JetBlue Airlines 2004 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2004 JetBlue Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

ITEM 1. BUSINESS
Overview
JetBlue Airways Corporation, or JetBlue, is a major low-cost passenger airline that provides
high-quality customer service at low fares primarily on point-to-point routes. As of February 10, 2005,
we operated a total of 280 daily flights. We focus on serving markets that previously were underserved
and large metropolitan areas that have had high average fares. We currently serve 30 destinations in
12 states, Puerto Rico, the Dominican Republic and The Bahamas. We intend to maintain a disciplined
growth strategy by increasing frequency on our existing routes, connecting new city pairs and entering
new markets. For the year ended December 31, 2004, JetBlue was the 10th largest passenger carrier in
the United States based on revenue passenger miles. Effective January 1, 2005, we became a major
U.S. airline, which we believe we achieved faster than any other airline in aviation history.
While the domestic airline industry has continued to suffer financial losses through 2004, JetBlue
has remained profitable. We had net income of $47.5 million and $103.9 million for the years ended
December 31, 2004 and 2003, respectively. We also generated operating margins of 8.9% and 16.9% in
2004 and 2003, respectively, which were higher than most other major U.S. airlines, according to
reports by those airlines. Our success, even amid a very tumultuous revenue environment and record
high fuel prices, is attributable to our focus on customer satisfaction and our ability to contain our
operating costs. Our load factor (the percentage of aircraft seating capacity actually utilized) of 83.2%
during 2004 was higher than that reported by any of the other major U.S. airlines, whose weighted
average load factor was 75.9% during 2004. In 2004, we demonstrated our commitment to customer
service by attaining the highest completion factor, the highest on-time performance and the lowest
incidence of mishandled bags amongst all major U.S. airlines.
We are scheduled to add 113 new Airbus A320 aircraft and 100 Embraer E190 aircraft to our
current operating fleet of 70 Airbus A320 aircraft by the end of 2011. We have an experienced
management team and a strong company culture with a productive and incentivized workforce that
strives to offer high-quality customer service, while at the same time operating efficiently and keeping
costs low. Our high daily aircraft utilization and low distribution costs also contribute to our low
operating costs. Our widely available low fares are designed to stimulate demand, which we have
demonstrated through our ability to increase passenger traffic in the markets we serve. In addition to
our low fares, we offer our customers a differentiated product, including new aircraft, leather seats,
reliable operating performance and free LiveTV (a satellite TV service with programming provided by
DIRECTV) at every seat. In 2004, we continued to improve our customers’ flying experience by
increasing the total number of LiveTV channels from 24 to 36 and by adding movie channel offerings
from News Corporation’s Fox Entertainment Group, both of which are scheduled to be available on all
of our aircraft in early 2005. We plan to add free XM Satellite Radio to our fleet by the end of 2005.
JetBlue was incorporated in Delaware in August 1998. Our principal executive offices are located
at 118-29 Queens Boulevard, Forest Hills, New York 11375 and our telephone number is
(718) 286-7900. Our filings with the Securities and Exchange Commission, or the SEC, are accessible
free of charge at our website investor.jetblue.com. Information contained on our website is not
incorporated by reference in this report. As used in this Form 10-K, the terms ‘‘JetBlue’’, ‘‘we’’, ‘‘us’’,
‘‘our’’ and similar terms refer to JetBlue Airways Corporation and its subsidiaries, unless the context
indicates otherwise.
Our Strategy
Our goal is to establish JetBlue as a leading low-fare, low-cost passenger airline by offering
customers high-quality customer service and a differentiated product. We strive to offer low fares that
stimulate market demand while maintaining a continuous focus on cost-containment and operating
efficiencies. We intend to follow a controlled growth plan designed to take advantage of our
1