain in our fleet and provide capacity backfill, particularly in 2025 when we expect the remaining even 90s will officially leave the fleet and when Pratt & Whitney related availability challenges increase.

Moving to Slide 16.

We ended the second quarter with $1.6 billion in liquidity.

Excluding our $600 million undrawn credit facility year to date, we have secured $1.3 billion in committed financing to support our capital expenditures.

We continuously seek opportunities to strengthen our liquidity position in order to fund our CapEx needs for the next 12 to 18 months, we refinanced our short term debt maturities, including addressing as quickly as possible our convertible notes that will become current in April of 2025 and to generally provide us with additional liquidity, which will better position us to execute our strategy discussed today.

An example of our strength in liquidity is the amendment and extension of our revolving credit facility, which will now mature in 2029.

In addition, we may opportunistically execute on future financing transactions, including in the capital and syndicated loan markets, which may be structured to be secured by a portion of our unencumbered assets, which are currently valued at approximately $11 billion.

Our most significant unencumbered asset is our customer loyalty program, which is valued at about half of our current unencumbered asset base.

Of course, any future financings are subject to mark market conditions, and there is no guarantee we will be able to execute on them.

Before I hand it back to Joanna to close out the call, I would emphasize how focused we are on making year-over-year margin improvements and getting back to positive operating margin again.

Through Jet forward, we believe we have a clear and actionable strategy to deliver $800 million to $900 million of incremental EBIT in 2027 and a strong foundation off of which we can return to our historical earnings power.

Joanna, over to you.

Thank you, Ursula, and thank you all for joining us.

I want to close by reiterating our commitment to building value for our owners, starting with our return to profitability.

I'd like to thank the team for all of the good work behind the Jet four plan.

We have been and are taking aggressive action on every front and strongly believe that the focus of our attention has to be on the execution of Jet forward.

Given this and coupled with the longer-term planning uncertainties from the Pratt & Whitney engine issues, we've decided to communicate more about our strategy now rather than hold an Investor Day in the fall.

Our team is fully committed to ongoing outreach and two-way communication with all of you, and we look forward to continuing to discuss our plans as we roll out additional strategic initiatives through the remainder of the year.

With clarity on our path forward, we are energized and moving forward with resolve and determination.

I'm incredibly confident in the outlook of our business as we turbocharge our strengths and execute on our four priority moves to return JetBlue to profitability and deliver for all of our stakeholders.

Thank you.

And with that, we will take your questions.

(Operator Instructions)

Dan McKenzie, Seaport Global.

Your line is now open.

Oh, hey, good morning.

Thanks, guys.

I guess first question is for Joanna, setting aside the fourth quarter this year so looking ahead to 2025, it looks like from Jet forward in the $1 billion plus in initiatives you're, you know, most likely penciling in summer profitability on, but is the punchline really that JetBlue can get to profitability in each of the quarters?

Or is it just given the Pratt & Whitney challenges?

Is the goal simply to get to breakeven in the seasonally softer periods.

I just I'm not looking for a forecast.

I'm just trying to get a sense of what's aspirational versus realistic in the medium term here from where you sit?.

Sure, thanks, Dan, I appreciate the question.

And so it maybe be just headline.

We are so focused on trying to get to profitability as soon as possible.

We've actually kicked off our 2025 planning season earlier this year with a goal to build a plan that will deliver a breakeven operating margin for the full year of 2025.

And that said, you know, it's much too early in the planning cycle to commit to that.

We traditionally haven't provided that kind of guidance so early on, but we are very focused on trying to get there for next year.

This obviously assumes sort of the mid to high 10s for Pratt & Whitney and a competitive macro backdrop.

But that's how we're thinking about things for next year.

Yeah, understood.

And then given 11 parked aircraft each month, you know, is there can you share what the loss year to date is from the Pratt & Whitney issue or the challenges.

And the reason I'm asking is I'm just trying to separate out the temporary earnings impediment to the story here versus the structural impediments to getting back to the on the financial targets?

Yeah, it's a great question.

And so we're not going to break out specifically the Pratt & Whitney item.

I can say it's incredibly frustrating, you know, maybe more.

So I think some of the announcements RTX made yesterday, we are focused on trying to resolve the situation with Pratt & Whitney that reflects the nature of the damages that we're experiencing.

