JetBlue's JetForward Inflection: Fuel Recapture, BlueFirst, and a New Full-Year Guide

Q2 RASM jumps 10.9%, fuel recapture hits 50%, and JetBlue lays out a path to $1 EPS in 2028.

JBLU · Earnings Call · 2026-07-28

JetBlue's second quarter delivered the clearest evidence yet that its JetForward transformation is taking hold. Revenue per available seat mile (RASM) rose 10.9% year-over-year, beating the midpoint of a previously raised guide, and the company achieved ~50% fuel recapture – above its own expectation of 40% or more. “We delivered strong revenue performance in the second quarter with RASM increasing 10.9% year-over-year” — Martin St. George, President and COO · 2026-07-28, said President Marty St. George. The pricing environment has become supportive, with demand strength persisting across the booking curve. This beat allowed management to re-establish full-year guidance, which had been withdrawn in April after the fuel spike.

Fuel Recapture and the Pratt Settlement

Ursula Hurley, CFO, cited the step-up in fuel recapture and cost discipline. “RASM is now expected to be 10-plus points higher than CASM ex-fuel in the second half” — Ursula Hurley, CFO · 2026-07-28 – a reflection of better pricing power and unit cost control. A key new tailwind is the initial settlement with Pratt & Whitney over GTF engine groundings. “We are pleased to have an initial settlement complete with Pratt” — Ursula Hurley, CFO · 2026-07-28, she said. The $105 million settlement (80% to operating expense, 25% hitting 2026) will support CASM ex-fuel in the back half. jet fuel price remains volatile, but pricing traction and capacity discipline are offsetting it.

Premium Push: BlueFirst and Fort Lauderdale

JetForward's flagship commercial initiative, BlueFirst, is finally reaching the market.

At run rate, we believe BlueFirst will support meaningful unit revenue and margin expansion, including nearly 5 points of RASM growth.
Joanna Geraghty, CEO · 2026-07-28

The retrofit program is on track to complete the majority of the fleet by end-2027, with revenue building into 2028. Combined with the co-brand card momentum and the Blue Sky partnership, premium penetration is widening. Meanwhile, Fort Lauderdale is a generational opportunity: capacity grew nearly 40% while RASM rose 11% in the quarter.

Balance Sheet and 2028 Target

The company ended the quarter with $2.2B in liquidity (23% of TTM revenue) against a 17-20% target. Operating income was -$336M in Q1 2026, but the trajectory – from a -$767M trough in Q1 2024 – is toward breakeven. Management reaffirmed a return to sustained operating profitability in 2027 and set a 2028 EPS target of at least $1 per share, assuming $3/gal fuel and continued demand. sustained profitability is no longer a distant hope but a concrete plan. From the prior call, the change is stark. In April, Ursula noted, “We were 90% booked in 1Q because, remember, fuel spiked in early March” — Joanna Garrity, Chief Financial Officer · 2026-04-28, limiting recapture. Now, with a longer booking window and higher fares, the company is confident in 100% recapture by early 2027. “We need to recover more than that because many of our other inputs have gone up” — Marty St. George, President and Chief Commercial Officer · 2026-04-28 – but the latest results suggest they are on the right track.