ジェットブルー（JBLU）2026年第3四半期決算説明会：燃料コストが上昇する中、RASMは18.4%上昇

主要要点

• ジェットブルー航空が発表した2026年第3四半期の有効座席マイル当たり売上高（RASM）は前年同期比18.4%増となり、当初ガイダンスの中央値を約4ポイント上回りました。
• 同社によると、堅調な需要と運賃値上げにより、燃料コスト上昇分の87%を回収することができ、当初予想の70%〜80%を上回りました。
• 第3四半期の燃料コストは1ガロン当たり3.91ドルと、前年同期比で57%上昇しました。燃油を除くCASM（有効座席マイル当たり運航費用）は7%増加し、これには夏の運航混乱による約4ポイントの押し上げ要因が含まれています。
• 経営陣は第4四半期のRASMが18%〜22%増加すると予想しており、燃料価格が85%上昇すると見込まれるものの、調整後営業利益率は前年同期比で1〜2ポイント改善すると試算しています。
• ジェットブルーは当四半期末時点で22億ドルの流動性と約70億ドルの担保未設定資産を保有して終了しました。経営陣は引き続き2027年の営業黒字化、それに続く2028年のフリーキャッシュフロー黒字化および少なくとも1ドルのEPS（1株当たり利益）の達成を目標としています。

主要財務データ

事業・運航パフォーマンス

フォートローダーデールは引き続き成長の中心的原動力となりました。供給能力（キャパシティ）が65%以上拡大したにもかかわらず、同市場のRASMは前年同期比で約15%増加しました。ジェットブルーは、第4四半期におけるフォートローダーデールの座席シェアが14ポイント増の約37%に達すると見込んでおり、冬のピーク時の1日当たり出発便数は39%増の150便を超えると試算しています。

経営陣によると、フォートローダーデールの前年同期比での供給能力拡大は第3四半期にピークを迎えた可能性が高いとのことです。成長の緩やか化と供給能力の成熟により、単価当たり売上高（ユニットレベニュー）のさらなる改善が下支えされると期待されています。当四半期中、ブロワード郡における提携クレジットカードの新規獲得数は前年同期比で55%増加しました。

ジェットブルーの新しい国内線ファーストクラス製品「Blue First」は、30以上の路線で販売が開始されており、12月8日のボストン〜フォートローダーデール線から運航が始まります。経営陣によると、初期の予約は主に既存顧客によるものとのことです。サプライチェーンの制約から完全な設置は2028年後半まで延びるものの、機体の大部分は2027年末までに改修される見込みです。

また、ジェットブルーは新しいレベニューマネジメントシステムへの移行を完了しました。同プラットフォームには、経営陣がさらなる単価当たり売上高の改善源と位置付ける「Mint」クラスや乗り継ぎ旅程の自動最適化機能が追加されています。

第3四半期のロイヤルティ事業収入は20%増加しました。「Premier Card」の新規獲得数は前年同期比で8倍に急増し、コアポートフォリオ全体のカード利用額は2桁の伸びを記録しました。2月にロイヤルティ提携「Blue Sky」が開始されて以来、ユナイテッド航空便で11億ポイント以上のTrueBlueポイントが交換・利用されました。

同社は、旅行関連プロダクトのプラットフォーム「Paisly」が2026年に約1億ドルの営業利益を創出し、2028年までにその貢献度がほぼ倍増すると予想しています。この目標には新たなパートナーの追加は織り込まれていません。

経営陣によるガイダンス

ジェットブルーは、年間設備投資額が2020年代末まで10億ドル未満に留まると見込んでいます。経営陣は、2027年の継続的な営業黒字化、ならびに2028年のフリーキャッシュフロー黒字化および少なくとも1ドルのEPS達成という目標を改めて表明しました。

同社によると、第4四半期の売上高見通しは、繁忙期と閑散期全体の堅調な需要、規律ある供給能力の配置、ならびに「JetForward」施策からの貢献増大を反映しています。供給能力の拡大はフォートローダーデールに集中しており、その他のネットワークは横ばいから減少傾向となっています。

リスクと注視すべき分野

燃料価格の上昇は、依然として最も重大な足元の圧迫要因となっています。ジェットブルーは第4四半期の燃料価格を1ガロン当たり約4.64ドル（前年同期比85%高）と見込んでいます。燃料価格の高騰は、同社が7月に示した通期営業利益率の見通しに対して3.5ポイントの押し下げ要因となりました。

ジェットブルーの北東部市場における天候不順と航空交通管理の制約により、第3四半期の完了供給能力が減少し、運航混乱に伴う乗務員関連コストが増加しました。経営陣はまた、マクロ経済の不確実性と原油価格の継続的な変動も理由として挙げました。

2028年のフリーキャッシュフロー目標への道筋をつけるにあたり、流動性の維持が引き続き課題となっています。ジェットブルーは第4四半期に「Orion」航空機担保融資に基づき追加で2億5,000万ドルを引き出す予定であり、調達コストを重要考慮事項としつつさらなる航空機ファイナンスを検討しています。

サプライチェーンの制約が「Blue First」導入に伴う機体改修のペースを制限しています。経営陣は、追加の座席が調達できれば設置作業をより迅速に進めることができると述べました。

