UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to__________

Commission File Number: 000-49728

JETBLUE AIRWAYS CORPORATION

(Exact name of registrant as specified in its charter)


Delaware			87-0617894
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

27-01 Queens Plaza North	Long Island City	New York	11101
(Address of principal executive offices)			(Zip Code)

(718) 286-7900

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.01 par value	JBLU	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~June 30, 2021,~~March 31, 2022, there were ~~318,022,154~~320,789,028 shares outstanding of the registrant’s common stock, par value $0.01.

Table of Contents

JETBLUE AIRWAYS CORPORATION

FORM 10-Q

INDEX


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			3
Consolidated Balance Sheets - ~~June~~ 3 0 ~~, 2021~~March 31, 2022 and December 31, ~~2020~~2021			3
Consolidated Statements of Operations - Three ~~and Six~~ Months Ended ~~June~~ 3 0 ,March 31, 2022 and 2021 ~~and 2020~~			5
Consolidated Statements of Comprehensive ~~Income~~Loss - Three ~~and Six~~ Months Ended ~~June 30~~,March 31, 2022 and 2021 ~~and 2020~~			6
Condensed Consolidated Statements of Cash Flows - ~~Six~~Three Months Ended ~~June~~ 3 0 ,March 31, 2022 and 2021 ~~and 2020~~			7
Consolidated Statements of Stockholders' Equity - Three ~~and Six~~ Months Ended ~~June~~ 3 0 ,March 31, 2022 and 2021 ~~and 2020~~			89
Notes to Condensed Consolidated Financial Statements			910
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			2522
Item 3. Quantitative and Qualitative Disclosures About Market Risk			4340
Item 4. Controls and Procedures			4340

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			4441
Item 1A. Risk Factors			4441
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4441
Item 5. Other Information			4441
Item 6. Exhibits			4442

SIGNATURE			44

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share data)


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
CURRENT ASSETS	CURRENT ASSETS					CURRENT ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	2,409	$	1,918	Cash and cash equivalents	$	1,834	$	2,018
Investment securities	Investment securities	1,317		1,135		Investment securities	950		824
Receivables, net of allowance of $2, at June 30, 2021 and December 31, 2020, respectively.		276		98
Inventories, net of allowance of $22 and $27, at June 30, 2021 and December 31, 2020, respectively.		59		71
Receivables, less allowance (2022-$3; 2021-$3)						Receivables, less allowance (2022-$3; 2021-$3)	248		207
Inventories, less allowance (2022-$25; 2021-$24)						Inventories, less allowance (2022-$25; 2021-$24)	68		74
Prepaid expenses and other	Prepaid expenses and other	135		123		Prepaid expenses and other	172		124
Total current assets	Total current assets	4,196		3,345		Total current assets	3,272		3,247
PROPERTY AND EQUIPMENT	PROPERTY AND EQUIPMENT					PROPERTY AND EQUIPMENT
Flight equipment	Flight equipment	10,793		10,256		Flight equipment	11,265		11,161
Predelivery deposits for flight equipment	Predelivery deposits for flight equipment	343		420		Predelivery deposits for flight equipment	369		337
Total flight equipment and predelivery deposits, gross	Total flight equipment and predelivery deposits, gross	11,136		10,676		Total flight equipment and predelivery deposits, gross	11,634		11,498
Less accumulated depreciation	Less accumulated depreciation	3,047		2,888		Less accumulated depreciation	3,324		3,227
Total flight equipment and predelivery deposits, net	Total flight equipment and predelivery deposits, net	8,089		7,788		Total flight equipment and predelivery deposits, net	8,310		8,271
Other property and equipment	Other property and equipment	1,219		1,202		Other property and equipment	1,228		1,205
Less accumulated depreciation	Less accumulated depreciation	629		591		Less accumulated depreciation	681		662
Total other property and equipment, net	Total other property and equipment, net	590		611		Total other property and equipment, net	547		543
Total property and equipment, net	Total property and equipment, net	8,679		8,399		Total property and equipment, net	8,857		8,814
OPERATING LEASE ASSETS	OPERATING LEASE ASSETS	742		804		OPERATING LEASE ASSETS	767		729
OTHER ASSETS	OTHER ASSETS					OTHER ASSETS
Investment securities	Investment securities	1		2		Investment securities	110		39
Restricted cash	Restricted cash	53		51		Restricted cash	67		59
Intangible assets, net of accumulated amortization of $379 and $360, at June 30, 2021 and December 31, 2020, respectively.		264		261
Intangible assets, less accumulated amortization (2022-$417; 2021-$405)						Intangible assets, less accumulated amortization (2022-$417; 2021-$405)	274		284
Other	Other	480		544		Other	456		470
Total other assets	Total other assets	798		858		Total other assets	907		852
TOTAL ASSETS	TOTAL ASSETS	$	14,415	$	13,406	TOTAL ASSETS	$	13,803	$	13,642

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited, in millions, except per share data)


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES	CURRENT LIABILITIES					CURRENT LIABILITIES
Accounts payable	Accounts payable	$	530	$	365	Accounts payable	$	624	$	499
Air traffic liability	Air traffic liability	1,880		1,122		Air traffic liability	1,939		1,618
Accrued salaries, wages and benefits	Accrued salaries, wages and benefits	435		409		Accrued salaries, wages and benefits	478		480
Other accrued liabilities	Other accrued liabilities	584		215		Other accrued liabilities	496		359
Current operating lease liabilities	Current operating lease liabilities	112		113		Current operating lease liabilities	108		106
Current maturities of long-term debt and finance lease obligations	Current maturities of long-term debt and finance lease obligations	432		450		Current maturities of long-term debt and finance lease obligations	381		355
Total current liabilities	Total current liabilities	3,973		2,674		Total current liabilities	4,026		3,417
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	3,998		4,413		LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS	3,545		3,651
LONG-TERM OPERATING LEASE LIABILITIES	LONG-TERM OPERATING LEASE LIABILITIES	697		752		LONG-TERM OPERATING LEASE LIABILITIES	726		690
DEFERRED TAXES AND OTHER LIABILITIES	DEFERRED TAXES AND OTHER LIABILITIES					DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes	Deferred income taxes	830		922		Deferred income taxes	702		843
Air traffic liability - non-current	Air traffic liability - non-current	589		616		Air traffic liability - non-current	655		640
Other	Other	515		78		Other	551		552
Total deferred taxes and other liabilities	Total deferred taxes and other liabilities	1,934		1,616		Total deferred taxes and other liabilities	1,908		2,035
COMMITMENTS AND CONTINGENCIES (Note 6)	COMMITMENTS AND CONTINGENCIES (Note 6)	0		0		COMMITMENTS AND CONTINGENCIES (Note 6)	0		0
STOCKHOLDERS’ EQUITY	STOCKHOLDERS’ EQUITY					STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value; 25 shares authorized, none issued	Preferred stock, $0.01 par value; 25 shares authorized, none issued	0		0		Preferred stock, $0.01 par value; 25 shares authorized, none issued	—		—
Common stock, $0.01 par value; 900 shares authorized, 476 and 474 shares issued and 318 and 316 shares outstanding at June 30, 2021 and December 31, 2020, respectively		5		5
Treasury stock, at cost; 158 and 158 shares at June 30, 2021 and December 31, 2020, respectively		(1,989)		(1,981)
Common stock, $0.01 par value; 900 shares authorized, 479 and 478 shares issued and 321 and 320 shares outstanding at March 31, 2022 and December 31, 2021, respectively						Common stock, $0.01 par value; 900 shares authorized, 479 and 478 shares issued and 321 and 320 shares outstanding at March 31, 2022 and December 31, 2021, respectively	5		5
Treasury stock, at cost; 158 and 158 shares at March 31, 2022 and December 31, 2021, respectively						Treasury stock, at cost; 158 and 158 shares at March 31, 2022 and December 31, 2021, respectively	(1,995)		(1,989)
Additional paid-in capital	Additional paid-in capital	3,012		2,959		Additional paid-in capital	3,058		3,047
Retained earnings	Retained earnings	2,785		2,968		Retained earnings	2,531		2,786
Accumulated other comprehensive income		0		0
Accumulated other comprehensive (loss)						Accumulated other comprehensive (loss)	(1)		—
Total stockholders’ equity	Total stockholders’ equity	3,813		3,951		Total stockholders’ equity	3,598		3,849
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	14,415	$	13,406	TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	13,803	$	13,642

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions, except per share data)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
OPERATING REVENUES	OPERATING REVENUES									OPERATING REVENUES
Passenger	Passenger	$	1,388	$	170	$	2,058	$	1,682	Passenger	$	1,603	$	670
Other	Other	111		45		174		121		Other	133		63
Total operating revenues	Total operating revenues	1,499		215		2,232		1,803		Total operating revenues	1,736		733
OPERATING EXPENSES	OPERATING EXPENSES									OPERATING EXPENSES
Aircraft fuel and related taxes	Aircraft fuel and related taxes	336		29		530		394		Aircraft fuel and related taxes	571		193
Salaries, wages and benefits	Salaries, wages and benefits	577		477		1,098		1,078		Salaries, wages and benefits	688		521
Landing fees and other rents	Landing fees and other rents	174		62		289		174		Landing fees and other rents	132		115
Depreciation and amortization	Depreciation and amortization	133		140		258		279		Depreciation and amortization	143		125
Aircraft rent	Aircraft rent	26		16		50		37		Aircraft rent	26		25
Sales and marketing	Sales and marketing	47		8		70		60		Sales and marketing	57		23
Maintenance, materials and repairs	Maintenance, materials and repairs	164		73		268		233		Maintenance, materials and repairs	152		104
Other operating expenses	Other operating expenses	261		124		471		394		Other operating expenses	334		210
Special items	Special items	(366)		(304)		(655)		(102)		Special items	—		(289)
Total operating expenses	Total operating expenses	1,352		625		2,379		2,547		Total operating expenses	2,103		1,027
OPERATING INCOME (LOSS)		147		(410)		(147)		(744)
OTHER EXPENSE
OPERATING LOSS										OPERATING LOSS	(367)		(294)
OTHER INCOME (EXPENSE)										OTHER INCOME (EXPENSE)
Interest expense	Interest expense	(54)		(40)		(112)		(65)		Interest expense	(37)		(58)
Capitalized interest		3		3		6		7
Interest income and other expenses		(39)		(3)		(37)		(2)
Total other expense		(90)		(40)		(143)		(60)
INCOME (LOSS) BEFORE INCOME TAXES		57		(450)		(290)		(804)
Interest income										Interest income	4		4
Gain on investments, net										Gain on investments, net	2		4
Other										Other	—		(3)
Total other income (expense)										Total other income (expense)	(31)		(53)
LOSS BEFORE INCOME TAXES										LOSS BEFORE INCOME TAXES	(398)		(347)
Income tax benefit	Income tax benefit	(7)		(130)		(107)		(216)		Income tax benefit	(143)		(100)
NET INCOME (LOSS)		$	64	$	(320)	$	(183)	$	(588)
NET LOSS										NET LOSS	$	(255)	$	(247)

EARNINGS (LOSS) PER COMMON SHARE:
LOSS PER COMMON SHARE:										LOSS PER COMMON SHARE:
Basic	Basic	$	0.20	$	(1.18)	$	(0.58)	$	(2.14)	Basic	$	(0.79)	$	(0.78)
Diluted	Diluted	$	0.20	$	(1.18)	$	(0.58)	$	(2.14)	Diluted	$	(0.79)	$	(0.78)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME (LOSS)~~LOSS

(unaudited, in millions)

Three Months Ended June 30,
2021 2020
NET INCOME (LOSS) $ 64 $ (320)
Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $0 and $(1) in 2021 and 2020, respectively 0 3
Total other comprehensive income 0 3
COMPREHENSIVE INCOME (LOSS) $ 64 $ (317)


	Three Months Ended March 31,
	2022		2021
NET LOSS	$	(255)	$	(247)
Changes in fair value of available-for-sale securities, net of reclassifications into earnings, net of deferred taxes of $0 and $0 in 2022 and 2021, respectively	(1)		—
Total other comprehensive loss	(1)		—
COMPREHENSIVE LOSS	$	(256)	$	(247)

Six Months Ended June 30,
2021 2020
NET LOSS $ (183) $ (588)
Changes in fair value of derivative instruments, net of reclassifications into earnings, net of deferred taxes of $0 and $3 in 2021 and 2020, respectively 0 (5)
Total other comprehensive income (loss) 0 (5)
COMPREHENSIVE LOSS $ (183) $ (593)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


		Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020			2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	Net loss	$	(183)	$	(588)	Net loss	$	(255)	$	(247)
Adjustments to reconcile net loss to net cash provided by operating activities:	Adjustments to reconcile net loss to net cash provided by operating activities:					Adjustments to reconcile net loss to net cash provided by operating activities:
Deferred income taxes	Deferred income taxes	(93)		(198)		Deferred income taxes	(141)		(97)
Impairment of long-lived assets		0		202

Depreciation	Depreciation	238		255		Depreciation	130		117
Amortization	Amortization	20		24		Amortization	13		8
Stock-based compensation	Stock-based compensation	17		15		Stock-based compensation	11		8
Changes in certain operating assets and liabilities	Changes in certain operating assets and liabilities	1,439		147		Changes in certain operating assets and liabilities	499		304
Deferred federal payroll support program grants	Deferred federal payroll support program grants	185		363		Deferred federal payroll support program grants	—		87
Other, net	Other, net	35		3		Other, net	(10)		(3)
Net cash provided by operating activities	Net cash provided by operating activities	1,658		223		Net cash provided by operating activities	247		177
CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(524)		(377)		Capital expenditures	(85)		(211)
Predelivery deposits for flight equipment	Predelivery deposits for flight equipment	(16)		(57)		Predelivery deposits for flight equipment	(49)		(6)

Purchase of held-to-maturity investments						Purchase of held-to-maturity investments	(63)		—

Purchase of available-for-sale securities	Purchase of available-for-sale securities	(520)		(861)		Purchase of available-for-sale securities	(290)		—
Proceeds from the sale of available-for-sale securities	Proceeds from the sale of available-for-sale securities	340		890		Proceeds from the sale of available-for-sale securities	153		270

Other, net	Other, net	(2)		0		Other, net	—		(1)
Net cash used in investing activities		(722)		(405)
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	(334)		52
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	Proceeds from issuance of long-term debt	1,010		1,517		Proceeds from issuance of long-term debt	—		855
Proceeds from short-term borrowings		0		981
Proceeds from sale-leaseback transactions		0		118
Proceeds from issuance of common stock		22		22

Proceeds from issuance of stock warrants	Proceeds from issuance of stock warrants	14		18		Proceeds from issuance of stock warrants	—		8
Repayment of long-term debt and finance lease obligations	Repayment of long-term debt and finance lease obligations	(1,481)		(177)		Repayment of long-term debt and finance lease obligations	(83)		(644)
Repayment of short-term borrowings		0		(3)

Acquisition of treasury stock	Acquisition of treasury stock	(7)		(167)		Acquisition of treasury stock	(6)		(6)
Other, net	Other, net	(1)		0		Other, net	—		(1)
Net cash (used in) provided by financing activities		(443)		2,309
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		493		2,127
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	(89)		212
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH						INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(176)		441
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	1,969		1,018		Cash, cash equivalents and restricted cash at beginning of period	2,077		1,969
Cash, cash equivalents and restricted cash at end of period(1)	Cash, cash equivalents and restricted cash at end of period(1)	$	2,462	$	3,145	Cash, cash equivalents and restricted cash at end of period(1)	$	1,901	$	2,410

SUPPLEMENTAL CASH FLOW INFORMATION	SUPPLEMENTAL CASH FLOW INFORMATION					SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest (net of amount capitalized)		$	97	$	45
Cash payments for income taxes (net of refunds)		0		0

NON-CASH TRANSACTIONS
Operating lease assets obtained in exchange for operating lease liabilities		$	0	$	2

(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:

		June 30, 2021		June 30, 2020
Cash and cash equivalents		$	2,409	$	2,561

Restricted cash		53		584
Total cash, cash equivalents and restricted cash		$	2,462	$	3,145
Cash payments for interest						Cash payments for interest	$	20	$	40

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


	Three Months Ended March 31,
	2022		2021
Cash payments for income taxes (net of refunds)	1		—

NON-CASH TRANSACTIONS
Operating lease assets obtained under operating leases	$	59	$	—

(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:

	March 31, 2022		March 31, 2021
Cash and cash equivalents	$	1,834	$	2,358

Restricted cash(2)	67		52
Total cash, cash equivalents and restricted cash	$	1,901	$	2,410

(2) Restricted cash primarily consists of security deposits, funds held in escrow for estimated workers’ compensation obligations, and performance bonds for aircraft and facility leases.

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(unaudited, in millions)

Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Income Total
Balance at March 31, 2021 475 $ 5 158 $ (1,987) $ 2,975 $ 2,721 $ 0 $ 3,714
Net income — — — — — 64 — 64
Vesting of restricted stock units 0 — — (2) — — — (2)
Stock compensation expense — — — — 9 — — 9
Stock issued under Crewmember stock purchase plan 1 — — — 22 — — 22
Warrants issued under federal support programs — — — — 6 — — 6
Balance at June 30, 2021 476 $ 5 158 $ (1,989) $ 3,012 $ 2,785 $ 0 $ 3,813
Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Loss Total
Balance at March 31, 2020 428 $ 4 158 $ (1,980) $ 2,294 $ 4,054 $ (6) $ 4,366
Net loss — — — — — (320) — (320)
Other comprehensive income — — — — — — 3 3
Vesting of restricted stock units 0 — — (1) — — — (1)
Stock compensation expense — — — — 6 — — 6
Stock issued under Crewmember stock purchase plan 2 — — — 22 — — 22
CARES Act warrant issuance — — — — 18 — — 18
Balance at June 30, 2020 430 $ 4 158 $ (1,981) $ 2,340 $ 3,734 $ (3) $ 4,094
Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Income Total
Balance at December 31, 2020 474 $ 5 158 $ (1,981) $ 2,959 $ 2,968 $ 0 $ 3,951
Net loss — — — — — (183) — (183)
Other comprehensive income — — — — — — 0 0
Vesting of restricted stock units 1 — — (8) — — — (8)
Stock compensation expense — — — — 17 — — 17
Stock issued under Crewmember stock purchase plan 1 — — — 22 — — 22
Shares repurchased — — 0 0 0 — — 0
Warrants issued under federal support programs — — — — 14 — — 14
Balance at June 30, 2021 476 $ 5 158 $ (1,989) $ 3,012 $ 2,785 $ 0 $ 3,813
Common
Shares Common
Stock Treasury
Shares Treasury
Stock Additional
Paid-In
Capital Retained
Earnings Accumulated Other Comprehensive Income (Loss) Total
Balance at December 31, 2019 427 $ 4 145 $ (1,782) $ 2,253 $ 4,322 $ 2 $ 4,799
Net loss — — — — — (588) — (588)
Other comprehensive loss — — — — — — (5) (5)
Vesting of restricted stock units 1 — — (7) — — — (7)
Stock compensation expense — — — — 15 — — 15
Stock issued under Crewmember stock purchase plan 2 — — — 22 — — 22
Shares repurchased — — 13 (192) 32 — — (160)
CARES Act warrant issuance 18 18
Balance at June 30, 2020 430 $ 4 158 $ (1,981) $ 2,340 $ 3,734 $ (3) $ 4,094


	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
Balance at December 31, 2021	478	$	5	158	$	(1,989)	$	3,047	$	2,786	$	—	$	3,849
Net loss	—	—		—	—		—		(255)		—		(255)
Other comprehensive (loss)	—	—		—	—		—		—		(1)		(1)
Vesting of restricted stock units	1	—		—	(6)		—		—		—		(6)
Stock compensation expense	—	—		—	—		11		—		—		11
Balance at March 31, 2022	479	$	5	158	$	(1,995)	$	3,058	$	2,531	$	(1)	$	3,598

	Common Shares	Common Stock		Treasury Shares	Treasury Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income		Total
Balance at December 31, 2020	474	$	5	158	$	(1,981)	$	2,959	$	2,968	$	—	$	3,951
Net loss	—	—		—	—		—		(247)		—		(247)

Vesting of restricted stock units	1	—		—	(6)		—		—		—		(6)
Stock compensation expense	—	—		—	—		8		—		—		8
Warrants issued under federal support programs	—	—		—	—		8		—		—		8
Balance at March 31, 2021	475	$	5	158	$	(1,987)	$	2,975	$	2,721	$	—	$	3,714

See accompanying notes to condensed consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1—Summary of Significant Accounting Policies

Basis of Presentation

JetBlue Airways Corporation, or JetBlue, provides air transportation services across the United States, the Caribbean and Latin ~~America. Our~~America, and between New York and London. Our condensed consolidated financial statements include the accounts of JetBlue and our subsidiaries which are collectively referred to as “we” or the “Company”. All majority-owned subsidiaries are consolidated on a line by line basis, with all intercompany transactions and balances being eliminated. These condensed consolidated financial statements and related notes should be read in conjunction with our ~~2020~~2021 audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, or our ~~2020~~2021 Form 10-K.

These condensed consolidated financial statements are unaudited and have been prepared by us following the rules and regulations of the U.S. Securities and Exchange Commission, or the SEC. In our opinion they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States, or GAAP, have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading.

