JetBlue Airways Corp (JBLU) 2021 Q3 法說會逐字稿

Good morning. My name is Francie. I would like to welcome everyone to the JetBlue Airways Third Quarter 2021 Earnings Conference Call. As a reminder, today's call is being recorded. (Operator Instructions)

I would now like to turn the call over to the JetBlue's Director of Investor Relations, Jose Caiado. Please go ahead.

Thanks, Francie. Good morning, everyone, and thanks for joining us for our third quarter 2021 earnings call. This morning, we issued our earnings release and a presentation that we will reference during this call. All those documents are available on our website at investor.jetblue.com and have been filed with the SEC.

In New York to discuss our results are Robin Hayes, our Chief Executive Officer; Joanna Geraghty, our President and Chief Operating Officer; and Ursula Hurley, our Chief Financial Officer. Also joining us for Q&A are Scott Laurence, Head of Revenue and Planning; Dave Clark, VP of Sales and Revenue Management; and Andres Barry, President of JetBlue Travel Products.

This morning's call includes forward-looking statements about future events. All such forward-looking statements are subject to certain risks and uncertainties, and actual results may differ materially. Please refer to our most recent earnings release and our most recent Form 10-Q or 10-K for a more detailed discussion of the risk factors that could cause the actual results to differ materially from those contained in our forward-looking statements, including, among others, the COVID-19 pandemic, fuel availability and pricing and the outcome of the lawsuit, filed by the DOJ, related to our Northeast Alliance. The statements made during this call are made only as of the date of the call, and we undertake no obligation to update the information. Investors should not place undue reliance on these forward-looking statements. Also, during the course of our call, we may discuss several non-GAAP financial measures. For a reconciliation of 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'd like to turn the call over to Robin Hayes, JetBlue's CEO.

Thank you, Jose, and good morning, everyone. As we have done throughout the pandemic, I'd like to take a moment to remember 4 crew members we have lost to COVID-19 in recent months. Richard O was a beloved member of our systems engineering team, here at Long Island City, and has worked for us for almost 12 years. He was also a close friend to his fellow crew members. Joseph Anderson supported training and development programs for our customer support team, for the last 5 years, and was known for his generosity and adventurous spirit. Mandy Gomez was a cherished member of our in-flight team for almost as many years as JetBlue has been operating. And Alex Kandora joined the JetBlue family in October 2002. He was a treasured member of the ground ops team at Orlando, where he was always known for being first to chip in and help. Our hearts go out to their family, friends and fellow crew members and to all of those, who have been impacted by COVID-19.

I'd now like to thank our truly amazing 21,000 crew members. They continue to deliver for our customers, and they give me great confidence that JetBlue is well positioned for future success.

Moving to Slide 4 of our 3Q '21 earnings presentation. For the third quarter, we reported an adjusted loss per share of $0.12. I'm encouraged by the steady progress we are making, while capitalizing on opportunities to enhance our future earnings power. And while the demand environment has been affected by case counts, we believe that demand is, once again, poised to reaccelerate into the peak holiday periods and beyond, as people adjust to a new normal. As we look ahead and plan for 2022, we'll retain the agility that has characterized our planning process for the last 18 months and as we prepare for continued demand recovery. We are marching towards a full recovery and the return to sustained profitability, with margin truly as our North Star. I'm a firm believer that our unique business model, low cost, low fares and the superior product, positions JetBlue to thrive in the years ahead.

Now, turning to Slide 5 of our presentation. Throughout the pandemic, we have not lost sight of our commitment to serve our communities, add more diversity to the aviation industries pipeline and increased sustainability across our operations. JetBlue continues to lead the industry in ESG. As the first airline, U.S. airline, to file SASB and TCFD-aligned ESG reports, the executive compensation to ESG-met tie executive compensation to ESG metrics execute a sustainability-linked loan and operate an ESG subcommittee of our Board of Directors. We're also pleased to see our initial 2017 investment in Joby Aviation validated, as they went public this past quarter. With our efforts, we are honoring our responsibility to our customers, our crew members, development and strengthening shareholders' value, as we recover and grow. I'm pleased to say, we are now well ahead of pace to achieve our target of transitioning 10% of our fuel usage to sustainable aviation fuel by 2030, enabled by our recent deals with SG Preston, Neste, World Energy and World Fuel Services. We are taking a diversified approach on staff by engaging with multiple partners. Our industry has a responsibility to decarbonize, and we cannot do it alone. Earlier this month, the International Air Transport Association member airlines committed to achieving net-zero carbon emissions by 2050. Following the [IRT] resolution, we are pleased to see the Air Transport Action Group, or ATAG, adopt a net-zero carbon goal for 2050. ATAG is a global organization, comprised of airlines, airports, aircraft and engine OEMs and air traffic controllers. These commitments underscore an unparalleled and collaborative approach across our entire industry to address key challenges and advance collectively towards our net-zero targets. We are happy to play a role in continuing to lead the industry with the most holistic plan to address sustainability, and we're delighted to see some of our competitors (technical difficulty) up to this issue.

We've also recently released our annual ESG and social impact report, which includes the results of our first ever climate risk scenario analysis as well as an overview of our corporate responsibility programs, focused on youth education, the environment and increasing diversity within the STEM fields that fuel our airline. Both comprehensive reports can be found on our Investor Relations web page.

Moving now to Slide 6. As we work through the annual planning process, our teams are setting solid goals for our network, commercial and cost initiatives and capital allocation priorities. I could not be more proud of our team's efforts, and I'm confident we are setting JetBlue on the trajectory to restore our earnings power to beyond 2019 levels over the coming years, generating long-term value for all of our shareholders -- stakeholders. Over the course of the pandemic, we launched game-changing network moves and continued to pursue strategic initiatives to build a strong foundation for our long-term success. We're thrilled to have finally landed in London in the third quarter, a milestone achievement that was years in the making, and we look forward to bringing JetBlue's low fares and award-winning service to even more customers across the Atlantic, just as the U.S. prepares to ease entry requirements for U.K. travelers next month. Our team is doing a fantastic job in rolling out and expanding our commercial initiatives, including the latest evolution of our Fare Options, which helped drive the industry's best revenue acceleration this summer. Our JetBlue Travel Products subsidiary remains a bright spot in recovery, delivering over 40% revenue growth versus pre-pandemic levels. And our efforts in Loyalty are starting to materially enhance earnings performance. Our talent -- our relentless work to shape our cost structure, is a key pillar of our goal of achieving superior margins. We are deep in our planning process and working diligently to mitigate the external cost pressures tied to the recovery. I'm confident that we'll maintain a competitive cost structure and return to our roots as a low-cost airline.