アナリスト質疑応答のハイライト

• 流動性と資金調達：燃料価格のボラティリティが続き、同社が黒字化を目指す中、経営陣は引き続き過去12ヶ月の売上高の17%〜20%に相当する流動性を指標範囲として運用しています。航空機を担保とした資金調達が短期的な優先事項ですが、経営陣は負債以外の選択肢も利用可能であると述べています。
• 担保未設定資産：28億ドル規模の航空機およびエンジン資産プールは第3四半期末時点の測定値です。経営陣は、予定されている2億5,000万ドルの資金調達と4機の追加機体納入後も、年末の資産レベルは同程度に維持されると見込んでいます。
• コストパフォーマンス：ジェットブルーは第3四半期に3,000万ドルを超える管理可能コストの削減を達成しました。経営陣は以前、2027年に1桁台半ばの供給能力成長に伴い、管理可能ユニットコストの伸びを1桁台前半に抑えられる可能性があることを示唆していました。
• 価格設定と需要：経営陣は、運賃の値上げにもかかわらず明確な需要の価格弾力性は見られないと述べました。9月の平均運賃は7月の平均運賃を上回っており、経営陣はジェットブルーの歴史において前例のないことであると説明しました。
• 貸借対照表の優先事項：ジェットブルーがフリーキャッシュフローの黒字化を達成した後は、デレバレッジ（負債削減）が資本配分の最優先事項になると経営陣は述べています。
• ネットワーク展開：2026年第4四半期のネットワークのうち、開設後1年未満の路線はわずか4%、2年未満は5%にとどまります。そのため経営陣はネットワーク全体が成熟していると位置付ける一方で、フォートローダーデールでの乗り継ぎや新しいレベニューマネジメントプラットフォームによるさらなる収益機会を指摘しました。

決算説明会全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, everyone. My name is Jillian. I would like to welcome everyone to the JetBlue Airways Third Quarter 2026 Earnings Conference Call. As a reminder, today's call is being recorded. [Operator Instructions] I would now like to turn the call over to JetBlue's Director of Investor Relations, Kush Patel. Please go ahead, sir.

Koosh Patel

Thanks, Julia. Good morning, everyone, and thank you for joining us for our Third Quarter 2026 Earnings Call. Yesterday, we issued our earnings release and a presentation that we will reference during this call.

All of those documents are available on our website at investor.jetblue.com and on the SEC's website at www.sec.gov. In New York to discuss our results are Joana Gary, our Chief Executive Officer; Marty St. George, our President; and Ursula Hurley, our Chief Financial Officer.

During today's call, we'll make forward-looking statements about our outlook, strategy and future performance. These statements are based on our current expectations and are subject to risks and uncertainties that could cause actual results to differ materially.

Please refer to our earnings release and SEC filings for information about risk factors that could cause those differences. These statements speak only as of today, and we undertake no obligation to update them. We may also discuss certain non-GAAP financial measures.

Reconciliations to the most directly comparable GAAP measures are included in our earnings materials and are available on our Investor Relations website. And now I'd like to turn the call over to Joanna Gardy, JetBlue's CEO.

Joanna Geraghty

Thank you, Kush. Good morning, everyone, and thank you for joining us today. I want to start by reinforcing the bigger picture and the progress that we are making.

Despite significant fuel headwinds and a challenging summer operation, our revenue performance is among the strongest in the industry with unit revenue up 18.4% in the third quarter and further acceleration expected in the fourth.

Customer demand remains resilient, and we are seeing Jet forward benefits compounding with some of our largest opportunities still ahead. Importantly, we are already expanding margins year-over-year despite elevated fuel prices.

We remain focused on operating profitability in 2027 and see multiple paths to at least in earnings per share and positive free cash flow in 2028. Importantly, our liquidity and financing flexibility provide an important bridge as these benefits build.

The fuel challenges the industry faces are real, but so is our progress. JetBlue has a strong brand, a high-value network, customers who are loyal to our digit offering, great crew members and a clear strategy to achieve sustained profitability.

We are confident in our plan and focused on delivering the results that this airline is capable of achieving. Turning to the third quarter. I'm very encouraged by the strength we saw in the underlying business this quarter. Revenue materially exceeded our initial expectations and strengthened as the quarter progressed, with momentum continuing into the fourth quarter.

For me to highlights stand out from the quarter. First, demand remained resilient even as industry fares moved higher in response to elevated jet fuel costs. This revenue strength helped us recapture higher fuel faster than initially expected, and we achieved 87% recapture in the third quarter versus our initial expectation of 70% to 80%.

Second, Fort Lauderdale continues to demonstrate the strength of our network strategy, delivering strong unit revenue performance even as we significantly expanded our operations. At the same time, the quarter was impacted by an unusually challenging summer operating environment.

Severe weather and air traffic control constraints across our core Northeast geographies reduced our completed capacity and increased our disruption in crew costs.

Through it all, our crew members worked tirelessly to care for our customers and recover our operations, and I want to thank them for their tremendous dedication throughout such a demanding summer. Even with elevated fuel prices and the air traffic control pressures we faced this summer, we still expect to deliver year-over-year adjusted operating margin expansion over the second half of this year.