Due to the ongoing impacts from the coronavirus ("COVID-19") pandemic, seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, and other factors, our operating results for the periods presented herein are not necessarily indicative of the results that may be expected for other interim periods or the entire fiscal year.

Investment Securities

Investment securities consist of available-for-sale investment securities, ~~and~~ held-to-maturity investment securities, and equity securities. When sold, we use a specific identification method to determine the cost of the securities.

Available-for-sale investment securities. Our available-for-sale investment securities include investments such as time deposits, U.S. Treasury bills with maturities between three and twelve months, commercial paper, and convertible debt securities.

The fair values of these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the fair value hierarchy. We did 0tnot record any material gains or losses on these securities during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 or ~~2020.~~2021. Refer to Note 87 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

Held-to-maturity investment securities. Our held-to-maturity investment securities consist of investment-grade interest bearing instruments, such as corporate bonds and U.S. Treasury notes, which are stated at amortized cost. We do not intend to sell these investment securities and the contractual maturities are not greater than 24 months. Those with maturities less than twelve months are included in short-term investments on our consolidated balance sheets. Those with remaining maturities in excess of twelve months are included in long-term investments on our consolidated balance sheets. We did not ~~have any held-to-maturity investments as of June 30, 2021 and December 31, 2020. We did 0t~~ record any ~~significant~~material gains or losses on these securities during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 or ~~2020.~~2021.

Equity investment securities. Our equity investment securities include investments in common stocks of publicly traded companies which are stated at fair value. We recognized a net unrealized loss of $2 million on these securities during the three months ended March 31, 2022. No gains or losses were recorded during the same period in 2021.

The aggregate carrying values of our short-term and long-term investment securities consisted of the following at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in millions):

June 30, 2021 December 31, 2020
Available-for-sale securities
Time deposits $ 1,311 $ 1,130
Debt securities 7 7
Total available-for-sale securities 1,318 1,137
Total investment securities $ 1,318 $ 1,137

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	March 31, 2022		December 31, 2021
Available-for-sale investment securities
Time deposits	$	865	$	790
Commercial paper	61		2
Debt securities	10		8
Total available-for-sale investment securities	936		800
Held-to-maturity investment securities
Corporate bonds	100		37
Total held-to-maturity investment securities	100		37
Equity investment securities	24		26
Total investment securities	$	1,060	$	863

Other Investments

Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC, or JTV, has equity investments in emerging companies which do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the Financial Accounting Standards ~~Update ("ASU"~~Board (the "FASB") ~~2016-01,~~ ~~Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~Accounting Standards Codification (the "Codification"), we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. The carrying amount of these investments, which is included within other assets on our consolidated balance sheet, was ~~$46~~$73 million and ~~$40~~$72 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. We did not record any material gains or losses on these investments during the three months ended March 31, 2022 and 2021.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

We have an approximate 10% ownership interest in the TWA Flight Center Hotel at John F. Kennedy International Airport and it is also accounted for under the measurement alternative. The carrying amount of this investment was $14 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Equity Method Investments

Investments in which we can exercise significant influence are accounted for using the equity method in accordance with Topic 323, Investments - Equity Method and Joint Ventures of the ~~Financial Accounting Standards Board (the "FASB") Accounting Standards Codification (the "Codification").~~FASB Codification. The carrying amount of our equity method investments was ~~$32~~$37 million an~~d $34~~and $32 million as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, and is included within other assets on our consolidated balance sheets.

~~Recently Adopted Accounting Standards~~

~~New accounting rules and disclosure requirements can impact our financial results and the comparability~~ In March 2022, we recognized a gain of $3 million on one of our financial statements. The authoritative literature which has recently been issued and that we believe will impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements.

~~In December 2019, the FASB issued ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The update eliminates, clarifies, and modifies certain guidance~~equity method investments related to its issuance of additional shares upon the ~~accounting for income taxes. We adopted the requirements~~closing of ~~ASU 2019-12 as of January 1, 2021. The adoption of ASU 2019-12 did not have~~ a ~~material impact on our condensed consolidated financial statements.~~subsequent financing round.

~~In August 2020, the FASB issued ASU 2020-06,~~ Debt —Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ~~("ASU 2020-06")~~. This update simplifies the accounting for certain convertible instruments by removing the separation models for convertible debt with a cash conversion feature and for convertible instruments with a beneficial conversion feature. As a result, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. Additionally, this update amends the diluted earnings per share calculation for convertible instruments by requiring the use of the if-converted method. The treasury stock method is no longer available. Entities may adopt the requirements of ASU 2020-06 using either a full or modified retrospective approach, and it is effective for interim and annual reporting periods beginning after December 15, 2021. Early adoption is permitted for interim and annual reporting periods beginning after December 15, 2020. We adopted the requirements of ASU 2020-06 as of January 1, 2021. The adoption did not have an impact on our condensed consolidated financial statements as we did not have any convertible instruments outstanding as of December 31, 2020. As discussed in Note 3 to our condensed consolidated financial statements, in March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. We evaluated the conversion feature of this note offering for embedded derivatives in accordance with ASC 815, ~~Derivatives and Hedging, and the substantial premium model in accordance with ASC 470,~~ ~~Debt~~. Based on our assessment, we concluded that separate accounting for the conversion feature of this note offering is not required. The carrying value of this convertible note was included within long-term debt and finance lease obligations on our consolidated balance sheet as of June 30, 2021.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Note 2— Revenue Recognition

The Company categorizes the revenues received from contracts with its customers by revenue source as we believe it best depicts the nature, amount, timing, and uncertainty of our revenue and cash flow. The following table provides the revenues recognized by revenue source for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Passenger revenue	Passenger revenue									Passenger revenue
Passenger travel	Passenger travel	$	1,322	$	145	$	1,945	$	1,553	Passenger travel	$	1,490	$	625
Loyalty revenue - air transportation	Loyalty revenue - air transportation	66		25		113		129		Loyalty revenue - air transportation	113		45
Other revenue	Other revenue									Other revenue
Loyalty revenue	Loyalty revenue	81		38		126		88		Loyalty revenue	88		45
Other revenue	Other revenue	30		7		48		33		Other revenue	45		18
Total revenue	Total revenue	$	1,499	$	215	$	2,232	$	1,803	Total revenue	$	1,736	$	733

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

TrueBlue® is our customer loyalty program designed to reward and recognize our customers. TrueBlue® points earned from ticket purchases are presented as a reduction to Passenger travel within passenger revenue. Amounts presented in Loyalty revenue - air transportation represent the revenue recognized when TrueBlue® points have been redeemed and the travel has occurred.

In June 2021, the Company entered into an Amended and Restated Co-Branded Card Agreement with Barclaycard® (the "Co-Brand Agreement"). The Co-Brand Agreement, which amends and restates the existing Barclaycard® Co-Brand Agreement, extends the term to 2031 and modifies certainLoyalty revenue within other ~~terms. The terms~~revenue is primarily comprised of the ~~Co-Brand Agreement are effective January 1, 2021. The performance obligations such air transportation; use~~non-air transportation elements of the ~~JetBlue brand name, and access to~~sales of our frequent flyer customer lists; advertising; and other airline benefits. are consistent with the previous agreement. We continue to use the accounting method that allocates the consideration received based on the relative selling prices of those performance obligations. The increase in loyalty program revenues are primarily related to brand and non-air transportation elements. In addition, in July 2021, the Company entered into an Amended and Restated Co-Branded Card Agreement with MasterCard® to continue our partnership as network provider under the Co-Brand Agreements.TrueBlue® points.

Contract Liabilities

Our contract liabilities primarily consist of ticket sales for which transportation has not yet been provided, unused credits available to customers, and outstanding loyalty points available for redemption (in millions):


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Air traffic liability - passenger travel	Air traffic liability - passenger travel	$	1,628	$	964	Air traffic liability - passenger travel	$	1,643	$	1,323

Air traffic liability - loyalty program and deferred revenue		1,350		825
Air traffic liability - loyalty program (air transportation)						Air traffic liability - loyalty program (air transportation)	912		891
Deferred revenue(1)						Deferred revenue(1)	595		613
Total	Total	2,978		1,789		Total	$	3,150	$	2,827

(1) Deferred revenue is included within other accrued liabilities and other liabilities on our consolidated balance sheets.

During the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ we recognized passenger ~~rev~~revenue of ~~enue of $371~~$709 millionand ~~$666~~$237 million respectively, that was included in passenger travel liability at the beginning of the respective periods.

The Company elected the practical expedient that allows entities to not disclose the amount of the remaining transaction price and its expected timing of recognition for passenger tickets if the contract has an original expected duration of one year or less or if certain other conditions are met. We elected to apply this practical expedient to our contract liabilities relating to passenger travel and ancillary services as our tickets or any related passenger credits generally expire one year from the date of issuance.

TrueBlue® points are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of the points that were part of the air traffic liability balance at the beginning of the period as well as points that were issued during the period.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

The table below presents the activity of the current and non-current air traffic liability for our loyalty program, and includes points earned and sold to participating companies for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in millions):


Balance at December 31, ~~2020~~2021	$	~~733~~891
TrueBlue® points redeemed	(113)
TrueBlue® points earned and sold	~~186~~134
Balance at ~~June 30, 2021~~March 31, 2022	$	~~806~~912

Balance at December 31, ~~2019~~2020	$	~~661~~733
TrueBlue® points redeemed	~~(129)~~(45)
TrueBlue® points earned and sold	~~144~~70
Balance at ~~June 30, 2020~~March 31, 2021	$	~~676~~758

The timing of our TrueBlue® point redemptions can vary; however, the majority of our points are redeemed within approximately three years of the date of issuance.

Note 3—Long-term Debt, Short-term Borrowings and Finance Lease Obligations

During the three months ended March 31, 2022, we made principal payments of $83 million on our outstanding debt and finance lease obligations.

We had pledged aircraft, engines, other equipment, and facilities with a net book value of $5.6 billion at March 31, 2022 as security under various financing arrangements.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~Note 3—Long-term Debt, Short-term Borrowings and Finance Lease Obligations~~

~~During the six months ended June 30, 2021, we made payments of $1.5 billion on our outstanding debt and finance lease obligations.~~

~~We had pledged aircraft, engines, other equipment, and facilities with a net book value of $6.6 billion at June 30, 2021 as security under various financing arrangements.~~

At ~~June 30, 2021,~~March 31, 2022, scheduled maturities of our long-term debt and finance lease obligations were ~~$218~~$267 million for the remainder of ~~2021, $390~~2022, $557 million ~~in 2022, $599 million~~ in 2023, ~~$340~~$332 million in 2024, ~~$305~~$192 million in 2025, $929 million in 2026, and ~~$2.6~~$1.6 billion thereafter.

The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 were as follows (in millions):


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
		Carrying Value		Estimated Fair Value(2)		Carrying Value		Estimated Fair Value(2)			Carrying Value		Estimated Fair Value(2)		Carrying Value		Estimated Fair Value(2)
Public Debt	Public Debt									Public Debt
Fixed rate special facility bonds, due through 2036	Fixed rate special facility bonds, due through 2036	$	42	$	46	$	42	$	45	Fixed rate special facility bonds, due through 2036	$	42	$	44	$	42	$	45
Fixed rate enhanced equipment notes:	Fixed rate enhanced equipment notes:									Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032	2019-1 Series AA, due through 2032	546		460		560		440		2019-1 Series AA, due through 2032	532		398		532		442
2019-1 Series A, due through 2028	2019-1 Series A, due through 2028	170		155		174		152		2019-1 Series A, due through 2028	166		141		166		150
2019-1 Series B, due through 2027	2019-1 Series B, due through 2027	101		133		107		139		2019-1 Series B, due through 2027	95		113		94		121
2020-1 Series A, due through 2032	2020-1 Series A, due through 2032	607		672		627		658		2020-1 Series A, due through 2032	587		566		587		634
2020-1 Series B, due through 2028	2020-1 Series B, due through 2028	161		216		170		223		2020-1 Series B, due through 2028	153		183		153		199
Non-Public Debt	Non-Public Debt									Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023	Fixed rate enhanced equipment notes, due through 2023	100		102		114		116		Fixed rate enhanced equipment notes, due through 2023	66		65		88		88
Fixed rate equipment notes, due through 2028	Fixed rate equipment notes, due through 2028	796		806		891		1,017		Fixed rate equipment notes, due through 2028	575		519		620		706
Floating rate equipment notes, due through 2028	Floating rate equipment notes, due through 2028	128		126		152		144		Floating rate equipment notes, due through 2028	89		83		103		99
Floating rate term loan credit facility, due through 2024		0		0		702		759
2020 sale-leaseback transactions, due through 2024										2020 sale-leaseback transactions, due through 2024	346		358		347		374
Unsecured CARES Act Payroll Support Program loan, due through 2030	Unsecured CARES Act Payroll Support Program loan, due through 2030	259		222		259		207		Unsecured CARES Act Payroll Support Program loan, due through 2030	259		188		259		219
Secured CARES Act Loan, due through 2025		105		108		104		104
Citibank line of credit, due through 2023		0		0		546		533
2020 sale-leaseback transactions, due through 2024		350		387		352		393
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	144		123		0		0		Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	144		104		144		121
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031										Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031	132		95		132		111
0.50% convertible senior notes due 2026	0.50% convertible senior notes due 2026	734		675		0		0		0.50% convertible senior notes due 2026	737		628		736		673
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031		132		113		0		0
Total(1)	Total(1)	$	4,375	$	4,344	$	4,800	$	4,930	Total(1)	$	3,923	$	3,485	$	4,003	$	3,982

(1) Total excludes finance lease obligations of $553 million and ~~$63~~$3 million at ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

(2) The estimated fair values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair ~~values of our enhanced equipment notes and our special facility bonds were based on quoted market prices in markets with low trading volumes. The fair~~ value of our non-public debt ~~was~~are estimated using a discounted cash flow analysis based on our borrowing rates for instruments with similar terms and therefore classified as Level 3 in the fair value hierarchy. ~~The fair values of our other financial instruments approximate their carrying values.~~ Refer to Note 87 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

We have financed certain aircraft with Enhanced Equipment Trust Certificates, or EETCs. One of the benefits of this structure is being able to finance several aircraft at one time, rather than individually. The structure of EETC financing is that we create pass-through trusts in order to issue pass-through certificates. The proceeds from the issuance of these certificates are then used to purchase equipment notes, which are issued by us and are secured by our aircraft. These trusts meet the definition of a variable interest entity, or VIE, as defined in ~~the~~Topic 810, ~~Consolidations~~Consolidation ~~topic~~ of the FASB Codification, and must be considered for consolidation in our financial statements. Our assessment of our EETCs considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks in each. The main purpose of the trust structure is to enhance the credit worthiness of our debt obligation through certain bankruptcy protection provisions and liquidity facilities, and also to lower our total borrowing cost. We concluded that we are not the primary beneficiary in these trusts because our involvement in them is limited to principal and interest payments on the related notes, the trusts were not set up to pass along variability created by credit risk to us, and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our financial statements.

~~Unsecured~~

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Federal Payroll Support Programs

As a result of the adverse economic impact of COVID-19, we have received assistance under various payroll support programs provided by the federal government.

CARES Act – Payroll Support Program

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). Under the CARES Act, assistance was made available to the aviation industry in the form of direct payroll support (the "Payroll Support Program") and secured loans (the "Loan Program").

On April 23, 2020, we entered into a Payroll Support Program Agreement (the "PSP Agreement") under the CARES Act with the United States Department of the Treasury ("Treasury") governing our participation in the Payroll Support Program. Under the Payroll Support Program, Treasury provided us with a total of approximately $963 million (the "Payroll Support Payments") consisting of $704 million in grants and $259 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until April 23, 2025, and the applicable Secured Overnight Financing Rate ("SOFR") plus 2.00% thereafter until April 23, 2030. The principal amount may be repaid at any time prior to maturity at par. As part of the agreement, JetBlue issued to Treasury warrants to acquire more than 2.7 million shares of our common stock under the program at an exercise price of $9.50 per share.

Consolidated Appropriations Act – Payroll Support Program ~~Extension Loan~~2

On January 15, 2021, we entered into a Payroll Support Program Extension Agreement (the "PSP Extension Agreement") with ~~the United States Department of the~~ Treasury ~~("Treasury")~~ governing our participation in the federal Payroll Support Program for passenger air carriers under the United States Consolidated Appropriations Act, 2021 (the “Payroll Support Program 2"). ~~During the six months ended June 30, 2021,~~ Treasury provided us with a total ~~payments~~ of approximately $580 million (the "Payroll Support 2 Payments") under the program, consisting of $436 million in grants and $144 million in unsecured term loans, with funding received on January 15, 2021, March 5, 2021 and April 29, 2021. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until January 15, 2026, and the applicable ~~Secured Overnight Financing Rate ("SOFR")~~SOFR plus 2.00% thereafter until January 15, 2031. In consideration for the Payroll Support 2 Payments, we issued warrants to purchase approximately 1.0 million shares of our common stock to ~~the~~ Treasury at an exercise price of $14.43 per share.

American Rescue Plan Act – Payroll Support Program 3

On May 6, 2021, we entered into a Payroll Support 3 Agreement (the "PSP3 Agreement") with Treasury governing our participation in the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 (the "Payroll Support Program 3"). Treasury provided us with a total of approximately $541 million (the "Payroll Support 3 Payments") under the program, consisting of $409 million in grants and $132 million in unsecured term loans. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until May 6, 2026, and the applicable SOFR plus 2.00% thereafter until May 6, 2031. In consideration for the Payroll Support 3 Payments, we issued warrants to purchase approximately 0.7 million shares of our common stock to Treasury at an exercise price of $19.90 per share.

The warrants associated with each of the payroll support programs described above will expire ~~five~~5 years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time. In accordance with the PSP Extension Agreement, we are required to comply with the relevant provisions of the Payroll Support Program 2 which, among other things, includes the following: the requirement to use the Payroll Support 2 Payments exclusively for the continuation of payment of crewmember wages, salaries and benefits; the prohibition on involuntary furloughs and reductions in crewmember pay rates and benefits through March 31, 2021; the requirement that certain levels of commercial air service be maintained until March 1, 2022; the prohibitions on share repurchases and the payment of common stock dividends; and restrictions on the payment of certain executive compensation until October 1, 2022.

On April 29, 2021, Treasury provided us an Additional Payroll Support 2 Payment of $76 million, consisting of $53 million in grants and $23 million in an unsecured term loan under the PSP Extension Agreement. In consideration for the Additional Payroll Support 2 Payment, we issued warrants to Treasury to purchase approximately 0.2 million additional shares of our common stock at an exercise price of $14.43 per share. The terms of the unsecured term loan and additional warrants are identical to those issued in the first quarter of 2021 under the Payroll Support Program 2.

The carrying ~~value~~values relating to the payroll support ~~extension~~ grants were recorded within other accrued liabilities and were recognized as a contra-expense within special items on our consolidated statements of operations as the funds ~~are~~were utilized. The relative fair value of the warrants ~~estimated to be $9 million,~~ were recorded within additional paid-in capital and reduced the total carrying value of the ~~grants to $427 million.~~grants. Proceeds from the payroll support ~~extension~~ grants and from the issuance of payroll support warrants were classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows. Our funding from ~~the~~all payroll support ~~extension~~ grants ~~received under Payroll Support Program 2 was~~has been fully utilized ~~as of June~~since September 30, 2021.

The carrying ~~value~~values relating to the unsecured ~~term~~payroll support loans iswere recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from the loans were classified as financing activities on our condensed consolidated statement of cash flows.

~~0.50% Convertible Senior Notes due 2026~~CARES Act – Secured Loan Program

Under the CARES Act Loan Program, JetBlue had the ability to borrow up to a total of approximately $1.9 billion from Treasury. We entered into a loan and guarantee agreement (the "Loan Agreement") with Treasury and made an initial drawing

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

of $115 million under the CARES Act Loan Program on September 29, 2020. In connection with this initial drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share. The warrants will expire five years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.

On September 15, 2021, the Company repaid the full amount of outstanding borrowings under the Loan Agreement, which, together with accrued interest and fees, totaled approximately $118 million. As of March 31, 2022, we did not have a balance outstanding and all obligations under the Loan Agreement, including all pledges of collateral, were terminated in full.

0.50% Convertible Senior Notes due 2026

In March 2021, we completed a private offering for $750 million of 0.50% convertible notes due 2026. The notes are general unsecured senior obligations and will rank equal in right of payment with all of our existing and future senior unsecured indebtedness and senior in right of payment to our existing and future subordinated debt. The notes will effectively rank junior in right of payment to any of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness and are structurally subordinated to all of our indebtedness and other liabilities. The net proceeds from this offering were ~~approximately~~approximately $734 million.

Holders of the notes may convert them into shares of our common stock prior to January 1, 2026 only under certain circumstances (such as upon the satisfaction of the sale price condition, the satisfaction of the trading price condition, notice of redemption, or specified corporate events) and thereafter at any time at a rate of 38.5802 shares of common stock per $1,000 principal amount of notes, which corresponds to an initial conversion price of approximately $25.92 per share. The conversion rate is subject to adjustment upon the occurrence of certain specified events, including, but not limited to, the issuance of certain stock dividends on common stock, the issuance of certain rights or warrants, subdivisions, combinations, distributions of capital stock, indebtedness or assets, cash dividends and certain issuer tender or exchange offers.

