JetBlue Airlines 2006 Annual Report Download

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Table of contents

  • Page 1

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  • Page 3
    ...nal nine months of the year. Our Return to Profitability plan renewed our long-term focus on low cost carrier spending habits while right-sizing a sustainable growth rate. The JetBlue Experience It is the dedication and spirit of our crewmembers, living our core values of Safety, Caring, Integrity...

  • Page 4
    ... we ended the year with 78 full-time equivalent employees, or FTEs, per aircraft. This significantly exceeded our initial year-end 2007 target of 80 FTEs per aircraft. Additionally, through the hard work of our crewmembers, we reduced our stage length adjusted operating cost per available seat mile...

  • Page 5
    ...our crewmembers will keep JetBlue a different kind of airline. We believe we have the best crewmembers, service and product in the skies and we are excited about the future. We also believe we have the right plan in place to continue to grow profitably, improve our operational and financial health...

  • Page 6
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  • Page 7
    ... Employer Identification No.) (State or other jurisdiction of incorporation or organization) 118-29 Queens Boulevard Forest Hills, New York 11375 (Address, including zip code, of registrant's principal executive offices) (718) 286-7900 Registrant's telephone number, including area code: Securities...

  • Page 8
    ...Competition ...Route Network ...High Quality Customer Service ...Safety and Security ...Marketing and Distribution ...Customer Loyalty Program ...Pricing ...Revenue Management ...People ...Maintenance ...Aircraft Fuel...LiveTV, LLC ...Government Regulation ...Risk Factors ...Risks Related to JetBlue...

  • Page 9
    ...Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters...Certain Relationships and Related Transactions, and Director Independence ...Principal Accounting Fees and Services...

  • Page 10
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  • Page 11
    ... airline that provides high quality customer service at low fares primarily on point-to-point routes. As of February 14, 2007, we operated a total of 502 daily ï¬,ights. We focus on serving markets that have had high average fares. We currently serve 50 destinations in 21 states, Puerto Rico...

  • Page 12
    ... rows 12-25, providing the most legroom in coach of all U.S. airlines. We are also upgrading the LiveTV entertainment on our Airbus A320 aircraft to include larger 6.8-inch television screens and adding 100 channels of XM Satellite Radio. Grow Our Presence in New York City and Expand Our Network...

  • Page 13
    ... our low unit costs are: • High aircraft utilization. By scheduling and operating our aircraft efficiently, we are able to spread our fixed costs over a greater number of ï¬,ights and available seat miles. For the year ended December 31, 2006, our aircraft operated an average 12.7 hours per day...

  • Page 14
    customer service, productivity and cost control. We also provide extensive training for our employees, including a leadership program and other training that emphasizes the importance of safety. Our leadership team has extensive and diverse airline industry experience. During 2006, we made changes ...

  • Page 15
    ..., customer service, routes served, ï¬,ight schedules, types of aircraft, safety record and reputation, code-sharing relationships, capacity, in-ï¬,ight entertainment systems and frequent ï¬,yer programs. In addition, the migration of fare-conscious travelers away from traditional network airlines...

  • Page 16
    ... to partner with Cape Air, an airline that serves destinations out of Boston and San Juan, Puerto Rico. We plan to pursue other alliances with international airlines to leverage our presence at JFK. Route Network Our operations primarily consist of transporting passengers on our aircraft, with...

  • Page 17
    ... are designed to be customer-friendly and include all seats are pre-assigned; all travel is ticketless, using electronic tickets; our policy is not to overbook ï¬,ights; fares are based on one-way travel; no Saturday night stay is required; and change fees are only $30 per passenger ($25 if done...

  • Page 18
    ...cant cost savings and enables us to continue to build loyalty through increased customer interaction. We sell vacation packages through JetBlue Getaways, a one-stop, value-priced vacation website designed to meet customers' demand for self-directed packaged travel planning. Getaways packages offer...

  • Page 19
    ... Reward points into JetBlue TrueBlue points. We intend to pursue other marketing partnerships in the future. Pricing Our low cost structure allows us to offer simplified, everyday low fares to our customers. We offer a range of fares, including 14-day, 7-day and 3-day advance purchase fares and day...

  • Page 20
    ... business plan is to reward our employees by providing them with the ability to align their personal successes with those of JetBlue. Our compensation packages include competitive salaries, wages and benefits, profit sharing and an employee stock purchase plan. In addition, a significant number...

  • Page 21
    736 reservation agents, and 2,180 management and other personnel. At December 31, 2006, we employed 8,393 full-time and 2,231 part-time employees. Maintenance We have an FAA-approved maintenance program, which is administered by our technical operations department. Consistent with our core value of ...