Lastly, we made incremental progress in deleveraging our balance sheet by paying off our Cares Act loan and other bank loans. Our unwavering commitment to repair our balance sheet, is part of our balanced approach to capital allocation.

And moving to Slide 7. I'd like to spend a minute discussing in greater detail our Northeast Alliance with American Airlines and the many benefits this alliance brings to all of our stakeholders, New York, a capacity-constrained region, has historically been dominated by just 2 carriers. And in Boston, our alliance is enabling JetBlue to expand our low fares and superior products to new markets and create a broader and virtual network. This alliance, in no uncertain terms, to supercharge competition in the region. It's important to note that our commitment to competition and low fares, is steadfast, as is our commitment to our home here in the Northeast as New York's hometown airline. We will continue to implement this important alliance and deliver meaningful value to all of our stakeholders, including our customers, crew members, owners and the broader economy here in the Northeast. We are fully committed to this alliance and to delivering the tremendous benefits of added competition to our customers. Together with American Airlines, we plan to operate close to 500 daily flights in November, 300 of which will be flown by JetBlue. Given a vastly expanded network and flying, the NEA is estimated to generate more than $800 million in annual consumer benefits. We're also in the process of hiring 1,800 new crew members as a direct result of the growth the NEA is enabling for us, jobs that otherwise wouldn't be created without this alliance.

I'll close with another huge thank you to our crew members, with exciting revenue initiatives, a firm grip on cost and superior margins as our guiding light, I am very confident, we are charting a course to emerge in this crisis stronger than ever. Joanna, over to you.

Thanks, Robin. I'll also start by recognizing our extraordinary crew members, who helped us achieve among the industry's quickest ramp-up during the most challenging summer in our history. We were not immune to the operational challenges felt across the industry, exacerbated by weather, runway closures and a patchwork of variant COVID travel restrictions. At the same time, you, our crew members, have laid the foundation for a stronger JetBlue. And I thank you for everything that you continue to do to support our customers and one another.

Turning to Slide 9. I am very pleased with our exceptionally strong revenue performance in the third quarter, which declined 5.5% year over 2. This result was better than our most recent revenue guidance from early September, largely stemming from our Fare Options initiative, which continues to outperform our expectations. We also benefited from a renewed uptick in demand, beginning in mid-September. July and August performance was solid, with load factors in the mid-80s and overall yields largely back to pre-pandemic levels, which is simply outstanding, considering the vast majority of our customers, this summer, were leisure and VFR. September took the brunt of the booking softness, associated with rising case counts tied to the Delta variant and the expected post-Labor Day corporate demand recovery that was pushed out to the right. That said, trends did stabilize during the month and are improving. We expect robust revenue acceleration throughout the quarter, as the holidays approach and demand continues to meaningfully improve. For the fourth quarter, we are planning for revenue to decline between 8% and 13% year over 2. We expect trough to be challenging, exacerbated by a slower business travel recovery, but the holidays are performing meaningfully better, and we took tactical capacity actions to better align with the demand environment. Our strong revenue performance is driven by our continued execution on a number of unique initiatives. Our Northeast Alliance with American Airlines is unleashing tremendous benefits for our customers. This alliance, above all, is about growth, JetBlue's growth that would not otherwise be possible. We are bringing more low fares, a greatly enhanced network and schedule and more seats to the Northeast. Together with American, we have already launched 58 new routes out of the Northeast and added frequencies on more than 130 routes, and we will expand through next year, including to 18 new international destinations. Starting next week, we'll begin our long-awaited expansion at LaGuardia with new flights to Jacksonville, Savannah and Sarasota, with plans to serve new destinations in 2022, including Nashville, New Orleans and Portland, Maine. Our growth in the Northeast has already provoked a competitive response from the entrenched legacy carriers that have long dominated in the region and who stand to benefit the most from the absence of a viable third competitor in the region. Our refreshed Fare Options offering continues to outperform our expectations. We're pleased to see customer behavior and buy-up activity driving a revenue benefit, in excess of the 2 points that we called out last quarter, validating our view that we offer the best product in every category we serve, all at low fares. Our JetBlue Travel Products subsidiary had its highest revenue quarter on record in Q3, and for the full year, is on pace not only to deliver the highest revenue relative to overall flight revenue, but in absolute terms as well. This is being driven by very strong performance in vacation packages, travel insurance and car rentals, powered by our Paisly platform. And the team continues to innovate and expand its offering, including the recent launch of flights + cruise bundles for JetBlue Vacations. And we're gaining additional traction in lodging options for Paisly with the launch of vacation rentals. These recent trends and new product launches keep me confident that we are firmly on a path to achieve $100 million in run rate EBIT next year.

Lastly, our teams continue to grow and enhance our Loyalty program. From a revenue perspective, we are nearly fully recovered to pre-pandemic levels and continue to accelerate growth rates that are having a material impact on program performance. For customers, we are on the front end of a multiyear effort to expand benefits and add value to our TrueBlue Point currency. Thus far, we've introduced Loyalty benefits that give both JetBlue and American customers the opportunity to earn on both airlines as well as our first phase of reciprocal elite benefits. This creates a new option for Americans' 20 million-plus advantage members, many of which might not have otherwise considered JetBlue.

Over the coming months, we plan to roll out personalized offering and experiences for TrueBlue members as well as enhancements for our Mosaic customers. Ultimately, we are in the process of transforming our TrueBlue platform. I could not be more excited about the future in this space.

Turning to capacity, on Slide 10. In the third quarter, our flown capacity declined 1% year over 2. For the fourth quarter of 2021, our planning assumption is for capacity to decline between 4% and 7% year over 2, given the seasonal pullback in leisure demand and the corporate travel recovery that has been pushed back. Corporate travel, which historically accounted for approximately 20% of our revenue, is currently trending closer to 5% to 10%. While the recovery has been delayed, it is improving significantly each week, and we remain optimistic for this segment to recover even more robustly this winter. We are hitting new highs in the corporate travel recovery, which has recovered approximately 1/3 of 2019 levels. Over the coming years, we expect the NEA will allow us to capture a greater share of corporate travel in the Northeast. As always, we will remain nimble in adjusting to future demand volatility, tied to the course of the pandemic. VFR and leisure demand continues to underpin our strong performance. Our network is designed to carry leisure customers to and from high-value geography. To that end, we are pleased that authorities have sensibly relaxed travel restrictions between the U.S. and the U.K. In the week following the administration's announcement regarding the reopening of the travel corridor, we saw a step-change increase, by more than fivefold, for bookings from the U.K. point of sale for November travel and beyond. As we move through the recovery, we will continue to be nimble in deploying capacity to areas of demand strength. Our network is one of our greatest assets, and we will continue to build relevance across our focus cities to serve our customers and achieve long-term success. We are thrilled to have meaningfully upside from the NEA ahead of us.