We saw modest margin expansion in the third quarter and expect points of further growth in the fourth quarter, even with fuel up 85%. We know there is still work ahead, particularly given elevated fuel prices and macroeconomic uncertainty.

But our third quarter performance provides further evidence that Jet Forward is delivering results. We've now delivered consecutive quarters of improving year-over-year RASM growth and are among the industry leaders for second half revenue expansion. We remain on track to achieve our 2026 JetForward targets with several important initiatives continuing to build into 2027 and beyond.

And we are already seeing that execution translate into results in Fort Lauderdale. We expect our seat share to reach approximately 37% in the fourth quarter, up 14-point year-over-year, reflecting the scale that we are building as our operation expands. We're also deepening our engagement with local customers and co-brand acquisitions in Broward County increased 55% year-over-year in the third quarter.

These actions are driving strong RASM growth in Fort Lauderdale and illustrate the early success of our strategic capacity growth. Blue First is yet another important driver of our growth and is our largest jet forward initiative. Seats are now on sale, and we look forward to welcoming our first customers in early December. We're excited to offer customers a domestic first-class experience at an accessible price point.

At runway, we expect Blue First to deliver nearly points of RASM improvement with its revenue and margin contributions building through 2028 and beyond. Turning to our financial position. We ended the quarter with $2.2 billion in liquidity and approximately $7 billion in unencumbered assets, including $2.8 billion in aircraft and engines.

Together, these resources provide substantial financial flexibility and an important bridge as we execute JetForward and move towards a stronger earnings and cash flow profile. The progress that we are seeing across our business is real. Our revenue initiatives are delivering. We are beginning to expand margins year-over-year and the benefits of JetForward are compounding as existing initiatives mature and new ones come online. With the financial resources to support our plan, our focus is on building on that momentum to achieve sustained operating profitability in 2027 and achieve positive free cash flow and at least $1 of earnings per share in 2028.

Let me be clear. That is where our intention is and that is how we intend to create long-term value for our shareholders. With that, I will turn it over to Marty.

Martin St. George

Thank you, Joanna. I also want to thank our crew members for their unwavering commitment to our customers and to JetBlue some. Their efforts helped us navigate a challenging operating environment while continuing to deliver strong commercial results. Revenue was a clear highlight in the third quarter, and we are pleased that the strikes we saw through September has carried into the fourth quarter. .

During Q3, RASM increased 18.4% year-over-year, roughly 4 points better than the midpoint of our initial guidance. That puts JetBlue among the industry leaders in year-over-year total and unit revenue growth this quarter, reinforce the momentum that we are seeing from our commercial initiatives. Higher yields supported and passed by our investments in revenue management technology drove a majority of this outperformance.

Customer volumes remain relatively resilient and we saw no meaningful signs of elasticity despite higher fares as we responded to elevated fuel costs. Both premium and Maine delivered double-digit RASM growth with the strength in main particularly encouraging.

Demand strength remains broad-based across both peak and open travel periods with healthy booking trends continuing into the fall. Turning to Fort Lauderdale. We see continued acceleration in RASM growth throughout the year even as we significantly expanded our operations.

In the third quarter, RASM increased nearly 15% year-over-year on more than 65% capacity growth. This performance demonstrates strong customer response as we continue to rapidly build scale in the market. We're expanding travel options for Broward County residents and creating more connecting opportunities for customers throughout our network by adding destinations and frequencies and optimizing our ruling bank schedule.

With 15 new destinations and increased frequencies to others, we expect peak daily departures to exceed 150 this winter up 39% year-over-year. We recently launched service to 2 new destinies in Colombia, bringing our international network from Fort Lauderdale to 18 destinations. Robust growth required close collaboration, and I want to personally thank Mark Gail and the team at Broward County Aviation Department for their ongoing partnership as we continue to expand our operations.

While we plan to continue to grow, we believe the third quarter likely represents our peak year-over-year growth rate in Fort Lauderdale. This should support further RASM expansion as our growth moderates and new capacity matures.

Turning to first, our new domestic first-class experience is now on sale across more than 30 routes. Service began December 8 between Boston and Fort Lauderdale and will expand to additional routes in a phased rollout. We prioritized markets with strong premium demand, where Blue First can help us capture high-yield bookings and improve our revenue banks. We're encouraged by the early response to Blue First, which suggests that we are tapping independent that demand for a domestic first at product among existing customers, particularly on leisure routes from New York and Boston. Approximately 35% of bookings so far are award reductions and Basic members account for nearly 1/4 of the seats booked.

While still early, this engagement, reinforce that confidence and prove first ability to capture more premium travel demand from our existing loyal customer base. We're also pleased with the progress that we are making in modernizing our revenue management technology. We've completed the transition to a new system that improves forecasting and enables more sophisticated revenue optimization across our network including automated management of Mint and connecting actuaries for the first time.

Early results are ahead of our expectations, and we're adding capabilities to better interest shift in demand, respond more quickly to market conditions and support further unit revenue improvement over time. Loyalty continues to deliver strong sequential growth, driven by our premium and partner strategy with revenue up 20% for the quarter, the highest level of growth since 2023.

Acquisition of the Premier Card grew eightfold year-over-year in the third quarter as customers responded positively to the benefits refresh and the opening of our latest Blue House in Boston. Has spend remained robust across our core brand portfolio, growing double digits and pulling loyalty cash remuneration solidly attract from mid-teens growth for the year.

