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Speaker 1: As then in your dad, speaking.

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Speaker 2: From the day jet Blue launched more than two decades ago.

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Speaker 2: It's cast itself as a refreshing alternative to legacy airlines.

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Speaker 1: Hey hey, look out the window, world, maybe hey over.

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Speaker 2: Jet Blue has become the sixth largest US carrier, and

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Speaker 2: while it has ambitious plans to grow, it stayed true

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Speaker 2: to its disruptive roots. One of the coolest things about

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Speaker 2: jet Blue is that kind of startup spirit, right. That's

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Speaker 2: a differentiator, the kind of the smallness of it in

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Speaker 2: a sense, do you do you keep that as you

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Speaker 2: grow bigger?

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Speaker 3: It won't be easy. With twenty five thousand people today,

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Speaker 3: you know, it's already HoTT than when it was a

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Speaker 3: thousand that at the beginning.

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Speaker 2: It helps to have leaders on board who've been there

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Speaker 2: for the long haul, like cfo Ursula Hurley Well.

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Speaker 3: Ursler joined Jet Blue as an intern.

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Speaker 4: I came home for the summer and needed a summer

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Speaker 4: job and Jet Blue, who at the time, I was

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Speaker 4: like jet who, because Jet Blue was literally three years

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Speaker 4: old back then, had posted summer internship at a university

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Speaker 4: pot board. They gave me freight privileges and so I

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Speaker 4: was allowed to fly across the country if there were

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Speaker 4: seats available on any flight at any point in time.

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Speaker 4: Now fast forward twenty years later, I haven't.

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Speaker 2: Left working in financial roles across the company. She's developed

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Speaker 2: a broad portfolio of skills and a unique depth of knowledge.

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Speaker 3: I think curiosity is a great skill in business, particularly

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Speaker 3: in our business, which is so challenging. US is not

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Speaker 3: just a number CFO. Urse understands the whole business. When

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Speaker 3: someone's in front of her asking for more money, US

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Speaker 3: knows whether that's going to work or not, and she

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Speaker 3: can ask the right questions and that's a great skill.

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Speaker 2: A CEO who's made a name as an instigator and

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Speaker 2: a CFO with passion and perspective will lead Jet Blue

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Speaker 2: on the next leg of its journey.

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Speaker 4: Robin has always been a very strong advocate of mine,

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Speaker 4: and we collaborate together. There are times when we don't agree,

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Speaker 4: there are times when we do agree, and I believe

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Speaker 4: that that's healthy and we end up in a better

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Speaker 4: position for Jet Blue. So there's puts in takes. We

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Speaker 4: push back on each other. There are points in time

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Speaker 4: where we need to take risks and we need to

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Speaker 4: do those in a measured way, and so we try

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Speaker 4: to be thoughtful about where we place our bets, and

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Speaker 4: we do that in a responsible way in order to

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Speaker 4: create a product offering that customers really value.

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Speaker 2: As much as Jet Blue has grown, it's still fighting

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Speaker 2: an uphill battle for market share. The big four airlines

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Speaker 2: United American, Delta, and Southwest control most of US domestic

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Speaker 2: passenger traffic.

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Speaker 5: We have a two tier system where we have the

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Speaker 5: haves and the have not. Seriously, you have four airlines

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Speaker 5: that are about seventy two to seventy five percent market share.

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Speaker 5: There's this enormous gap between four and five.

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Speaker 2: In July twenty twenty two, Jet Blue agreed to purchase

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Speaker 2: Spirit Airlines and a three point eight billion dollar deal.

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Speaker 2: In March twenty twenty three, the US Department of Justice

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Speaker 2: sued to block the merger on antitrust grounds. Until the

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Speaker 2: core battle is resolved, the shape and scale of Jet

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Speaker 2: Blue's future.

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Speaker 6: Remains in limbo.

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Speaker 2: So you have to, in a sense, make two plans

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Speaker 2: and go along two paths until you know what the

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Speaker 2: outcome is.

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Speaker 6: How stressful is that and how does ursula help you?