I'll close by expressing my utmost gratitude to our crew members. Their professionalism and dedication enabled us to navigate all of the unique challenges, we have faced as a team. We are as excited as ever for our future, as we rebuild our margins and restore earnings in 2022 and beyond.

With that, over to you, Ursula.

Thank you, Joanna. I'd also like to thank our incredible crew members for their commitment and hard work in building a solid foundation to ensure JetBlue emerges from the crisis as a stronger airline. Our teams continue to lay the groundwork through our 2022 planning process to ultimately return to long-term financial success and create value for our owners.

I'll start on Slide 12, with a brief overview of our financial results for the quarter. Revenue was $2 billion, down 5.5% year over 2. Cost per available seat mile was down 2.1% year over 2. CASM ex-fuel was up 12.7% year over 2. Adjusted EBITDA was $140 million, and GAAP earnings per share was $0.40 and adjusted loss per share was $0.12. We also recorded a $54 million gain from our investments through JetBlue Tech Ventures. Going forward, we expect to record mark-to-market gains and losses from our equity investments in other income, but we'll exclude these adjustments in our non-GAAP results. We were very pleased to achieve pretax profitability in both July and August, as expected, and both our third quarter revenue and adjusted EBITDA came in above the high end of the ranges, we expected in early September. This was largely driven by stronger-than-expected performance of Fare Options and a mid-September pickup in bookings, which drove the best revenue results in the third quarter of those that have reported. For the fourth quarter, we estimate our EBITDA will range between negative $50 million to positive $50 million. This sequential decrease is due to the seasonal leisure demand pattern and pressure from the recent material spike in fuel prices

Turning to Slide 13. Our teams worked exceptionally well to manage the complexities due to the swift operational ramp up for the peak summer travel period. As we look ahead, we believe we are charting a course for sustained profitability and superior margins through a laser focus on cost control. We'll maintain a nimble and flexible approach in managing capacity, as we have done throughout the pandemic. During the third quarter, CASM ex fuel increased approximately 12.7% year over 2, within the range of our prior assumption, to ensure appropriate staffing levels for our summer operation. This excludes a payroll benefit of $186 million from PSP2 and 3, which we exhausted in August, and reflects approximately 6 points of temporary headwinds, we previously identified in last quarter's call that we expect to persist through year-end. For the fourth quarter, our planning assumption is for CASM ex-fuel to increase between 14% to 16% year over 2, which, again, includes short-term pressure from temporary headwinds, tied to the recovery. This sequential increase is largely a function of lower capacity for the leisure-demand trough period, partially offset by underlying improvement in our unit cost trajectory. We expect to achieve meaningful productivity efficiencies in 2022, as we continue to ramp and welcome new crew members into the operation.

Moving to Slide 14. Our teams continue to work diligently to improve our cost structure and mitigate the near-term pressures, we are facing, as we restore the business and invest in our long-term earnings power. We continue to expect CASM ex-fuel to improve from a double-digit growth rate in the second half of 2021 to low single-digit growth in 2022 versus 2019 levels. We are in the thick of our annual planning cycle, and today, I'd like to share an early view of our cost trajectory next year. We expect 2022 to be a story of 2 halves, assuming a stronger performance in the second half as the recovery ramp. We expect CASMx to remain elevated through the first half of next year due to lower capacity assumptions, before inflecting in the latter half of the year. As the recovery accelerates, we expect elevated rents and landing fees to normalize and to start seeing benefits from our [Enerwide-prize] push for productivity to mitigate inflationary pressures. In addition, we plan to continue investing in our margin-accretive NEA, as business travel recovers, and catching up on the significant amount of maintenance work, we deferred throughout the pandemic. Following the completion of our planning process, we will share more about our initiatives that will help us achieve our cost goals. We are fully committed to keeping our costs low and generating superior margins for the long term.

Moving to Slide 15. In the third quarter, we took delivery of 3 A220s and 1 A321LR. The fleet stood at 280 aircraft at the end of September, and we expect to take delivery of 2 additional aircraft during the fourth quarter. Our full year 2021 CapEx forecast remains unchanged, at approximately $1 billion, the majority of which is aircraft CapEx, which we intend to pay for with cash.

Turning to the balance sheet and liquidity on Slide 16. At the end of September, we maintained a strong liquidity position with unrestricted cash and short-term investments of $3.3 billion or 41% of 2019 revenue. We expect to maintain a minimum liquidity balance of around $2.5 billion in the medium term, inclusive of our revolver, and we believe we have the ability to raise cash at attractive rates, if necessary. Our commitment to delever our balance sheet, lower our debt service obligations and grow our unencumbered asset base, remains a key pillar in our recovery. During the third quarter, we continue to take action to repair our balance sheet by paying down the $115 million Care Act loan and an incremental $105 million of bank debt. Year-to-date, we have repaid a total of approximately $1.5 billion of debt. And as a result, we have reduced our annual interest expense by approximately [$33] million in 2021. Our net and weighted average cost of debt remains below pre-pandemic levels, while our debt-to-cap ratio stood at 53% at the end of September, a slight decrease from the prior quarter. In addition, our unencumbered asset base grew by approximately $500 million during the third quarter. We continue to make extremely good progress in returning our balance sheet to investment-grade credit metrics.

Looking ahead, we plan to maintain a balanced approach to capital allocation to help achieve our financial targets, enabled by our relatively-strong balance sheet, which, we believe, ranks among the best in the industry.

I'll close with another thank you to our inspiring crew members for helping to navigate the most challenging period in our history. They are playing a critical role in positioning JetBlue to exit the crisis on a path towards creating value for all of our stakeholders.

With that, we will now take your questions. Over to you, Francie.

(Operator Instructions) Your first question comes from the line of Savi Syth, from Raymond James.