This is ultimately a transitory issue that should cycle through over the next few years, but we are entering a more impactful stage for JetBlue, hence the mid to high 10s on energy count that we will have for 2025.

It's been challenging to forecast exactly what the AOG impact will be in outer years, which is why we're not communicating any targets out that far.

But we are taking, I think, all the necessary steps to mitigate as much as possible.

The impact of Pratt, that's keeping older aircraft line longer and some of the deferrals, frankly, that we're doing will have a positive impact on our agent count because these aircraft come and the engines are taken off with within a year, year and a half.

And so that's not a particularly good use of capital.

So it is ultimately a transitory issue, but it will be with us for the next several years.

Okay, thanks for your time guys.

Mike Linenberg, Deutsche Bank.

Your line is now open.

I have a question on for Marty and Ursula.

Marty, the comment that you made about you talked about Mint resin being up low single digits on I think I heard 30% ASM growth.

So the question is who's driving that?

And sort of I'm asking that within the context of you indicating that you're going to pivot away from corporate out of New York.

I would think that you probably you carry a decent amount of price sensitive corporate.

So can you square that with some the success that you're seeing right now with Mint?

Sure, Mike, thanks for the question.

On hedging.

I would say I mean, first of all, yes, we when we said we're pivoting away from corporate we will continue to carry corporate customers.

There's no walking away from corporate market.

I think the better way to describe it as we're not really designing the network for corporate like we want them.

And if you look at some of the changes we've made in New York, some of the routes we pulled, I think it's very consistent with what we've seen as far as a slower recovery of corporate travel in New York with respect to the mix we're seeing there with respect to the net results, I think it's clear to say that the cabin on our airplanes may not look exactly like the cabin on some of the legacy airlines that we carry a lot of high end leisure customers, both in the transcon market and the European market.

And I think I think it is not up for debate.

This is the best premium product that's offered by US flag carrier across Atlantic or transcon.

So we've attracted a lot of customers.

And yes, we absolutely have business customers, especially in New York on and we have a lot of high-end leisure to so that to a certain extent, I think the product speaks for itself and that's how customers responding to it.

The numbers back it up, thanks.

Ursula, just a question on the CapEx, the $3 billion, just looking at the new fleet plan, it does look like it's back-end loaded.

How should we think about how CapEx it's one-six this year what's the right number for next year, knowing that just the movement with PDPs and the fact that the deferrals are search for airplanes that come later in the decade as it is at a similar number?

Is it just a little bit lower?

I'm trying to get a sense of where that that free cash cash flow could be next year.

Thank you.

Thanks for the question, Mike.

This year we've got 27 deliveries and our CapEx is $1.6 billion.

And next year, we actually only take 24 aircraft So directionally, you should expect total CapEx to be a few hundred million dollars lower year over year.

Perfect.

Thank you.

Jamie Baker, J.P. Morgan.

Your line is open.

Fair enough.

Good morning, everybody.

How do we square the order deferral against your international ambitions?

You know, at a minimum it suggests that you won't be making any major incremental push from here into Europe.

Would it be fair to at least wonder if you intend a European retreat?

Just trying to tie your transatlantic ambitions to the fleet changes.

Thanks, Jamie, it's a great question, so I can help.

So I think you should think of transatlantic as it's done nicely this summer.

We continue to optimize on the transatlantic markets to reflect the seasonality of that geography.

It's an important part of the JetBlue network.

We're pleased with what it does and seasonally and what it does as contributions to our loyalty program.

Obviously, the deferral to the XLR will have an impact on growth in that market.

But it's by no means retreats.

And it's a, I think, further learning how to best ensure that those routes are profitable and on driving earnings for the business.

Excellent.

I'll take backer over any reference to bunny slopes, Joanna, and then for Marty and this echoes a question I asked of Alaska.

You cited even more space rather than being up double digits, I guess two parts.

One, how does that compare to prior quarters?

Has there been a noticeable inflection?

And second relative to I guess, I guess blue or blue plus what's the approximate premium you collect on even more space?

Thanks in advance.

Hi, Jamie, thanks.

So first thing, I said this has been a medium term trend as far as their performance of the on the horizon for even more space.

Customers are very much smarter to work and they continue to find value in it.