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Speaker 3: So our number one prior toy right now is to

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Speaker 3: get the Spirit merger done. We think it's transformational for

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Speaker 3: the industry. We think it's going to create a truly

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Speaker 3: national lo fare, high quality airline to challenge the big

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Speaker 3: So obviously Ursula has been really involved in that as

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Speaker 3: early as last year, actually convincing Spirit shareholders to take

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Speaker 3: out deal versus another inferior deal that was on the table,

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Speaker 3: but also running the business day to day.

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Speaker 2: How hard is it to deal with you forecasting and

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Speaker 2: planning years out with two very different outcomes.

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Speaker 4: Yeah, we have fantastic teams who are building plans for

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Speaker 4: both scenarios. Right that the benefit of Spirit is it's

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Speaker 4: going to allow us to turbocharge our organic growth plan

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Speaker 4: if Spirit doesn't happen, which I feel very confident that

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Speaker 4: it will, and we have opportunities that we can continue

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Speaker 4: to implement in.

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Speaker 6: Order to bring Jet Blue the Jet.

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Speaker 4: Blue experience to more customers. So I'm excited in general

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Speaker 4: about growth.

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Speaker 2: Jet Blue's growth plan begins with modernizing and expanding its fleet,

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Speaker 2: replacing older aircraft with Airbus A two twenties that add

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Speaker 2: passenger capacity while increasing cost efficiency Airbus A three twenties

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Speaker 2: to support long haul routes, but delivery delays caused by

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Speaker 2: supply chain problems are proving to be headwinds.

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Speaker 4: We will need to get creative on how we source

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Speaker 4: airplanes in order to continue the Jet Blue growth trajectory.

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Speaker 3: We have a very big order book of new airplanes,

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Speaker 3: but they're all coming late. On top of that, there

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Speaker 3: are some engine issues, and so we actually have airplanes

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Speaker 3: on the ground today with no engines because there isn't

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Speaker 3: enough engines to support them. I would say right now,

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Speaker 3: that is the biggest inhibitor to that organic plan.

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Speaker 2: A potential growth driver is the addition of transatlantic routes.

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Speaker 2: Since twenty twenty one, Jet Blue has begun service to London,

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Speaker 2: Paris and Amsterdam.

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Speaker 3: It's still early days, right, It's still a relatively small

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Speaker 3: part of our network, but it will grow.

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Speaker 2: Leisure travel to Europe has spiked in twenty twenty three,

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Speaker 2: with airlines adding capacity to meet demand that's far exceeded

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Speaker 2: twenty nineteen levels. Jet blues global ex bansion has helped

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Speaker 2: offset a decline in domestic passenger traffic.

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Speaker 3: One of the benefits these large airlines have not only

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Speaker 3: are they large, but they also have a lot of

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Speaker 3: hedging due to the fact they fly to so many

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Speaker 3: different markets. So we don't have that. You know, we're very,

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Speaker 3: very focused on domestic and Caribbean and Latin America. The

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Speaker 3: hedging I call it, or the having access to more

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Speaker 3: geographic diversity will actually help us.

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Speaker 4: So we are actually flying to Europe with the Airbus

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Speaker 4: A three twenty one long range aircraft, so it's actually

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Speaker 4: a narrow body aircraft. There is a way in which

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Speaker 4: we can pivot that asset to more domestic flying if

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Speaker 4: we have to, if the demand environment in Europe pools.

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Speaker 2: Jet Blues revenues have bounced back from the troughs of COVID.

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Speaker 2: The pandemic's long tail has created an uncomfortable new normal

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Speaker 2: on the expense side.

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Speaker 5: In general for the industry, revenues are back to twenty

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Speaker 5: nineteen levels, but costs are over twenty nineteen levels by

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Speaker 5: about eighteen or nineteen percent.

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Speaker 4: We're operating in a very volatile environment, so Jet Blue

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Speaker 4: has a very large presence here in New York, and

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Speaker 4: there are air traffic control challenges, so we've had to

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Speaker 4: over invest in hiring access crew members and building flexibility

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Speaker 4: into our planning process. Over time, we hope to wean

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Speaker 4: some of those investments back as the operating environment around

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Speaker 4: us stabilizes.