  • Page 22
    ...international airlines for the sale of certain hardware and installation, programming and maintenance of its live in-seat satellite television as well as XM Satellite Radio Service and certain other products and services. LiveTV continues to pursue additional customers. Government Regulation General...

  • Page 23
    ... to extensive government regulation. The availability of international routes to U.S. carriers is regulated by treaties and related agreements between the United States and foreign governments. We currently operate international service to The Bahamas, the Dominican Republic, Bermuda, Aruba and...

  • Page 24
    ...of passenger traffic or maintaining the level of fares required to maintain profitable operations in new and existing markets and could impede our growth strategy, which would harm our business. Additionally, if a traditional network airline were to fully develop a low cost structure, our business...

  • Page 25
    ...be delivered through 2010 and selling five Airbus A320 aircraft. We may further reduce our future growth plans from previously announced levels. In addition, our competitors often add service, reduce their fares and/or offer special promotions following our entry into a new market. We cannot assure...

  • Page 26
    ... customer service and achieve low operating costs. These systems include our computerized airline reservation system, ï¬,ight operations system, telecommunications systems, website, maintenance systems, check-in kiosks and in-ï¬,ight entertainment systems. Since we only issue electronic tickets...

  • Page 27
    ... successfully take delivery of and operate reliably the new EMBRAER 190 aircraft we agreed to purchase, our business could be harmed. Acquisition of a new type of aircraft, such as the EMBRAER 190, which we initially placed into revenue service in November 2005, involves a variety of risks relating...

  • Page 28
    ..., regulations, taxes and airport rates and charges have been proposed from time to time that could significantly increase the cost of airline operations or reduce the demand for air travel. If adopted, these measures could have the effect of raising ticket prices, reducing revenue and increasing...

  • Page 29
    ... aircraft sales, assignments and/or leases. (2) Assumes all options are exercised. Facilities We occupy all of our facilities at each of the airports we serve under leases or other occupancy agreements. Our agreements for terminal passenger service facilities, which include ticket counter and gate...

  • Page 30
    ... gates and eight ticket counter positions. We lease a 70,000 square foot aircraft maintenance hangar and an adjacent 32,000 square foot office and warehouse facility at JFK to accommodate our technical support operations and passenger provisioning personnel. The ground lease for this site expires...

  • Page 31
    .... David Barger, age 49, is our President and Chief Operating Officer and has served in this capacity since August 1998. He is also a member of our board of directors. From 1992 to 1998, Mr. Barger served in various management positions with Continental Airlines, including Vice President, Newark hub...

  • Page 32
    ...Senior Vice President Airports and Operational Planning and has served in this capacity since February 2006 when he was promoted from Vice President Operational Planning, a position he had held since July 2005. From October 2004 to July of 2005, Mr. Maruster served as Vice President Customer Service...

  • Page 33
    PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Global Select Market under the symbol JBLU. The table below shows the high and low sales prices for our common stock, as adjusted for...

  • Page 34
    ... return on our common stock with the cumulative total return of the Standard & Poor's 500 Stock Index and the AMEX Airline Index for the period beginning on April 11, 2002, the date of our initial public offering, and ending on December 31, 2006. The comparison assumes the investment of $100 in...

  • Page 35
    ... statements and related notes thereto included elsewhere in this report. 2006 Year Ended December 31, 2005 2004 2003 (in millions, except per share data) 2002 Statements of Operations Data: Operating revenues ...Operating expenses: Salaries, wages and benefits ...Aircraft fuel ...Landing fees and...

  • Page 36
    ... 415 2002 Year Ended December 31, 2005 2004 2003 Operating Statistics (unaudited): Revenue passengers (thousands)...Revenue passenger miles (millions) ...Available seat miles (ASMs)(millions)...Load factor ...Breakeven load factor (5)...Aircraft utilization (hours per day)...Average fare ...Yield...

  • Page 37
    ... revenue per passenger mile and expenses. ''Aircraft utilization'' represents the average number of block hours operated per day per aircraft for the total ï¬,eet of aircraft. ''Average fare'' represents the average one-way fare paid per ï¬,ight segment by a revenue passenger. ''Yield per passenger...

  • Page 38
    ...routes, excluding Puerto Rico, accounted for 2.6% of our total passenger revenues in 2006. Because all of our fares are nonrefundable, revenue is recognized either when the transportation is provided or after the ticket or customer credit expires. We measure capacity in terms of available seat miles...

  • Page 39
    ...structure, we frequently offer sale fares with shorter advance purchase requirements in most of the markets we serve and match the sale fares offered by other airlines. Other revenue consists primarily of the fees charged to customers in accordance with our published policies relating to reservation...