And I think it's worth noting that as we measure the resin growth, we're really talking about the incremental the sort of the bias over the core fair.

You remind that we don't sell the cabin.

We sell it as an add-on.

So the RASM, basically the incremental revenue from the upsell.

So it's sort of a little bit.

We look at that revenue sort of decoupled from the core on and as far as the, um, as far as the value of that product versus the core, I mean, it's as of now the way we sell it and that may change in the future.

But as of now the way we sell it as an add on, it's still there's still customers who are fundamentally buying and reject the value proposition and just want to upgrade to get a little bit more.

And frankly, that very much what we're seeing advisement to I mean, these are this is not all dramatically new customers for JetBlue.

These are our current customers.

We're finding more value in the product offering that we have.

But does that change your total collected yield?

It does improve it by 10% does it improve it by 60%?

Just order of magnitude there would be helpful.

Thanks.

I actually don't I don't know that number exactly for things get back to you on that one, it's about [25%], the total premium cabins between and even more cabin at about 25% of

[RASMs].

So you can almost sort of back into it if you want and I could do it now in form--

Thank you, everybody.

Savanthi Syth, Raymond James.

Your line is open.

Hey, good morning.

And just on the unit cost, the exit rate here is high, but I realize that there is some kind of timing issues and the capacity declining.

How should we think about what type of trend we should expect in 2025 given capacities flat, but you also have a lot of cost initiatives here.

Thanks, Savanthi, for the question.

So historically, when we were growing mid to high single digits pre-COVID, we were targeting a flattish unit cost growth.

And you know, conceptually and if we're not growing again next year, which we highlighted today on the call, and you would target in a mid single digit number.

And clearly with Jet forward, we have aspirations to put at 2025 plan together.

That is hopefully even better than that.

That's helpful.

Appreciate that Ursula, and just following up on that business network change question, I'm just curious in terms of kind of business demand today, what you're seeing and with the network changes in the do you expect it to account for less than that 20% of revenue that you saw historically?

Or is it still around the same ballpark, given that you're retaining that business customer.

Hi, Savanthi, thanks for the question.

I'll take that one.

On one number, I will report as if you look at the contracted Corporate Customer business revenue, we're still up.

So I'd say very high single digits.

So it continues to grow.

And I think, frankly, with the retreat that we have been doing over the last three quarters, that yeah, I think that was a bit of a pleasant surprise for us because obviously those are much higher, but the share markets when we flow those.

And so I think the trend continues with respect to going forward, even if you look at some of the business routes out, I'll pick one out just because it's a great example of like Minneapolis and even though Minneapolis, Boston was a pretty strong business route, it was still instead of 20% corporate, it was 25%, 30% corporate.

It was more corporate, but I guess I would say it was not more corporate enough, so to speak.

So I as far as you know 1,000 flights a day, I don't think it's going to dramatically move.

I don't think it's going to dramatically move that number from where it is now.

That's helpful, thank you.

Duane Pfennigwerth, Evercore ISI.

Your line is open.

Hey, thanks for the time.

On the network benefits bucket, as you expect cutting cutting loss-making routes and increasing your East Coast focus, can you talk a little bit about how you increase your East Coast focus with constraints in the New York market?

And then you just given the timeline here 2025 to 2027, why would it take very long to realize that it seems like you could start to see some of those benefits in the second half of this year.

So I guess why aren't those benefits dropping more quickly?

Maybe I'll take it and I'll throw it to Marty.

So I think you have to look at what we've announced versus when these are effective.

And we laid that out in the back of the earnings presentation, which shows exactly when some of these markets are closing.

So there's a large that closed in October and I think this was some of the confusion on the last call where I think the announcements get confused with the respective dates and so on.

So you know, we'll see full year run rate next year for all of the markets that we've announced so far on and on.

I think it's just a matter of understanding the timing of the announcements versus when this actually takes place.

The only thing I'd add is, you know, as difficult as it is for us to make some of these decisions for closing markets and closing routes and the impact it has on crew members, which we do not take lightly at the core.

Our goal is to move to profitability as quickly as we can.

And frankly, we're very excited about where we are move.

Their plans are to take advantage of opportunities right away, especially with our focus on that.

The been the best leisure airline of these costs.