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Speaker 3: So I mean to give you an example, we have

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Speaker 3: about one hundred million dollars more of reserve or standby

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Speaker 3: pilots in twenty twenty three than we had in twenty

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Speaker 3: nineteen just to fly the same schedule. Because the infrastructure

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Speaker 3: is still more brittle.

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Speaker 2: And pilot salaries are about to sort. New labor contracts

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Speaker 2: are building in raises that will add significant labor costs

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Speaker 2: to every airline's ledger. With a shortage of qualified pilots looming,

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Speaker 2: their leverage would continue to grow.

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Speaker 5: Hey, it's going up by thirty five to forty percent,

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Speaker 5: which is insane. I've seen this movie before and this

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Speaker 5: is not sustainable in my opinion.

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Speaker 3: We've certainly seen since COVID know a lot more pilot attrition.

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Speaker 3: We saw a lot of the time as during COVID,

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Speaker 3: and that then created this kind of gap of pilot's

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Speaker 3: once business return.

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Speaker 1: The pilot shortage has been an issue for years, and

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Speaker 1: I do believe we are on a I hate to

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Speaker 1: use the term crash course for you know, even bigger

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Speaker 1: issues in the future.

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Speaker 5: Nobody has problems hiring, it's retaining that's the problem. The

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Speaker 5: flight attendants are negotiating for contract and let's you know,

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Speaker 5: just give them a smaller increase. I just look at

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Speaker 5: all these costs that are going onto the industry and

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Speaker 5: I don't see the revenue offset.

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Speaker 2: The pressure is on Ursula Hurley's team to trim costs

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Speaker 2: in an inflationary environment.

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Speaker 6: We've committed to.

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Speaker 4: Deliver O one hundred and fifty to two hundred million

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Speaker 4: dollars in structural cost savings by the end of twenty

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Speaker 4: twenty four.

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Speaker 3: You know, it's a team effort, right as CFO, however capable,

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Speaker 3: they are kind of do it all by themselves.

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Speaker 6: You know.

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Speaker 3: Part of it is to kind of bring the whole

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Speaker 3: organization together. And I think you know, Ursules's strength, because

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Speaker 3: she's worked here for so long, is that she knows how.

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Speaker 2: To do that in a capital intensive industry. Rising interest

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Speaker 2: rates are another concern.

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Speaker 4: Liquidity is the lifeblood of an airline. We make very

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Speaker 4: conservative decision making about when we raise funding and how

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Speaker 4: we raise funding. We try to diversify our sources and

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Speaker 4: we're always very focused on the actual rates and we

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Speaker 4: like to build an inflexibility in these financing structures so

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Speaker 4: that we can we have an opportunity to prepay debt

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Speaker 4: when appropriate so that we can continue to optimize the

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Speaker 4: overarching rates that we're paying.

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Speaker 2: It's been a turbulent year for Jet Blue shares, one

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Speaker 2: more example of the volatility that Ursula Hurley is determined

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Speaker 2: to stabilize. You worked in investor relations on the way

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Speaker 2: to this chair. As a result of that, are you

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Speaker 2: extremely sensitive in terms of the stock price, in terms

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Speaker 2: of analyst ratings?

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Speaker 6: I am.

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Speaker 4: I mean, that's the core of what I do and

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Speaker 4: what my teams are responsible for. I probably checked the

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Speaker 4: stock price way too many times a day. We have

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Speaker 4: three stakeholders. We have our customers, we have our crew members,

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Speaker 4: and we have our shareholders, and so those are the

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Speaker 4: lenses that we look through when we make any type

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Speaker 4: of decision, and so we need to be balanced. But

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Speaker 4: at the end of the day, it's all about returning

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Speaker 4: for our shareholders.

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Speaker 2: Since Jet Blue began flying in February two thousand, the

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Speaker 2: airline has prided itself on offering a high end customer

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Speaker 2: experience at a moderate price. It pioneered a meddies like

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Speaker 2: free Wi Fi on every flight and live TV at

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Speaker 2: every seat. Airfares have risen in the last two years

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Speaker 2: as demand has recovered, but Robin Hayes insists Jet Blues

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Speaker 2: low cost philosophy will not change.