Our investments in premium products and partnerships are driving deeper loyalty and engagement with record levels of active TrueBlue members and elite status to applications this quarter. Our newest Blue House launch has been met by rate reviews and outstanding NPS results since opening in August, and it's just another one of the many investments we are making in the premium customer experience.

Our Blue Sky loyalty collaboration which improves global access for TrueBlue members has now passed more than 1.1 billion in TrueBlue points redeemed on United flights since the loyalty efforts launched in February. We're also seeing encouraging progress at page which delivered its strongest financial results ever in Q3.

Further, rental cap bookings through mileage plus travel have outpaced United's previous provider on a per-day basis since launch. We're building on that early traction with plans to introduce additional offerings throughout '26 and in the first half of 2027. Pavel is on track to deliver nearly $100 million in operating income this year with that contribution expected to nearly double by 2028, driven by the maturation of our existing JetBlue business and the continued ramp of land offering to the United. Importantly, this target does not assume any additional partners, which presents the potential source of further upside as we expand the platform.

Looking forward, we expect fourth quarter RASM increased 18% to 22% year-over-year. This represents further acceleration from the third quarter despite year-over-year comparisons that are 2 to 3 points more challenging as we begin to lap the demand improvement that started last year.

This is expected to be our fifth consecutive quarter of escalating year-over-year RASM growth, which provides further evidence that our jet forward initiatives are delivering results and strengthening our revenue performance.

Based on what our competitors have guided so far, we expect to continue to be among industry leaders in the fourth quarter as well. For the full year, we now expect RASM to increase 13.5% to 14.5%. Even with this revenue method, we remain disciplined with our capacity deployment. Fourth quarter growth is concentrated in Fort Lauderdale, we had initial return and substantial opportunity to continue to support additional investments. Capacity in the rest of the network is flat to down.

We expect fourth quarter capacity growth of 3% to 4% and full year growth of 1.5% to 2.5% year-over-year. Our fourth quarter capacity guide reflects significant impact of weather and operational disruptions that reduced completed flying last year. Excluding the impact of those prior year disruptions, scheduled capacity growth is nearly 2 points lower.

Taken together, continued revenue strength, disciplined capacity deployment and the growing contributions from our jet board initiatives give us confidence in our revenue trajectory as we close out the year and head to 2027.

And with that, I'll turn it over to Oslo.

Ursula Hurley

Thank you, Marty. We're encouraged by the progress we're making on margins. We delivered year-over-year adjusted operating margin improvement in the third quarter and expect further expansion in the fourth as continued revenue strength is complemented by a meaningful step down in the growth of our CASM excluding fuel. .

This progression is an important step towards sustained operating profitability in 2027. We are also taking concrete steps to further enhance liquidity and maintain the financial flexibility needed to execute JetForward. On the cost side, third quarter CASM as fuel increased 7% year-over-year at the midpoint of our updated September guidance.

As previously communicated, our underlying unit cost performance remained consistent with our initial 2.5% to 4.5% guidance range, excluding approximately 4 points of pressure from summer operating disruptions.

Our third quarter fuel price was $3.91 per gallon, 57% higher year-over-year. Looking to the fourth quarter, we expect fuel prices of approximately $4.64 per gallon with continued revenue strength supporting further progress in recapturing higher fuel costs. Looking to the fourth quarter, we expect CASM ex fuel between negative 1% and positive 1% year-over-year.

This represents a meaningful step down in unit cost growth and a return to the cost trajectory we guided at the beginning of the year. For the full year, we now expect CASM ex fuel growth of 3.5% to 4.5%.

Turning to profitability. We now expect a full year adjusted operating margin of negative 4.5% to 6.5%. The revision primarily reflects higher fuel prices which created 3.5 points of pressure relative to our July outlook. Stronger revenue performance has helped offset a significant portion of these headwinds. We also expect one to two points of year-over-year adjusted operating margin expansion in the fourth quarter, despite fuel prices expected to be 85% higher than last year.

This reflects the strength of our revenue initiatives and continued improvement in our underlying cost trajectory. Turning to liquidity. Our position remains strong and we continue to take a disciplined and proactive approach to managing our balance sheet. Our quarter end liquidity was $2.2 billion, including our $600 million undrawn credit facility.

We also provided notice to draw the incremental $250 million available under our aircraft-backed financing of Orion with funding expected in the fourth quarter. We've recently completed updated appraisals across our fleet, positioning us well for potential additional aircraft-backed financing. Higher appraised values together with 8 A220 aircraft purchased with cash this year through the third quarter, bringing the value of our fully unencumbered aircraft and engines to $2.8 billion, up from roughly $2 billion previously.

This brings our total unencumbered asset base to approximately $7 billion. Importantly, our portfolio of unencumbered aircraft and engines includes a similar mix of assets as those we successfully financed earlier this year.

Together with our existing liquidity, our financial options give us confidence that we have the flexibility and runway to navigate a prolonged period of higher fuel prices while continuing to support our operations and advance JetForward. Turning to capital expenditures. Third quarter CapEx was $189 million below our prior outlook, primarily due to the timing of one aircraft delivery and LGA slot payments shifting into the fourth quarter.

