JetBlue Airlines 2004 Annual Report Download - page 13

reinforce our culture through an extensive orientation program for new employees that emphasizes the
importance of customer service, productivity and cost control to help maintain our success. We
communicate actively on a regular basis with all of our employees, keep them informed about events at
the company and solicit feedback for ways to improve teamwork and their working environment. We
also provide extensive training for our employees, including a leadership program and other training
which emphasizes the importance of safety.
Well-Positioned in New York, the Nation’s Largest Travel Market. Our primary base of operations at
New York’s JFK airport provides us access to a market of over 21 million potential customers in the
New York metropolitan area and approximately six million potential customers within 15 miles of the
airport. Our location at JFK allows us to provide reliable service to our customers. JFK generally only
experiences congestion from the late afternoon to the early evening when international traffic and the
domestic traffic that feeds it are at their peak. This period, from 3:00 p.m. to 7:59 p.m., is regulated by
the Federal Aviation Administration, or FAA, High Density Rule, which requires a slot or slot
exemption for every landing and takeoff. While we have 75 daily slot exemptions at JFK that allow us
to fly during this congested period, we schedule approximately two-thirds of our JFK flights outside of
this period.
JFK’s infrastructure, which includes four runways, large facilities and a direct light-rail connection
to the New York subway system and Long Island Rail Road, provides us with operational efficiencies
that we believe have contributed to our profitability. In order to reach more customers in the New
York metropolitan area, we expanded our presence in 2004 by adding service out of LaGuardia
Airport, which currently has seven daily flights to Ft. Lauderdale, Florida. While LaGuardia has
increased our access to the New York market, it has also made us more susceptible to flight delays
resulting from the greater congestion associated with this airport.
Proven Management Team. We are led by a management team with significant airline industry
experience, including experience at successful low-cost, customer-focused airlines, such as Southwest
Airlines. Our Chief Executive Officer, David Neeleman, was the president and one of the founders of
Morris Air, which was acquired by Southwest Airlines in 1993. Mr. Neeleman was also instrumental in
developing the Open Skies reservation system and in founding WestJet, a Canadian low-fare airline.
David Barger, our President and Chief Operating Officer, was vice president in charge of Continental
Airlines’ Newark hub from 1994 to 1998. Our Chief Financial Officer, John Owen, was treasurer of
Southwest Airlines from 1984 to 1998. Thomas Kelly, our Executive Vice President and Secretary, has
worked with David Neeleman for over 20 years and served as Executive Vice President and General
Counsel of both Morris Air and Open Skies.
Our Industry
The passenger airline industry in the United States has traditionally been dominated by the major
U.S. airlines, the largest of which are American Airlines, Continental Airlines, Delta Air Lines,
Northwest Airlines, Southwest Airlines, United Air Lines and US Airways. The DOT defines the major
U.S. airlines as those airlines with annual revenues of over $1 billion, which currently consists of 14
passenger airlines. These major U.S. airlines offer scheduled flights to most large cities within the
United States and abroad and also serve numerous smaller cities. Most major U.S. airlines have
adopted the ‘‘hub and spoke’’ route system. This system concentrates most of an airline’s operations at
a limited number of hub cities, serving most other destinations in the system by providing one-stop or
connecting service through the hub.
Regional airlines, such as SkyWest Airlines and Mesa Airlines, typically operate smaller aircraft on
lower-volume routes than major U.S. airlines. In contrast to low-fare airlines, regional airlines generally
do not try to establish an independent route system to compete with the major U.S. airlines. Rather,
regional airlines typically enter into relationships with one or more ‘‘hub and spoke’’ major U.S. airlines
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