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Speaker 3: People want low fares. Our model has always been offering

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Speaker 3: low fares with great service to stimulate additional trips. I mean,

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Speaker 3: I think given the pivot for the industry away from

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Speaker 3: business travel to leisure travel, when you're talking about someone's

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Speaker 3: leisure travel, you're not just competing with other airlines, right,

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Speaker 3: You're competing with am I going to get a new car?

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Speaker 3: So you're competing for a people's show of wallet. And

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Speaker 3: I think what we have to do is make sure

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Speaker 3: that travel is a compelling choice for people.

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Speaker 2: A compelling travel experience starts well before a customer boards

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Speaker 2: the aircraft. Ursula Hurley walked me through Terminal five at

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Speaker 2: New York's John F. Kennedy Airport, where the complexity of

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Speaker 2: the business she oversees really comes into focus.

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Speaker 4: We operate one thousand flights a day, we serve over

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Speaker 4: one hundred destinations, and we transport about forty million customers

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Speaker 4: per year. When you think about a person booking a

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Speaker 4: flight to getting them to their destination and home from

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Speaker 4: their destination, it takes an army of things to go right.

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Speaker 4: As we were coming through the depths of COVID, the

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Speaker 4: labor market was very very challenging. You had people leaving

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Speaker 4: the company to do life changes, and so we had

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Speaker 4: to very quickly hire thousands of crew members to staff

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Speaker 4: back up. Because the demand for air travel came back

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Speaker 4: so quickly, attrition has stabilized, so we're always monitoring the

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Speaker 4: hiring metrics, how long it takes to get them through training,

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Speaker 4: and what the job market looks like for each of

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Speaker 4: these specific work groups.

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Speaker 2: Of course, premium products help airlines relieve margin pressures. I

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Speaker 2: got to sample Jet Blues revamped Mint experience.

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Speaker 6: This is the new Mint.

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Speaker 4: This is our premium business class offering.

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Speaker 2: What's the process like you order the plane from air

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Speaker 2: Bus and then do you fitted out yourself?

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Speaker 6: Or how does how does this work? How do you

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Speaker 6: make a Mint?

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Speaker 4: It's a multi year process that we work with our

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Speaker 4: Jet Blue product team and my fleet team work and

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Speaker 4: collaborate with business partners to define and create what we

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Speaker 4: want the experience to look like. We stress test it,

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Speaker 4: we make sure that we're doing it in a cost

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Speaker 4: conscious way. We optimize the seating configuration on every airplane

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Speaker 4: to drive margin. On this aircraft, we have one hundred

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Speaker 4: and sixty seats in total. We have sixteen Mint seats

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Speaker 4: and then we have one hundred and forty four core

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Speaker 4: seats in the back of the airplane.

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Speaker 6: What kind of growth are you expecting from Mint?

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Speaker 4: So we have forty six Mint aircraft today and we

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Speaker 4: have over twenty more aircraft on order that will be

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Speaker 4: configured in Mint that can fly to Europe. So we're

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Speaker 4: really excited to spread the jetbou brand throughout more European destinations.

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Speaker 6: I'm spoiling myself. Wow, that's really it's really flat and

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Speaker 6: I fit look at that.

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Speaker 2: There's change on the way at JFK ground has been

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Speaker 2: broken on a new Terminal six. It will connect with

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Speaker 2: Terminal five and add capacity for up to ten gates.

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Speaker 2: Jet Blue joins a consortium of companies managing the four

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Speaker 2: point two billion dollar project, helping definance, design, and guide

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Speaker 2: its construction towards completion in twenty twenty eight.

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Speaker 3: I think that what people want these days is an easy,

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Speaker 3: quick experiments through the airport.

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Speaker 1: We need to have better technology at all points throughout

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Speaker 1: the journey. We need to embrace biometrics. Consumers hate standing

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Speaker 1: in lines. There is biometric technology that can help cut

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Speaker 1: security lines and check in lines.

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Speaker 4: In a third, we're still in the design phase for

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Speaker 4: Terminal six. But we leverage what other airports have done

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Speaker 4: and what we've seen throughout the world, quite frankly, and

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Speaker 4: we're going to pick the best of everything to really

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Speaker 4: elevate the game, and technology is going to be at

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Speaker 4: the backbone of that journey. We want to be able

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Speaker 4: to create and give customers experiences where they can self

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Speaker 4: serve as much as possible across the travel ribbon. So

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Speaker 4: whether it's checking in, whether it's checking your bag, going

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Speaker 4: through security, boarding a flight, we want everyone to be

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Speaker 4: able to do that seamlessly and be able to do

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Speaker 4: that with your own handheld technologies.