Our full year CapEx outlook remains unchanged at approximately $850 million. We continue to expect annual CapEx below $1 billion through the end of the decade supporting our path towards positive free cash flow and balance sheet improvement.

Looking ahead, we expect the benefits of JetForward to continue compounding as our existing commercial initiatives mature, Blue first begins to contribute and cost efficiencies build. That growing contribution supports our goal of achieving operating profitability in 2027 and progressing towards positive free cash flow.

Further out, we continue to target at least $1 of earnings per share in 2028. While the mix of drivers may differ from what we outlined in July, our strong revenue performance reinforces our confidence that there are multiple paths to achieving that target, including through stronger unit revenues that could help offset potentially higher fuel costs.

Despite the challenging macro environment, we are starting to see financial progress and adjusted operating margin expansion. We still have plenty of work to do, but the path is becoming clear.

We expect positive free cash flow in 2028 and believe we have the liquidity and unencumbered asset base needed to get us there. We will remain focused on disciplined execution and capital management to drive sustainable earnings growth and create long-term value for our shareholders.

With that, we are happy to take your questions. Over to you, Julian.

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Jamie Baker with JPMorgan. Please go ahead.

質疑応答

Jamie Baker

So Ursula, can we discuss liquidity options from here and maybe dig in to what the pecking order for future raises might look like. I mean we've been assuming that aircraft-related debt was probably there was, I don't know, first in the queue. But have you considered the carve-out in loyalty deal, that $400 million of forward mileage sale potential? And then with the pale disclosure, there's been a lot of focus on the Canada precedent, but that's loyalty. We hadn't really thought about Tasly in how the value of that business could aesthetically exceed your equity market cap perhaps that's a more realistic option in issuing debt side to TrueBlue. Quite a bit in here, but I'll let you run with it from there, if you don't mind.

Ursula Hurley

Yes. Thanks for the question, Jamie. So we're -- we believe we ended the quarter with a really healthy liquidity position at the $2.2 billion, including the revolver. As I mentioned in my script, we are looking to potentially do some incremental aircraft financing in the back half of this year.

We are very focused on cost of funding. I mentioned we had our assets reappraised and we have the $2.8 billion in aircraft and engines. However, we do have other levers that can help bridge us to 2028 in terms of liquidity. So other potentials that exist, we are focused on cost of funding.

So in the immediacy, we're focused on aircraft as we end 2026 and so maybe, Joanna, over to you if you have any other comments.

Joanna Geraghty

Yes, I mean, I'll just add. I mean, I think Orsi did a nice job. She's laid out sort of the liquidity levers that we have on the debt side and I think you correctly point out that we do have opportunities beyond traditional debt financing that could drive meaningful value without adding additional interest.

And so I think the broader point I'd like to make is we have multiple avenues to strengthen liquidity beyond the current balance we have and the unencumbered assets to support our plan and bridge us to 2028, where we remain committed to the goal of $1 of EPS.

And that includes everything from as you point out, Peasley, we have venture investments, are there opportunities with the cobrand credit card. We're just not in a position today to kind of further elaborate on those. But I think point being, we've got a healthy liquidity balance and opportunities beyond what you see on the paper.

Jamie Baker

Okay. That's helpful. And then just a follow-up on the ex fuel CASM. Obviously, fourth quarter capacity is going to be down from the third quarter. Axial CASM is going to be meaningfully better. I know third quarter had 4 points of pressure in there. But like even if we adjust for that, the sequential change looks pretty good. I mean are there any line items in particular that drive the planned outcome? Or is it just sort of everything?

Ursula Hurley

Yes. So extremely pleased with the guide for the fourth quarter on controllable costs. The team has been executing exceptionally well. So the team had executed over $30 million of controllable cost savings in the third quarter. We're really focused on driving efficiencies, whether that's productivity, whether that's just in the technology that we're using or even how would we source it and procure with business partners.

So super proud of the team. We always knew that this was going to be the trajectory and the cadence of this CASM ex fuel performance this year. As a reminder, last year, we did face 2 points of headwinds.

We had some weather, we had the government shutdown. And so they contributed last year. So that is making the comp year-over-year look a little better. What I will say is we enter 2027, we have provided previous guidance that if we're growing mid-single digits. We expect to print a low single-digit controllable cost growth next year. So that just speaks to the continued execution of the team in regards to the JetForward cost initiatives.

Jamie Baker

That's great.

Operator

Your next question comes from the line of Brandon Oglenski with Barclays.

Brandon Oglenski

Ursula, maybe if we can come back to liquidity because I think that's been the focus here with investors recently especially with rumors of like a creditor group forming or something here. I don't know if you can speak directly to that. But then maybe specifically, as you look out, I mean, it looks like you will be burning through pretty sizable amount of cash in the fourth quarter.

And I think seasonally, 1Q is a little bit soft for you as well. So what would be like the right amount of incremental capital that you'd be looking to raise here?

Ursula Hurley

Yes. I appreciate the question, Brandon. So since we launched JetForward, we've used this 17% to 20% as a percent of trailing 12 months revenue range as kind of guidance. We thought that this level would provide us the appropriate runway to execute JetForward through a volatile environment. I would still use that as a reference point.