Upon conversion, the notes will be settled in cash up to the aggregate principal amount of the notes to be converted and, at our election, in shares of our common stock, cash or a combination of cash and shares of our common stock in respect of the remainder, if any, of our conversion obligation.

We are not required to redeem or retire the notes periodically. We may, at our option, redeem any of the notes for cash at a redemption price of 100% of their principal amount, plus accrued and unpaid interest at any time on or after April 1, 2024 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption to the holders.

~~As discussed in Note 1 to our condensed consolidated financial statements, we early adopted the provisions of ASU 2020-06. Accordingly, we~~We evaluated the conversion feature of this note offering for embedded ~~derivatives~~derivative in accordance with ~~ASC~~Topic 815, Derivatives and Hedging of the FASB Codification, and the substantial premium model in accordance with ~~ASC~~Topic 470, Debt. of the FASB Codification. Based on our assessment, separate accounting for the conversion feature of this note offering is not required.

~~Unsecured American Rescue Plan Act of 2021 Payroll Support Program~~

~~On May 6, 2021, we entered into a Payroll Support 3 Agreement (the "PSP3 Agreement") with Treasury governing our participation in~~Interest expense recognized during the federal payroll support program for passenger air carriers under Section 7301 of the American Rescue Plan Act of 2021 (the "Payroll Support Program 3"). In the second quarter of 2021, Treasury provided us with total payments of $541three months ended March 31, 2022 was $2 million, ~~(the "Payroll Support 3 Payments") under the program, consisting of $409~~which included $1 million in grants (the "PSP3 grants") and $132 million in unsecured term loans (the "PSP3 loans") with funding received on May 6, 2021 and June 3, 2021. The PSP3 loans have a 10-year term and bear interest on the principal amount outstanding at an annual rateamortization of 1.00% until May 6, 2026, and the applicable SOFR plus 2.00% thereafter until May 6, 2031. In consideration for the Payroll Support 3 Payments, we issued warrants (the "PSP3 warrants") to purchase approximately 0.7 million shares of our common stock to the Treasury at an exercise price of $19.90 per share. The PSP3 warrants will expire five years afterdebt issuance ~~and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.~~

~~The carrying value relating to the PSP3 grants are recorded within other accrued liabilities and are~~costs. Interest expense recognized as a contra-expense within special items on our consolidated statements of operations as the funds are utilized. The relative fair value of the warrants, estimated to be $5 million, are recorded within additional paid-in capital and reduced the total carrying value of the grants to $404 million. Proceeds from the PSP3 grants and from the issuance of PSP3 warrants are classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows. As of June 30, 2021, the carrying value of our PSP3 grants was approximately $186 million.

The carrying value relating to the PSP3 loans is recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from the loans are classified as financing activities on our condensed consolidated statement of cash flows.

~~Floating Rate Term Loan Credit Facility~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

On June 17, 2020, we entered into a $750 million term loan credit facility with Barclays Bank PLC, as administrative agent (the "Term Loan"). The loans thereunder bear interest at a variable rate equal to LIBOR (subject to a 1.00% floor), or at our election another rate, in each case, plus a specified margin. Our obligations were secured on a senior basis by airport takeoff and landing slots at LaGuardia Airport, John F. Kennedy International Airport, and Reagan National Airport and the right to use certain intellectual property assets comprising the JetBlue brand. ~~Slots are rights to take-off or land at a specific airport during a specific time period~~ during the ~~day and a means by which airport capacity and congestion can be managed.~~ The Term Loan is subject to amortization payments of 5% per year, payable quarterly, commencing on September 30, 2020 with the remaining balance due and payable in a single payment on the maturity date of June 17, 2024.three months ended March 31, 2021 was insignificant.

On June 17, 2021, the Company voluntarily repaid a portion of its outstanding borrowings under the Term Loan. On June 30, 2021, the Company repaid the full amount of outstanding borrowings under the Term Loan, which, together with its repayment of June 17, 2021, totaled approximately $722 million, plus accrued interest and associated fees. As of June 30, 2021, all obligations under the Term Loan, including all pledges of collateral were terminated in full.

~~The Coronavirus Aid, Relief, and Economic Security (CARES) Act~~

~~CARES Act Payroll Support Program~~

On April 23, 2020, we entered into a Payroll Support Program Agreement (the "PSP Agreement") under the CARES Act with the Treasury governing our participation in the Payroll Support Program. Under the Payroll Support Program, Treasury provided us with payments which totaled $963 million (the "Payroll Support Payments") consisting of $704 million in grants and $259 million in unsecured term loans, with payments received on April 23, 2020 and September 30, 2020. The loans have a 10-year term and bear interest on the principal amount outstanding at an annual rate of 1.00% until April 23, 2025, and the applicable SOFR plus 2.00% thereafter until April 23, 2030. The principal amount may be repaid at any time prior to maturity at par. As part of the agreement, JetBlue issued to the Treasury warrants to acquire more than 2.7 million shares of our common stock under the program at an exercise price of $9.50 per share. The warrants will expire five years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.

The carrying value relating to the payroll support grants was recorded within other accrued liabilities and was recognized as a contra-expense within special items on our consolidated statements of operations as the funds were utilized. The relative fair value of the warrants, estimated to be $19 million, was recorded within additional paid-in capital and reduced the total carrying value of the grants to $685 million. Proceeds from the payroll support grants and from the issuance of warrants were classified within operating activities and financing activities, respectively, on our condensed consolidated statements of cash flows. Our funding from the payroll support grants under the CARES Act were fully utilized as of December 31, 2020.

The carrying value relating to the unsecured term loans is recorded within long-term debt and finance lease obligations on our consolidated balance sheets. The proceeds from the loans were classified as financing activities on our condensed consolidated statement of cash flows.

~~Secured CARES Act Loan Program~~

Under the CARES Act Loan Program, JetBlue had the ability to borrow up to a total of approximately $1.9 billion from the Treasury. We entered into a loan and guarantee agreement (the "Loan Agreement") with the Treasury and made an initial drawing of $115 million under the CARES Act Loan Program on September 29, 2020. In connection with this initial drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share. The warrants will expire five years after issuance and will be exercisable either through net cash settlement or net share settlement, at our option, in whole or in part at any time.

~~Unless otherwise terminated early, all borrowings under the CARES Act Loan Program are due and payable on the fifth anniversary of the initial borrowing date.~~Short-term Borrowings bear interest at a variable rate equal to LIBOR (or another rate based on certain market interest rates, plus a margin of 1% per annum, in each case with a floor of 0%), plus a margin of 2.75% per annum. Our obligations under the CARES Act Loan Program are secured by liens on (i) certain eligible aircraft and engine collateral and (ii) certain cash accounts (collectively, the "Collateral"). Under the terms of the CARES Act Loan Program, we

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

may also pledge eligible spare parts, slots, gates and routes, and additional aircraft, real property, ground support equipment, flight simulators and equity interests. The CARES Act Loan Program includes affirmative and negative covenants that restrict our ability to, among other things, dispose of Collateral, merge, consolidate or sell assets, incur certain additional indebtedness or pay certain dividends. In addition, we are required to maintain unrestricted cash and cash equivalents and unused commitments available under all revolving credit facilities aggregating not less than $550 million and to maintain a minimum ratio of the borrowing base of the Collateral (determined as the sum of a specified percentage of the appraised value of each type of Collateral) to outstanding obligations under the CARES Act Loan Program of not less than 1.6 to 1.0. If we do not meet the minimum collateral coverage ratio, we must either provide additional Collateral to secure our obligations under the CARES Act Loan Program or repay the loans by an amount necessary to maintain compliance with the collateral coverage ratio. The CARES Act Loan Program contains events of default customary for similar financings. Upon the occurrence of an event of default, the outstanding obligations under the CARES Act Loan Program may be accelerated and become due and payable immediately. In addition, if certain change of control events occur with respect to JetBlue, we will be required to prepay the loans in full under the CARES Act Loan Program.

In May 2021, we notified the Treasury of our intent to forego our remaining borrowing capacity of approximately $1.8 billion and subsequently on June 2, 2021 the liens on certain eligible engines and certain loyalty program assets, including JetBlue's rights in certain loyalty program agreements, loyalty program data and intellectual property, were released from the Collateral.

~~As of June 30, 2021, $115 million remained outstanding under the Loan Agreement.~~

~~Fixed Rate Enhanced Equipment Notes~~

~~2020-1A and B Equipment Notes~~

In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $808 million secured by 24 Airbus A321 aircraft. The equipment notes were issued in two series: (i) Series A, bearing interest at the rate of 4.00% per annum in the aggregate principal amount equal to $636 million, and (ii) Series B, bearing interest at the rate of 7.75% per annum in the aggregate principal amount equal to $172 million. Principal and interest are payable semi-annually.

~~2019-1B Equipment Notes~~

In August 2020, we completed a public placement of equipment notes in an aggregate principal amount of $115 million bearing interest at a rate of 8.00% per annum. These equipment notes are secured by 25 Airbus A321 aircraft, which were included in the collateral pool of our 2019-1 Series AA and Series A offerings completed in November 2019. Principal and interest are payable semi-annually.

~~2020 Sale-Leaseback Transactions~~

In 2020, we executed $563 million of sale-leaseback transactions. Of these transactions, $354 million did not qualify as sales for accounting purposes. The assets associated with these transactions remain on our consolidated balance sheets within property and equipment and the related liabilities under the lease are classified within debt and finance leases obligations. These transactions are treated as cash from financing activities on our consolidated statements of cash flows. The remaining $209 million of sale-leaseback transactions qualified as sales and generated a loss of $106 million. The assets associated with these transactions which qualified as sales are recorded within operating lease assets. The liabilities are recorded within current operating lease liabilities and long-term operating lease liabilities on our consolidated balance sheets. These transactions are treated as cash from investing activities on our consolidated statements of cash flows.

~~We did not execute any sale-leaseback transactions in the~~ ~~second quarter~~ ~~of 2021.~~

Citibank ~~Revolving~~Line of Credit ~~Agreement~~

We have a revolving Credit and Guaranty Agreement with Citibank N.A. as the administrative agent, for up to $550 ~~million (the "Revolving Facility").~~million. The term of the ~~Revolving Facility~~facility runs through August 2023. Borrowings under the ~~Revolving Facility~~Credit and Guaranty Agreement bear interest at a variable rate equal to LIBOR, plus a margin. The ~~Revolving Facility is~~Credit and Guaranty Agreement are secured by unencumbered aircraft, simulators, and certain other ~~assets as permitted thereunder.~~assets. The ~~Revolving Facility~~Credit and Guaranty Agreement includes covenants that require us to maintain certain minimum balances in unrestricted cash, cash equivalents, and unused commitments available under revolving credit facilities. In addition, the covenants restrict our ability to, among other things, dispose of certain collateral, or merge, consolidate, or sell assets. As of and for the periods ended March 31, 2022 and December 31, 2021, we did not have a balance outstanding or any borrowings under this line of credit.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~We borrowed the full amount of $550 million under this revolving credit facility on April 22, 2020.~~

We repaid the full balance of this facility in the first quarter of 2021 and all the collateral securing the borrowings under the facility has been released. As of and for the quarter ended June 30, 2021, we did not have a balance outstanding or any borrowings under the Revolving Facility.

~~Short-term~~

Morgan Stanley Line of Credit

We have a revolving line of credit with Morgan Stanley for up to approximately $200 million. This line of credit is secured by a portion of our investment securities held by Morgan Stanley and the amount available to us under this line of credit may vary accordingly. This line of credit bears interest at a floating rate based upon LIBOR, plus a margin. As of and for the periods ended ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we did not have a balance outstanding or any borrowings under this line of credit.

Note 4—~~Earnings (Loss)~~Loss Per Share

Basic earnings per share is calculated by dividing net (loss) income by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from restricted stock units, the Crewmember Stock Purchase Plan, convertible notes, and any other potentially dilutive instruments using the treasury stock and if-converted methods. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts wwere ~~ere~~ ~~1.2~~2.9 million and 3.5 million for the three months ended ~~June 30, 2020. Anti-dilutive common stock equivalents excluded from the computation of diluted earnings per share amounts were 3.6 million~~March 31, 2022 and ~~1.6 million for the six months ended~~ ~~June 30,~~ 2021, ~~and~~ ~~June 30, 2020, respectively~~.respectively.

The following table shows how we computed ~~basic and diluted earnings~~loss per common share for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (dollars and share data in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Net income (loss)		$	64	$	(320)	$	(183)	$	(588)
Net loss										Net loss	$	(255)	$	(247)

Weighted average basic shares	Weighted average basic shares	317.7		271.7		317.0		275.1		Weighted average basic shares	320.5		316.3
Effect of dilutive securities	Effect of dilutive securities	3.8		0		0		0		Effect of dilutive securities	—		—
Weighted average diluted shares	Weighted average diluted shares	321.5		271.7		317.0		275.1		Weighted average diluted shares	320.5		316.3

Earnings (loss) per common share:
Loss per common share										Loss per common share
Basic	Basic	$	0.20	$	(1.18)	$	(0.58)	$	(2.14)	Basic	$	(0.79)	$	(0.78)
Diluted	Diluted	$	0.20	$	(1.18)	$	(0.58)	$	(2.14)	Diluted	$	(0.79)	$	(0.78)

On February 24, 2020, JetBlue entered into an accelerated share repurchase agreement, or ASR, paying $160 million for an initial delivery of 6.6 million shares. The term of the ASR concluded on March 16, 2020 with a delivery of 4.9 million additional shares to JetBlue on March 18, 2020. A total of 11.5 million shares, at an average price of $13.91 per share, were repurchased under the agreement.

~~Our share repurchase program has been suspended since March 31, 2020.~~

Note 5—Crewmember Retirement Plan

We sponsor a retirement savings 401(k) defined contribution plan, or the Plan, covering all of our crewmembers where we match 100% of our crewmember contributions up to 5% of their eligible wages. The contributions vest over three years and are measured from a crewmember's hire date. Crewmembers are immediately vested in their voluntary contributions.

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Another component of the Plan is a Company discretionary contribution of 5% of eligible non-management crewmember compensation, which we refer to as Retirement Plus. Retirement Plus contributions vest over three years and are measured from a crewmember's hire date.

Certain Federal Aviation Administration, or FAA, licensed crewmembers receive an additional contribution of 3% of eligible compensation, which we refer to as Retirement Advantage.

Our pilots receive a non-elective Company contribution of 16% of eligible pilot compensation per the terms of the finalized collective bargaining agreement between JetBlue and the Air Line Pilots Association ~~or ALPA,~~("ALPA"), in lieu of the above 401(k) Company matching contribution, Retirement Plus, and Retirement Advantage contributions. ~~Refer to Note 6 to our condensed consolidated financial statements for additional information.~~The Company's non-elective contribution ~~of 16%~~ of eligible pilot compensation vests after three years of service.

Our non-management crewmembers are eligible to receive profit sharing, calculated as 10% of adjusted pre-tax income before profit sharing and special items up to a pre-tax margin of 18% with the result reduced by Retirement Plus contributions and the equivalent of Retirement Plus contributions for pilots. If JetBlue's resulting pre-tax margin exceeds 18%, non-management crewmembers will receive 20% profit sharing on amounts above an 18% pre-tax margin.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Total 401(k) company match, Retirement Plus,, Retirement Advantage, pilot retirement contribution, and profit sharing expensed for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021 was $62 millionand ~~2020 was $100 million and $92~~$48 million, respectively.

Note 6—Commitments and Contingencies

Flight Equipment Commitments

In February 2022, we exercised our option to purchase 30 additional Airbus A220-300 aircraft under our existing agreement with Airbus Canada Limited Partnership. The 30 additional A220-300 aircraft are expected to be delivered from 2022 to 2026. Options for 20 additional A220-300 aircraft remain available to us.

As of ~~June 30, 2021,~~March 31, 2022, our firm aircraft orders consisted of 6564 Airbus A321neo aircraft and 6792 Airbus A220 aircraft, scheduled for delivery through 2027. Committed expenditures for these aircraft and related flight equipment, including estimated amounts for contractual price escalations and predelivery deposits as of ~~June 30, 2021~~March 31, 2022 is approximately ~~$0.4~~$0.7 billion for the remainder of ~~2021, $0.8 billion in~~ 2022, $1.6 billion in 2023, ~~$1.8~~$2.0 billion in 2024, ~~$1.2~~$1.7 billion in 2025, $1.4 billion in 2026, and ~~$1.6~~$1.0 billion thereafter.

The amount of committed expenditures stated above represents the current delivery schedule set forth in our Airbus order book as of March 31, 2022. In February 2022, we received notice from Airbus of anticipated delivery delays for the A220 aircraft. We expect a delivery of a maximum of 9 A220 aircraft in 2022 as a result of the delays.

In October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new commercial aircraft and related parts imported from certain European Union member states, which include aircraft and other parts we are already contractually obligated to purchase, including those noted above. The U.S. Trade Representative increased the tariff to 15% effective March 2020. In March 2021, the U.S. Trade Representative announced a four-month suspension of the tariff that was followed by an announcement in June 2021 that the suspension will be extended for five years. We continue to work with our business partners, including Airbus, to evaluate the potential financial and operational impact of these announcements on our future aircraft deliveries, including after the suspension is lifted. The ~~continued~~ imposition of ~~the~~this or any tariff could substantially increase the cost of new ~~Airbus~~ aircraft and parts.

Other Commitments

We utilize several credit card processors to process our ticket sales. Our agreements with these processors do not contain covenants, but do generally allow the processor to withhold cash reserves to protect the processor from potential liability for tickets purchased, but not yet used for travel. While we currently do not have any collateral requirements related to our credit card processors, we may be required to issue collateral to our credit card processors, or other key business partners, in the future.

As of ~~June 30, 2021,~~March 31, 2022, we had approximately ~~$26~~$32 million in assets serving as collateral for letters of credit relating to a certain number of our leases. These are included in restricted cash and expire at the end of the related lease terms. Additionally, we had approximately $26 million pledged related to our workers' compensation insurance policies and other business partner agreements, which will expire according to the terms of the related policies or agreements.

~~Amid the COVID-19 pandemic, we reached an Agreement in Principle with ALPA to avoid involuntary furloughs of~~Except for our pilots ~~through~~and inflight crewmembers who are represented by the Air Line Pilots Association ("ALPA") and the Transport Workers Union of America ("TWU"), respectively, our other frontline crewmembers do not have third party representation.

In April 2021, ALPA, on behalf of the JetBlue pilot group, filed a grievance relating to the Northeast Alliance Agreement ("NEA"), an expanded codeshare and marketing alliance between JetBlue and American Airlines, Inc. ("American") at ~~least October 1,~~4 Northeast airports. ALPA claims that in entering the NEA, JetBlue violated certain scope clauses as contained in the pilots’ ALPA collective bargaining agreement. A final mediation session concluded in September 2021 and in ~~exchange for short-term~~January 2022, the parties submitted final written briefs to the System Board. Shortly after submission of the briefs, the parties agreed to enter into non-binding mediation with the assistance of the arbitrator with a temporary hold on a System Board decision. As a result of the mediation process, the parties agreed to certain changes to the collective bargaining agreement. The agreement, ratified by the JetBlue pilot group in April 2022, included a one-time payment of $30 million to be paid and recorded as expense in the second quarter of 2022 and a 3% base pay increase effective May 1, 2022.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~In April 2018, JetBlue inflight~~We enter into individual employment agreements with each of our non-unionized FAA-licensed crewmembers, ~~elected to be solely represented by the Transport Workers Union of America, or TWU. The National Mediation Board, or NMB, certified the TWU~~which include dispatchers, technicians, and inspectors, as ~~the representative body for JetBlue inflight crewmembers. In November 2020, our inflight crewmembers voted to reject the tentative collective bargaining~~well as air traffic controllers. Each employment agreement ~~between JetBlue and the TWU. The parties have re-engaged in negotiations~~is for a ~~collective bargaining agreement.~~

~~Except as noted above,~~term of five years and automatically renews for an additional five years unless either the crewmember or we elect not to renew it by giving at least 90 days' notice before the end of the relevant term. Pursuant to these agreements, these crewmembers can only be terminated for cause. In the event of a downturn in our business that would require a reduction in work hours, we are obligated to pay these crewmembers a guaranteed level of income and to continue their benefits if they do not ~~have third party representation.~~obtain other aviation employment.

Legal Matters

Occasionally, we are involved in various claims, lawsuits, regulatory examinations, investigations and other legal matters involving suppliers, crewmembers, customers, and governmental agencies, arising, for the most part, in the ordinary course of business. The outcome of litigation and other legal matters is always uncertain. The Company believes it has valid defenses to the legal matters currently pending against it, is defending itself vigorously, and has recorded accruals determined in accordance with GAAP, where appropriate. In making a determination regarding accruals, using available information, we evaluate the likelihood of an unfavorable outcome in legal or regulatory proceedings to which we are a party and record a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of our defenses, and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from our current estimates. It is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to our consolidated results of operations, liquidity, or financial condition.

To date, none of these types of litigation matters, most of which are typically covered by insurance, has had a material impact on our operations or financial condition. We have insured and continue to insure against most of these types of claims. A judgment on any claim not covered by, or in excess of, our insurance coverage could materially adversely affect our consolidated results of operations, liquidity, or financial condition.