I think about the growth we've seen in places like obviously Boston, which has always been a growth focus, but the growth we put in the provenance Bradley opening up by slip opening up Manchester, I think we are establishing ourselves and even more so as the best leisure choice for our customers, I'm not taking any victory laps right now.

As far as network transformation.

But I think we're very, very optimistic about the moves.

And yes, we are starting to see benefits.

But as you'll see in that chart, that's in the back of the deck.

They said you roll out some of them just happened last month, and that continues the rest of the year.

Thanks for that detail.

And then just for my follow-up on the convert.

How are you thinking about addressing that?

I think you alluded to I think you alluded to in basically financing options, but how are you thinking about addressing it and kind of your willingness to let that go current early next year?

Thank you.

Yeah, thanks for the question, Duane, and we obviously have a healthy unencumbered asset base to the tune of $11 billion.

About half of that is attributed to our loyalty program.

So we're currently assessing all markets and to see the most effective and the most constructive in terms of online cost of funding.

And we do not intend to let the convert go current.

So I mentioned in my prepared remarks, we're opportunistically looking across our markets.

Okay.

Thank you.

Conor Cunningham, Melius Research.

Your line is open.

Thank you, Marty.

As you mentioned, the strength in men's and even more.

But that kind of highlights just the core weakness that's happening in the core cabin right now, there's been a ton of discussion this quarter about, you know, overcapacity and all that stuff and not really around a demand problem.

I'm just curious on what how you view the current demand environment right now.

Thank you.

Hi Conor, Thanks for the question.

And first of all, with respect to the bigger question about the premium cabins versus the core coach cabin, my view is this is why we have a spectrum of customers who are we carrying a spectrum of products?

We've talked a little bit about our tire customer.

We've done a ton of research in the last year or so trying to understand how the market has changed and the market has clearly changed in 2024 versus what we saw in the world pre-COVID.

And we've got a wide spectrum of customers who carry well, over half of our customers are [$1] price sensitive and they will go fly ULCC the say

[$5].

And you know, that is a big chunk of our every airplane.

But luckily, we have a lot of ASMs out there in the premium cabins and a lot of customers were buying up to blue or high fare products and to me at the spectrum of everything we carry with respect to the demand environment overall, I'd say if I look specifically at second quarter.

In general, I'd say that the trust held up a little bit better than we expected.

I think that peaks performed as expected.

I think the real news as far as what's happening with demand is actually supply, which is we called out in the last earnings call where supply got a little bit misaligned with on where demand was.

And I said at the time you know, ultimately water seeks its own level and we will eventually have supply get back to more equilibrium, it has happened.

We've made our own changes as far as where we've moved my we've seen the change in the industry.

And I think ultimately, we all have owners and we all have a goal of profitable.

So ultimately, things worked out in the end when it comes to them.

Okay.

Appreciate that.

And then you mentioned the GTF issue outside of the powder metal problem.

I was hoping you could flesh out that comment a little bit more.

Is it that the oil consumption issue that some have already mentioned it?

And I'm just curious, is that new or is that something new and it was just over now somewhat overshadowed by?

Yeah, the Paramount problem has been out there for.

Thank you.

I'll take that.

Yeah, sure, it's nothing new.

I mean, obviously, these engines and you have certain maintenance inspection cycles on various things trigger it.

So while powder metals on is ultimately what caused the significant on challenges with throughput.

So that's what backed everything up on there are a number of other maintenance issues that are that we're working through because it's a new engine.

And so that just exacerbates the situation with the shop capacity and then supply chain, I will say incredibly frustrating.

We are working with Pratt on reaching a settlement that we believe reflects the extent of the impact to JetBlue.

But it is definitely a frustrating situation.

And that's why I think going back to the deferrals, it makes a lot of sense to defer the through 21 new aircraft, not just because it offsets our capital commitments in the near term, but also because nobody wants to take a brand-new aircraft and then ground it after a year, year-and-a-half.

Appreciate it.

Thank you.

Scott Group, Wolfe Research.

Your line is open.

Hey, thanks.

Good morning, I want to ask a near term loan and then a longer-term one so on the resin front, so low single digit increase this year, is that in sorry, in Q3, is that sort of dependent on like a September inflection like other airlines have talked about or are you guys already there?

So just sort sort of thoughts on like them the cadence of Ryzen throughout the quarter?