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Speaker 1: Also, I'm just going to say, for Jet Blue, you

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Speaker 1: need to have a lounge. Jeff Blue has you know,

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Speaker 1: the T five is great, but for premium travelers, especially

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Speaker 1: now that flights are delayed so much, you.

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Speaker 2: Don't want to wait in the terminal, there's no VIP

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Speaker 2: lounge here.

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Speaker 6: Is that right? No specific Jet Blue VIP lounge. Is

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Speaker 6: that going to change with the new terminal?

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Speaker 4: It could there could be a potential where we're evolving

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Speaker 4: the mint and premium customer offering. We need to make

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Speaker 4: sure that we're building out our customer offerings in a

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Speaker 4: cost conscious way.

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Speaker 2: Chief financial Office Ursula Hurley has spent her entire professional.

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Speaker 6: Career at Jet Blue.

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Speaker 2: Her rise from college intern to the c suite is

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Speaker 2: rare for an industry that's still male dominated at the

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Speaker 2: highest levels.

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Speaker 5: We don't have a lot of diversity in the c suite.

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Speaker 5: We have a lot of diversity below that level, and

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Speaker 5: airlines are working on improving it. They have goals for

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Speaker 5: their boards, they have goals for management, but what they

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Speaker 5: have to do is attract and.

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Speaker 2: Retain the Jet Blue bucks the trend. It's the only

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Speaker 2: airline among one hundred and twenty three global carriers tracked

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Speaker 2: by Bloomberg with fifty percent gender parity among executives.

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Speaker 4: Diversity drives innovation. At the end of the day, innovation

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Speaker 4: provides stronger returns. I also am president of our Jet

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Speaker 4: Blue Foundation, and the mission of the foundation is to

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Speaker 4: promote access to STEM and aviation to young girls of

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Speaker 4: color and two young girls who don't have access to experiences.

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Speaker 2: The company's diversity goals include getting more women into the cockpit.

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Speaker 3: Pilots are tough. I mean, historically, you know in the

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Speaker 3: US we've been about ninety five percent men five percent women.

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Speaker 3: That's clearly a significant imbalance.

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Speaker 4: We have made great strides in increasing the number of

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Speaker 4: women in our pilot work group. We have what are

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Speaker 4: called our gateway programs. The diversity is very impressive, so

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Speaker 4: you see a lot more women, and you also see

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Speaker 4: a lot more women of diverse race as well.

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Speaker 2: Along with plans to make the future of aviation more inclusive,

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Speaker 2: Jet Blue has taken steps to make it more sustainable.

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Speaker 2: In the last two years, it signed agreements with suppliers

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Speaker 2: for millions of gallons of sustainable aviation fuel or SAFF.

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Speaker 4: We have committed to net zero by twenty forty and

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Speaker 4: we have also committed to fly ten percent of our

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Speaker 4: fuel consumption on SAFF by twenty thirty and so today

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Speaker 4: we actually consume SAFF in three of our airports that

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Speaker 4: are based in California, and so we're on a path

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Speaker 4: to achieve that ten percent. There is not enough staff

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Speaker 4: out there for consumption, and so we're encouraging producers, financiers

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Speaker 4: as well as other airlines to help push this forward

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Speaker 4: and provide us opportunities to achieve our sustainability goals.

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Speaker 2: Like many companies, Jet Blue is exploring the potential of

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Speaker 2: artificial intelligence.

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Speaker 4: We can utilize AI to make better decisions. We can

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Speaker 4: also utilize AI to help us gather and analyze information.

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Speaker 2: It's already invested in AI tools to improve its operations.