On September 21, 2021, the United States Department of Justice (the "DOJ"), along with the Attorneys General of each of the States of Arizona, California, and Florida, the Commonwealths of Massachusetts, Pennsylvania, and Virginia, and the District of Columbia, filed a lawsuit in the United States District Court for the District of Massachusetts against JetBlue and American, and, together with JetBlue, the “Carriers” concerning the Carriers’ previously implemented NEA. The lawsuit asserts and seeks an adjudication that the NEA violates Section 1 of the Sherman Act, and that the Carriers be permanently enjoined from continuing and restrained from further implementing the NEA.

~~Note 7—Financial Derivative Instruments and Risk Management~~

~~As part~~Also on September 21, 2021, the Department of ~~our risk management strategy, we periodically purchase over the counter energy derivative instruments and enter into fixed forward price agreements, or FFPs, to manage our exposure~~Transportation (the "DOT") published a Clarification Notice relating to the ~~effect~~agreement that had been reached between the DOT, JetBlue, and American in January 2021, at the conclusion of ~~changes~~the DOT’s review of the NEA ("DOT Agreement"). The DOT Clarification Notice stated, among other things, that the DOT Agreement remains in force during the ~~price~~pendency of ~~jet fuel. Prices for~~ the ~~underlying commodities have historically been highly correlated~~DOJ action against the NEA and, while the DOT retains independent statutory authority to ~~jet fuel, making derivatives~~prohibit unfair methods of ~~them effective at providing short-term protection~~competition in air transportation, the DOT intends to defer to DOJ to resolve the antitrust concerns that the DOJ has identified with respect to the NEA. The DOT simultaneously published a Notice Staying Proceeding in relation to a complaint by Spirit Airlines, Inc. regarding the NEA, pending resolution of the DOJ action described above.

JetBlue believes the lawsuit is without merit and, along with American, intends to defend itself vigorously. Given the nature of this case, we are unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter. In November 2021, JetBlue and American filed a motion to dismiss the DOJ's lawsuit against ~~volatility in average fuel prices. We also periodically enter into jet fuel basis swaps for~~ the ~~differential between heating oil and jet fuel, to further limit the variability in fuel prices at various locations. We do not hold or issue any derivative financial instruments for trading purposes.~~

~~Aircraft Fuel Derivatives~~

~~We attempt to obtain cash flow hedge accounting treatment for each fuel derivative that we enter into. This treatment is provided for under ASC 815,~~ ~~Derivatives and Hedging~~ which allows for gains and losses on qualifying hedges to be deferred until the underlying planned jet fuel consumption occurs, rather than recognizing the gains and losses on these instruments into earnings during each period they are outstanding. When the underlying jet fuel is consumedNEA. Motion practice has concluded and the ~~related derivative contract settles, any gain or loss previously recorded in other comprehensive income is recognized in aircraft fuel expense. If~~parties await a ~~hedge does not qualify for hedge accounting,~~decision, while the ~~periodic changes in its fair value are recognized in interest income and other. All cash flows related to our fuel hedging derivatives are classified as operating cash flows.~~lawsuit proceeds concurrently.

Our current approach to fuel hedging is to enter into hedges on a discretionary basis without a specific target of hedge percentage needs. We view our hedge portfolio as a form of insurance to help mitigate the impact of price volatility and protect us against severe spikes in oil prices, when possible.

~~We did not have any fuel hedging contracts outstanding as of June 30, 2021 or December 31, 2020.~~

~~The table below reflects quantitative information related to our derivative instruments and where these amounts are recorded in our financial statements (dollar amounts in millions):~~

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Fuel derivatives
Hedge effectiveness losses recognized in aircraft fuel expense $ 0 $ 1 $ 0 $ 3
Losses on derivatives resulting from the discontinuance of hedge accounting recognized in interest income and other 0 3 0 5
Hedge losses on derivatives recognized in comprehensive income 0 0 0 11
Percentage of actual consumption economically hedged 0 % 32 % 0 % 24 %

Any outstanding derivative instrument exposes us to credit loss in connection with our fuel contracts in the event of nonperformance by the counterparties to the agreements, but we do not expect that any of our counterparties will fail to meet their obligations. The amount of such credit exposure is generally the fair value of our outstanding contracts for which we are in a receivable position. To manage credit risks we select counterparties based on credit assessments, limit our overall exposure to any single counterparty, and monitor the market position with each counterparty. Some of our agreements require cash deposits from either JetBlue or our counterparty if market risk exposure exceeds a specified threshold amount.

We have master netting arrangements with our counterparties allowing us the right of offset to mitigate credit risk in derivative transactions. The financial derivative instrument agreements we have with our counterparties may require us to fund all, or a portion of, outstanding loss positions related to these contracts prior to their scheduled maturities. The amount of collateral posted, if any, is periodically adjusted based on the fair value of the hedge contracts. Our policy is to offset the liabilities represented by these contracts with any cash collateral paid to the counterparties.

~~There were 0 offsetting derivative instruments as of June 30, 2021 or December 31, 2020.~~

Note 8—7—Fair Value

Under ~~the~~Topic 820, Fair Value ~~Measurements and Disclosures~~Measurement ~~topic~~ of the FASB Codificationdisclosures are required about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs as follows:

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Level 1 - observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 - quoted prices in active markets for similar assets and liabilities, and other inputs that are observable directly or indirectly for the asset or liability; or

Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following is a listing of our assets and liabilities required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 (in millions):


		June 30, 2021									March 31, 2022
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	1,740	$	100	$	0	$	1,840	Cash equivalents	$	1,128	$	15	$	—	$	1,143
Available-for-sale investment securities	Available-for-sale investment securities	0		1,318		0		1,318		Available-for-sale investment securities	—		936		—		936
Equity investment securities										Equity investment securities	24		—		—		24

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~


		December 31, 2020									December 31, 2021
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	1,330	$	130	$	0	$	1,460	Cash equivalents	$	1,515	$	—	$	—	$	1,515
Available-for-sale investment securities	Available-for-sale investment securities	0		1,137		0		1,137		Available-for-sale investment securities	—		800		—		800
Equity investment securities										Equity investment securities	26		—		—		26

Refer to Note 3 to our condensed consolidated financial statements for fair value information related to our outstanding debt obligations as of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

Cash equivalents

Our cash equivalents include money market securities and time deposits which are readily convertible into cash, have maturities of three months or less when purchased, and are considered to be highly liquid and easily tradable. The money market securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy. The fair values of remaining instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the hierarchy.

Available-for-sale investment securities

Our available-for-sale investment securities include investments such as time deposits and convertible debt securities. The fair values of these instruments are based on observable inputs in non-active markets, which are therefore classified as Level 2 in the hierarchy. We did 0tnot record any material gains or losses on these instruments during the three months ended March 31, 2022 and 2021.

Equity investment securities

Our equity investment securities include investments in common stocks of publicly traded companies. The fair values of these instruments are classified as Level 1 in the hierarchy as they are based on unadjusted quoted prices in active markets for identical assets. We recognized a net unrealized loss of $2 million on these securities during the three ~~and six~~ months ended ~~June 30, 2021 and 2020.~~March 31, 2022. No gains or losses were recorded during the same period in 2021.

Other Investments

2219

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As discussed in Note 9—1 to our condensed consolidated financial statement, JTV has equity investments in emerging companies that do not have readily determinable fair values. In accordance with Topic 321, Investments - Equity Securities of the FASB Codification, we account for these investments using a measurement alternative which allows entities to measure these investments at cost, less any impairment, adjusted for changes from observable price changes in orderly transactions for identifiable or similar investments of the same issuer. We did not record any material gains or losses on these investments during the three months ended March 31, 2022 and 2021.

Note 8—Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in fair value of our ~~aircraft fuel derivatives which qualify for hedge accounting.~~available-for-sale securities. A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ is as follows (in millions):


	~~Aircraft Fuel Derivatives(1)(2)~~
~~Balance of accumulated income, at March 31, 2021~~	$	0
~~Reclassifications into earnings, net of deferred taxes of $0~~	0
~~Change in fair value, net of deferred taxes of $0~~	0
~~Balance of accumulated income, at June 30, 2021~~	$	0

~~Balance of accumulated (loss), at March 31, 2020~~	$	~~(6)~~
~~Reclassifications into earnings, net of deferred taxes $(1)~~	3
~~Change in fair value, net of deferred taxes of $0~~	0
~~Balance of accumulated (loss), at June 30, 2020~~	$	~~(3)~~

~~A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the six months ended June 30, 2021 and 2020 is as follows (in millions):~~


	~~Aircraft Fuel Derivatives(1)(2)~~
~~Balance of accumulated income, at December 31, 2020~~	$	0
~~Reclassifications into earnings, net of deferred taxes of $0~~	0
~~Change in fair value, net of deferred taxes of $0~~	0
~~Balance of accumulated income, at June 30, 2021~~	$	0

~~Balance of accumulated income, at December 31, 2019~~	$	2
~~Reclassifications into earnings, net of deferred taxes $(2)~~	6
~~Change in fair value, net of deferred taxes of $5~~	~~(11)~~
~~Balance of accumulated (loss), at June 30, 2020~~	$	~~(3)~~


	Available-for-sale securities(1)		Total
Balance of accumulated income, at December 31, 2021	$	—	$	—
Reclassifications into earnings, net of deferred taxes of $0	—		—
Change in fair value, net of deferred taxes of $0	(1)		(1)
Balance of accumulated (loss), at March 31, 2022	$	(1)	$	(1)

Balance of accumulated income, at December 31, 2020	$	—	$	—
Reclassifications into earnings, net of deferred taxes $0	—		—
Change in fair value, net of deferred taxes of $0	—		—
Balance of accumulated income, at March 31, 2021	$	—	$	—

(1) Reclassified to ~~aircraft fuel expense.~~interest income.

(2) In 2020, we made several capacity reductions in response to the COVID-19 pandemic. These capacity reductions led to the discontinuance of hedge accounting on a number of our aircraft fuel derivatives as the forecasted consumption of aircraft fuel was no longer probable. Losses of $2 million and $4 million that were previously deferred in other comprehensive loss were reclassified to interest income and other during the three and six months ended June 30, 2020, respectively.

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~~PART I. FINANCIAL INFORMATION~~

~~ITEM 1. FINANCIAL STATEMENTS~~

~~JETBLUE AIRWAYS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

Note ~~10—~~9—Special Items

The following is a listing of special items presented on our consolidated statements of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Special Items	Special Items									Special Items
Federal payroll support grant recognition(1)	Federal payroll support grant recognition(1)	$	(357)	$	(304)	$	(644)	$	(304)	Federal payroll support grant recognition(1)	$	—	$	(288)
CARES Act employee retention credit(2)	CARES Act employee retention credit(2)	(9)		0		(11)		0		CARES Act employee retention credit(2)	—		(1)
Fleet impairment(3)		0		0		0		202
Total	Total	$	(366)	$	(304)	$	(655)	$	(102)	Total	$	—	$	(289)

(1) As discussed in Note 3 to our condensed consolidated financial statements, we ~~are participants~~received assistance in ~~Payroll Support Program 2~~the form of grants and ~~Payroll Support Program 3, both of which are~~unsecured loans under various federal payroll support programs. Funds under these federal payroll support programs for air carriers (the "Programs"). In the six months ended June 30, 2021, Treasury provided us with payroll support funding totaling $1.1 billion, consisting of $845 million in grants and $276 million in unsecured term loans under the Programs. The payroll support funds under these Programs arewere to be used exclusively for the continuation of payment of crewmember wages, salaries and benefits. The carrying values of the payroll support grants ~~are~~(after consideration of the warrants we issued) were recorded within other liabilities and ~~will be~~were recognized as contra-expenses within special items on our consolidated statements of operations as the funds ~~are~~were utilized. We utilized ~~$357~~$288 million ~~and $644 million~~ of ~~the~~ payroll support grants ~~under the Programs~~ for the three ~~and six~~ months ended ~~June 30, 2021, respectively.~~March 31, 2021. Our payroll support grants were fully utilized as of December 31, 2021.

(2) The Employee Retention Credit ("ERC") under the CARES Act is a refundable tax credit which encourages ~~businesses~~business to keep employees on the payroll during the COVID-19 pandemic. Eligible employers can qualify for up to $5,000 of credit for each employee based on qualified wages paid after March 12, 2020 and before January 1, 2021. The Internal Revenue Service ("IRS") subsequently issued Notice 2021-23 and Notice 2021-49 which collectively extended the ERC eligibility to cover qualified wages paid after December 31, 2020 and before January 1, 2022. Qualified wages are the wages paid to an employee

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

JETBLUE AIRWAYS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

for the time that the employee is not providing services due to an economic hardship, specifically, either (1) a full or partial suspension of operations by order of a governmental authority due to COVID-19, or (2) a significant decline in gross receipts. Our policy is to recognize the ERC when it is filed with the ~~Internal Revenue Service.~~IRS. We recognized ~~$9 million and $11~~$1 million of ERC as a contra-expense within special items on our consolidated statements of operations for the three ~~and six~~ months ended ~~June 30, 2021, respectively.~~

~~(3) Under the~~ ~~Property, Plant, and Equipment~~ topic of the Codification, we are required to assess long-lived assets for impairment when events and circumstances indicate that the assets may be impaired. An impairment of long-lived assets exists when the sum of the estimated undiscounted future cash flows expected to be generated directly by the assets are less than the book value of the assets. Our long-lived assets include both owned and leased properties which are classified as property and equipment, and operating lease assets on our consolidated balance sheets, respectively.

Our operations were adversely impacted by the unprecedented decline in demand for travel caused by the COVID-19 pandemic. To determine if impairment exists in our fleet, we grouped our aircraft by fleet-type and estimated their future cash flows based on projections of capacity, aircraft age, maintenance requirements, and other relevant conditions. Based on the assessment, we determined the future cash flows from the operation of our Embraer E190 fleet were lower than the carrying value. For those aircraft, including the ones that are under operating lease, and related spare parts in our Embraer E190 fleet, we recorded an impairment loss of $0 and $202 million for the three and six months ended June 30, 2020, respectively. These losses represent the difference between the book value of these assets and their fair value. We estimated the fair value of our Embraer E190 fleet using third party valuations and considered specific circumstances such as aircraft age, maintenance requirements and condition, and therefore classified as Level 3 in the fair value hierarchy. We evaluated the remaining fleet and determined the future cash flows of our Airbus A320 and Airbus A321 fleet exceeded their carrying value as of June 30,March 31, 2021.

~~No impairment loss was recorded for the three and six months ended June 30, 2021.~~

~~As the extent of the ongoing impact from the COVID-19 pandemic remains uncertain, we will update our assessment as new information becomes available.~~

Note 10—Subsequent Event

Proposal to Acquire Spirit Airlines

On April 5 2022, we announced that we have delivered to the board of directors of Spirit Airlines, Inc. ("Spirit") a proposal to acquire all of the outstanding shares of Spirit common stock for a per share consideration of $33.00 in cash.

We intend to fund the transaction with cash on hand and debt financing.

Any transaction with Spirit would be subject to negotiation and execution of, among other agreements, a definitive merger agreement between JetBlue and Spirit which would be subject to approval by each company’s Board of Directors. Completion of the transaction would be subject to customary closing conditions, including receipt of required regulatory approvals and approval of Spirit’s shareholders.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The COVID-19 pandemic ~~continues~~continued to have ~~a significant~~an adverse impact on our business and operating ~~revenues and financial position. We began seeing signs of recovery~~results in ~~February 2021 that continued to progress throughout~~ the ~~second~~first quarter of ~~2021. The length and severity of~~2022. We have seen continued improvements in our business during the reduction in travel demand due to the COVID-19 pandemic are uncertain, but with increasing vaccination rates, reductions in infection rates related to new COVID-19 variants and easing of travel advisories and restrictions, we believe customer confidence will continue to grow, leading to increased demand throughout the summer of 2021. We expect widespread vaccinations to result in sustained demand improvement going forward, with recovery of domestic demand preceding the recovery of international demand in most regions. If consumer confidence and demand for air travel returns,first quarter, which we expect to ~~return to 2019 capacity levels~~continue throughout 2022.

First Quarter 2022 Results

Our operating results in the ~~second half~~first quarter of ~~2021.~~

~~Second Quarter~~ 2021 ~~Results~~

~~Our second quarter~~and 2020 ~~results~~ were adversely impacted by the COVID-19 pandemic. As a result, ~~the~~ comparisons ~~to 2020~~of our year-over-year performance are inflated and ~~are~~would not necessarily be indicative of our future operating results. In certain cases, we have also provided comparisons of our ~~second~~first quarter ~~2021~~2022 results to our ~~second~~first quarter 2019 results, which isare more reflective of pre-pandemic ~~operations.~~operations, allowing for a better understanding of the full impact of the COVID-19 pandemic and the progress of our recovery.

•~~Second~~First quarter system capacity increased by ~~465.6%~~69.2% year-over-year and decreased by ~~(14.9)% versus~~0.3% compared to the ~~second~~first quarter of 2019.

•Revenue for the ~~second~~first quarter of ~~2021~~2022 increased by ~~$1,284 million~~137.0%, or $1.0 billion year-over-year, to ~~$1,499 million and~~$1.7 billion. Compared to the first quarter of 2019, revenue decreased by ~~(28.8)% versus the second quarter of 2019.~~7.2%, or $135 million.

•Operating revenue per available seat mile ~~(RASM)~~("RASM") for the ~~three months ended June 30, 2021~~first quarter of 2022 increased by ~~23.4%~~40.0% year-over-year to ~~10.99~~11.29 cents. This compares to a decrease of 6.9% from the first quarter of 2019.

•Operating expense for the ~~three months ended June 30, 2021~~first quarter of 2022 increased by ~~116.3%~~104.8% year-over-year to ~~1,352 million and decreased by (27.2)% versus~~$2.1 billion. Compared to the ~~second~~first quarter of ~~2019.~~2019, operating expense increased by 17.1%, or $308 million.

•Operating expense per available seat mile ~~(CASM)~~("CASM") for the ~~three months ended June 30, 2021 decreased~~first quarter of 2022 increased by ~~(61.7)%~~21.0% year-over-year to ~~9.91~~13.67 cents. This compares to an increase of 17.5% from the first quarter of 2019.

•Our operating expense for the ~~second~~first quarter of 2021 and ~~2020~~2019 included the effects of special items. In the second quarter of 2021, we recognized $357 million of contra-expense representing the amount of federal payroll support extension grants provided by the payroll support programs, that were utilized during the period, and $9 million of contra-expense related to the recognition of Employee Retention Credits provided by the CARES Act. Our operating expense for the second quarter of 2020 included $304 million of payroll support grants under the CARES act as a contra-expense within special items on our consolidated statement of operations. Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our operating expense(1) increased by ~~53.7%~~36.3% to ~~$1,371 million.~~$1.5 billion year-over-year. This compares to an increase of 13.5% from the first quarter of 2019. Refer to our ''Regulation G Reconciliation of Non-GAAP Financial Measures" at the end of this section for details of the special items.

•Excluding fuel and related taxes, special items, as well as operating expenses related to our non-airline businesses, our cost per available seat mile ~~(CASM ex-fuel)~~("CASM ex-fuel")(1) decreased by ~~(72.8)%~~19.4% year-over-year to ~~10.05~~9.87 cents for the ~~second~~first quarter of ~~2021~~.2022. This compares to an increase of 13.9% from the first quarter of 2019.

•Our reported (loss) earnings ~~(loss)~~ per share for the ~~second~~first quarter of 2022, 2021, and ~~2020~~2019 were ~~$0.20~~$(0.79), $(0.78), and ~~$(1.18),~~$0.14, respectively. Excluding ~~special items,~~mark-to-market and certain gains and losses on our investments, our adjusted loss per share(1) for the ~~second~~first quarter of 2022 was $(0.80). Excluding special items, our adjusted (loss) earnings per share~~2021~~(1) for the first quarter of 2021 and ~~2020~~2019 were ~~$(0.65)~~$(1.48) and ~~$(2.02),~~$0.16, respectively.

~~Since February 2021,~~Network

Enabled by our NEA with American, we ~~have seen a meaningful rebound~~added three new destinations to our network in the demand for leisure travel. We are encouraged by the improving booking trends, and believe the ongoing acceleration in demand will continue throughout the summer, subject to the increase in vaccination rates, reductions in COVID-19 infection rates, including those associated with new variants, and easingfirst quarter of ~~travel restrictions.~~ 2022.


Destination						Service Commenced

Puerto Vallarta, Mexico						February 19, 2022
Kansas City, Missouri						March 27, 2022
Milwaukee, Wisconsin						March 27, 2022

We expect to ~~increase capacity in response~~continue diversifying our network as we recover from the pandemic. We have previously announced services to the ~~level~~following new destinations:


Destination						Service Expected to Commence

Vancouver, Canada						June 9, 2022
Asheville, North Carolina						June 16, 2022

(1) Refer to our ''Regulation G Reconciliation of ~~demand. We have taken a number~~Non-GAAP Financial Measures" at the end of ~~steps to position ourselves~~this section for ~~recovery when demand for air travel returns to pre-pandemic levels.~~more information on this non-GAAP measure.

~~Network~~22

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~~In February 2021, we added service to Miami and Key West which further expanded our relevance in South Florida.~~PART I. FINANCIAL INFORMATION

~~In April 2021, we operated~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Following the success of our inaugural ~~flight~~transatlantic service between New York's John F. Kennedy International Airport and London, which began in August 2021, we have announced plans to begin service to London from Boston Logan International Airport this summer.

