JetBlue's Q2 2025: Contradictions in Premium Travel, Capacity Management, and Strategic Initiatives

Operational Improvements and Revenue Performance:
- JetBlue reported a modest operating profit in Q2 and achieved a completion factor of 99.6%, achieving a 7% year-over-year improvement in unit CASM while unit revenue declined 1.5% year-over-year.
- The improvement in operations and customer satisfaction, reflected by a double-digit increase in Net Promoter Score, contributed approximately $15 million of incremental EBIT over the first half of 2025.
- The close-in bookings increased by 7% in May and June, contributing to a strong Q2, and demand is expected to remain robust in July, although weather and air traffic control challenges impacted operations in July.

JetForward Progress and Partnerships:
- JetBlue's JetForward multiyear transformation is on track to deliver $290 million in benefits by year-end, with $180 million achieved cumulatively by the end of Q2.
- The partnership with United Airlines, called BlueSky, is expected to contribute an incremental $50 million in EBIT through 2027, enhancing JetBlue's network distribution and loyalty program, with additional benefits from the Paisly platform.
- The collaboration with United will expand TrueBlue earnings and utility, increasing cross-merchandising and enhancing customer choice.

Cost Management and Fleet Optimization:
- JetBlue's cost management efforts resulted in CASM ex fuel guidance of up 5% to 7%, a significant improvement over the previous guidance of up 6.5% to 8.5%.
- The revised forecast for aircraft on the ground due to Pratt & Whitney GTF issues improved, with expectations for fewer than 10 aircraft on average this year, supporting a return to capacity growth post-2025.
- Fleet optimization included the sale of 2 upcoming XLR deliveries and the decision to pause restyling of 4 A320 aircraft, focusing on capital-efficient growth.

Network Strategy and Market Adjustments:
- JetBlue's network realignment efforts in 2024, including closing 15 Blue Cities, contributed to $15 million of incremental EBIT over the first half of 2025.
- New markets such as secondary Northeast cities exceeded expectations and showed positive early traction, demonstrating signs of relative improvement in network optimization.
- The realignment aimed to serve JetBlue's core customer by focusing on its best East Coast leisure network.