JetBlue Airlines 2004 Annual Report Download - page 1

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20APR200409520546
Dear Fellow Stockholders:
What a difference five years makes. On February 11, 2005, JetBlue Airways celebrated its five-year
anniversary. As we reflect on this occasion, we have much to celebrate and even more to look forward
to. Thanks to the dedicated efforts of our outstanding crewmembers, 2004 was another very solid year
for us; our fourth straight year of profitability. We closed the year having reported sixteen consecutive
quarters of profitable results. In 2004, five airlines, representing 24% of industry capacity, were
operating under bankruptcy protection. Collectively, U.S.-based airlines lost $5.2 billion for the year.
Considering this, together with the escalating cost of fuel and the weak revenue environment that
permeated the industry, our success in running a profitable airline was no small feat. As we move
through 2005, we are confident that our business plan is strong and believe we are capable of
continuing to deliver on the goal we set out with five long years ago: delivering profits for our
stockholders and crewmembers while offering an excellent experience for our customers.
A key part of JetBlue’s success is our devotion to keeping the brand fresh and, based on customer
feedback, the continual improvement of our industry-leading product. Consistent with our original
goals, our service continues to focus on taking the hassle out of air travel by offering customers what
they want, and nothing they don’t. Customers today enjoy low, easy-to-understand fares, convenient
flights, and pre-assigned leather seats with up to 34 inches of seat pitch. Additionally, we now offer up
to 36 channels of free DIRECTVprogramming as well as Fox Premium Entertainmentmovies for a
nominal fee. Later this year we will provide up to 100 channels of XM Satellite Radioand wider
screens for viewing. Most importantly, friendly, courteous and compassionate service will continue to be
our trademark. The caring service provided by our crewmembers has clearly resonated among the
traveling public: in 2004, JetBlue achieved the highest load factor of any major U.S. carrier with 83.2%
and accommodated close to 12 million customers. Our loyalty program, True Blue, also continues to
grow nicely; we now have over 2.2 million participants. JetBlue is now part of the American Express
Membership Rewardsprogram. Soon we plan to announce a strategic partnership to offer a JetBlue
affinity credit card and we intend to make available all-inclusive travel packages later this year with air
travel, car rentals and hotels offered via our website.
Another critical component of our success is our operational integrity. In 2004, JetBlue achieved
industry-leading operating metrics as measured by the Department of Transportation, or DOT. In the
five reportable categories, our airline placed first in four categories and third in the fifth, when
compared to other major U.S. airlines. We achieved a 99.4% completion factor, or operation of
scheduled flights, ranking in first place despite the impact of several hurricanes in August and
September. In fact, our team achieved the highest technical reliability of A320 aircraft operators
world-wide. We placed first in on-time performance, with an 81.6% performance despite our
concentration in the congested air traffic corridors in and near New York. We had the fewest number
of baggage mishandlings, 2.99 per 1,000 customers boarded, and we endeavor to deliver all inbound
baggage to the carousel within 20 minutes of flight arrival. As our policy is to not oversell flights, we
easily led the industry with the fewest oversales. Finally, we placed third in complaints to the DOT with
0.27 reports per 100,000 customers boarded. This equates to one complaint per 400,000 customers in
our system. While we know that strong operating performance is essential to running a good airline, we
continue to emphasize the importance of managing the customers’ experience instead of simply
managing a metric. Of course, our number one priority will always be safety and to this end, the
Federal Aviation Administration (FAA) continues to be an invaluable business partner.

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