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Speaker 3: A number of years ago, we set up Jet Blue Ventures,

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Speaker 3: which is one of our subsidiaries that really is at

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Speaker 3: the intersection of technology and the travel industry. Tomorrow Io,

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Speaker 3: which is our weather forecasting company, one of our initial

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Speaker 3: investments in Jet Blue Ventures, and they use a lot

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Speaker 3: of really cool technology, including AI to more accurately put

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Speaker 3: weather and deciding what flies to cancel and delay, or

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Speaker 3: what run ways to land on, or how much fuel

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Speaker 3: to load based on a more accurate forecast. Using AI

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Speaker 3: and other technology is a game changer for us. So

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Speaker 3: you know, I think that we're going to continue to

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Speaker 3: see that across more aspects of our company.

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Speaker 2: Jet Blue fights off the Dog lawsuit and pulls off

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Speaker 2: the Spirit merger. Robin Hayes will lead the company into

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Speaker 2: a new era of size and scale. He believes customers

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Speaker 2: will benefit.

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Speaker 3: We have four large airlines today that have about twenty

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Speaker 3: percent of the market each. A Jet Blue Spirit combination

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Speaker 3: will put us between eight to nine percent, so we'll

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Speaker 3: still be a distant number five we'll still be less

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Speaker 3: than half the size of these Big four, but it's

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Speaker 3: not sustainable to have this bifurcated industry where we have

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Speaker 3: four big players at twenty percent and everyone else is

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Speaker 3: showing twenty percent of the market between them. So we

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Speaker 3: feel passionately that one of the best things that can

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Speaker 3: happen for consumers is the Jet Lo Spirit deal because

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Speaker 3: it will give customers a truly more national choice than

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Speaker 3: just flying on the Big Four.

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Speaker 2: In any future scenario, Ursula Hurley will have a lot

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Speaker 2: on her plate. She'll play a key role as Jet

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Speaker 2: Blue continues to innovate and grow.

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Speaker 6: I asked her what she sees when she looks ahead.

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Speaker 2: What are you most excited about for the next ten

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Speaker 2: years of Jet Blue.

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Speaker 4: I'm really excited to see jet Blue continue to grow.

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Speaker 4: At the end of the day, we view ourselves as

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Speaker 4: a destructor and a maverick in the aviation industry, and

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Speaker 4: we want to bring more of the Jet Blue experience

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Speaker 4: to more customers across the country. And I'm really excited

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Speaker 4: to play a meaningful role in that growth journey.

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Speaker 2: And So, what's the biggest challenge over the next ten

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Speaker 2: years that keeps you up at night?

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Speaker 4: The biggest challenge is just managing the volatility of the

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Speaker 4: industry that we live in. And I mean there are

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Speaker 4: many puts into our business and we're thrown many curveballs,

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Speaker 4: and so it's just having the agility and quite frankly,

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Speaker 4: the resiliency to power through it and look for ways

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Speaker 4: in which we can deliver for our customers, our crew

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Speaker 4: members as well as our shareholders.

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Speaker 2: What is one skill set or knowledge area that you

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Speaker 2: think every CFO is going to have to develop or

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Speaker 2: have over the next ten years.

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Speaker 4: Just resiliency, just the dynamic of the world that we

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Speaker 4: live in. You need to be able to power through.

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Speaker 4: You need to be able to see through the trees.

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Speaker 4: You need to identify opportunities and push people. You really

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Speaker 4: need to inspire and bring people along with you in

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Speaker 4: order to be successful.

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Speaker 2: And what advice would you give someone who is promoted

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Speaker 2: to CFO today.

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Speaker 6: You have to have.

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Speaker 4: An exceptional team around you in order to be successful.

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Speaker 4: You also need to dive into the details. Knowing and

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Speaker 4: un understanding the analytics and the drivers of the business

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Speaker 4: will allow you to push back and quite frankly, create

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Speaker 4: more value. And then I would also tell people you

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Speaker 4: need to manage your stakeholders effectively. So whether that's a shareholder,

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Speaker 4: whether that's the board, a customer, a crew member, taking

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Speaker 4: in their feedback and implementing their thoughts to make Jet

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Speaker 4: Blue an even better company than we are today. So

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Speaker 4: at the end of the day, hire a fantastic team,

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Speaker 4: dive into the details, and ensure that you're managing your

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Speaker 4: stakeholder base as effectively as possible.

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Speaker 6: I'm Matt Miller, this is Bloomberg