JetBlue Airlines 2004 Annual Report Download - page 19

that the fee structure would remain in place until further notice. A revision in the fee structure
assessed by the TSA could result in increased costs for us.
We have voluntarily implemented additional security measures, including the installation of four
cabin security cameras on each aircraft with a live video feed to the cockpit crew. In addition to these
voluntary measures, we have complied fully with all new FAA and TSA security requirements and will
continue to abide by all future security enhancement requirements.
Marketing and Distribution
Our primary marketing strategy is to attract new customers by widely communicating our value
proposition that low fares and quality air travel need not be mutually exclusive. We market our services
through advertising and promotions in newspapers, magazines, television, radio and outdoor billboards,
and through targeted public relations and promotional efforts. We have also relied on word-of-mouth
to promote our brand. In 2004, we launched Company Blue, a corporate travel booking program, which
should allow us to penetrate the managed business travel segment by offering corporate managers the
ability to better track, record and report on their company’s travel expenses.
We generally run special promotions in coordination with the inauguration of service into new
markets. Starting approximately five weeks before the launch of a new route, we typically undertake a
major advertising campaign in the target market and local media attention frequently focuses on the
introduction of our low fares.
In order to attract customers to our website, we provide double TrueBlue points to customers who
book reservations on www.jetblue.com. The percentage of our total sales booked on our website
continues to increase and averaged 75.4% for the year ended December 31, 2004. Our second largest
distribution channel is our reservation agents who account for 22.9% of our sales. As of December 31,
2004, we do not participate in any global distribution system and book 100% of our reservations
ourselves through a combination of our website and reservation agents. Our distribution mix creates
significant cost savings and enables us to continue to build loyalty with our customers through increased
interaction with them.
Customer Loyalty Program
JetBlue’s customer loyalty program, TrueBlue Flight Gratitude, is an online program designed to
reward and recognize our most loyal customers. The program offers incentives to increase travel on
JetBlue and provides our customers with additional conveniences and features. TrueBlue members earn
points for each one-way trip flown based on the length of the trip. Points are accumulated in an
account for each member and expire after twelve months. A free round trip award to any JetBlue
destination is earned after attaining 100 points within a consecutive twelve-month period. Awards are
automatically generated and are valid for one year.
The number of estimated travel awards outstanding at December 31, 2004 was approximately
88,000 awards and includes an estimate for partially earned awards. The number of travel awards used
on JetBlue during 2004 was approximately 20,000, which represented less than one percent of our total
revenue passenger miles for that year. Due to the structure of the program and low level of
redemptions as a percentage of total travel, the displacement of revenue passengers by passengers using
TrueBlue awards has been minimal to date.
Beginning in December 2004, we entered into an agreement with American Express allowing its
cardholders to convert their Membership Reward points into JetBlue TrueBlue points. We intend to
pursue other partnerships in 2005.
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