Fleet

Properties

Reaffirming our commitment to New York, in February 2022, we executed a new lease for our primary corporate offices that will extend our stay in the present Long Island City location until 2039. This new lease contributed $59 million to our total operating lease assets and liabilities balances at March 31, 2022.

Environmental, Social, and Governance ("~~JFK"~~ESG")

We remain focused on continuing to lead in ESG initiatives. Our efforts include:

•In March 2022, the JetBlue Foundation awarded 10 charitable organizations with grants to support and advance their education and mentorship programs. These grants are expected to further the Foundation's mission of increased advocacy for inclusion, gender and racial parity within science, technology, engineering and math education, and aviation.

•We expanded our Gateway program to provide a pathway for families of our crewmembers to become pilots through a defined education, training, and time-building program.

•We made an investment in Electric Power Systems, a leading provider of aerospace battery systems, through JetBlue Technology Ventures ("JTV"), our wholly owned subsidiary.

•In April 2022, JTV announced its investment as a limited partner in TPG Rise Climate, the climate investing strategy of TPG's global impact investing platform TPG Rise, further continuing its commitment to creating a more sustainable travel industry.

•In April 2022, we announced the execution of an offtake agreement with Aemetis for 125 million gallons of blended sustainable aviation fuel ("SAF") to ~~Guatemala City's La Aurora International Airport, making us~~be delivered over 10 years beginning in 2025.

Outlook for 2022

We are pleased with the ~~only airline that offers daily service~~momentum in demand and revenue trends which accelerated throughout the first quarter. We expect revenue for the second quarter of 2022 to increase between ~~New York City~~11% to 16 % compared to the same period in 2019, sustained by the underlying momentum.

To alleviate the recent operational challenges, we are further moderating our capacity growth for the remainder of the year. For the second quarter of 2022, we expect capacity to increase between 0% to 3% compared to the same period in 2019. Full year 2022 capacity is expected to increase between 0% to 5% compared to 2019. Our original expectation for full year 2022 capacity was an increase of between 11% to 15% versus 2019. We believe our operational investments and ~~Guatemala's capital city.~~capacity reductions will improve our operational performance in the coming months while we expect to fly a record number of customers. Given our reduced capacity outlook, we are also exploring the potential to accelerate the retirement of some of our older aircraft.

Operating expenses per available seat mile, excluding fuel and related taxes, other non-airline operating expenses, and special items ("CASM Ex-Fuel")(1) for the second quarter of 2022 is expected to increase between 15% to 17%. This increase is primarily attributed to the following factors: certain inefficient, close-in capacity reductions; premium and incentive pay to our frontline crewmembers to support the operation; ramp-up costs to maintain our hiring pace for the summer; and recent changes

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

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

to the collective bargaining agreement with our pilots group. We expect full year 2022 CASM Ex-Fuel to increase between 10% to 15% compared to 2019.

Despite the temporary cost challenges expected in the near term, we expect the Company will return to profitability in the second half of 2022.

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

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Three Months Ended March 31, 2022 vs. 2021

Overview

We reported a net loss of $255 million, an operating loss of $367 million and an operating margin of (21.1)% for the three months ended March 31, 2022. This compares to a net loss of $247 million, an operating loss of $294 million and an operating margin of (40.2)% for the three months ended March 31, 2021. Loss per share was $(0.79) for the three months ended March 31, 2022 compared to $(0.78) for the same period in 2021.

Our reported results for the three months ended March 31, 2022 included mark-to-market and certain gains and losses on our investments. Adjusting for these items, our adjusted net loss(1) was $256 million, and adjusted loss per share(1) was $(0.80) for the three months ended March 31, 2022.

Our reported results for the three months ended March 31, 2021 included the effects of special items. Adjusting for these special items(1), our adjusted net loss(1) was $467 million, adjusted operating loss(1) was $583 million, adjusted operating margin(1) was (79.6)%, and adjusted loss per share(1) was $(1.48) for the three months ended March 31, 2021.

On-time performance, as defined by the Department of Transportation ("DOT"), is arrival within 14 minutes of scheduled arrival time. In the first quarter of 2022, our system wide on-time performance was 65.6% compared to 78.9% for the same period in 2021. Our completion factor decreased by 3.0 points to 94.9% in the first quarter of 2022 from 97.9% for the same period in 2021. We experienced operational challenges in the first quarter of 2022 which continued into April.

Operating Revenues


(Revenues in millions; percent changes based on unrounded numbers)	Three Months Ended March 31,						Year-over-Year Change
	2022			2021			$		%
Passenger revenue	$	1,603		$	670		$	933	139.5	%
Other revenue	133			63			70		111.0
Total operating revenues	$	1,736		$	733		$	1,003	137.0	%

Average Fare	$	195.99		$	149.97		$	46.02	30.7	%
Yield per passenger mile (cents)	14.67			11.52			3.15		27.3
Passenger revenue per ASM (cents)	10.42			7.36			3.06		41.5
Operating revenue per ASM (cents)	11.29			8.06			3.23		40.0
Average stage length (miles)	1,231			1,277			(46)		(3.6)
Revenue passengers (thousands)	8,177			4,463			3,714		83.2
Revenue passenger miles (millions)	10,927			5,808			5,119		88.1
Available Seat Miles (ASMs) (millions)	15,383			9,090			6,293		69.2
Load Factor	71.0		%	63.9		%			7.1		pts.

Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More® Space. The increase in passenger revenue of $933 million, or 139.5%, for the three months ended March 31, 2022 compared to the same period in 2021, was primarily driven by the return in demand for travel as we continue to recover from the COVID-19 pandemic. Revenue passengers increased by 83.2% to 8.2 million for the three months ended March 31, 2022 from 4.5 million for the same period in 2021.

Other revenue is primarily comprised of the marketing component of the sales of our TrueBlue® points. It also includes revenue from the sale of vacation packages, ground handling fees received from other airlines, and rental income. The increase in other revenue of $70 million, or 111.0%, was principally driven by an increase in marketing revenue associated with our TrueBlue® program due to higher customer spend along with improved metrics from our new co-branded credit card agreements, which became effective in mid-2021.

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

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~In June 2021,~~Our first quarter 2022 results were characterized by a very strong demand acceleration, with revenue coming in more than six points ahead of our original forecast of a decline between 11% and 16% compared to the same period in 2019. Load factors improved meaningfully from an average of 62% in January to 80% in March. We delivered positive year-over-three revenue growth in the month of March as we ~~launched daily service to Los Cabos, Mexico from JFK and Los Angeles International Airport.~~exited the quarter with tremendous revenue momentum driven by very strong underlying travel demand across our business.

Operating Expenses

In ~~July 2021,~~detail, our operating costs per available seat mile, or ASM, were as follows:


(in millions; per ASM data in cents; percent changes based on unrounded numbers)	Three Months Ended March 31,				Year-over-Year Change				Cents per ASM
	2022		2021		$		%		2022	2021	% Change
Aircraft fuel and related taxes	$	571	$	193	$	378	195.0	%	3.71	2.13	74.3	%
Salaries, wages and benefits	688		521		167		32.0		4.47	5.74	(22.0)
Landing fees and other rents	132		115		17		14.8		0.86	1.26	(32.2)
Depreciation and amortization	143		125		18		15.1		0.93	1.37	(32.0)
Aircraft rent	26		25		1		4.2		0.17	0.27	(38.4)
Sales and marketing	57		23		34		152.9		0.37	0.25	49.4
Maintenance, materials and repairs	152		104		48		45.8		0.99	1.15	(13.8)
Other operating expenses	334		210		124		59.2		2.17	2.31	(5.9)
Special items	—		(289)		289		(100.0)		—	(3.18)	(100.0)
Total operating expenses	$	2,103	$	1,027	$	1,076	104.8	%	13.67	11.30	21.0	%

Total operating expenses excluding special items(1)	$	2,103	$	1,316	$	787	59.8	%	13.67	14.48	(5.6)	%

Aircraft Fuel and Related Taxes

Aircraft fuel and related taxes increased by $378 million, or 195.0%, for the three months ended March 31, 2022 compared to the same period in 2021. The average fuel price for the three months ended March 31, 2022 increased by 68.4% to $2.90 per gallon. Our fuel consumption increased by 75.2%, or 85 million gallons, due to the increase in capacity as demand for travel returned. Scheduled departures increased to 78,393 flights, or 78.0%, for the three months ended March 31, 2022. Given the significant rise in fuel costs, we ~~launched services~~moderated our capacity growth for the first quarter of 2022.

Salaries, Wages and Benefits

Salaries, wages and benefits increased by $167 million, or 32.0%, for the three months ended March 31, 2022 compared to ~~Kalispell/Glacier Park International Airport~~the same period in ~~Montana with up to three weekly flights from JFK and launched service to Boise Airport in Idaho from JFK with up to four weekly flights.~~

~~We also anticipate launching service from JFK to London Heathrow in August 2021 and London Gatwick in September~~ 2021. ~~Service from Boston’s Logan International Airport to London will launch in summer 2022. London will be our first destination in Europe.~~

~~Commercial Partnerships~~

~~We continue to develop our strategic relationship with American Airlines Group Inc. ("American"). In February 2021, we began codeshare operations under our alliance agreement on select flights.~~

~~Enabled~~The increase was driven primarily by higher total hours worked by our ~~alliance~~crewmembers as we align our workforce with ~~American,~~the increased demand for travel. As of March 31, 2022, we have approximately 23,500 crewmembers compared to approximately 20,000 crewmembers at March 31, 2021. The average number of full-time equivalent crewmembers increased by 33.2% compared to the same period in ~~April 2021, we announced our plans to add seven new destinations between late 2021~~2021. We expect near-term pressures on salaries, wages and ~~2022~~benefits driven by premium and incentive pay to our ~~route map. We also announced significant growth plans at New York's LaGuardia Airport ("LGA") where we plan~~frontline crewmembers to ~~launch 40 new routes~~support the operation, ramp-up costs to maintain our hiring pace for the summer, and recent changes to the collective bargaining agreement with our pilots group.

Landing Fees and Other Rents

Landing fees and other rents increased by $17 million, or 14.8%, for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to increases in departures.

Depreciation and Amortization

Depreciation and amortization increased by $18 million, or 15.1%, for the ~~coming~~three months ~~many enabled~~ended March 31, 2022 compared to the same period in 2021 primarily driven by the ~~Northeast Alliance; doubling our presence in LGA by the end~~addition of ~~2021.~~

We believe our partnership with American will create more capacity, seamless connectivity for travelers in the northeast, and offer more choices for customers across the networks of both airlines. By leveraging our Northeast Alliance with American, we look to re-build business market frequencies ahead of an expected business travel recovery in the fall. In addition, we expect this relationship will also accelerate our recovery as the travel industry adapts to16 new ~~trends as a result of the COVID-19 pandemic.~~

~~Fleet~~

~~We took delivery of six~~ aircraft ~~in the second quarter of 2021 and paid for each delivery with cash on hand.~~

~~In connection with our plans to begin~~that were placed into service ~~to London, we took delivery~~since March 31, 2021. The average number of our ~~first two Airbus A321LR~~operating aircraft increased by 6.0% during the ~~long range model of the Airbus A321, in the second quarter.~~

Given the new growth opportunities being provided by our Northeast alliance, we are re-examining our Fleet to ensure we are well equipped to capitalize fully on current and near term conditions. We have a plan to delay our retirement schedule for our owned E190s which offers a constructive way to profitably grow in the Northeast while protecting the balance sheet. We will of course remain flexible with our fleet to align with the demand environment.

~~Also in the second quarter, we placed our first two Airbus A220 aircraft into service. We believe the economics of the Airbus A220 aircraft, which have approximately 30% lower direct cost per seat~~three months ended March 31, 2022 as compared to ~~our Embraer E190 fleet, will be pivotal~~the same period in ~~helping us reshape our cost structure and rebuild our margin as we begin to recover from the pandemic.~~

~~Additionally we placed two new Airbus A321neo aircraft into service which will help reduce C0~~2 ~~emissions with improved fuel economy through newly designed engine technology and cabin changes.~~

~~Customer Experience~~

~~In February 2021, we unveiled a reimagined version of our Mint~~® ~~experience, our premium product offering. The new service includes a completely refreshed cabin design featuring private suites with a sliding door for every Mint~~® ~~customer. Each Mint~~® ~~aircraft will also include two Mint~~® Studio suites which offer the most space in a premium experience from any U.S. airline based on personal square footage per passenger seat. We debuted this new premium service with a 16-seat individual2021.

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

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~suite layout in June on a limited number of flights between New York~~Sales and ~~Los Angeles in 2021. For our anticipated transatlantic flights to London, the new Mint~~® ~~experience will include 24 individual suites.~~Marketing

~~We also updated our Fare Options platform giving our customers more choices~~Sales and ~~flexibility by eliminating change and cancel fees on our~~ ~~Blue~~marketing increased $34 million, or 152.9%,~~Blue Extra~~, ~~Blue Plus, and Mint~~® ~~fares. Beginning in July 2021, customers who purchased these fares on our domestic flights will also be guaranteed overhead bin space for one carry-on bag.~~

In March 2021, we introduced Paisley by JetBlue ("Paisley"), a new travel website that leverages smart technology to provide individually tailored offers our customers based on their itinerary. We believe Paisley will add breadth to our product offerings, learn more about our customers' preferences, and contribute to future earnings growth.

~~Outlook for 2021~~

~~As we continue to navigate through the pandemic, we are optimistic about the future. Based on our current planning assumptions, we expect capacity~~ for the ~~third quarter of 2021 to be flat to down~~ three ~~percent as~~months ended March 31, 2022 compared to the same period in ~~2019.~~2021 principally driven by higher credit card fees and computer reservation system charges, which are directly related to return in demand as we continue to recover from the pandemic. Revenue passengers increased by 4 million, or 83.2%, year-over-year.

~~Revenue is expected to decline between 4%~~Materials and ~~9% in~~Repairs

Maintenance materials and repairs increased $48 million, or 45.8%, for the ~~third quarter of 2021 as~~three months ended March 31, 2022 compared to the same period in ~~2019. We expect~~2021, primarily driven by the ~~demand acceleration which began~~increase in ~~February 2021 to continue as larger portions~~flying and timing of heavy maintenance visits and engine maintenance.

Other Operating Expenses

Other operating expenses consist of the ~~U.S. population become vaccinated against COVID-19~~following categories: outside services (including expenses related to fueling, ground handling, skycap, security, and ~~travel advisories~~janitorial services), insurance, personnel expenses, professional fees, onboard supplies, shop and ~~restrictions begin to ease. We are closely monitoring the latest news with respect to the COVID variants~~office supplies, bad debts, communication costs, and ~~the potential impact that continued spread of these variants could have on the demand for air travel.~~taxes other than payroll and fuel taxes.

~~We presently expect third quarter 2021~~Other operating expenses ~~to increase by approximately 11-13% as~~increased $124 million, or 59.2%, for the three months ended March 31, 2022 compared to the same period in ~~2019. We plan to continue managing our cost structure, while mitigating near term cost pressures from higher fuel prices, airport rents and landing fees, and labor costs~~2021 as we ~~ramp~~ramped up the level of our operations ~~if we begin~~in response to ~~see a~~the return ~~of capacity back to pre-pandemic levels.~~in demand for air travel.

Special Items

~~RESULTS OF OPERATIONS~~

~~Three Months Ended June 30, 2021 vs. 2020~~

~~Overview~~

~~We reported a net income of $64 million, operating income of $147 million and an operating margin of 9.8%~~Special items for the three months ended ~~June 30, 2021. This compares~~March 31, 2021 included the following:

•Contra-expense of $288 million, which represents the amount of federal payroll support grants utilized during the period; and

•Contra-expenses of $1 million related to ~~a net loss~~the recognition of ~~$320 million, an operating loss of $410 million and an operating margin of (190.8)%~~Employee Retention Credits provided by the CARES Act.

There were no special items for the three months ended ~~June 30, 2020. Earnings per share were $0.20~~March 31, 2022.

Operational Statistics

The following table sets forth our operating statistics for the ~~second quarter of 2021~~three months ended March 31, 2022 and ~~$(1.18) of loss per diluted share for the same period in 2020.~~

~~Our reported results for the second quarter of 2021 and 2020 included the effects of special items. Adjusting for these special items(1)~~, our adjusted net loss was $(206) million, adjusted operating loss was $(219), adjusted operating margin was (14.6)%, and adjusted loss per share was $(0.65) for the second quarter of 2021. This compares to adjusted net loss of $(548) million, adjusted operating loss of $(714) million, adjusted operating margin was (332.6)%, and adjusted diluted loss per share of $(2.02) for the second quarter of 2020.

On-time performance, as defined by the Department of Transportation, or DOT, is arrival within 14 minutes of scheduled arrival time. In the second quarter of 2021, our systemwide on-time performance was 73.8% compared to 92.9% for the same

~~period in 2020. Our completion factor increased by 13.3% points to 99.2% in the second quarter of 2021 from 85.9% in the same period in 2020.~~

2021:

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

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Operating Revenues~~

(Revenues in millions; percent changes based on unrounded numbers) Three Months Ended June 30, Year-over-Year Change
2021 2020 $ %
Passenger revenue $ 1,388 $ 170 $ 1,218 715.5 %
Other revenue 111 45 66 148.0
Total operating revenues $ 1,499 $ 215 $ 1,284 597.7 %
Average Fare $ 174.90 $ 276.35 $ (101.45) (36.7) %
Yield per passenger mile (cents) 12.82 20.86 (8.04) (38.5)
Passenger revenue per ASM (cents) 10.18 7.06 3.12 44.2
Operating revenue per ASM (cents) 10.99 8.91 2.08 23.4
Average stage length (miles) 1,279 1,183 96 8.1
Revenue passengers (thousands) 7,938 616 7,322 1,188.5
Revenue passenger miles (millions) 10,804 816 9,988 1,223.7
Available Seat Miles (ASMs) (millions) 13,645 2,413 11,232 465.6
Load Factor 79.2 % 33.8 % 45.4 pts.

Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More® Space. The increase in passenger revenue of $1,218 million, or 715.5%, for the three months ended June 30, 2021 compared to the same period in 2020, was primarily driven by the increase in demand for travel as we recover from the COVID-19 pandemic. Revenue passengers increased to 7.9 million for the three months ended June 30, 2021 from 616 thousand for the same period in 2020.

~~Operating Expenses~~

~~In detail, our operating costs per available seat mile, or ASM, were as follows:~~

(in millions; per ASM data in cents; percent changes based on unrounded numbers) Three Months Ended June 30, Year-over-Year Change Cents per ASM
2021 2020 $ % 2021 2020 % Change
Aircraft fuel and related taxes $ 336 $ 29 $ 307 1,051.8 % 2.46 1.21 103.7 %
Salaries, wages and benefits 577 477 100 20.9 4.23 19.78 (78.6)
Landing fees and other rents 174 62 112 180.7 1.27 2.57 (50.4)
Depreciation and amortization 133 140 (7) (4.9) 0.98 5.81 (83.2)
Aircraft rent 26 16 10 63.8 0.19 0.66 (71.0)
Sales and marketing 47 8 39 508.9 0.35 0.32 7.7
Maintenance, materials and repairs 164 73 91 122.8 1.20 3.05 (60.6)
Other operating expenses 261 124 137 110.5 1.91 5.12 (62.8)
Special items (366) (304) (62) 20.2 (2.68) (12.62) (78.7)
Total operating expenses $ 1,352 $ 625 $ 727 116.3 % 9.91 25.90 (61.7) %
Total operating expenses excluding special items(1)
$ 1,718 $ 929 $ 789 84.8 % 12.59 38.52 (67.3) %

~~Aircraft Fuel and Related Taxes~~

Aircraft fuel and related taxes increased by $307 million, for the three months ended June 30, 2021 compared to the same period in 2020. The average fuel price for the three months ended June 30, 2021 increased by 98.8% to $1.91 per gallon. Our fuel consumption increased by 479.3%, or 146 million gallons, due to increased demand as we recover from the COVID-19

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~pandemic. We expect our fuel consumption to gradually increase in 2021 as we continue to recover from the pandemic and add capacity back into the system.~~

~~Salaries, Wages and Benefits~~

Salaries, wages and benefits increased $100 million, or 20.9%, for the three months ended June 30, 2021 compared to the same period in 2020, driven primarily by the increase in demand for travel driving up total hours worked by our crewmembers. Beginning in March 2020, we instituted a company-wide hiring freeze, implemented salary and wage reductions of 20% to 50% for our officers, and reduced work hours for all other management workgroups.

~~Landing Fees and Other Rents~~

Landing fees and other rents increased $112 million, or 180.7%, for the three months ended June 30, 2021 compared to the same period in 2020 primarily due to increases in rates as well as increases in customers and departures. We currently expect rents and landing fees to continue to increase into 2022 due to increased rates and a higher volume of flights.

~~Depreciation and Amortization~~

Depreciation and amortization decreased $(7) million, or (4.9)%, for the three months ended June 30, 2021 compared to the same period in 2020. Beginning in June 2020, we entered into sale-leaseback transactions for our aircraft resulting in a decline in depreciation expense. This decline in expense was essentially offset by an increase in aircraft rent as we converted owned aircraft into leased aircraft.

~~Aircraft Rent~~

Aircraft rent increased $10 million, or 63.8%, for the three months ended June 30, 2021 compared to the same period in 2020. Beginning in June 2020, we entered into sale-leaseback transactions for some of our aircraft resulting in an increase in aircraft rent.

