Erica Karp’s Introduction:
Erica Karp, an advisory board member for SAI, introduced Robin Hayes from JetBlue. She praised JetBlue’s commitment to corporate sustainability and humanity in the aviation industry.

Corporate Sustainability:
Erica Karp defined corporate sustainability as the “relentless pursuit of material progress towards a more regenerative and inclusive global economy.” She emphasized the importance of considering the impact of business activities on society and the environment.

JetBlue’s Contributions:
Erica Karp commended JetBlue for its efforts in bringing humanity back to the travel industry. She mentioned the company’s founder’s goal of sparking a passion for aviation and highlighted JetBlue’s focus on balancing profitability with social and environmental considerations.

Travel and Tourism’s Significance:
Erica Karp highlighted the substantial impact of the travel and tourism industry, representing over 10% of global GDP and employing 290 million people worldwide. She emphasized the importance of recognizing the industry’s significance and addressing its challenges.

Balancing Economic and Social Goals:
Erica Karp acknowledged the difficulty of making decisions that balance economic profitability with social and environmental concerns. She emphasized the need to strike a balance and move towards a more sustainable and inclusive global economy.

Inspiration from “Le Petit Prince”:
Erica Karp drew inspiration from “Le Petit Prince,” suggesting that fostering a passion for the beauty of travel and tourism can drive innovation and progress. She emphasized the importance of creating a vision and inspiration for positive change in the industry.

Special Mention:
Erica Karp congratulated JetBlue for having a baby born on one of its flights, expressing joy and well wishes.

Introduction of Speakers:
Robin Hayes is the CEO of JetBlue and has been in the airline industry for his entire career. He is accompanied by colleagues from JetBlue’s investor relations, sustainability, legal, and finance teams.

JetBlue’s Founding and Mission:
JetBlue was founded by David Nealman in 2000 with the goal of bringing humanity back to air travel. Hayes emphasizes the importance of creating an exciting industry for young people to pursue careers in.

JetBlue’s Competitive Advantages:
Hayes believes JetBlue’s most sustainable competitive advantage is its culture and people. The airline has a number of innovative features, including: Most legroom of any airline Free high-speed broadband Wi-Fi Mint premium service with significantly lower fares

Business Model and Focus Cities:
JetBlue positions itself between low-cost carriers and legacy airlines. It has six focus cities on the East Coast, with a strong presence in Boston, New York, Orlando, Fort Lauderdale, San Juan, and Puerto Rico. The airline also has a small focus city on the West Coast in the LA Basin, including Long Beach.

Challenges and Opportunities:
JetBlue faces challenges with on-time performance due to its heavy capacity on the East Coast, where 25% of total air traffic control delays in the US occur. The airline has taken steps to improve its margins by making changes to its business model while maintaining its commitment to providing a superior product to customers.

Financial Performance:
In 2015, JetBlue nearly caught up to its industry competitors in terms of margins. In 2016 and 2017, the airline was slightly ahead of the industry. In 2018, JetBlue fell slightly behind, but announced initiatives to achieve superior margins again by 2020 without changing its core values and customer focus.

Values and Culture:
JetBlue emphasizes values as the cornerstone of its success, prioritizing safety and a culture that supports frontline crew members. The company believes that a strong culture drives service excellence, customer satisfaction, and shareholder returns. JetBlue’s open-door policy encourages direct communication between frontline crew members and leaders, fostering a supportive environment. Leaders actively engage with frontline crew members to understand challenges and remove obstacles, enabling them to deliver better service.

Data-Driven Correlation:
JetBlue analyzes data to correlate values affirmation with positive outcomes. In airports, crew members who strongly align with JetBlue’s values deliver 18% higher customer satisfaction. Reservation crew members with a strong connection to values sell 21% more ancillary revenue and process 18% more calls per month. Support center crew members show 81% lower attrition when they affirm their trust in JetBlue’s values.

Long-Term Sustainability Initiatives:
JetBlue outlined initiatives to achieve superior margins by 2020, focusing on network and fleet, cost and product offering, and capital allocation. The company emphasizes balancing short-term goals with long-term sustainability, considering the industry’s cyclical nature. JetBlue recognizes the importance of fuel efficiency and carbon emissions regulation, aligning with global concerns.