I think as the business continues to improve and we get to consistent profitability that, that metric could evolve. Clearly, we're not managing the business to a percent in isolation. To your point, we're definitely managing our uses of cash, including fuel, working capital, obviously, our debt obligations and our capital spending.

I mean I do find comfort in the fact that we do have a CapEx profile that will be below $1 billion through the end of the decade. And as I mentioned in my prepared remarks, I do believe that we have a very healthy unencumbered asset base, like 2.8 being aircraft and engines that I believe can be a really strong bridge to get us 14 months until 2028 when we're going to deliver the dollar EPS and positive free cash flow.

So I feel comfortable about where we're at to get us to a point where the business is generating healthy levels of cash going forward.

Brandon Oglenski

I appreciate that risen maybe, John, maybe a bigger question here. Just how much debt do you think this company can sustain long term? And obviously, JetForward appears to be working here. You guys have the bridge to get to 2028. But I guess, longer term, where do you want to see leverage for this business? .

Joanna Geraghty

Yes. I mean at this point, we're focused on driving operating profit next year and delivering the dollar EPS and a return to free cash flow in 2028. And there are multiple paths to that goal.

I think one point just worth mentioning, the fuel assumptions behind those those commitments or those projections. And we assume fuel is slightly above $4 for 2027, which I think is important. And then we see consensus for '28, which is around $3. So listen, our focus is on continued execution. We recognize we need to get to a position where we're repairing the balance sheet. Fuel obviously presents a challenging headwind.

But again, I think there is a significant disconnect between the narrative and the bond market and what our financial results are demonstrating, but also the financial flexibility we have over the foreseeable future to bridge it to that 2028 EPS goal.

David Clark

Mark, I just want to say 1 thing. When we gave that 2020 goal, we were doing that on second quarter 2016 revenues. And obviously, the pricing environment has changed pretty dramatically since then. So I think what we're excited about is we have a lot of different paths to get to at least $1 EPS in 2028. And I'll remind everybody, 2028 is 14 months away. So this is a bridge, but it's not a very long bridge.

Ursula Hurley

Yes. Just the last thing I would add is when we deliver at least $1 in EPS in 2028, we're producing positive free cash flow. The #1 priority is going to be delevering the business.

And I think it's important to note that we have very manageable CapEx profile through the end of the decade, both sub $1 billion. So all positive free cash flow will be going to improve the leverage metrics.

I would also highlight that -- the most important part is driving margin expansion and helping the business delever. And in the fourth quarter, we're expanding margins to the tune of 1 to 2 points, even with fuel up like 85%.

And so what that tells you is that the underlying initiatives in JetForward are compounding and driving margin expansion, which is going to get us on a path where we're generating significant free cash flow so that we can delever and improve the credit metrics.

Operator

Your next question comes from the line of Michael Linenberg with Deutsche Bank. Please go ahead.

Michael Linenberg

Marty, earlier, you mentioned that you just weren't seeing any signs of elasticity. I know there was a fair increase, I believe, that actually you lend not you personally, but JetBlue led a day or 2 ago, it looked like it did not go through.

Is that a sign that maybe the consumer is or sort of at the limit. I mean we've had, I don't know, somewhere between 15 and 20 fare increases since earlier this year. What's the appropriate read on that?

David Clark

Question. First of all, I will take credit for lesser increases because we have to get to compensatory price number. We are still in a situation where prices in 2026 are still lower than the real price in 2019.

We are still not cutting back to '29, 2019 prices on a real basis. Second thing is don't believe everything you read I do not consider that their increased sales. There was 1 airline that did not come along on a relatively limited number of days. 93% of our seats have been subject to that fair increase.

So yes, 7% of the seats we actually pulled back on because 1 of our competitors didn't match for whatever reason. But not standing, I do see resilience in pricing right now. And again, if you look at the inputs and let's take fuel out of it, let's just talk about rent and landing fees. Let's talk about labor, let's talk about maintenance.

There are a lot of costs in this business that have gone up by big numbers in 2019, and we still have not caught up to those increases in rail pricing. So nobody looks at the environment says that we've reached an equilibrium as far as pricing.

But if you look at where cost is right now, we still have not as an industry caught up to the cost input changes.

Michael Linenberg

Okay. Great. And then my second question, Ursula, when we look at your aircraft that are delivering, I think you have a few more A220s this year than, I think, another 7 next year, 9 in 2028. Should we assume that those are all going to just be paid for out of cash? And if that's the case, at what point does your net debt peak. Is that 2028? I mean I know you've talked about hitting free cash flow and deleveraging, but there's always a bit of a lag. And so I'm just trying to go through the timing here, at what point does that net debt position peak before it starts coming down?

Ursula Hurley

Yes. So I appreciate the question, Mike. So as you mentioned, that is our go-forward delivery schedule. We have the 2.8 in unencumbered aircraft engines today that obviously is going to continue to build as we take deliverie. In regards to funding the business for 2027, like it's our job to evaluate all markets, all assets and basically run the analysis to say what is the most efficient way to finance the business. .

Based on where we sit today, I do believe that that's going to continue to be aircraft but we will do the appropriate analysis at that point in time. What I will say is that I have zero concerns about being able to finance in the market. The vintage and age of these aircraft are similar to what we financed earlier this year.