If I may, for Ursula, I think if you look at the second half 2022, unit cost, kind of, view that it should be, kind of, below second half '19. I believe, pre-COVID, with the structural cost program, you were looking to be about, maybe 1 to 2 points lower than 2019. So on top of that, now you have several headwinds, including 2 to 4 points of -- from the NEA, you have elevated maintenance and inflation, kind of, which nets you out to, kind of, a low single-digit pressure in the, kind of, the best case scenario. So to get to that, kind of, below 2019 level in second half 2022, how much of it is coming from, maybe capacity growth versus 2019? And how much of it is, maybe more structural cost initiatives, that you hadn't identified or perhaps hadn't executed, when you, kind of, came out with that 2020 guide, back in January of 2020?

I want to reiterate, we're laser-focused on costs, and we acknowledge that costs are the key to our success in delivering superior margins. Our singular focus on mitigating the sustained headwinds, which we highlighted, which we're cycling through the volume of maintenance events as well as, to your point, the investments in the NEA, the way which we're going to mitigate those, is through operating leverage, productivity gains, optimizing our business-partner spend, ensuring that our fixed costs, achieved in 2020, carried through to 2022. And as we bring capacity back, we will continue to see the structural cost benefits that we achieved prior to COVID. So as I look at next year, I'm extremely confident that we have a path to achieve the low single-digit CASM ex-fuel guidance that we provided.

Got it, got it. That's helpful. And if I might, a quick follow-up to -- Joanna, you had mentioned, kind of, buy-up in excess of 2 points to the year-over-2-year revenue in 3Q. So wondering, if you could provide some color on kind of the magnitude from the contributions, from the other revenue initiatives and maybe the kind of the progress, you expect over the next year or 2?

Yes, sure. I'll start walk through each one of them and Dave Clark, feel free to add additional color, if I've missed anything. So the way we're looking about this, these are unique JetBlue revenue initiatives. There's 4 of them that sit on top of, I think, what we view as 2022 being a pretty strong recovery year, both leisure and then taking advantage of the return of the business customer. Fare Options 2.1 recall, we launched, sort of, the latest iteration of this, less than a year ago. Fare Options has absolutely delivered on what we expected. It's -- our goal is to deliver the best product, at a low fare, in every category, how we compete in the segment and marketplace with clearly defined products and price points. So we're just incredibly pleased with the overall performance. We had originally anticipated about a 1-point RASM benefit. We adjusted that in the last earnings call, to closer to 2, and now we're exceeding 2. So I think, just great performance by the team. And I think, the other piece worth mentioning is we have continued ability to optimize, as we learn more and follow customer behavior throughout the year and how they engage with their options, both in the peaks and in the off-peak timeframe. The two things that are driving the improved performance, greater upsell and frankly, more customers are checking more bags. So that's what you're seeing on the Fare Options side of the house. In terms of Loyalty, the second of the 4 initiatives, no change from last quarter. That's a point of RASM. It is purely economics, associated with the co-brand deal. So as you think about Loyalty, you should think of incremental benefit, on top of that coming from growth of the program, organic growth, growth from the NEA and the partnership we have with American Airlines. And then we have, I think, a unique opportunity to really focus on serving some of these underserved segments that don't have access to credit in some of the same ways that others may, as we focus on our DE&I strategy. And then, as we mentioned, evolving the overall program from 2022 into '23. JTP, the third of the 4, we see that delivering about $100 million of EBIT next year. We're making great progress. Andreas Barry and his team, the cruise + flights, as we mentioned, and Paisly, we should think about Paisly as offering additional travel benefits to customers, who book trips on JetBlue, whether that's cars, hotels, excursions, and we see a tremendous opportunity there. And then finally, last but certainly not least, is the NEA. We are very confident that this will be margin accretive as we move into 2022, particularly with the recovery of business travel. That said, there is a large leisure place here as well, which we're excited about. And we've continue to tout the benefits of this. I mean, I think you see it across the industry with some of the announcements for other carriers around the competitive landscape. We are going to bring a viable third competitor to this region, more seats, more routes, lower fares, better service. This unlocks tremendous growth opportunities for JetBlue in our geography, that we would not have otherwise had. With that, will come greater relevance, whether it's through code share, Loyalty or joint corporate sales. So those are the 4 initiatives. We're really excited about the momentum we have, behind those, you factor that in with the improving demand environment, and 2022 should shape up to be a good year, on the revenue side, for us.

And where is the JTP today?

We haven't indicated where it is today. It's on a journey, but we're very confident it will hit $100 million of EBIT, through the end of '22.

Your next question comes from the line of Catherine O'Brien, from Goldman Sachs.

So one on the transatlantic, I know you called out the recent strength, that seems in line with what your competitors have also been seeing. But we've also had one of your competitors call out that they expect the domestic network to be more challenged, due to industry capacity growth in international, over the next couple of years. I guess, first, do you agree and if you do, would you consider speeding up your transatlantic expansion? Like, are you able to, with your current slot ?

Sure. Maybe I'll start with transatlantic first and, sort of, what we're seeing there, to give you a little bit more insight. So frankly, we timed the launch. I'd like to take credit for it, but we timed it incredibly well, with the the change in the 212(f) travel restrictions. So that could not have happened at a better time. That's ramping up very nicely. Load factors are around 60%, but that jumps after November 8. It's -- if you've read any of the reviews, an absolutely fantastic product, a fantastic service. We are doing what we do best, bringing better product, at a low fare, in a historically overpriced market and really excited about what we are doing there. In terms of future growth opportunities there, we are focused on London and New York and Boston, next summer, and that's where our priorities are, in terms of transatlantic. As you think about the domestic landscape, we are quite bullish on the domestic landscape. We have a set of unique revenue initiatives. We are -- others are talking about pivoting to leisure, we are a leisure carrier. That is what we do. We do it well. That is what we are born to do. Leisure continues to fuel this recovery. It remains strong, both on the VFR side and the strictly-leisure side. That said, we're also well positioned for business recovery as you look at -- not just what we organically do, largely out of Boston, but what the NEA is going to be delivering for us as well. The peaks are strong. Holidays are looking good. So we're excited about what next year brings. And we think the transatlantic is, frankly, gravy, on top of what we're already doing.

Okay. Great. And maybe just sticking with revenue. I know, in the past, you've estimated or share that corporate revenue represents about 20% to 30% of total. I guess, two parts. One, any early thoughts on where that could go with the NEA, as you break into some new accounts in the Northeast. And then, I'm guessing that varies seasonally. Any thoughts on, perhaps the greater drag that might represent in 4Q and 1Q versus 2Q and 3Q, and I'm guessing it's a lower percentage of total revenue.