~~Sales and Marketing~~

~~Sales and marketing increased $39 million, or 508.9%, for the three months ended June 30, 2021 compared to the same~~

~~period in 2020 driven by an increase in sales in the period due to an increase in demand for travel.~~

~~Maintenance Materials and Repairs~~

Maintenance materials and repairs increased $91 million, or 122.8%, for the three months ended June 30, 2021 compared to the same period in 2020, primarily driven by an increase in maintenance deferred during the COVID-19 pandemic. As of June 30, 2020, we had approximately 115 aircraft parked.

~~Other Operating Expenses~~

Other operating expenses consist of the following categories: outside services (including expenses related to fueling, ground handling, skycap, security, and janitorial services), insurance, personnel expenses, professional fees, onboard supplies, shop and office supplies, bad debts, communication costs, and taxes other than payroll and fuel taxes.

Other operating expenses increased $137 million, or 110.5%, for the three months ended June 30, 2021 compared to the same period in 2020 due to an increase in demand to fly as we begin to come out of the COVID-19 pandemic.

~~We continue to focus on driving efficiencies and productivity across our business. We expect the benefits from the run-rate savings associated with our Structural Cost Program to continue.~~

~~Special Items~~

For the three months ended June 30, 2021, special items included a contra-expense of $357 million which represents the amount of payroll support grants utilized during the period. In addition, special items included a contra-expense of $9 million related to the recognition of Employee Retention Credits provided by the CARES act.

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~Six Months Ended June 30, 2021 vs. 2020~~

~~Overview~~

We reported a net loss of $183 million, an operating loss of $147 million and an operating margin of (6.6)% for the six months ended June 30, 2021. This compares to a net loss of $588 million, an operating loss of $744 million and an operating margin of (41.3)% for the six months ended June 30, 2020. Loss per share was $(0.58) for the six months ended June 30, 2021 compared to loss per share of $(2.14) for the same period in 2020.

~~Our reported results for the six months ended June 30, 2021 and 2020 included the effects of special items. Adjusting for these special items(1)~~, our adjusted net loss was $665 million, adjusted operating loss was $802 million, adjusted operating margin was (35.9)%, and adjusted loss per share was $(2.10) for the six months ended June 30, 2021. This compares to adjusted net loss of $664 million, adjusted operating loss of $846 million, adjusted operating margin of (46.9)%, and adjusted loss per share of $(2.42) for the six months ended June 30, 2020.

~~Operating Revenues~~

(Revenues in millions; percent changes based on unrounded numbers) Six Months Ended June 30, Year-over-Year Change
2021 2020 $ %
Passenger revenue $ 2,058 $ 1,682 $ 376 22.4 %
Other revenue 174 121 53 42.9
Total operating revenues $ 2,232 $ 1,803 $ 429 23.7 %
Average Fare $ 165.93 $ 191.83 $ (25.90) (13.5) %
Yield per passenger mile (cents) 12.39 15.00 (2.61) (17.4)
Passenger revenue per ASM (cents) 9.05 9.72 (0.67) (6.9)
Operating revenue per ASM (cents) 9.82 10.42 (0.60) (5.8)
Average stage length (miles) 1,278 1,163 115 9.9
Revenue passengers (thousands) 12,401 8,766 3,635 41.5
Revenue passenger miles (millions) 16,611 11,208 5,403 48.2
Available Seat Miles (ASMs) (millions) 22,734 17,304 5,430 31.4
Load Factor 73.1 % 64.8 % 8.3 pts.

~~Passenger revenue is our primary source of revenue, which includes seat revenue and baggage fees, as well as revenue from our ancillary product offerings such as Even More~~® Space. The increase in passenger revenue of $376 million, or 22.4%, for the six months ended June 30, 2021 compared to the same period in 2020, was primarily driven by the increase in demand for travel as we begin to come out of the COVID-19 pandemic which began in March of 2020. Revenue passengers increased by 41.5% to 12.4 million for the six months ended June 30, 2021 from 8.8 million for the same period in 2020.

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~Operating Expenses~~

~~In detail, our operating costs per available seat mile, or ASM, were as follows:~~

(in millions; per ASM data in cents; percent changes based on unrounded numbers) Six Months Ended June 30, Year-over-Year Change Cents per ASM
2021 2020 $ % 2021 2020 % Change
Aircraft fuel and related taxes $ 530 $ 394 $ 136 34.3 % 2.33 2.28 2.2 %
Salaries, wages and benefits 1,098 1,078 20 1.9 4.83 6.23 (22.5)
Landing fees and other rents 289 174 115 66.4 1.27 1.00 26.7
Depreciation and amortization 258 279 (21) (7.6) 1.13 1.61 (29.7)
Aircraft rent 50 37 13 35.7 0.22 0.22 3.3
Sales and marketing 70 60 10 15.7 0.31 0.35 (11.9)
Maintenance, materials and repairs 268 233 35 14.7 1.18 1.35 (12.7)
Other operating expenses 471 394 77 19.7 2.07 2.27 (8.9)
Special items (655) (102) (553) (541.8) (2.88) (0.59) (388.5)
Total operating expenses $ 2,379 $ 2,547 $ (168) (6.6) % 10.46 14.72 (28.9) %
Total operating expenses excluding special items(1)
$ 3,034 $ 2,649 $ 385 14.5 % 13.34 15.31 (12.9) %

~~Aircraft Fuel and Related Taxes~~

Aircraft fuel and related taxes increased by $136 million, or 34.3%, for the six months ended June 30, 2021 compared to the same period in 2020. The average fuel price for the six months ended June 30, 2021 increased by 5.8% to $1.84 per gallon. Our fuel consumption increased by 27.0%, or 61 million gallons, due to capacity increases as demand for travel grew. We expect our fuel consumption to gradually increase in 2021 as we continue to recover from the pandemic and add capacity back into the system.

~~Salaries, Wages and Benefits~~

Salaries, wages and benefits increased by $20 million, or 1.9%, for the six months ended June 30, 2021 compared to the same period in 2020, driven primarily by the increase in demand for travel driving up total hours worked by our crewmembers. In the comparison period, beginning in March 2020, we instituted a company-wide hiring freeze, implemented salary reductions of 20% to 50% for our officers, and reduced work hours for all other management workgroups. As of June 30, 2021, we have approximately 20,000 crewmembers compared to approximately 21,500 crewmembers at June 30, 2020.

~~Landing Fees and Other Rents~~

Landing fees and other rents increased by $115 million, or 66.4%, for the six months ended June 30, 2021 compared to the same period in 2020 primarily due to increases in rates, customers, and departures as demand for travel increases.

~~We expect cost pressures in landing fees and other rents due to increases in rates at the airports we serve, coupled with an increase in the number of departures as we ramp up our operations.~~

~~Depreciation and Amortization~~

Depreciation and amortization decreased by $21 million, or 7.6%, for the six months ended June 30, 2021 compared to the same period in 2020. This decrease was primarily attributed to the impairment of our E190 fleet and related spare parts in 2020. In addition, we also executed a number of sale-leaseback transactions towards the second half of 2020, the majority of which qualified as sales for accounting purposes. As a result of these sales, we no longer record depreciation expense on the assets. The costs associated with leasing these assets back from the purchaser are included in Aircraft Rent on our consolidated statements of operations.

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

The decreases described above were partially offset by additional depreciation expenses related to four new aircraft that were placed into service since June 30, 2020. The average number of aircraft increased by 2.8% during the six months ended June 30, 2021 as compared to the same period in 2020.

~~Aircraft Rent~~

Aircraft rent increased $13 million, or 35.7%, for the six months ended June 30, 2021 compared to the same period in 2020. As discussed above, we executed a number of sale-leaseback transactions towards the second half of 2020, the majority of which qualified as sales for accounting purposes. The assets associated with these transactions which qualified as sales are recorded ~~within operating lease assets and rent expenses are recognized throughout the life of the related lease terms.~~

~~Sales and Marketing~~

Sales and marketing increased $10 million, or 15.7%, for the six months ended June 30, 2021 compared to the same period in 2020 driven by higher credit card fees and computer reservation system charges which are directly related to demand increases as we recover from the pandemic.

~~Maintenance Materials and Repairs~~

Maintenance materials and repairs increased $35 million, or 14.7%, for the six months ended June 30, 2021 compared to the same period in 2020, primarily driven by an increase in maintenance events. During 2020, we parked aircraft and deferred non-essential maintenance expenditures to conserve cash.

~~We expect expenses relating to maintenance, materials, and repairs to increase throughout 2021.~~

~~Other Operating Expenses~~

Other operating expenses increased $77 million, or 19.7%, for the six months ended June 30, 2021 compared to the same period in 2020 due to capacity increases in response to the increase in demand as we recover from the COVID-19 pandemic.

~~Special Items~~

~~Special items for the six months ended June 30, 2021 included the following:~~

•~~Contra-expense of $(644) million, which represents the amount of federal payroll support grants utilized during the period; and~~

•~~Contra-expenses of $(11) million related to the recognition of Employee Retention Credits provided by the CARES Act.~~

For the six months ended June 30, 2020, special items include a contra-expense of $304 million which represents the amount of CARES Act payroll support grants utilized during the period, and the impairment charge of $202 million on our Embraer E190 fleet.

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~The following table sets forth our operating statistics for the three and six months ended June 30, 2021 and 2020:~~


		Three Months Ended June 30,						Year-over-Year Change		Six Months Ended June 30,						Year-over-Year Change			Three Months Ended March 31,						Year-over-Year Change
(percent changes based on unrounded numbers)	(percent changes based on unrounded numbers)	2021			2020			%		2021			2020			%		(percent changes based on unrounded numbers)	2022			2021			%
Operational Statistics	Operational Statistics																	Operational Statistics
Revenue passengers (thousands)	Revenue passengers (thousands)	7,938			616			1,188.5		12,401			8,766			41.5		Revenue passengers (thousands)	8,177			4,463			83.2
Revenue passenger miles (RPMs) (millions)	Revenue passenger miles (RPMs) (millions)	10,804			816			1,223.7		16,611			11,208			48.2		Revenue passenger miles (RPMs) (millions)	10,927			5,808			88.1
Available seat miles (ASMs) (millions)	Available seat miles (ASMs) (millions)	13,645			2,413			465.6		22,734			17,304			31.4		Available seat miles (ASMs) (millions)	15,383			9,090			69.2
Load factor	Load factor	79.2		%	33.8		%	45.4	pts	73.1		%	64.8		%	8.3	pts	Load factor	71.0		%	63.9		%	7.1	pts
Aircraft utilization (hours per day)	Aircraft utilization (hours per day)	8.8			1.6			450.0		7.4			6.1			21.3		Aircraft utilization (hours per day)	9.9			5.9			67.8

Average fare	Average fare	$	174.90		$	276.35		(36.7)		$	165.93		$	191.83		(13.5)		Average fare	$	195.99		$	149.97		30.7
Yield per passenger mile (cents)	Yield per passenger mile (cents)	12.82			20.86			(38.5)		12.39			15.00			(17.4)		Yield per passenger mile (cents)	14.67			11.52			27.3
Passenger revenue per ASM (cents)	Passenger revenue per ASM (cents)	10.18			7.06			44.2		9.05			9.72			(6.9)		Passenger revenue per ASM (cents)	10.42			7.36			41.5
Operating revenue per ASM (cents)	Operating revenue per ASM (cents)	10.99			8.91			23.4		9.82			10.42			(5.8)		Operating revenue per ASM (cents)	11.29			8.06			40.0
Operating expense per ASM (cents)	Operating expense per ASM (cents)	9.91			25.90			(61.7)		10.46			14.72			(28.9)		Operating expense per ASM (cents)	13.67			11.30			21.0
Operating expense per ASM, excluding fuel(1)	Operating expense per ASM, excluding fuel(1)	10.05			36.95			(72.8)		10.92			12.90			(15.3)		Operating expense per ASM, excluding fuel(1)	9.87			12.25			(19.4)

Departures	Departures	67,253			12,896			421.5		111,302			96,191			15.7		Departures	78,393			44,049			78.0
Average stage length (miles)	Average stage length (miles)	1,279			1,183			8.1		1,278			1,163			9.9		Average stage length (miles)	1,231			1,277			(3.6)
Average number of operating aircraft during period	Average number of operating aircraft during period	269.0			262.0			2.7		268.0			260.6			2.8		Average number of operating aircraft during period	282.0			266.0			6.0
Average fuel cost per gallon, including fuel taxes	Average fuel cost per gallon, including fuel taxes	$	1.91		$	0.96		98.8		$	1.84		$	1.74		5.8		Average fuel cost per gallon, including fuel taxes	$	2.90		$	1.72		68.4
Fuel gallons consumed (millions)	Fuel gallons consumed (millions)	176			30			479.3		288			227			27.0		Fuel gallons consumed (millions)	197			112			75.2
Average number of full-time equivalent crewmembers	Average number of full-time equivalent crewmembers									15,416			16,759					Average number of full-time equivalent crewmembers	19,304			14,493			33.2

Historical trends may not continue. The ongoing COVID-19 pandemic continues to cause disruptions in our ~~operations during the three months ended June 30, 2021.~~operations. We expect our operating results to significantly fluctuate from quarter-to-quarter in the future due to the uncertainties surrounding the COVID-19 pandemic, its impact on the economy and consumer behavior, and various other factors which are outside of our control. Consequently, we believe quarter-to-quarter comparisons of our operating results may not necessarily be meaningful; you should not rely on our results for any one quarter as an indication of our future performance.

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~CONSOLIDATED BALANCE SHEET ANALYSIS~~

~~The following is a discussion~~impacts of the ~~significant changes between June 30, 2021, and December 31, 2020.~~

(in millions)
Selected Balance Sheet Data: June 30, 2021 December 31, 2020 $ Change % Change
ASSETS
Cash and cash equivalents 2,409 1,918 491 25.6 %
Investment securities 1,317 1,135 182 16.0 %
Receivables, net of allowance of $2, at June 30, 2021 and December 31, 2020, respectively. 276 98 178 181.9 %
Flight equipment 10,793 10,256 537 5.2 %
LIABILITIES
Air traffic liability 1,880 1,122 758 67.5 %
Other accrued liabilities 584 215 369 171.7 %
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS 3,998 4,413 (415) (9.4) %

~~Cash and cash equivalents~~

~~Cash and cash equivalents increased by $491 million, or 25.6%, primarily related to $1.6 billion cash from operations,~~COVID-19 pandemic, airlines including ~~$1.1 billion funds related to the various PSP programs. Our cash portion at June 30, 2021 also benefited~~us, have faced ongoing challenges ranging from the ~~initial cash payments associated~~spread of the Omicron variant, staffing ramp up, workforce attrition, weather events, and air traffic delays. To address these challenges, we have announced a series of investments aimed at restoring crewmember and customer confidence for the upcoming summer travel season. These investments are centered around five initiatives:

Schedule reduction

A reduced schedule will offer more buffer and flexibility to recover from operational disruptions and put less stress on crew resources. We originally planned to grow our 2022 capacity by 11% to 15% compared to 2019. With a reduced schedule, we now plan to grow our 2022 capacity by 0% to 5% compared to 2019. Most importantly, we are reducing our summer schedule by more than 10% from our original plan, and scheduled aircraft utilization will be down by 10% to 15% compared to 2019. Even with the reductions, we expect to grow significantly in New York's three major airports as part of the NEA, from 200 flights per day in 2019 to nearly 300 flights per day.

Hiring and training

Despite reductions in capacity growth, we will proceed with hiring efforts to increase staffing for the summer, including 5,000 new crewmembers in New York. We have also increased our ~~new Co-Branded Credit Card agreement.The increase~~pilot training team and simulator capacity to ~~cash was offset by $1.4 billion of debt principal repayments.~~

~~Investment securities~~

~~Investment securities increased by $182 million, or 16.0%, primarily driven by an~~meet the increase in ~~time deposits.~~demand resulting from pilot attrition.

~~Receivables, less allowance~~Addressing customer call volume and hold times

~~Receivables increased by $178 million, as a result of improvements in demand which~~Recent operational disruptions have led to ana record number of calls into our customer support center and extended wait times. These disruptions, coupled with a greater number of customers taking advantage of ticket flexibility and calls regarding other COVID-related questions, have taxed customer service teams across the industry. Since last fall, we have onboarded more than 1,100 new hires into customer support and we continue to increase ~~in receivables from our credit card processors.~~

~~Flight equipment~~

Flight equipment increased by $537 million, or 5.2%, principally driven by aircraft capital expenditures made in the first half of 2021. Additional information related to our aircraft capital expenditures are provided within our discussion of investing activities under the "Liquidityhiring and ~~Capital Resources" section below.~~

~~Air traffic liability~~

Air traffic liability increased by $758 million, or 67.5%, driven by the improvements in demand as customers begin to gain confidence to travel and resumed booking travel further in advance. The cash collected from customers for future travel is recordedtraining while also bringing on ~~our balance sheet until the point in time that the customer travels.~~

~~Other accrued liabilities~~

~~Other accrued liabilities increased by $369 million, or 171.7%, primarily as a result of the unused portion of our payroll support extension grants received under the Consolidated Appropriations Act.~~

As discussed in Note 3 to our condensed consolidated financial statements, on January 15, 2021, we entered into a PSP Extension Agreement with the Treasury governing our participation in the Payroll Support Program 2. In the first half of 2021, Treasury provided us with Payroll Support 2 Payments totaling $580 million. These payments consist of $436 million in grants and $144 million in unsecured term loans. In consideration for the Payroll Support 2 Payments, we issued warrants to Treasury to purchase approximately 1.0 million shares of our common stock at an exercise price of $14.43 per share.

~~On May 6, 2021, we entered into a Payroll Support 3 Agreement with Treasury governing our participation in the federal~~outside

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

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~payroll~~ support ~~program~~to help manage call volume. By this summer, we expect to have our largest-ever customer support team ready to support customers as many embark on their first vacation or travel experience since the pandemic.

We are continuing to strengthen staffing for ~~passenger~~our suite of digital tools to help customers avoid waiting on hold, including online chat capabilities and support via iMessage. In addition, we are also improving self-service capabilities on our website to offer customers additional options to make changes without calling.

Furthermore, we are also working to proactively cancel flights on days when bad weather is forecasted or if we anticipate air ~~carriers under Section 7301~~traffic control delays due to congestion or air traffic control center staffing shortages. Cancellations well in advance of scheduled departures will allow customers more time to adjust their plans.

Proactive aircraft maintenance efforts

The reduced schedule frees up aircraft time to give us additional opportunities to get ahead of planned maintenance programs. We are investing in additional preventative maintenance as well as reserving more aircraft as spares this summer to reduce the impact of maintenance-related cancellations and delays.

With COVID-19 supply chain challenges continuing, we have pre-purchased long lead parts, tools, and equipment as well as added additional inventory of frequently used parts, to mitigate potential delays.

Facilities / infrastructure readiness

This summer, we expect to operate approximately 190 daily flights from JFK as we continue to expand our footprint enabled by the NEA. With our heavy concentration in the Northeast and major operation at JFK, ensuring that JFK runs smoothly is essential for the entire network. In addition to hiring across workgroups, we are making a number of investments at JFK’s Terminal 5, which include:

•Redeveloping a portion of the ~~American Rescue Plan Act~~lobby to add more kiosks and open additional space for customer throughput.

•Re-timing flights for the busiest international markets to ensure sufficient lobby space is available for COVID documentation checks.

•Smoothing out some of ~~2021. In~~ the ~~second~~peaks in the schedule to ease congestion in the lobby, TSA checkpoint, and gates.

•Dedicating ground staffing crews at gates across Terminal 5 and adding ground equipment.

While summer reliability continues to be the focus, we expect to also see a significant improvement in our airport facilities across focus cities this fall, as new terminals and space become available to support our growth. We plan to consolidate or open new or renovated terminal spaces in LaGuardia, Newark, and Orlando.

CONSOLIDATED BALANCE SHEET ANALYSIS

The following is a discussion of the changes in certain balance sheet data between March 31, 2022, and December 31, 2021.


(in millions)
Selected Balance Sheet Data:	March 31, 2022	December 31, 2021	$ Change	% Change
ASSETS
Cash and cash equivalents	1,834	2,018	(184)	(9.1)	%
Investment securities	950	824	126	15.4	%
Receivables, less allowance (2022-$3; 2021-$3)	248	207	41	19.8	%
Investment securities (non-current)	110	39	71	183.7	%
LIABILITIES
Accounts payable	624	499	125	24.9	%
Air traffic liability	1,939	1,618	321	19.8	%
Other accrued liabilities	496	359	137	38.5	%
Total debt and finance lease obligations	3,926	4,006	(80)	(2.0)	%

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

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cash and cash equivalents

Cash and cash equivalents decreased by $184 million, or 9.1%, to $1.8 billion as of March 31, 2022. Notable outflows during the three months ended March 31, 2022 include: $200 million of net purchases in investment securities, $134 million in capital expenditures inclusive of predelivery deposits for flight equipment, and $83 million in repayment of long-term debt and finance lease obligations. These outflows were partially offset by net cash provided by operating activities of $247 million.

Investment securities

Investment securities increased by $126 million, or 15.4%, primarily driven by the net purchases of commercial paper and time deposit which had maturities of between three and twelve months at March 31, 2022.

Receivables, less allowance

Receivables increased by $41 million, or 19.8%, mainly as a result of the continuing improvements in demand which led to an increase in receivables from our credit card processors.

