JetBlue Airlines 2004 Annual Report Download - page 30

We could be subject to liability arising from claims or other actions relating to our handling of customer
data.
Through our computerized reservation system, we are provided with and maintain data regarding
our customers and their travel itineraries. Various federal and state laws and regulations impose
limitations on the dissemination of that information by us.
Beginning in September 2003, several lawsuits were commenced against us alleging various causes
of action, including fraudulent misrepresentation, breach of contract, violation of privacy rights, as well
as violations of consumer protection statutes and federal electronic communications laws. These claims
arose out of our providing access to limited customer data to a government contractor in connection
with a test project for military base security. Since the lawsuits are in the preliminary stages, we are
unable to determine the impact they may have upon us.
Our reputation and financial results could be harmed in the event of an accident or incident involving
our aircraft.
An accident or incident involving one of our aircraft, or an aircraft containing LiveTV equipment,
could involve significant potential claims of injured passengers or others in addition to repair or
replacement of a damaged aircraft and its consequential temporary or permanent loss from service. We
are required by the DOT to carry liability insurance. Although we believe we currently maintain
liability insurance in amounts and of the type generally consistent with industry practice, the amount of
such coverage may not be adequate and we may be forced to bear substantial losses from an accident.
Substantial claims resulting from an accident in excess of our related insurance coverage would harm
our business and financial results. Moreover, any aircraft accident or incident, even if fully insured,
could cause a public perception that we are less safe or reliable than other airlines, which would harm
our business.
Risks Associated with the Airline Industry
The airline industry has incurred significant losses resulting in airline restructurings and bankruptcies,
which could result in changes in our industry.
As a result of slower general economic conditions that have persisted since 2001, domestic airlines
have experienced a decline in demand resulting in extensive industry-wide financial losses. While
domestic passenger traffic is returning to previous levels, the airline industry has continued to add or
restore capacity, resulting in strong price competition. Financial losses have continued into 2004
resulting in airlines renegotiating or attempting to renegotiate labor contracts, reconfiguring flight
schedules, furloughing or terminating employees, as well as other efficiency and cost-cutting measures.
Two major airlines have reexamined their traditional business models and have created their own
low-fare operations. Despite these actions, several airlines have sought or threatened reorganization
under Chapter 11 of the U.S. Bankruptcy Code permitting them to reduce labor rates, restructure debt,
terminate pension plans and generally reduce their cost structure. Such factors may have a greater
impact during time periods when the industry encounters continued financial losses, as airlines under
financial pressures may institute pricing structures to achieve near-term survival rather than long-term
viability. It is foreseeable that further airline reorganizations, bankruptcies or consolidations may occur,
the effects of which we are unable to predict. We cannot assure you that the occurrence of these
events, or potential changes resulting from these events, will not harm our business or the industry.
Continued high fuel costs would harm our business.
Fuel costs constitute a substantial portion of our total operating expenses. There have been
significant increases in fuel costs and continued high fuel costs or further increases would harm our
financial condition and results of operations. Historically, fuel costs have been subject to wide price
fluctuations based on geopolitical issues and supply and demand. Fuel availability is also affected by
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