Yes. So our corporate travel typically represents, over the course of the year, about 20% of our overall revenue. In the fall, it moves up to 25%. If you look at other airlines and think about the NEA opportunity, they're around 30%. So anywhere between that 20% to 30% range of, sort of, how we're thinking about the revenue opportunity from Corpus for the NEA. We're very excited about the partnership. Not only does this give us access to American's accounts, but we'll be able to do joint corporate sales. So we're very pleased about the opportunity, on the business travel, on the corporate side. But again, I also want to emphasize, there's tremendous leisure opportunity as well. We've announced a whole set of routes into the, sort of, mid-Atlantic, South, got Denver. So the NEA is definitely corporate, corporate piece of it, but there's also a tremendous leisure piece. And it's, frankly, making JetBlue a 5% player, a far more relevant competitor in this region, with a much bigger network, much better opportunities for customers, joint loyalty. So all good things there.

Your next question comes from the line of Duane Pfennigwerth, from Evercore ISI.

Just on the E190s, can you let us know, like how restored they are now? What percent of the ultimate recovery, in the E190s, we're seeing, maybe in the fourth quarter and first quarter? And I don't know if you have any high-level thoughts on, kind of, margin profile, by fleet type.

Scott, do you want to take that?

Yes, I can take that. This is Scott. A couple of things. The first is, the E190s are flying, and we'll be flying. The fleet comes out entirely out of the storage, as of November 19. In terms of the E190 and its profile versus the rest of fleet, pre-COVID, I mean, obviously, we had some maintenance headwinds on that airplane. And it's, again, I think, serving a very good purpose, as we focus on the shorter-haul flying, particularly in Boston and as we ramp up the NEA. So again, I think, while that -- we have that fleet here, a bit longer because of the NEA opportunity. Again, we -- I think we're in a position to see that airplane producing, given the profile of the missions that we can fly that on.

The only thing I'd build on that, Duane, it's Robin, is to Scott's point, I think we've really learned with that airplane over the years, the type of mission, where it can perform well. And I think, as we pivot back to NEA schedule, as we pivot back to higher frequency, shorter stages to certainly what we've been flying it during COVID, where we were really flying it for, sort of, cash generation purposes. I think, we feel really good about the ability for the 190 to also drive and contribute to margin.

And then, maybe just to stay on that fleet type. Everything you've said about the NEA and being certainly more relevant here in New York, that makes a lot of sense. If it doesn't go the way you anticipate -- and you've been very transparent about the cost headwinds related to this fleet type into next year. If this does not go the way you anticipate, do those costs just go away, and do these 190s go back into storage? And that's just a client question. I appreciate your thoughts.

Yes. John, I appreciate the question. I mean, obviously, you're going to expect me to start the answer by saying that we are very confident that the NEA will be extremely successful. I mean, when I look at JetBlue's P&L over the years, one of the things that limited us, just with the lack of the ability to grow New York. New York has always been a market, where we've made really good margins and others have struggled. So there's no reason not to believe that the NEA won't be successful. And I think, most industry observers see that, too. And I think, everything that we said around, sort of, allowing JetBlue to build more relevant. Some of the things that Joanna talked about, giving people a reason to get the credit card to engage more heavily in the TrueBlue program, all those things flow from having a bigger, more relevant network. However, I don't want to dodge your question. So what if we're wrong about all of that? Well, the costs simply come out. I mean, if you look at the CASM guide that we said, it really relates to keeping the one ] beyond the original plan, to set them down, which was really a one-for-one as the 220s came in. And it reflects the fact that we have more flying in higher-cost airports. And of course, if the NEA doesn't happen, I assume the slots that will be flying, the additional slots that will be flying, we would no longer be flying. And you would see the airport costs reduce, as we would have less exposure to some of those high-cost airports. So the purpose of the what-if planning, please, I'll say again, we're very confident that the NEA will be incredibly successful and do everything. We believe it will. But if we are wrong about that, or if, for some reason, the DOJ was successful, which I don't believe they will be, but if they were, then it will be relatively straightforward to back those costs out.

Your next question comes from the line of Dan McKenzie, from Seaport Global.

Just a couple of questions here. I guess, going back to the script, a few things that you guys shared, restoring earnings power beyond 2019 and superior margins for the long term. So if I go back to 2019, JetBlue was pretty clear that, that year was a transition year, on the way to a better 2020. So I guess -- what I'm wondering is, are you guys saying that you think you really have a business plan here for better margins versus 2019 steady state?

Ursula, do you want to take that?

Sure. So Dan, as you referenced, I would remind us all that we were on a path to deliver flat CASM ex-fuel, pre-COVID. So we exceeded cost expectations in 2019. We significantly closed the gap versus our peers, and we were on track to deliver record cost performance in 2020. And costs are a vital pillar of our business model. And when you couple our commitment to deliver flattish unit cost trajectory, to drive superior margins over the long term, with the unique revenue opportunities that are currently outperforming, and that flat CASM ex-fuel commitment, it's a meaningful and powerful formula to restore earnings power and expand our margins over the long term.

Okay. Got it. And then, going back to an earlier question, 20% to 30% of the revenue coming from corporate travel versus 20% historically, if I heard that correctly, is that an outlook for 2022? And I guess, is it -- I'm just wondering about the resistance to reinstating, kind of, the margins that you've reported, historically. I'm just wondering if it's tied to the lack of visibility around the timing of when corporate travel returns?

No, no. So let me be clear. So 2019, on average, our corporate contribution was about 20% of revenue and the fall was 25% because, obviously, more corporate fly in the fall. As we look at the industry, and the potential opportunity with the NEA, because that will obviously, drive more corporates on to JetBlue. And the industry is, on average, about 30% corporate travel. So we're at 20%, the industry is at 30%. Somewhere between there, lies the opportunity for JetBlue with the NEA.

Our next question comes from the line of Conor Cunningham, from MKM Partners.

So you're calling out 6 points of transitory cost pressures. Just, what gives you the confidence that, in this inflationary environment, we want to see stickier labor costs? Or maybe, a better way to ask it is, how many people are you planning on hiring in 2022 or from now till the end of 2022? And just, like how has the wage rates changed as of date?

