JetBlue Airways Corporation (NASDAQ:JBLU) Q2 2020 Earnings Conference Call - Final Transcript

Jul 28, 2020 • 10:00 am ET

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JetBlue Airways Corporation (NASDAQ:JBLU) Q2 2020 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] Our first question comes from the line of Jamie Baker of J.P. Morgan. Your line is open.

Analyst
Jamie Baker

Hey, good morning to the team. So my first question relates to the pilot deal that was announced at the beginning of the month. It appears that the primary impetus from management's perspective was being able to announce the American relationship partnership, but there do appear to be some other smaller tweaks in the deal. Should we be thinking about any temporary or even permanent cost reductions or efficiencies or is the pilot deal really best viewed as something you needed in order to proceed with the American announcement?

Executive
Joanna Geraghty

Hi, Jamie. This is Joanna. I'll take that question. First, I'd just like to say our pilots have been great partners over the past several months, particularly given the challenges that the business is facing. The work we've done with pilots provides JetBlue a level of relief insofar as there are minimum hour schedule requirements that have been reduced and we also achieved a level of scope relief.

The scope clause in the pilot contract required us to grow and hire a certain number of new pilots and obviously in this environment, that's not something that's happening. So there was a level of scope relief in there and then also a level of commitment to no furloughs through the end of April. So we are really pleased with the partnership over the past few months and they along with our other work groups have been absolutely committed to making JetBlue successful as we navigate through this crisis.

Analyst
Jamie Baker

But do you consider the scope component to be the most relevant?

Executive
Joanna Geraghty

I think they all work together and all were important to both JetBlue and to our pilots.

Analyst
Jamie Baker

Okay. And then, Steve, could you run down the incremental sources of liquidity remaining. What you envision pledging for the loan should you draw it. The brand was pledged already, but is there other intellectual property/ Where are we with unencumbered aircraft? Just an update in that regards would be helpful. Thank you.

Executive
Steve Priest

All right, good morning, Jamie and thank you for the question. I have to say as a starting point, I couldn't be happier with A, the fact that we came into this crisis with probably the second strongest balance sheet in the industry and then, secondly, the incredible levels of urgency and focus and execution that the team has gone through over the last few months. In fact, we've raised a total of $3.7 billion since we started the crisis and our debt to cap is only sort of sitting at 55%, which candidly is pretty strong when you relate that to the competitive set.

With regards to additional liquidity sources that we have, I would describe this as a sort of continued focus which is one: we continue to have north of $1 billion of unencumbered assets available to us on the balance sheet and that excludes our loyalty program and