Fleet Modernization:
JetBlue is replacing its 60 Embraer 190 aircraft with more fuel-efficient Airbus 220s, promising a 40% reduction in fuel burn per seat and 30% lower operating costs. The company has also ordered 85 Airbus 321neos, offering substantial fuel burn and carbon dioxide emission savings compared to previous aircraft models.

Long-Term Fleet Plan:
JetBlue’s long-term fleet plan prioritizes fuel-efficient airplanes to reduce operating costs and environmental impact. The average lifespan of an airplane is 20 to 25 years, making these investments beneficial over an extended period.

Corsair and Global Carbon Framework:
JetBlue supports the Corsair plan, a global framework aimed at creating a uniform approach to offsetting carbon growth in the airline industry. This initiative prevents individual countries from developing varying schemes, easing regulatory burdens for airlines operating internationally.

EU Emissions Trading Plan Replacement:
Corsair replaces the EU’s emissions trading plan, which faced resistance from the US, China, and other countries. It provides a comprehensive framework for carbon offsetting, including aircraft technology, operational improvements, and sustainable fuels.

Air Traffic Control Reform and Operational Improvements:
JetBlue advocates for air traffic control reform, utilizing satellite-based technology to enhance efficiency and reduce congestion in airspace, particularly on the East Coast. Other initiatives focus on operational improvements to minimize delays and enhance the overall efficiency of the aviation system.

JetBlue’s Leadership in Sustainable Fuels:
JetBlue is recognized as a leader in sustainable fuels, actively pursuing initiatives to reduce the industry’s carbon footprint.

Key Actions to Offset Corsair Expenses:
Allocate up to 4% of fuel purchases from sustainable sources. Mitigate costs over time through these sustainable practices.

Climate Risk Consideration for JetBlue:
JetBlue has a significant presence in Caribbean and Latin America, which are vulnerable to hurricanes. The 2017 hurricane season, with Irma and Maria, severely impacted JetBlue’s network.

Resilience during the 2017 Hurricane Season:
Despite the hurricanes, JetBlue’s business experienced less impact than expected. Focus on visiting friends and relatives (VFR) travel provided resilience. The airline’s ability to reallocate assets to unaffected markets helped maintain operations.

Recovery from Hurricanes:
Leisure travel to hurricane-hit destinations saw a downturn, but VFR travel recovered quickly. JetBlue moved resources to unaffected Caribbean destinations. Infrastructure restoration allowed JetBlue to return airplanes to impacted areas.

San Juan-Orlando Route Case Study:
Industry capacity between San Juan and Orlando increased post-hurricane to accommodate increased travel. JetBlue’s unit revenue in the market improved, exceeding the system average.

Hurricane Response and Investability:
JetBlue’s response to hurricanes demonstrates its resilience and commitment to affected communities. The airline’s ability to move assets provides a unique advantage in responding to challenges.

Importance of Attracting Talent to the Airline Industry:
The airline industry is a growth industry, representing a significant portion of the US economy. Encouraging people to join the industry is crucial for its continued growth.

Declining Number of Pilots:
The number of pilots in the US is steadily declining due to mandatory retirement at age 65. Legacy airlines are facing a significant shortage of pilots as many are nearing retirement. Not enough new pilots are entering the system to meet the growing demand.

Cost of Becoming a Pilot:
The cost of becoming a commercial airline pilot in the US averages around $85,000. Some pilots spend even more than that to obtain the required 1,500 flight hours and college degrees. This high cost makes it difficult for many people to pursue a career as a pilot.

Expected Pilot Deficit:
The US is expected to face a deficit of around 15,000 pilots in the coming years. Younger airlines like JetBlue have a smaller percentage of pilots due to retire in the next five years compared to larger legacy airlines. Even JetBlue will need to replace a significant number of pilots in the next 10 years.

Lack of Diversity in the Pilot Workforce:
As of 2014, 97% of pilots in the US were of the same race, and 91% were of the same gender. This lack of diversity is a major concern for the industry.