And then any initial thoughts around Q4, if you have.

Hey, Scott, thanks for the question.

And yes, I listen to the commentary from other carriers.

I'm not sure I fully understand what they're saying.

It's our view is we're looking at the trends as they exist right now, we've got basically two thirds of the third quarter on the books, but one-third not in the books are as of today.

And there's no real inflection seen in there.

I mean, frankly, I mentioned in my prepared remarks that we undertook a lot of self-help in September.

I mean, Larry assembly down 10% September.

And again, I think as investors and frankly, as crewmembers and customers will be seeing more and more of that going forward as we pivot a little bit more towards leisure on, we're going to be much more respectful of not flying unproductive flying during the trough.

So my view is, yes, I'd say September is better than it would have been that if it's solely based on self-help, there's no inflection in our forecast.

Okay.

And then sort of in lieu of the Analyst Day, maybe I'll ask a longer term capacity, one so you guys are deferring planes, but at some point, the GTF issue gets better, right?

So you've got this like planting now out to '27.

I understand capacity's flat next year, but any any thoughts on like the multiyear capacity outlook in this plan?

And then ultimately, does this mean that free cash flow do we inflect positive on free cash?

Is it more likely '26, '27 and '25 give any thought there.

Thank you.

Yeah.

And maybe I'll touch passengers can touch on free cash flow.

So we've gone out flat capacity for next year.

We're not guiding beyond that.

The Pratt & Whitney GTF issue is volatile, and we are working with them on forecasting.

And obviously, we're hopeful that there are improvements on there.

And we're taking as many self-help measures as we can to offset that capacity impact.

But we're not in a position given all of the variables to guide to any kind of capacity or share any capacity projections out past 2025.

I'm on the free cash flow point.

I just want to wrap up here.

We've like priority number one is getting the business back to consistent profitability and Priority number two is then delivering positive free cash flow.

And I do believe that with the deferral that we announced today, it does start to lay the groundwork to help us get there.

And we've got to execute and we will execute on the $800 million to $900 million EBIT and then obviously you've got to layer in the macro backdrop assumptions and but ultimately profitability and then free cash flow that free cash flow will go to delevering the balance sheet.

Okay.

Thank you.

Brandon Oglenski, Barclays.

Your line is open.

Hey, good morning, Marty.

I guess I want to come back to the 3Q guide, though, because if I look at it, it appears maybe even unseasonably weak for you guys.

And I know seasonality is hard to judge here post pandemic, but I guess I hear you guys on when you've announced some changes, but you have done a lot of network reconfiguration since June.

And as you stated, you are pulling down trough capacity in September.

So I guess is it incremental softness you're seeing in your markets even with these changes that have already been implemented?

Hey, Brandon, thanks for the question.

I just wanted I don't look at it as a soft guide.

I would not look at this as like or something wrong in the third quarter.

I think we we guide based on what we're seeing right now in the bookings.

I think if you look at sort of sequentially on the path from second quarter to third quarter, I feel like we are more or less on track to where we were historically.

We can control our our capacity neutral pricing.

And then, you know, obviously, we want to deliver.

We our crew members delivering a great experience every day.

So, you know, my view is we're fundamentally looking at this as a guide that we're very happy with.

I mean, obviously, we always want more, but we are positive year over year, which I think a lot of our competitors are not.

And from that perspective, I'm somewhat surprised of the question I mean, I frankly, I'm my take is we just put our heads down and just moving forward on the path for following.

I do want to stress again, if you look at that slide in the back of the deck.

So many of these network changes are backloaded.

So I would not attribute too much of the resin in the third quarter to like big inflection from a network changes because it just takes longer than that.

I mean, margin maybe as a point of clarification, but I think it's down a few points sequentially quarter to quarter, and I get it that it's up year on year because you do have a pretty easy comp from last year.

I guess that's what we're observing.

Okay, Thank you.

Thank you.

Go ahead, Patel.

I apologize, Joe, I guess just on the bigger picture and maybe coming off of Scott's question, since we don't have an Investor Day.

We appreciate the outlook on 2027 EBIT improvement, $800 million to $900 million.

But I guess maybe looking backwards on structural cost improvement, even the revenue initiatives this year, they've only been able to offset so much of industry headwinds and macro, what have you.