Investment securities (non-current)

Long-term investment securities increased by $71 million, or 183.7%, principally driven by the purchases of corporate bonds in the first quarter of ~~2021, Treasury provided us with total payments of $541~~2022.

Accounts payable

Accounts payable increased by $125 million, ~~under~~or 24.9%, primarily due to increases in operating expenses attributed to the program, consisting of $409 million in grants and $132 million in unsecured term loans. In consideration for the Payroll Support 3 Payments, we issued warrants to purchase approximately 0.7 million sharescontinuing ramp up of our ~~common stock~~operations coupled with timing of payments.

Air traffic liability

Air traffic liability increased by $321 million, or 19.8%, driven by the continuing improvements in demand as consumer confidence in travel grows and customers resumed booking travel further in advance. Payments collected from customers for future travel is recorded on our balance sheet until the point in time when transportation is provided.

Other accrued liabilities

Other accrued liabilities increased by $137 million, or 38.5%, primarily due to the ~~Treasury~~timing of passenger tax remittances to governmental authorities. Passenger taxes are collected from customers when tickets are sold and remitted to the authorities at ~~an exercise price of $19.90 per share.~~a later date. The increase in passenger tax liability correlates to the increase in demand for travel as we continue to recover from the COVID-19 pandemic.

~~Long-term~~Total debt and finance lease obligations

~~Long-term~~Total debt and finance lease obligations decreased by ~~$(415)~~$80 million, or ~~(9.4)%. In~~2.0%, mainly due to principal payments made in the first quarter of 2022.

(1) ~~quarter~~Refer to our ''Regulation G Reconciliation of ~~2021, we completed~~Non-GAAP Financial Measures" at the ~~issuance~~end of our 0.50% Convertible Senior Notes due 2026 in the amount of $750 million and also received $276 million in unsecured term loans under the Payroll Support Program 2. These increases were partially offset by $768 million of principal paymentsthis section for more information on our debt and finance lease obligations and $722 million repayment of outstanding borrowings under the Term Loan. As the business continues to recover we will continue to look for opportunities to reduce our overall level of debt.this non-GAAP measure.

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

The airline business is capital intensive. Our ability to successfully execute our growth plans is largely dependent on the continued availability of capital on attractive terms. In addition, our ability to successfully operate our business depends on maintaining sufficient liquidity. We believe we have adequate resources from a combination of cash and cash equivalents, investment securities on hand, and available lines of credit. Additionally, our unencumbered assets could be an additional source of liquidity, if necessary.

We believe a healthy liquidity position is a crucial element of our ability to weather any part of the economic cycle while continuing to execute on our plans for profitable growth and increased returns. Our goal is to continue to be diligent with our liquidity, ~~and~~ maintain financial ~~flexibility.~~flexibility, and be prudent with capital spending.

At ~~June 30, 2021,~~March 31, 2022, we had cash, cash equivalents, ~~and~~ short-term investments, and long-term marketable securities of approximately ~~$3.7~~$2.9 billion. ~~Our~~

The COVID-19 pandemic continued to have an adverse impact on our business and operating results ~~for 2021 continue to be impacted by~~in the ~~COVID-19 pandemic and~~first quarter of 2022. We have seen continued improvements in our business during the first quarter which we expect to ~~maintain an elevated level of cash on hand as we navigate through 2021..~~continue throughout 2022.

Analysis of Cash Flows

Operating Activities

We rely primarily on operating cash flows to provide working capital for current and future operations. Cash flows from operating activities were ~~$1,658~~$247 million and ~~$223~~$177 million for the ~~six~~three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively. Lower losses, principally driven by ~~lower~~higher operating expenses coupled with federal payroll support extension grants received under the Consolidated Appropriations Act and the initial cash payments associated with our new Co-Branded Credit Card Agreement allrevenues contributed to the increase in operating cash flows.

Investing Activities

~~Investing activities for~~During the ~~six~~three months ended ~~June 30, 2021 included $340 million in proceeds from maturities of investment securities.~~

~~During the six months ended June 30, 2021,~~March 31, 2022, capital expenditures related to our purchase of flight equipment included ~~$340 million related to the purchase of seven Airbus A321neo aircraft and spare engines, $59 million related to the purchase of two A220 aircraft and spare engines $27~~$17 million for spare part purchases, ~~$57~~$49 million in work-in-progress relating to flight equipment, and ~~$16~~$49 million for flight equipment deposits. Other property and equipment capital expenditures also included ground equipment purchases and facilities improvements for ~~$41~~$19 million. Investing activities for the current year period also included $200 million in net purchases of investment securities.

During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, capital expenditures related to our purchase of flight equipment included ~~$200~~$156 million related to the purchase of three Airbus A321neo aircraft ~~one Airbus A321 lease buyout, the purchase of several~~and spare engines, ~~$104~~$20 million for spare part purchases, $12 million in work-in-progress relating to flight equipment, ~~$7 million for spare part purchases,~~ and ~~$57~~$6 million for flight equipment deposits. Other property and equipment capital expenditures also included ground equipment purchases and facilities improvements for ~~$66~~$23 million. Investing activities during the prior year period also included ~~the net~~$270 million in proceeds from maturities of investment ~~securities of $29 million.~~

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

securities.

Financing Activities

Financing activities for the ~~six~~three months ended ~~June 30,~~March 31, 2022 primarily consisted of principal payments of $83 million on our outstanding debt and finance lease obligations.

Financing activities for the three months ended March 31, 2021 primarily consisted of the following:

•Net proceeds of $734 million from the issuance of our 0.50% Convertible Senior Notes due 2026; and

•Net proceeds of ~~$276~~$121 million and ~~$14~~$8 million from the issuances of unsecured term loans and warrants, respectively, in connection with the Payroll Support Program 2 ~~and Payroll Support Program 3~~ under the Consolidated Appropriations Act.

These proceeds were ~~more than~~partially offset by principal payments of ~~$1.5 billion~~$644 million on our outstanding debt and finance lease obligations, $550 million of which were associated with the payoff of our revolving Credit and Guaranty Agreement.

~~Financing activities for the six months ended June 30, 2020 primarily consisted of the following:~~

• ~~$981 million in net proceeds from the drawdown of our 364-day term loan facility;~~

• ~~$717 million from our term loan facility with Barclays Bank PLC as administrative agent~~

•~~$550 million from our revolving credit facility with Citibank N.A as administrative agent~~

•~~Proceeds of $251 million and $18 million from the issuance of unsecured term loan and warrants, respectively, in connection with the Payroll Support Program under the CARES Act;~~

•~~$118 million of sale-leaseback transactions; and~~

•~~$22 million of proceeds from the issuance of common stock related to our crewmember stock purchase plan~~

~~CARES Act Loan Program~~

Under the CARES Act Loan Program as signed in September 2020 and subsequently amended in November 2020, we had the ability to borrow up to a total of approximately $1.9 billion from the Treasury. If we accepted the full amount of the loan, we would have issued warrants to purchase approximately 20.5 million shares of our common stock to the Treasury. Any amount received under the CARES Act Loan Program would have been subject to the relevant provisions of the CARES Act, including many of those governing the Payroll Support Program.

~~We made an initial drawing of $115 million under the CARES Act Loan Program on September 29, 2020.~~ In connection with this initial drawing, we entered into a warrant agreement with Treasury, pursuant to which we issued to Treasury warrants to purchase approximately 1.2 million shares of our common stock at an exercise price of $9.50 per share.

On January 15, 2021, we entered into a letter agreement with Treasury which provided an extension of the Loan Agreement allowing us the option to access the remaining borrowing capacity through May 28, 2021. In May 2021, we notified the Treasury of our intent to forego our remaining approximately $1.8 billion borrowing capacity and subsequently on June 2, 2021 the liens on certain eligible engines and certain loyalty program assets, including JetBlue's rights in certain loyalty program agreements, loyalty program data and intellectual property, were released from the collateral package.

~~As of June 30, 2021, $115 million of the borrowings under the CARES Act loan remained outstanding.~~

~~In March 2019,~~February 2022, we filed an automatic shelf registration statement with the SEC. Under this shelf registration statement, we may offer and sell from time to time common stock, preferred stock, debt securities, depositary shares, warrants, stock purchase contracts, stock purchase units, subscription rights, and pass-through certificates. We may utilize this shelf registration statement, or a replacement filed with the SEC, in the future to raise capital to fund the continued development of our products and services, the commercialization of our products and services, to repay indebtedness, or for other general corporate purposes. The warrants issued in connection with the various federal government support programs were made, and any

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

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

issuances of our underlying common stock are expected to be made, in reliance on the exemption from the registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), for transactions not involving a public offering.

Working Capital

We had working capital deficits of ~~$223~~$754 million and $170 million at ~~June 30, 2021 compared to $671 million at~~March 31, 2022 and December 31, ~~2020.~~2021, respectively. Our working capital ~~decreased~~deficit increased by ~~$448~~$584 million due to several factors, including an overall increase in our air traffic liability which was attributed to the increase in customer bookings as demand for air travel ~~begins~~continues to recover from the COVID-19 pandemic.

We expect to meet our obligations as they become due through available cash, investment securities, and internally generated funds, supplemented, as necessary, by financing activities and government assistance, which may be available to us.

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

We expect to generate positive working capital through our operations. However, we cannot predict what the effect on our business might be from future developments related to the COVID-19 pandemic ~~including the effectiveness of the available vaccines and the associated distribution,~~ and its impact on the economy and consumer behavior, the extremely competitive environment in which we operate, or from events beyond our control, such as volatile fuel prices, economic conditions, weather-related disruptions, airport infrastructure challenges, the spread of infectious diseases, the impact of other airline bankruptcies, restructurings or consolidations, U.S. military actions, or acts of ~~terrorism.~~terrorism, or other external geopolitical events and conditions. We believe there is sufficient liquidity available to us to meet our cash requirements for at least the next 12 months.

Contractual Obligations

Our contractual obligations at ~~June 30, 2021~~March 31, 2022 include the following (in billions):


		Payments due in															Payments due in
		Total		2021		2022		2023		2024		2025		Thereafter			Total		2022		2023		2024		2025		2026		Thereafter
Debt and finance lease obligations(1)	Debt and finance lease obligations(1)	$	5.1	$	0.3	$	0.5	$	0.7	$	0.4	$	0.4	$	2.8	Debt and finance lease obligations(1)	$	4.7	$	0.4	$	0.7	$	0.4	$	0.3	$	1.0	$	1.9
Operating lease obligations	Operating lease obligations	1.1		0.1		0.2		0.1		0.1		0.1		0.5		Operating lease obligations	1.0		0.1		0.2		0.1		0.1		0.1		0.4
Flight equipment purchase obligations(2)	Flight equipment purchase obligations(2)	7.4		0.4		0.8		1.6		1.8		1.2		1.6		Flight equipment purchase obligations(2)	8.4		0.7		1.6		2.0		1.7		1.4		1.0
Other obligations(3)	Other obligations(3)	3.0		0.2		0.4		0.5		0.4		0.4		1.1		Other obligations(3)	2.2		0.3		0.4		0.3		0.4		0.4		0.4
Total	Total	$	16.6	$	1.0	$	1.9	$	2.9	$	2.7	$	2.1	$	6.0	Total	$	16.3	$	1.5	$	2.9	$	2.8	$	2.5	$	2.9	$	3.7

The amounts stated above do not include additional obligations incurred as aof result of financing activities executed after ~~June 30, 2021.~~March 31, 2022.

(1) Includes actual interest and estimated interest for floating-rate debt based on ~~June 30, 2021~~March 31, 2022 rates.

(2) Amounts represent obligations based on the current delivery schedule set forth in our Airbus order book as of ~~June 30, 2021.~~March 31, 2022.

(3) Amounts include non-cancelable commitments for the purchase of goods and services.

As of ~~June 30, 2021,~~March 31, 2022, we are in compliance with the covenants of our debt and lease agreements. We have approximately ~~$26~~$32 million of restricted cash pledged under standby letters of credit related to certain leases that will expire at the end of the related lease terms.

As of ~~June 30, 2021,~~March 31, 2022, we operated a fleet of 130 Airbus A320 aircraft, 63 Airbus A321 aircraft, 2021 Airbus A321neo aircraft, ~~three~~eight Airbus A220 aircraft, and 60 Embraer E190 aircraft. Of our fleet, ~~210~~220 are owned by us, 62 are leased under operating leases, and ~~four~~none are leased under finance leases. Our owned aircraft include aircraft associated with sale-leaseback

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

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PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

transactions that did not qualify as sales for accounting purposes. As of ~~June 30, 2021,~~March 31, 2022, the average age of our operating fleet was ~~11.5~~11.9 years.

Our aircraft order book as of ~~June 30, 2021~~March 31, 2022 is as follows:


Year	Year	Airbus A321neo	Airbus A220	Total	Year	Airbus A321neo	Airbus A220	Total
2021		1	5	6
2022	2022	3	9	12	2022	3	10	13
2023	2023	11	18	29	2023	11	21	32
2024	2024	13	22	35	2024	13	27	40
2025	2025	11	12	23	2025	11	20	31
2026	2026	12	1	13	2026	12	14	26
2027	2027	14	—	14	2027	14	—	14

Total	Total	65	67	132	Total	64	92	156

In February 2022, we received notice from Airbus of anticipated delivery delays for the A220 aircraft. The table above represents the current delivery schedule set forth in our Airbus order book as of March 31, 2022. However, due to delays, we expect a delivery of a maximum of nine Airbus A220 aircraft in 2022.

Expenditures for our aircraft and spare engines include estimated amounts for contractual price escalations and predelivery deposits. We expect to meet our predelivery deposit requirements for our aircraft by paying cash or by using short-term borrowing facilities for deposits required six to 24 months prior to delivery. Any predelivery deposits paid by the issuance of notes are fully repaid at the time of delivery of the related aircraft.

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

~~Table of Contents~~

~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

Depending on market conditions, we anticipate using a mix of cash and debt financing for aircraft scheduled for delivery in ~~2021.~~2022. For deliveries after ~~2021,~~2022, although we believe debt and/or lease financing should be available to us, we cannot give any assurance that we will be able to secure financing on attractive terms, if at all. While these financings may or may not result in an increase in liabilities on our balance sheet, we expect our fixed costs to increase regardless of the financing method ultimately chosen. To the extent we cannot secure financing on terms we deem attractive, we may be required to pay in cash, further modify our aircraft acquisition plans, or incur higher than anticipated financing costs.

In October 2019, the Office of the U.S. Trade Representative announced a 10% tariff on new commercial aircraft and related parts imported from certain European Union member states, which include aircraft and other parts we are already contractually obligated to purchase, including those noted above. The U.S. Trade Representative increased the tariff to 15% effective in March 2020. In March 2021, the U.S. Trade Representative announced a four-month suspension of the tariff ~~which~~that was followed by an announcement in June 2021 that the suspension will be extended for five years. We continue to work with our business partners, including Airbus, to evaluate the potential financial and operational impact of these announcements on our future aircraft deliveries, including ~~once~~after the suspension is lifted. The ~~continued~~ imposition of ~~the~~this or any tariff could substantially increase the cost of new ~~Airbus~~ aircraft and parts.

Off-Balance Sheet Arrangements

Although some of our aircraft lease arrangements are with variable interest entities, as defined by ~~the~~Topic 810, Consolidations ~~topic~~ of the FASB Codification, none of them require consolidation in our condensed consolidated financial statements. Our decision to finance these aircraft through operating leases rather than through debt was based on an analysis of the cash flows and tax consequences of each financing alternative and a consideration of liquidity implications. We are responsible for all maintenance, insurance and other costs associated with operating these aircraft; however, we have not made any residual value or other guarantees to our lessors.

We have determined that we hold a variable interest in, but are not the primary beneficiary of, certain pass-through trusts. The beneficiaries of these pass-through trusts are the purchasers of equipment notes issued by us to finance the acquisition of aircraft. They maintain liquidity facilities whereby a third party agrees to make payments sufficient to pay up to 18 months of interest on the applicable certificates if a payment default occurs.

We have also made certain guarantees and indemnities to other unrelated parties that are not reflected on our balance sheet, which we believe will not have a significant impact on our results of operations, financial condition or cash flows. We have no other off-balance sheet arrangements.

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

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates included in our ~~2020~~2021 Form 10-K.

Forward-Looking Information

~~Forward-Looking Information Statements in this~~

This Report (or otherwise made by JetBlue or on JetBlue’s behalf) contain various forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which represent our management’s beliefs and assumptions concerning future events. These statements are intended to qualify for the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. When used in this ~~Report,~~document and in documents incorporated herein by reference, the words “expects,” “plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” “outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve risks, uncertainties and assumptions, and are based on information currently available to us. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, including, without limitation, the coronavirus ~~("COVID-19"~~(“COVID-19”) pandemic including ~~the effectiveness of the available vaccines, the associated distribution~~new and ~~vaccination rates, the infection rates associated with COVID-19~~existing variants, ~~travel advisories and restrictions~~ and the outbreak of any other disease or similar public health threat that affects travel demand or behavior; restrictions on our business related to the financing we accepted under various federal government support programs such as the ~~CARES~~Coronavirus Aid, Relief, and Economic Security Act, ~~and~~ the Consolidated Appropriations Act, ~~2021;~~and the American Rescue Plan Act; our significant fixed obligations and substantial indebtedness; risk associated with execution of our strategic operating plans in the near-term and long-term; the recording of a material impairment loss of tangible or intangible assets; our extremely competitive industry; volatility in financial and credit markets which could affect our ability to obtain debt and/or lease financing or to raise funds through debt or equity issuances; volatility in fuel prices, maintenance costs and interest

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

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~~PART I. FINANCIAL INFORMATION~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

rates; our reliance on high daily aircraft utilization; our ability to implement our growth strategy; our ability to attract and retain qualified personnel and maintain our culture as we grow; our reliance on a limited number of suppliers, including for aircraft, aircraft engines and parts and vulnerability to delays by those suppliers; our dependence on the New York and Boston metropolitan markets and the effect of increased congestion in these markets; our reliance on automated systems and technology; the outcome of the lawsuit filed by the Department of Justice and certain state Attorneys General against us related to our Northeast Alliance entered into with American Airlines, our being subject to potential unionization, work stoppages, slowdowns or increased labor costs; our presence in some international emerging markets that may experience political or economic instability or may subject us to legal risk; reputational and business risk from information security breaches or cyber-attacks; changes in or additional domestic or foreign government regulation, including new or increased tariffs; changes in our industry due to other airlines' financial condition; acts of war or terrorism; global economic conditions or an economic downturn leading to a continuing or accelerated decrease in demand for air travel; adverse weather conditions or natural disasters; ~~and~~ external geopolitical events and ~~conditions.~~conditions; the outcome of any discussions between JetBlue and Spirit Airlines, Inc. ("Spirit") with respect to a possible transaction, including the possibility that the parties will not agree to pursue a business combination transaction or that the terms of any such transaction will be materially different from those previously announced; the conditions to the completion of the possible transaction, including the receipt of any required stockholder and regulatory approvals, and, in particular, our expectation as to the likelihood of receipt of antitrust approvals; JetBlue’s ability to finance the possible transaction and the indebtedness JetBlue expects to incur in connection with the possible transaction; the possibility that JetBlue may be unable to achieve expected synergies and operating efficiencies within the expected timeframes or at all and to successfully integrate Spirit’s operations with those of JetBlue; and the possibility that such integration may be more difficult, time-consuming or costly than expected or that operating costs and business disruption (including, without limitation, disruptions in relationships with employees, customers or suppliers) may be greater than expected in connection with the possible transaction. It is routine for our internal projections and expectations to change as the year or each quarter in the year progresses, and therefore it should be clearly understood that the internal projections, beliefs, and assumptions upon which we base our expectations may change prior to the end of each quarter or year. Any outlook or forecasts in this document have been prepared without taking into account or consideration a possible transaction with Spirit.

Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. You should understand that many important factors, in addition to those discussed or incorporated by reference in this Report, could cause our results to differ materially from those expressed in the forward-looking statements. Potential factors that could affect our results include, those described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures about Market Risk" in this Report and our recently filed periodic report on Forms 10-K and 10-Q, as well as our other filings with the SEC. In light of these

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

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risks and uncertainties, the forward-looking events discussed in this Report might not occur. Our forward-looking statements speak only as of the date of this Report. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

Where You Can Find Other Information

Our website is www.jetblue.com. Information contained on our website is not part of this Report. Information we furnish or file with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to or exhibits included in these reports are available for download, free of charge, on our website soon after such reports are filed with or furnished to the SEC. Our SEC filings, including exhibits filed therewith, are also available at the SEC’s website at www.sec.gov.

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

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REGULATION G RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

We use non-GAAP financial measures in this report. Non-GAAP financial measures are financial measures that are derived from the condensed consolidated financial statements, but that are not presented in accordance with generally accepted accounting principles in the United States, or GAAP. We believe these non-GAAP financial measures provide a meaningful comparison of our results to others in the airline industry and our prior year results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, our financial performance measures prepared in accordance with GAAP. Further, our non-GAAP information may be different from the non-GAAP information provided by other companies. The information below provides an explanation of each non-GAAP financial measure and shows a reconciliation of non-GAAP financial measures used in this filing to the most directly comparable GAAP financial measures.