Yes. Conor. So to your point, we have highlighted, both short-term and longer-term headwinds, in regards to labor. On the short term, labor challenges. We believe that those are going to get mitigated, as we ramp up hiring. And essentially, the network sets into a new norm, we'll be able to, longer term, drive productivity efficiencies, which, we believe, will offset the longer-term inflationary pressures that we're seeing. So we entered -- obviously, the recovery occurred much quicker than we had originally anticipated throughout the summer. So there was a need to ensure that we paid appropriately to cover the operation. We're hiring in preparation for next year. And as I mentioned, once the network normalizes, we'll be able to drive those productivity efficiencies over the long term.

Okay, okay. And then, maybe to just piggyback on Duane's question around the E190. So I'm just curious on how much of your 2022 capacity plan is tied to the NEA? And like if that -- obviously, if that's blocked, does that basically just go away with the E190s? I'm just trying to get a sense for the moving parts, both on the cost side and the capacity side of the equation.

Yes. So this is Scott. I'll try to grab that. I mean, if you look at the NEA, represented about 2/3 of our capacity, just, sort of, going into this, right, to the 4 airports that are involved. What I would highlight is, the E190s are not big ASM contributors, right? They don't generate a lot of capacity because they tend to fly shorter stages. And obviously, they've only got 100 seats. So the stage on that airplane, as we move forward, into 2022, is going to continue to be somewhat limited, just based upon the high frequency flying, as we restore some of the frequencies, Boston to LaGuardia, things like that, that we haven't been able to traditionally access. So I think, if you look at that, and I guess, the concept of what we touched on earlier, the ASM generation associated there, probably is not going to be significant.

If I can just add to that, though, I do think, from a capacity point of view, that's very true. I think, if you think about what we were flying in New York, per day, per NEA, and what will be flying in New York, post-NEA, and then you take into account some additional growth in Boston because of NEA, you're talking probably, in excess of hundred departures a day, additionally, because of the NEA. And so whilst they are short stages, it has a very disruptive effect on low fares because these are some of the markets that additionally suffered from the high fares. And so whilst -- from a capacity point of view, it's not that significant. Those of you who may remember, pre-COVID, in 2019, I think the 190 is about 4% to 5% of our total capacity, in terms of ASM. You'll see the impact it has, is significant, just because of the number of additional flights today, allows us to offer out of New York.

Your next question comes from the line of Helane Becker of Cowen.

So one of the areas that you're really strong in, is the Caribbean. So we had some issues in Haiti. I don't know what's going on in Puerto Rico. Wondering if you can just give us an update on how you're thinking about that market into fourth quarter and first quarter, given how they were strong, from a VFR perspective, earlier this year?

Helane, I will give, sort of, a top line. I'll let Dave dig a little deeper on Haiti, specifically. Obviously, a tough situation. I know they've had a rough year with a variety of things happening. VFR has performed very well throughout the quarter. We've got good loads and higher fares, despite there being some pressure on industry capacity. We're very pleased with its performance into the holiday period. So overall, VFR holding up well, David, if you want to give a little color, specifically on Haiti?

Sure. And just overall, the region, Caribbean and Latin America was our strongest performing revenue region in Q3. It had the highest year-over-2 revenue growth. So if you look at it as a portfolio, performing quite well. As Joanna mentioned, the VFR demand was quite strong, but we also saw a lot of leisure traffic too, as customers look for outdoor activities and outdoor vacations. The Caribbean hits the spot very nicely. So we're all doing well. Yes, some challenging spots, Haiti being one of them, we continue to work through it, but the region as a whole has been a strong point for our network.

That's really helpful. And then my other question, and I don't mean to -- I'm going to apologize, I'm not going to be a jerk about it, but as you think about adding capacity, out of LaGuardia York specifically, JFK as well. You've got -- I mean, this area, as you guys know, is just fraught with ATC delays, whether like today, so how do you think about getting around the delays that all this excess or extra, maybe not excess, capacity will cause in the area to keep the operation from like lagging, falling apart, getting to it? And like I said, I don't mean to be a jerk about it, but...

No, no, no worries, Helane. Rest assured, we talked about it a lot here as well. Listen, the New York area is a very high-value geography. There's a lot of people that live here. who want to fly out of here, and there's a lot of people that want to visit here. And in the absence of meaningful reform with next-gen, it's an aerospace that we, I think, have done an exceptionally good job navigating through. We've got a great team that's focused on "how do you operate in the Northeast?" Frankly, other carriers have tried and haven't done it particularly well. And we have a unique operating model, specific to how we set up New York to, I think, protect the operation as best we can. We have a greater number of out and back flights between -- from Northeast other locations to try to ensure that there's a level of stability across the system, and we do have disruptive days. I think I will point out that the incremental growth that we have, is actually net neutral to the region because it's slot constrained in LaGuardia and JFK. So you're not seeing incremental flights necessarily as much as you're seeing JetBlue does have incremental flights, but in the industry as a whole, it will be the same number out of the region. But our team does a really great job in really trying circumstances. And I think you see customers still flying JetBlue because they recognize that this is a complex market, and we do it well. We focus on completing flights and getting customers to where they want to go, heavy leisure, that's what we know they want to do and that's what we prioritize.

Your next question comes from the line of Jamie Baker of JPMorgan.

Robin, a question on London and I guess, Europe, more broadly. How do you intend to build a brand there? I know what worked well here in the U.S., but different times, different market.

Well, Jamie, I'll do that because I know you have me pegged as a London guy, I guess, that's very fair.

What gave it away?

Yes, exactly. Look, I mean, we have a whole plan to do that. We have -- we wanted to wait until we got the U.K. was open. We -- I think we've got some very creative ways of doing it that can, I think, stay close to our low-cost routes. And whilst (technical difficulty) share the point-of-sale split between the U.K., in U.S., I will tell you, I'm already extremely pleased as to how much of our business is coming out of the U.K. point-of-sale, where we really haven't done too much to promote it, and it's significantly ahead of what we had even expected to be the case, sort of, steady state. So I think, clearly, what is understood over there, through a significant amount of media that we've had, is that we're doing it differently, and we're offering a much more accessible premium service, which is a very good premium service and continue to offer (technical difficulty) caught well. Coach, we call it core fares that are, sort of, restoring some of the glory days of transatlantic flying with a decent food and, of course, free Wi-Fi and free TV, including the BBC.

Okay. That's helpful. Robin, and then second, in the next 3 or 4 or 5 years, what do you think is the biggest structural risk, either to JetBlue or the industry? And I'm looking for, kind of, big-picture themes. This isn't a modeling question. So ESG, the next industry labor cycle, overcapacity, pandemic risk, those sorts of themes, to the extent it all goes wrong, what do you think would ultimately drive that?