And so I have all the confidence that we have a lot of flexibility and a lot of options as we go forward. But it's our job to make sure we're evaluating using the entirety of the unencumbered pool all markets at that point in time. And Joanna also mentioned that there could be some other non-debt opportunities for us to bring cash on the balance sheet that could also help bridge us to 2028 when we're delivering positive free cash flow.

Operator

Your next question comes from the line of Savi Syth with Raymond James. Please go ahead.

Savanthi Syth

Just maybe on Blue First, I was kind of curious -- any early learnings? And then just how many aircraft a month can you reconfigure as you get through next year? I'm just trying to figure out how we should think about the cadence there?

David Clark

Okay. Thanks, Savi. Well, first of all, to an early learnings. I think by far, our favorite fact is see how many of the seats being sold to our existing customers. So like that's I think there's a lot of speculation that this is a business model that was predicated on stealing customers for our competitors.

And it's just not what we're seeing at all. We're seeing our current customers locking to fill these seats. So we think that's actually a very good finding for us, number one. Number two, as far as the pace of installation, we will not be done installing until later in '28.

And frankly, the issue right now is supply chain. We can absolutely go faster. In fact, I was with Collins on Friday and had this exact conversation like we would love to get the faster. But unfortunately, as is a situation with so many products in the industry right now. Supply chain is a critical path factor. But I would gladly take feet faster if we could.

Ursula Hurley

But the majority of the fleet will be complete in 2027.

David Clark

By the end of 2027, yes.

Savanthi Syth

Got it. I appreciate that. And then just you mentioned Fort Lauderdale that growth should peak here in the third quarter and you annualize into next year. Curious how your -- some of your other focus cities are performing here and kind of where you'd like to see growth next year.

David Clark

So we don't get into too much detail as far as performance by Focus City. I would say that I think that we are much more even as far as profitability across cities than we've had historically.

And I think we've had a lot of progress as far as rightsized capacity. We have shrunk pretty significantly in Boston, New York and Orlando temporarily to fund Fort Lauderdale, but we're expecting to backfill that capacity as deliveries come in.

Overall, I would say that we love where this network has shaken out. And I would go back to the original conversation of the 4 key initiatives in JetForward, 1 of which being East Coast, best East Coast leisure network. We did not forecast Fort Lauderdale becoming available for a significantly larger focus city and connecting operation when we wrote JetForward.

But at the core, it is completely consistent with what we originally said we want to be, which is the best East Coast leisure network. So we're excited we have that opportunity. I'm actually very optimistic at what we're seeing in San Juan right now.

I think that we have a lot of opportunity to drive the system, which to me is a sort of a high-class problem to have. And it's 1 of the points in the script was we've reached a peak year-over-year growth in Fort Lauderdale. And now I think it's going to normalize to more typical growth.

And I think that's going to give us the opportunity to backfill one of the places where we had to take capacity out.

Operator

Your next question comes from the line of Maari with UBS.

Atul Maheswari

You have $2.2 billion in liquidity, and you mentioned about the 17% to 20% target of trailing 12-month revenues. Your covenants have a much lower requirement. So my question is, what's the thought process on keeping liquidity at these high levels and whether it would make sense to lower the threshold internally so that you can manage through the near-term cash burn posed by the higher jet fuel prices without going too much more debt?

Ursula Hurley

Yes. It's a really good question, Joel. And that's kind of what I referenced in my earlier response is we believe, given the volatility in oil right now and the business is still on a path to getting to positive op margin. '17 and '20 has been the target range. .

I think as we get the business to consistent profitability and turning out free cash flow, you could see us revise that target to be lower, especially if and when the oil environment settles down.

So I think it's just a matter of time by which we adjust that target, but we got to get the business to a place where we're delivering $1 EPS in 2028 and generating positive free cash flow.

Atul Maheswari

Okay. That makes sense. And then as a quick follow-up, you mentioned about the $2.8 billion in unencumbered aircraft and engine base that you have. Is that an end of third quarter number? And if so, what would be the unencumbered asset base after you raised the additional to $50 million in the fourth quarter?

Ursula Hurley

So the $2.8 billion is as of quarter close Q3, we will, obviously, that number and there are some puts and takes that will occur in the fourth quarter. So we will fund the $250 million aircraft at a port in in the fourth quarter, but we will also be taking 4 incremental aircraft deliveries within the quarter.

So I expect at year-end, the 2.8 to be roughly in the same ballpark that it was at the end of Q3 and another 7 aircraft next year.

So we're going to continue to that unencumbered asset base.

Atul Maheswari

Great. That's very helpful color. And good luck with the rest of the year.

Ursula Hurley

Thank you.

Operator

Your next question comes from the line of Dan McKenzie with Seaport Global.

Daniel McKenzie

Going back to the commentary in the release about meaningful runway for further growth as the commercial initiatives that mature here. Just curious, what percent of the network is less than 12 months mature.

And historically, when new routes have matured. Can you just remind us what that RASM uplift looks like? I know you guys have pulled down pretty sharply in Newark and obviously, the 85% growth at Fort Lauderdale.

David Clark

So right now, great question. Right now for fourth quarter '26, 4% of the system is at less than 1 year and only 5% less than 2 years. So it's basically a mature network right now.