Operating Expenses per Available Seat Mile, excluding ~~fuel~~Fuel and ~~related taxes, other non-airline operating expenses,~~Related Taxes, Other Non-Airline Operating Expenses, and ~~special items~~Special Items ("CASM Ex-Fuel")

Operating expenses per available seat mile, or CASM, is a common metric used in the airline industry. Our CASM for the relevant periods are summarized in the table below. We exclude aircraft fuel and related taxes, operating expenses related to other non-airline businesses, such as JetBlue Technology Ventures and JetBlue Travel Products, and special items from operating expenses to determine CASM ex-fuel, which is a non-GAAP financial measure.

~~For~~Special items for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 ~~special items~~ include contra-expenses recognized on the utilization of payroll support ~~extension~~ grants received under the ~~payroll support programs,~~Consolidated Appropriations Act, 2021, and contra-expenses recognized on the Employee Retention Credits provided by the CARES Act.

~~Special~~For the three months ended March 31, 2019, special items include one-time costs related to the Embraer E190 fleet transition as well as one-time costs related to the implementation of our pilots' collective bargaining agreement.

There were no special items for the three ~~and six~~ months ended ~~June 30, 2020 include contra-expenses recognized on the utilization of payroll support grants received under the CARES Act and the impairment charge of our Embraer E190 fleet.~~March 31, 2022.

We believe that CASM ex-fuel is useful for investors because it provides investors the ability to measure financial performance excluding items beyond our control, such as fuel costs, which are subject to many economic and political factors, or not related to the generation of an available seat mile, such as operating expense related to certain non-airline businesses. We believe this non-GAAP measure is more indicative of our ability to manage airline costs and is more comparable to measures reported by other major airlines.


NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL	NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL																	NON-GAAP FINANCIAL MEASURE RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL
		Three Months Ended June 30,								Six Months Ended June 30,									Three Months Ended March 31,
		2021				2020				2021				2020					2022				2021				2019
($ in millions; per ASM data in cents)	($ in millions; per ASM data in cents)	$		per ASM		$		per ASM		$		per ASM		$		per ASM		($ in millions; per ASM data in cents)	$		per ASM		$		per ASM		$		per ASM
Total operating expenses	Total operating expenses	$	1,352	$	9.91	$	625	$	25.90	$	2,379	$	10.46	$	2,547	$	14.72	Total operating expenses	$	2,103	$	13.67	$	1,027	$	11.30	$	1,795	$	11.63
Less:	Less:																	Less:
Aircraft fuel and related taxes	Aircraft fuel and related taxes	336		2.46		29		1.21		530		2.33		394		2.28		Aircraft fuel and related taxes	571		3.71		193		2.13		437		2.83
Other non-airline expenses	Other non-airline expenses	11		0.08		9		0.36		20		0.09		22		0.13		Other non-airline expenses	14		0.09		10		0.10		9		0.06
Special items	Special items	(366)		(2.68)		(304)		(12.62)		(655)		(2.88)		(102)		(0.59)		Special items	—		—		(289)		(3.18)		12		0.08
Operating expenses, excluding fuel	Operating expenses, excluding fuel	$	1,371	$	10.05	$	891	$	36.95	$	2,484	$	10.92	$	2,233	$	12.90	Operating expenses, excluding fuel	$	1,518	$	9.87	$	1,113	$	12.25	$	1,337	$	8.66

With respect to JetBlue’s CASM ex-fuel guidance, we are unable to provide a reconciliation of the non-GAAP financial measure to GAAP because the excluded items have not yet occurred and cannot be reasonably predicted. The reconciling information that is unavailable would include a forward-looking range of financial performance measures beyond our control, such as fuel costs, which are subject to many economic and political factors. Accordingly, a reconciliation to CASM is not available without unreasonable effort.

Operating Expense, ~~Loss~~(Loss) Income before Taxes, Net ~~Loss~~(Loss) Income and ~~Loss~~(Loss) Earnings per Share, excluding ~~special items~~Special Items and Net Gain on Investments

Our GAAP results in the applicable periods were impacted by credits and charges that were deemed special items.

For the three and six months ended June 30, 2021, special items include contra-expenses recognized on the utilization of payroll support extension grants received under the payroll support programs, and contra-expenses recognized on the Employee Retention Credits provided by the CARES Act.

For the three months ended June 30, 2020, special items included a contra-expense which represents the amount of CARES Act payroll support grants utilized during the period. For the six months ended June 20, 2020, special items included the impairment charge of our Embraer E190 fleet resulting from the decline in demand caused by the COVID-19 pandemic.

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Special items for the three months ended March 31, 2021 include contra-expenses recognized on the utilization of payroll support grants received under the Consolidated Appropriations Act, 2021, and contra-expenses recognized on the Employee Retention Credits provided by the CARES Act.

For the three months ended March 31, 2019, special items include one-time costs related to the Embraer E190 fleet transition as well as one-time costs related to the implementation of our pilots' collective bargaining agreement.

There were no special items for the three months ended March 31, 2022.

Mark-to-market and certain gains and losses on our investments were also excluded from our results for the three months ended March 31, 2022.

We believe the impact of these items distort our overall trends and that our metrics are more comparable with the presentation of our results excluding the impact of these items. The table below provides a reconciliation of our GAAP reported amounts to the non-GAAP amounts excluding the impact of these items.

NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, LOSS BEFORE TAXES, NET LOSS AND LOSS PER SHARE
EXCLUDING SPECIAL ITEMS
Three Months Ended June 30, Six Months Ended June 30,
(in millions, except per share amounts) 2021 2020 2021 2020
Total operating revenues $ 1,499 $ 215 $ 2,232 $ 1,803
Total operating expenses $ 1,352 $ 625 $ 2,379 $ 2,547
Less: Special items (366) (304) (655) (102)
Total operating expenses excluding special items $ 1,718 $ 929 $ 3,034 $ 2,649
Operating income (loss) $ 147 $ (410) $ (147) $ (744)
Add back: Special items (366) (304) (655) (102)
Operating loss excluding special items $ (219) $ (714) $ (802) $ (846)
Operating margin excluding special items (14.6) % (332.6) % (35.9) % (46.9) %
Income (loss) before income taxes $ 57 $ (450) $ (290) $ (804)
Add back: Special items (366) (304) (655) (102)
Loss before income taxes excluding special items $ (309) $ (754) $ (945) $ (906)
Pre-tax margin excluding special items (20.6) % (351.0) % (42.3) % (50.2) %
Net income (loss) $ 64 $ (320) $ (183) $ (588)
Add back: Special items (366) (304) (655) (102)
Less: Income tax (expense) benefit related to special items (96) (76) (173) (26)
Net loss excluding special items $ (206) $ (548) $ (665) $ (664)
Earnings Per Common Share:
Basic $ 0.20 $ (1.18) $ (0.58) $ (2.14)
Add back: Special items, net of tax (0.85) (0.84) (1.52) (0.28)
Basic excluding special items $ (0.65) $ (2.02) $ (2.10) $ (2.42)
Diluted $ 0.20 $ (1.18) $ (0.58) $ (2.14)
Add back: Special items, net of tax (0.85) (0.84) (1.52) (0.28)
Diluted excluding special items and gain on equity method investments $ (0.65) $ (2.02) $ (2.10) $ (2.42)

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, (LOSS) INCOME BEFORE TAXES, NET (LOSS) INCOME AND (LOSS) EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS AND NET GAIN ON INVESTMENTS
	Three Months Ended March 31,
(in millions, except per share amounts)	2022			2021			2019
Total operating revenues	$	1,736		$	733		$	1,871

Total operating expenses	$	2,103		$	1,027		$	1,795
Less: Special items	—			(289)			12
Total operating expenses excluding special items	$	2,103		$	1,316		$	1,783

Operating (loss) income	$	(367)		$	(294)		$	76
Add back: Special items	—			(289)			12
Operating (loss) income excluding special items	$	(367)		$	(583)		$	88

Operating margin excluding special items	(21.1)		%	(79.6)		%	4.7		%

(Loss) income before income taxes	$	(398)		$	(347)		$	58
Add back: Special items	—			(289)			12
Less: Net gain on investments	2			—			—
(Loss) income before income taxes excluding special items and net gain on investments	$	(400)		$	(636)		$	70

Pre-tax margin excluding special items	(23.0)		%	(86.7)		%	3.7		%

Net (loss) income	$	(255)		$	(247)		$	42
Add back: Special items	—			(289)			12
Less: Income tax (expense) benefit related to special items	—			(69)			3
Less: Net gain on investments	2			—			—
Less: Income tax (expense) related to gain on investments	(1)			—			—
Net (loss) income excluding special items and net gain on investments	$	(256)		$	(467)		$	51

(Loss) Earnings Per Common Share:
Basic	$	(0.79)		$	(0.78)		$	0.14
Add back: Special items, net of tax	—			(0.70)			0.02
Less: Net gain on investments, net of tax	0.01			—			—
Basic excluding special items and net gain on investments	$	(0.80)		$	(1.48)		$	0.16

Diluted	$	(0.79)		$	(0.78)		$	0.14
Add back: Special items, net of tax	—			(0.70)			0.02
Less: Net gain on investments, net of tax	0.01			—			—
Diluted excluding special items and net gain on investments	$	(0.80)		$	(1.48)		$	0.16

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Free Cash Flow

The table below reconciles cash provided by operations determined in accordance with GAAP to Free Cash Flow, a non-GAAP financial measure. Management believes that Free Cash Flow is a relevant metric in measuring our financial strength and is useful to investors in assessing our ability to fund future capital commitments and other obligations. Investors should consider this non-GAAP financial measure in addition to, and not as a substitute for, our financial measures prepared in accordance with GAAP.


NON-GAAP FINANCIAL MEASURE	NON-GAAP FINANCIAL MEASURE					NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF FREE CASH FLOW	RECONCILIATION OF FREE CASH FLOW					RECONCILIATION OF FREE CASH FLOW
		Six Months Ended June 30,					Three Months Ended March 31,
(in millions)	(in millions)	2021		2020		(in millions)	2022		2021
Net cash provided by operating activities	Net cash provided by operating activities	$	1,658	$	223	Net cash provided by operating activities	$	247	$	177
Less: Capital expenditures	Less: Capital expenditures	(524)		(377)		Less: Capital expenditures	(85)		(211)
Less: Predelivery deposits for flight equipment	Less: Predelivery deposits for flight equipment	(16)		(57)		Less: Predelivery deposits for flight equipment	(49)		(6)
Free Cash Flow	Free Cash Flow	$	1,118	$	(211)	Free Cash Flow	$	113	$	(40)

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Except as described below, there have been no material changes in market risks from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our ~~2020~~2021 Form 10-K.

Aircraft Fuel

Our results of operations are affected by changes in the price and availability of aircraft fuel. Market risk is estimated as a hypothetical 10% increase in the ~~June 30, 2021~~March 31, 2022 cost per gallon of fuel. Based on projected fuel consumption for the next 12 months, including the impact of our hedging position, such an increase would result in an increase to aircraft fuel expense of approximately $~~166~~300 million. As of ~~June 30, 2021,~~March 31, 2022, we had not hedged any of our projected fuel requirement for the remainder of ~~2021.~~2022.

Interest

Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments and on interest income generated from our cash and investment balances. The interest rate is fixed for ~~$3.9~~$3.8 billion of our debt and finance lease obligations, with the remaining ~~$0.2~~$0.1 billion having floating interest rates. As of ~~June 30, 2021,~~March 31, 2022, if interest rates were on average 100 basis points higher in ~~2021,~~2022, our annual interest expense would increase by ~~an insignificant amount.~~approximately $1 million. This amount is determined by considering the impact of the hypothetical change in interest rates on our variable rate debt.

If interest rates were to average 100 basis points lower in ~~2021~~2022 than they were during ~~2020,~~2021, our interest income from cash and investment balances would decrease by approximately ~~and insignificant amount.~~$1 million. This amount is determined by considering the impact of the hypothetical change in interest rates on the balances of our money market funds and short-term, interest-bearing investment for the trailing twelve month period.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer, or CEO, and our Chief Financial Officer, or CFO, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of the effectiveness of our disclosure controls and procedures as of ~~June 30, 2021.~~March 31, 2022. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of ~~June 30, 2021.~~March 31, 2022.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our controls performed during the quarter ended ~~June 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of our business, we are party to various legal proceedings and claims which we believe are incidental to the operation of our business. Refer to Note 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

ITEM 1A. RISK FACTORS

Part I, Item 1A "Risk Factors" of our ~~2020~~2021 Form 10-K, includes a discussion of our risk factors which are incorporated herein. There have been no material changes from the risk factors associated with our business previously disclosed in our Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In accordance with the Payroll Support Program Agreement, the Payroll Support Program Extension Agreement, the Payroll Support 3 Agreement, and the Loan Agreement with the Treasury, we are prohibited from making any share repurchases through September 30, 2022. We have suspended our share repurchase program as of March 31, 2020. The acquisition of treasury stock reflected on our condensed consolidated statement of cash flows for the three months ended ~~June 30,~~March 31, 2022 and 2021 represents the return of shares to satisfy tax payments associated with crewmember stock compensation that vested during the ~~period.~~respective periods.

In consideration for the Payroll Support 2 Payments, during the ~~six~~three months ended ~~June 30,~~March 31, 2021 we issued warrants to purchase approximately $10.8 million shares of common stock to the Treasury at an exercise price of $14.43 per share. In consideration for the Payroll Support 3 Payments, during the six months ended June 30, 2021 we issued warrants to purchase approximately $0.7 million shares of common stock to the Treasury at an exercise price of $19.90 per share. See Note 3 to our condensed consolidated financial ~~statements.~~statements for additional details.

ITEM 5. OTHER INFORMATION

~~None.~~Executive Compensation Awards

On April 28, 2022, the Board approved a form of Performance Cash Award under the JetBlue Airways Corporation 2020 Omnibus Equity Incentive Plan, and two forms of Executive Retention Awards (collectively, the “Awards”), which the Company intends to utilize as forms of short- and long-term compensation to certain members of the Company’s senior leadership team, including the named executive officers. In reviewing and recommending the Awards for approval by the Board, the Compensation Committee, in consultation with its independent advisors, determined that the Awards were appropriate and necessary to help ensure key leaders of the Company with deep airline industry expertise continue to steward the Company during the unprecedented economic disruption caused by the COVID-19 pandemic, and the uncertainty to air travel created thereby. The Awards were designed to retain and motivate our key leaders and to further align their interests with those of our stockholders. When setting the forms of the Awards, the Compensation Committee and the Board considered that such key leader's pay package was reduced substantially as a result of the effects of the pandemic on the Company, notwithstanding their extraordinary leadership during these unprecedented times. In addition, the Compensation Committee and the Board considered the challenges expected over the next several years due to continued uncertainty as to the long-term effects of the COVID-19 pandemic on the industry coupled with certain Government Support (as defined below) restrictions affecting the Company’s ability to provide market-competitive compensation opportunities. These concerns are particularly acute for the Company given these crewleaders’ expertise and demonstrated leadership, which are, to varying degrees, valued and transferrable to other companies both within – and outside – the airline industry.

Each Award is subject to the lapse of compensation restrictions under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, the Payroll Support Program 2 as established by the United States Consolidated Appropriations Act (the “Payroll Support Program 2”), and the Payroll Support Program 3 as established by the American Rescue Plan Act of 2021 (the “Payroll Support Program 3”) (the CARES Act, Payroll Support Program 2 and the Payroll Support Program 3 are collectively referred to as the “Government Support”). In addition, the recipient must remain employed with or performing services for the Company on the payment date, provided, if a recipient experiences a termination from service without cause or for good reason prior to the payment date, the recipient will receive the Award, or a portion thereof, on the payment date. For all other terminations of service prior to the payment date, the Board (or Compensation Committee if delegated by the Board), will determine continued eligibility for the Award.

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Upon satisfaction of the terms and conditions of the Executive Retention Awards (“ERAs”) each of the recipients will receive ERAs in the aggregate of the equivalent to a pre-established multiple of their respective base salaries as of April 28, 2022 as follows: Robin Hayes (1.28x), Joanna Geraghty (1.00x), Ursula Hurley (2.62x) and Brandon Nelson (0.99x). Payments pursuant to the Awards, if any, will be made in cash or fully vested shares of the Company’s common stock, as applicable, as determined by the Board (or Compensation Committee if delegated by the Board) in its sole discretion. No portion of the Award may be paid earlier than following the lapse of both the Government Support restrictions and, with respect to Performance Cash Awards, achievement of the performance condition.

The foregoing summary is not complete and is qualified in its entirety by reference to the form of Performance Cash Award and forms of Executive Retention Award Agreement, filed herewith as Exhibits 10.1, 10.2 and 10.3, and each as incorporated by reference herein.

ITEM 6. EXHIBITS

See accompanying Exhibit Index included after the signature page of this Report for a list of the exhibits filed or furnished with this Report.

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EXHIBIT INDEX


Exhibit Number						Exhibit
4.1*						~~Warrant Agreement, dated as of May 6, 2021, between JetBlue Airways Corporation and the United States Department of the Treasury~~
4.2*						~~Form of Warrant (included as Annex B to Exhibit 4.1)~~
10.1*						~~Payroll Support Program 3 Agreement, dated as of May 6, 2021, between JetBlue Airways Corporation and the United States Department of the Treasury~~
10.2*						~~Promissory Note, dated as of May 6, 2021 issued by JetBlue Airways Corporation in the name of the United States Department of the Treasury~~
~~10.3~~						Offer Letter between Ursula Hurley and JetBlue Airways Corporation, dated June 15, 2021—incorporated by reference to Exhibit 10.1 to our current report on Form 8-K dated May 11, 2021 and filed on June 21, 2021.
~~10.4~~						~~Form of Performance-Contingent Executive Retention Award Agreement—incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.~~
10.5*						~~JetBlue Executive Retention Award - Ursula Hurley dated February 12, 2021~~
10.6*						~~JetBlue Executive Retention Award - Ursula Hurley dated April 12, 2021~~
10.7*10.1†						Form of Performance ~~Share Unit~~Cash Award Agreement ~~(2020 Omnibus Incentive Plan)~~
10.8*10.2†						Form of ~~RSU~~Executive Award Agreement ~~for Non-Employee Directors (2020 Omnibus Incentive Plan)~~(award vesting on May 1, 2023)
10.9*10.3†						Form of ~~RSU~~Executive Award Agreement ~~Crewmembers (2020 Omnibus Incentive Plan)~~
10.10*						~~Form of Deferred Stock Unit Award Agreement (2020 Omnibus Incentive Plan)~~(award vesting on May 1, 2023, February 1, 2024, and February 1, 2025)
31.1*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer
31.2*						Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer
32**						Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Labels Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)
†						Compensatory plans in which the directors and executive officers of JetBlue participate.

*						Filed herewith.
**						Furnished herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JETBLUE AIRWAYS CORPORATION

(Registrant)

Date:

~~July 30, 2021~~April 29, 2022

By:

/s/ ~~Alexander Chatkewitz~~Ursula L. Hurley

~~Vice President, Controller, and~~Ursula L. Hurley
Chief ~~Accounting~~Financial Officer
~~(Principal Accounting Officer)~~

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	June 30, 2021		December 31, 2020
Available-for-sale securities
Time deposits	$	1,311	$	1,130
Debt securities	7		7
Total available-for-sale securities	1,318		1,137
Total investment securities	$	1,318	$	1,137


NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, LOSS BEFORE TAXES, NET LOSS AND LOSS PER SHARE EXCLUDING SPECIAL ITEMS
	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except per share amounts)	2021			2020			2021			2020
Total operating revenues	$	1,499		$	215		$	2,232		$	1,803

Total operating expenses	$	1,352		$	625		$	2,379		$	2,547
Less: Special items	(366)			(304)			(655)			(102)
Total operating expenses excluding special items	$	1,718		$	929		$	3,034		$	2,649

Operating income (loss)	$	147		$	(410)		$	(147)		$	(744)
Add back: Special items	(366)			(304)			(655)			(102)
Operating loss excluding special items	$	(219)		$	(714)		$	(802)		$	(846)

Operating margin excluding special items	(14.6)		%	(332.6)		%	(35.9)		%	(46.9)		%

Income (loss) before income taxes	$	57		$	(450)		$	(290)		$	(804)
Add back: Special items	(366)			(304)			(655)			(102)
Loss before income taxes excluding special items	$	(309)		$	(754)		$	(945)		$	(906)

Pre-tax margin excluding special items	(20.6)		%	(351.0)		%	(42.3)		%	(50.2)		%

Net income (loss)	$	64		$	(320)		$	(183)		$	(588)
Add back: Special items	(366)			(304)			(655)			(102)
Less: Income tax (expense) benefit related to special items	(96)			(76)			(173)			(26)
Net loss excluding special items	$	(206)		$	(548)		$	(665)		$	(664)

Earnings Per Common Share:
Basic	$	0.20		$	(1.18)		$	(0.58)		$	(2.14)
Add back: Special items, net of tax	(0.85)			(0.84)			(1.52)			(0.28)
Basic excluding special items	$	(0.65)		$	(2.02)		$	(2.10)		$	(2.42)

Diluted	$	0.20		$	(1.18)		$	(0.58)		$	(2.14)
Add back: Special items, net of tax	(0.85)			(0.84)			(1.52)			(0.28)
Diluted excluding special items and gain on equity method investments	$	(0.65)		$	(2.02)		$	(2.10)		$	(2.42)