So can you give us a better idea of like the baseline where do you expect to see the improvement from?

Is this like a breakeven basis and then add $800 million to 900 million to it?

Or how should investors think about that long term?

Yeah.

So I would think about it in those terms, it's a breakeven basis and add 800 to 900 to it.

And I think when you look at what we've done this year against, you know, a challenging first half, we were cycling against pent-up COVID demand and then elevated industry capacity, particularly in the Latin region.

Much of what we did this year on offset some of those challenges.

And so as I think about the path forward, given the uncertainty with Pratt beyond 2025, while we would have loved gone out with longer-term targets are just not in a position to do that on, but really proud of what we've executed to so far, whether that's the significant network adjustments, the preferred seating changes at Blue basic deferral, the aircraft on all, I think contributing to some some nice momentum this year going into next year.

But the $800 million to $900 million teams.

You've got key to that, and everybody is focused on delivering delivering those numbers over the next three years.

Thank you.

Andrew Didora, Bank of America.

Your line is open.

Hi, good morning, everyone.

Most of my questions have already been answered, but one conceptually for Marty, I guess we've heard a lot of other domestic airlines speaking about growing their premium seats as well.

So there's certainly more capacity coming here.

So how do you think about some of this premium resume growth that the industry has been seeing.

How do you do you think it gets competed away at all?

How does JetBlue kind of stay away from that?

Thank you.

Hi, Andrew.

Thanks for the question, it's funny.

We obviously, with the results we're seeing at our premium revenues.

We've spent a lot of time looking at this market overall.

And I think what yes, there are people who are attributing this to a sort of a post-COVID bump is something that's just a flash in the pan.

We can go back and track on this change back to the early 10s.

And we've sort of seen a pretty persistent move from the early 10s as far as more and more customers buying up.

And frankly, I think that what we're seeing is a longer-term segmentation of the market where we've got a big chunk of customers who are like those.

They'll do anything for us to save [$1] on a fair and we've got other customers who are willing to buy up to have a better experience.

And frankly, this is what excites me so much about the general business model is that this company has always been structured around customers willing to pay a little more to get a lot more.

So from that perspective, I think we couldn't be better positioned for this versus some of our competitors.

Great.

That's all I had.

Thank you.

Helane Renee Becker, TD Cowen.

Hi everyone, thanks very much for the time.

Just a quick one for me.

What's the cadence of the E190s retirements for next year?

And then would you talk just defining a little bit on the A220s, I think you've been operating those for about 3.5 years now.

So just curious how you're liking the asset.

I mean, obviously, you're keeping the deliveries, but any [keeping] problems, things like that?

Thanks very much.

Hey, Tom, it's Marty.

Thanks for the question.

With respect to the E190s, we said publicly that they will be retired by the end of 2025.

And that's the cadence that we're on right now on.

With respect to the to 220, I think we are very happy 220 customer.

We have had some reliability issues, which we've heard from others in the industry and we share the same.

Although the 220 does have GTF engines, it is not being affected nearly as much as the 320 neo family is.

So with respect 220, we are very happy customers.

Tom and congrats on your role and maybe just to put some numbers to it, we currently only have 22 W190s in the fleet, and I believe that will end this year 2024 with 15.

And to Marty's point, those 15 will be retired by the end of next year.

Got it.

Thanks very much, everyone.

Stephen Trent, Citi.

Good morning, everybody, and thanks very much for taking my question.

I was intrigued to hear care about, you mentioned the Latin overcapacity, but the big build out you guys have in Puerto Rico.

Are you able to tell us whether the airport authority in San Juan give you guys any incentives in terms of volumes and maybe some discounts on airport fees and that kind of thing?

Yes, I'll take that.

So I'm really proud of the work around Puerto Rico largest carrier there.

Important part of our network, tremendous support from our crew members locally and the airport authority.

We're not going to get into what, if any, incentives or otherwise we may or may not have gotten from the government or for the airport authorit.

But we have a long partnership with the community with the airport authority.

We're excited to open a crew base for pilots and in flight as well down in that area.

And I think continue to be the carrier of choice in Puerto Rico for that community.

Okay.

I understand, and I definitely appreciate that.

And just one more very quick housekeeping question.