We are really, really excited about what we're seeing in fit Lauderdale as far as the pace of growth of RASM, even with all the capacity increases, which we're really excited about. And I think the second issue is, again, we have hit peak growth for a lot of now.

So we actually think that's actually a great launching point for a continued increase of revenue going forward or I don't know. And then finally, we fairly stretch the surface as far as what we can do as far as revenue management capabilities, especially on connecting itineraries. I mean this is something that we've only done manually for the history of JetBlue. It's been carried so few connections.

We made this investment in revenue management system before we realize that connecting itineraries would be so important, but we knew that we'd be in a situation where it's good to have that capability. And then a year later, Spirit ends up creating opportunity for us and Fort Lauderdale. So we did prepare ourselves for this, and we're just barely starting to take advantage of it.

Daniel McKenzie

Very good. And then, Marty, I noticed the basic first-class product that's out there that's competitive with peers. But can you just help us understand what percent of the revenue you would characterize as upsell? And is that revenue pool outpacing system unit revenue trends today?

Martin St. George

Actually don't have that exact number, and I'm not going to try to make 1 up on the spot. Right now, we're very happy with the ability to put the mid-base product in there.

That was something we've been looking at for a while. But we wanted to wait until we had our second lounge open to do that because we do think that the launch access is a pretty big hook as far as having people want to get the opportunity to payable affair maybe have a lounge access.

We just added with a business partner called Plusgrade working on an upgrade product, which we are extremely happy with. And we may eventually build that product ourselves, but given that IT is always a constraint as far as we want to do more that can actually get done. We're very happy to work with the business part they can do that for us and it's been very effective so far.

And we've got a lot of stuff in sort of in the pipeline as far as better upgrade performance. Obviously, very important with the Blue First product coming in as far as trying to make sure that we optimize unit revenue that can. One thing that I think people are not getting much attention to is we're also using the upgrade products to better fill even more cabin.

So overall, we recognize that. It's very important to maximize unit revenue in premium seating, and we've got a lot of initiatives going on to make sure we get that.

Operator

Your next question comes from the line of Catherine O'Brien with Goldman Sachs.

Catherine O'Brien

Thanks for the time. Marty, can we take into what drove the 3Q RASM beat versus that initial July guidance? I know you noted broad-based strains, but any particular part of the network or cabin, a bright spot, in particular, and could you share some color on the geographical or cap level assumptions on drawing your 4Q outlook?

Martin St. George

Okay. Great. Katy. Thanks. So first of all, I think the big surprise for us in the third quarter was actually the strength of the trough. Historically at JetBlue forever. We've had a pretty big drop off from August to September when kids go back to school.

And I think our original expectation was that we see a similar drop off. But the results we saw in September in the sort of a pricing environment where we had some pretty significant fare increases due to the spike in fuel in August, which surprised us a lot.

We did not have the expectations of the quanti September we did and the one fund fact that I think we all have been very surprised by our average fare in September was higher than our average fare in July, which has never happened in the history of JetBlue.

So I think the overall strength we see, and I think it's 1 of rethought also in such a great fourth quarter guide is that we're seeing troughs perform very, very well, which historically we have not seen.

So I think that's actually a very, very good sign of the underlying resilience. I will also say, we have pulled a little bit of capacity out of fourth quarter. Even with strong demand at this higher fuel environment, the module flying, there's definitely modally that's not as accretive as we would like it to be.

So we pulled that capacity out. I'd say for 2027, we gave a guide to flow to mid-single digits. Now we're not guiding 27% on this call, that will be next call but I think you'd expect that number to be more to the low end than the high end of that guide.

Again, we'll talk about that 3 months from now. Yes. But overall, I think that the way that the pricing environment has reacted and the customer demand environment has basically not significantly dropped. I think it's giving us an incredible amount of optimism.

I would say that we've seen a marginally better performance in international than domestic, but it is not basis points. It's not that big. I think time of that is at full one's been so incredibly strong and that may be bias a little bit because the international has been outstanding.

But overall, this is very broad-based to the strength we're seeing right now.

Joanna Geraghty

I'll just out a flood for Jet Forward as well. So I mean, yes, broad-based strength across the network, demand remains resilient. Industry pricing is constructive. .

But at the end of the day, we've also been set forward for 2 years working on a series of initiatives, as you know, that we believe are now driving a compounding effect which, by the way, Blue first really still yet to come.

I mean we just went out for sale 2 weeks ago, I think. So whether it's Fort Lauderdale, the new revenue management system, our loyalty program with lounges and the premier card, I mean co-brands in South Florida are up 5%. Paisley, we just launched cars with MileagePlus. We've got all of that yet to come.

Just really proud that this is not just industry phenomenon. This is JetBlue strategy working underneath all of this and beginning to deliver tangible benefits with a lot still yet to come.

Martin St. George

Yes. I would thought in the fourth quarter, we are basically at the top of the industry guidance as far as our unit revenue. The other airline in their Southwest.

Southwest is still lapping the change in bags and seats. We're producing those numbers without having done bag the seats year-over-year. I think that's a real testament to just over.

Ursula Hurley

Hello.

Operator

Apologies, ladies and gentlemen, we will be pausing the broadcast. There is a brief technical difficulty. Please stand by.