Now, I think, in a big picture, and I think this is why we've been doing so much in the area of sustainability. I truly believe, going into COVID, we're having a lot of discussions with this, at both A4A, which is, as you know, the U.K. Trade Association and IATA. And you started to talk to some of the European airlines, around how it was done to think -- influence how they're thinking about planning and positioning. And I think I've been really, pleasantly -- I've really been really, really happy how well the U.S. airline industry has responded to this challenge in a relatively short space of time. We do not want -- we want people, who fly on ours, to know that we care about the environment, and that we are doing everything we can to reduce our carbon footprint. Because if we don't, as other other sectors do, the percentage of carbon emissions, that come from aviation, will climb than the 2% or 3% it is today, and we're going to have an even bigger target on our back. So I think that's the macro list -- that's the biggest macro risk that I would point to.

Your next question comes from the line of Andrew Didora of Bank of America.

Ursula, maybe -- can we go back to cost for a minute? Because in my model, I'm just having a hard time finding the kind of the cost line that has a lot of leverage to drive CASM down in the back half of next year. So maybe first question, can you give us any, kind of, rough estimates on what kind of capacity you're assuming, in the back half of '22, to get to that level? And then two, in the pandemic, I've been looking at cost more on an absolute basis as opposed to an ASM basis. And when I look at your cost structure, next year, do you think there'll be any line items that will be lower in 2022 than they were in 2019?

Andrew (technical difficulty) so in regards to the capacity level that we're expecting next year. So we do envision full year 2022 to be up versus 2019, and we expect that capacity to ramp up progressively, as we navigate through the year, depending on the shape of the recovery. So as we acknowledge, we live in a fluid environment. And so we'll put a stake in the ground, in terms of our capacity level, to basically drive margins and profitability. I think, an overarching comment is that we're still not in the new norm. So the operation is still very fluid, and it hasn't yet settled down. What I can point you to is, we're starting to see some efficiencies come through because we are getting to a more level-setted normalization. So meaning -- we had -- if you look at Q3 to Q4 of this year, it's a 2-point sequential CASM increase, and capacity is decreasing 5. So capacity, as it's coming back, we are getting to a more normal level with less volatility. And so we're starting to see cost efficiencies come to fruition that had previously been masked throughout COVID. So as I look into next year, the levers to be pulled are -- first and foremost, as the network normalizes and its hiring is optimized, we have to drive productivity. Like that is essential for us to gain meaningful cost efficiencies as we navigate through the year. I think, stuck in, I'll reiterate, we need to ensure the fixed cost, that we took out of 2020, are sustained as we navigate through 2022. And we're going through the 2022 planning process right now, and I can tell you no stone is going unturned. So I feel extremely confident that we've got levers to pull, in order to achieve the low single-digit CASM ex-fuel commitment next year.

Okay. And then, one short follow-up for me. In terms of the London flying, can you, kind of -- can you quantify what the CASM tailwind is going to be from that, next year?

Yes, this is Joanne. I'll take that. It's de minimis. I mean, just to give you a sense of the ASMs, London is currently contributing -- it's less than 0.5%, so de minimis.

Your next question comes from the line of Ravi Shanker, of Morgan Stanley.

Just a couple of follow-ups. I think, you said on the call that holiday travel is looking really strong, but I'm not sure if you quantified it, apologies, if you did. If you could just give us a sense of what holiday travel is, tracking like versus 2019? And second, not to, kind of, beat the horse on the whole margin versus cost story here. But I just wanted to clarify, Robin, you said at the top of the call that you're laser-focused on margin. Ursula, you said that you're highly focused on cost, and there's been a lot of talk on the revenue opportunity with NEA international as well. So the risk of being an all of the above, what is the priority here? Are you focused on EBIT dollar growth? Are you focused on margin improvement? Are you focused on cost control? Kind of what's the -- if you can, kind of, rank over that, that would be great.

Sure. I mean, I'll take that and then maybe -- I'll maybe answer the second part of your question, and maybe one of the team can take the, sort of, comment about the holiday. Margin is our North Star. I think the reason we spend so much time talking about cost, is that we knew, ahead of COVID, we had to do a lot of work to drive more efficiency in our cost structure. So we have the structural cost program that, in the end, ended up delivering more than the $250 million to $300 million goal we set. As we went through COVID, we also took some further opportunities to reduce our fixed cost structure as well. And so -- and as we come out of COVID, we need to be laser-focused on maintaining that focus on costs. And there were a lot of challenges that go with operating in the Northeast. And so we have to be very laser-focused on that, so that we can maintain our commitment to our cost structure, because ultimately, that's what allows us to offer low fares. Now, the reason, I think, margin is -- I think the proof point that margin is the North Star, is the decision that we took to enter into the NEA with American. It does drive some additional costs, which we outlined in the last earnings call, because we are keeping the 190s longer, and our mix is changing to have more flying into higher-cost airports. But we did that because (technical difficulty) margin. So I don't want -- I want everyone to be under no illusion, margin is our North Star, but we're ain't going to take an eye of the cost structure either.

And Ravi, this is Dave. Just following up on the question about the holidays. The holidays continue to book well. As we've seen in the third quarter, July and August, those peak travel periods performed very well. Right now, the holidays are about -- even with where we were at this point in 2019, they were behind, for quite a while, because of the Delta variant. So we were falling behind in August and early September. We've now been catching up for over a month and about even. And December, I'd say, especially is performing well. The last several weeks, we've actually taken more revenue bookings this year than we did, at the same time, in 2019, over those booking weeks.

Francie, we'll take a couple more questions.

Your next question comes from the line of Christopher.

So going back to this focus here on productivity, could you help us frame, how you're thinking about? And what are some of the metrics that we should look at here? Is it ASMs per FTE? And I guess, as a part B to that, do you believe that you can -- when fully recovered, meaning, on a 2019-like ASM base, can you run the airline at fewer FTEs, relative to 2019? Is it total passengers per FTE? And then, also on fuel, as we look out to 2022 and 2023, assuming where, I believe, we covered there, should we expect that line to improve as well versus 2019?