Looking at your your full year ASM guide in 3Q, and I thought I heard Marty say September ASMs are already down 10%.

Is it sort of unreasonable to consider 4Q ASMs, the implication down somewhere in the low teens?

Or am I thinking about that the wrong way?

Thank you.

No.

No, they're not down.

I don't know the exact number.

They are not down low teens.

Mid single digit down.

Very helpful.

I wanted to make sure.

It looks like I was not thinking about that correctly.

So I appreciate that.

Thank you.

No problem.

Chris Stathoulopolos, Susquehanna International Group.

Thank you.

Good morning, everyone.

Just want to say Joanna, Ursula, Marty and team, the urgency and focus here is clearly evident and so congrats on this plan.

The $400 million in EBIT here, I realize that there's more to come here, but given that you're not holding an Investor Day and there are more blue dots on the map here and relative to the other initiatives.

At a high level, should we think about this as more additive or a wholesale change.

So for example, rebranding or introduction of a new fare class.

And then also, I don't think I heard you discuss any initiatives around vacation packages and products.

Thanks.

Yes, I can take that.

It's great.

So to be clear, the blue dots do not reflect specific initiatives.

They are illustrative only.

I assume you're referring to the 400 in product and perks.

That consists of a number of things, I'd say, some of which build on what we've already announced around Blue Basic and preferred seating, but the majority of which are actually new initiatives.

And they cover everything from gaps in our product offering to things like a new revenue management system to enhancements in our loyalty program and continued steepening of the offerings we have for JetBlue Travel Products, which remains a very important part of the business and one which we think will be a significant driver in the JetForward plan to creating an even greater level of stickiness with our leisure customers.

And I would just reiterate, Chris, that the 400 includes initiatives that we haven't yet announced.

But you will hear more as we progress through the year.

Right.

Okay.

Thank you.

And my second, so on the competitive overlap and the route actions that you've done year-to-date, you've outlined some of those in the slides in the appendix, thank you.

Are we done here as we think about year end and so for those that want to do this analysis if at year end or early next year, if we were to rank order your routes based on RASM, should we expect at that point, for example, first and second quartiles based on RASM to account for the majority of your routes.

So meaning two-thirds or perhaps closer to 70%, 75%, just wanted to understand, as you talk about Marty talked about getting back to your core focus no longer accepting routes that meet your profitability standards, how we should sort of ultimately see that shakeout on the EM Form 41 data?

Yes.

Maybe I'll take the higher level, and I will throw it to Marty, for more details.

So in terms of whether we're done with network announcements.

I don't think you're ever done.

At the end of the day, we need to make sure that the network and where demand is reflects that we're driving as much profitability as possible.

I'd say we've made a large number of the most actually ever in our history.

We may have some more modest ones to come, but you should not expect this level of network changes kind of ongoing, Marty, do you want to take the second part?

Yes.

Thanks, Chris.

I mean, my view is, the there is a lot of science and network planning.

And we obviously have force rank the entire network as far as RASM as the producers right now and also what we think the upside to be.

And then we compare that to what the growth opportunities are.

I think the good news is, as we've laid out the the pillar of having the best East Coast leisure network, we have a lot of growth opportunities in that world.

I think what's very good is that we're not talking about busting into new territory and building a hub in Kansas City or something like that.

I mean, we're fundamentally looking at going back to the bread-and-butter of the Big East Coast markets that we're focused on.

So from that perspective, we see a lot of really good opportunities for growth.

At the same time, we, I think we did the math last night, some number over 40 airplanes had been cancelled and redeployed in the last three or four months on an active fleet of 270, 280, something like that.

So it's a lot of change at the same time.

You have noticed and you'll see again in that last page the back of the deck, we have sort of phase things out, mostly based on change the slot portfolio, seasonality, things like that.

It is a very, very deliberate process, but absolutely, yes.

The roots at the bottom of that force ranking that we don't see upside in are the ones that have gone away.

Again, I think it's important to go back to Joanna's point, the majority of the changes that happened, but it never ever ends.

Okay, thank you.

Thank you.

I'll turn the call back over to Koosh Patel for any additional or closing remarks.

That concludes our second-quarter 2024 conference call.

Thanks for joining us and have a great day.

And again, that will conclude today's conference.

Thank you for your participation.

You may disconnect at any time.