JetBlue’s Gateway Program:
JetBlue created gateway programs to address the pilot shortage and promote diversity. The program partners with smaller airlines and university courses to provide individuals with a path to becoming a JetBlue pilot. The program is open to individuals with no prior flying experience. JetBlue’s gateway program is seen as a successful initiative in addressing the pilot shortage and increasing diversity in the pilot workforce.

ESG and Culture at JetBlue:
JetBlue believes in the power of ESG (Environmental, Social, and Governance) to ensure long-term sustainability and a differentiated culture for crew members. The company is committed to delivering short-term results for investors while also ensuring the long-term viability of the business.

Gateway Select Program:
JetBlue’s Gateway Select program is a two-year initiative that aims to train and develop future pilots at a lower cost. The program has been successful in attracting a more diverse group of candidates, including five times more under-represented groups and double the number of women applicants.

Diversity and Inclusion:
JetBlue recognizes the need for greater diversity in the aviation industry and is taking steps to address the lack of diversity in its pilot workforce. The company acknowledges that there is still a lot of work to be done in this area, but is encouraged by the progress made so far.

Investing in Workforce and Fleet:
JetBlue is investing in the pipeline of labor to address shortages, particularly in maintenance technician roles in the US. The company is also investing in fleet and new engines to keep operating costs down over time.

Long-Term Sustainability:
JetBlue believes that these building blocks are essential for ensuring a long-term sustainable business. The company expects to deliver improved margins over time, both absolute and relative to its airline competitors, as a result of these investments.

Questions and Engagement:
The audience is encouraged to submit questions online via Slido (slido.com/cif6) during the live webcast.

Carbon Emission Goals and Strategies:
JetBlue aims to achieve carbon-free growth by 2020 and halve its carbon emissions by 2050 (compared to 2020 levels). The airline believes that new technologies, such as electric airplanes, will play a significant role in reaching these goals. JetBlue also supports the CORSIA (Carbon Offsetting and Reduction Scheme for International Aviation) agreement, which aims to offset carbon emissions from international flights.

Challenges and Opportunities:
The airline industry faces challenges in reducing carbon emissions due to the high cost of fuel and the need for efficient flight routes. JetBlue sees an opportunity to disrupt the high-fare market between the US and Europe with its Mint premium experience. The airline is also committed to reporting its environmental performance and has adopted the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD) frameworks.

Electric Airplanes and Infrastructure:
JetBlue is investing in electric airplanes through its subsidiary JetBlue Tech Ventures. The airline believes that electric air travel will become a viable alternative by 2050. JetBlue also supports the development of new infrastructure, both on the ground and in the air, to improve efficiency and reduce carbon emissions.

Commitment to Puerto Rico and European Expansion:
JetBlue has made significant efforts to support Puerto Rico, including providing aid after natural disasters and expanding its operations on the island. The airline plans to make a decision by the end of the year on whether to expand its service to Europe. JetBlue sees an opportunity to disrupt the high-fare market between the US and Europe with its Mint premium experience.

Reporting and Biofuels:
JetBlue is committed to transparent reporting of its environmental performance and has adopted the SASB and TCFD frameworks. The airline believes that reporting is critical for measuring and managing its carbon emissions. JetBlue is also exploring the use of biofuels as a sustainable alternative to traditional jet fuel.

Safety:
The CEO emphasizes the importance of safety and encourages employees to report any safety concerns, empowering them to call a timeout and address potential issues. The airline industry has made significant progress in safety over the past few decades, but nothing can be taken for granted.

Sustainable Fuels:
Sustainable fuels will comprise 4% of the fuel supply over the next few years. The investment in sustainable fuels will reduce the cost of carbon offset schemes. There is a strong economic case for investing in sustainable fuels.

Big Data:
Confidential internal surveys are used to collect data on employee commitment, trust, and other factors. This data is analyzed to identify connections between employee attitudes and business outcomes. Maintaining confidentiality is crucial to ensure employees’ trust and openness.

Hope for the Future:
The CEO expresses optimism about the future of the airline industry in the US. He believes the industry can achieve sustainability, profitability, and success, which will benefit all stakeholders.