This is Joanna. I'll take the first part, just to give you a sense of how we look at it. So it's a combination of departures and customers per FTE. Obviously, each work group has a specific set metric. So tech ops is a little bit different. It's less about departures and customers. But rest assured, we are looking at it, at every level and are very laser-focused on it. I'll point out a couple of things. #1, we will see a genuity benefit with hiring that we wouldn't have had post -- pre-COVID, as we bring more crew members on. So that's a tremendous benefit. #2, and Ursula mentioned it, but I cannot emphasize it enough. The volatility of the schedule has created a level of inefficiency into the operation that will go away into next year as things stabilize. So when you think about pulling capacity close in, you pay for a certain amount of crew costs, when you do that. When you think about pivoting the network to introduce new flying, it means that the markets where you have staffing, that may be excess staffing, that you otherwise would have used in a normal time. And so as the network stabilizes, as we continue to hire more crew members to make up for, where crew members have left at a lower seniority number, that will drive meaningful benefit across across the operations. So I think that's the most important thing to remember, and that will get much better as we cycle through and step into 2022. Right now, we are in ramp-up mode. We're hiring a lot, but there's also a training throughput issue. So we can't bring everybody on overnight. We have to meter them in. So you'll see a level of inefficiency into Q4 and into Q1 as we continue to ramp up and get to the right staffing complement, moving forward. Maybe Urs, you want to take the second part of the question.

Yes, I would just reiterate what Joanna said. So as we navigate through the 2022 planning process, we envision the network normalizing. We go work group by work group, in terms of the metrics that we track. I would also highlight that we'll also focus on where can we better leverage technology and where can we fundamentally improve processes. And this is not only in Joanna's frontline work groups, but also corporate support centers as well. So that's why we feel very confident that there's a path to deliver meaningful value here as we look at achieving that low single-digit CASM ex-fuel number next year.

Okay. And if I could, just a second question here on the 20% to 30% opportunity, on the business side, I'm just curious, what type of mix is that contemplating, in terms of industries? Is that similar to 2019? Or perhaps should we consider a different mix and by extension, different level of volume?

Sure. This is Dave. The mix would be largely the same. We already have about 3/4 of our business in corporate exposure, in New York and Boston. So growing this area won't change the mix significantly for us.

Your next question comes from the line of Brandon Oglenski of Barclays.

So I just want to circle back to the NEA, Robin or Joanna. Can you guys talk through the anticipated benefits of this partnership? And how important is that revenue-sharing portion of it? Because I think that might be where some of the criticism is coming out at this? And then Ursula, you did talk about a couple of points from the NEA, but that's being accretive to the outlook, I'm assuming that's more of the short-haul, small gauge line, but would love a little clarification there, too.

Sure. No, Brandon, I'll keep the high level, just because of time and then we can -- the team can always follow up. But (technical difficulty) I think of NEA. I mean, again, this is effectively enabling JetBlue to increase our presence in New York by nearly 50%. That is extremely significant, from a network relevance point of view, that is very important, in terms of being more attractive to corporate flying. I can't tell you, when we look at our data, how much of a high share of wallet that we have, of people's leisure income and other share of wallet in the business -- on the business side. And so the ability to fly more places, the ability for Americans' high-value customers to fly on JetBlue, the ability for us to offer (technical difficulty) our own TrueBlue members, especially our Mosaic members. And then, overlay all the benefits of Coach. It is a multi-pond approach. And all I will say is that I look back, historically, in JetBlue. New York has always been our standout performer, from a margin perspective, and this is enabling us to grow that beyond what we could have possibly done, without the NEA.

Great. And Francie, we'll take one final question from the analysts.

Your next question comes from the line of Hunter Keay of Wolfe Research.

So hey, listen, I know we know that the NEA is going to drive some cost on the East Coast. But how are you feeling about the ability to keep costs down on the West Coast, where you just, kind of, reoriented the West Coast strategy around LAX. I asked the question because Frontier just pull out of LAX because of what is doing with airport costs there. So when we think about this margin as a North Star concept, are you sure that you're going to be able to have the West Coast strategy be accretive to that, in the context of all the moving parts?

Scott, I appreciate the question. I think, first and foremost, the West Coast strategy is anchored around the transcon. And if you look at our performance in -- particularly in LAX, Mint has been the standout for us and continues to be the case. That was the case before COVID and through COVID and today. So again, I think the West Coast strategy is based upon ensuring that we leverage the -- having the best product at the best price. The NEA also comes into that as well. So again, I think the West Coast strategy is one where we can drive margin and a significant portion of the -- that success will come from Mint flying and expanded Mint flying and expanded transcon.

All right. And then, Robin, what are some of the things that JetBlue has historically done well on costs? And what are some things, where you see the most room, for improvement?

On costs, was that, Hunter?

Exclusively, on costs. Absolute costs. Not unit cost, but just, kind of, like overhead and just anything that you think you guys could probably do a better job, going forward, relative to where you've been in prior years.

Yes. I mean, I think, look, again, I point back to the 3 years of the structural cost program, where we delivered exactly what we said we would prefer to. We have some of the best, if not the best, unit cost performance during some of that period. And so I think the -- and we did have over $300 million of benefit. So I think that we've demonstrated cost business now for number of years, as we came to COVID, we also took the opportunity to look at other aspects of our things...

I'm sorry. I'm sorry, Hunter, I might on start again. I wasn't trying to avoid your question on cost. But to recap, I would say that between the period of 2017 and 2020, as we went through the structural cost program, a significant number of our maintenance cost issues, our distribution cost issues, you will recall those buckets. I mean historically, if you compare our cost performance to other airlines, one of the areas, where we have performed less well, was on maintenance costs. And that's why so much of the structural cost program was focused on that and putting the right agreements in place, as we took delivery of new airplanes to smooth that over time. So I'm very pleased that with the efforts that the team have made, in all of those areas. As we went into COVID, we took a really hard look at our fixed cost structure and, sort of, committed to delivering over $150 million of fixed cost savings, and we are well on the way in accomplishing that. And as we come out of COVID, I think, this long-term commitment. I mean, when I think about the next 5 years, I don't see any reason why JetBlue can't continue to deliver flattish CASM on, sort of, mid-single digit increases in capacity. And that's what will, kind of, I think, provide some clarity to. So this is a new JetBlue, from a cost perspective. I know, a lot of it gets masked at the moment because of what we've done with the network, and how we're managing through COVID. But I truly believe (technical difficulty) maintaining our discipline and focus on costs, plus the additional revenue initiatives. It is a unique story in the industry, in terms of one that can drive margin and drive margin next year. This is not a plan to drive margin in 2 or 4 years. This is a plan to drive margin into '22, and that's what we're focused on.

And that will conclude our third quarter 2021 conference call. Thanks for joining us this morning. Have a great day.

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