  • Page 40
    ... in higher unit costs, we expect the increase in unit revenues to be higher than the increase in unit costs. Assuming fuel prices of $1.93 per gallon, net of effective hedges, our cost per available seat mile for 2007 is expected to increase by 5% to 7% over 2006. Our operating margin is expected...

  • Page 41
    ...miles due to increased operation of the shorter range EMBRAER 190 and capacity reductions in our East-West markets. A shorter average stage length results in fewer available seat miles and, therefore, higher unit costs. We estimate that more than half of the year-over-year increase in our total cost...

  • Page 42
    ... a cost per available seat mile basis, sales and marketing expense increased 5% primarily due to higher credit card fees resulting from higher average fares. We book the majority of our reservations through a combination of our website and our agents (79% and 19% in 2006, respectively). Maintenance...

  • Page 43
    ... having 28% more average aircraft in-service offset by lower utilization of the EMBRAER 190. Operating expenses per available seat mile increased 14% to 6.98 cents. In detail, operating costs per available seat mile were (percent changes are based on unrounded numbers): Year Ended December 31, 2005...

  • Page 44
    ... related to new aircraft leases. Cost per available seat mile decreased 16% due to higher capacity and a lower percentage of our ï¬,eet being leased. Sales and marketing expense increased 29%, or $18 million, due to higher credit card fees resulting from increased passenger revenues. On a cost...

  • Page 45
    ... income (loss)...Operating margin...Pre-tax margin...Operating Statistics: Revenue passengers (thousands) ...Revenue passenger miles (millions) ...Available seat miles (ASMs) (millions). Load factor ...Breakeven load factor (2) ...Aircraft utilization (hours per day) ...$ (32) (5.2)% (9.7)% 4,335...

  • Page 46
    ...the SEC relating to our sale, from time to time, in one or more public offerings of debt securities, pass-through certificates, common stock, preferred stock and/or other securities. The net proceeds of any securities we sell under this registration statement may be used to fund working capital and...

  • Page 47
    ... the sale and leaseback over 18 years of six EMBRAER 190 aircraft for $152 million by a U.S. leasing institution, (3) the financing of 15 Airbus A320 aircraft with $498 million in ï¬,oating rate equipment notes purchased with the proceeds from our November 2004 public offering of Series 2004-2 pass...

  • Page 48
    ... aircraft until 21 months prior to the scheduled delivery date for those aircraft not on firm order. In November 2005, we executed a 30-year lease agreement with the Port Authority of New York and New Jersey, or PANYNJ, for the construction and operation of a new terminal at JFK. The aggregate cost...

  • Page 49
    ... five-year term unless either the employee or we elect not to renew it. Pursuant to these agreements, these employees can only be terminated for cause. In the event of a downturn in our business that would require a reduction in work hours, we are obligated to pay these employees a guaranteed level...

  • Page 50
    ...Changing market prices of new and used aircraft, government regulations and changes in our maintenance program or operations could result in changes to these estimates. The amortization of our purchased technology, which resulted from our acquisition of LiveTV in 2002, is based on the average number...

  • Page 51
    ... in the lives of the awards would also require us to reevaluate the liability, potentially resulting in a significant impact in the year of change as well as in future years. We also sell TrueBlue points to participating partners. Revenue from these sales is allocated between passenger revenues and...

  • Page 52
    ... fuel. Our results of operations are affected by changes in the price and availability of aircraft fuel. To manage the price risk, we use crude or heating oil option contracts or swap agreements. Market risk is estimated as a hypothetical 10% increase in the December 31, 2006 cost per gallon of fuel...

  • Page 53
    ... DATA JETBLUE AIRWAYS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share amounts) 2006 Year Ended December 31, 2005 2004 OPERATING REVENUES Passenger ...Other ...Total operating revenues...OPERATING EXPENSES Salaries, wages and benefits ...Aircraft fuel...Landing fees...

  • Page 54
    JETBLUE AIRWAYS CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except per share data) December 31, 2006 2005 ASSETS CURRENT ASSETS Cash and cash equivalents ...Investment securities ...Receivables, less allowance (2006-$2; 2005-$1) ...Inventories, less allowance (2006-$2; 2005-$1) ...Prepaid...

  • Page 55
    JETBLUE AIRWAYS CORPORATION CONSOLIDATED BALANCE SHEETS (In millions, except per share data) December 31, 2006 2005 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable ...Air traffic liability ...Accrued salaries, wages and benefits ...Other accrued liabilities ...Short-term...

  • Page 56
    ... of held-to-maturity investments ...Proceeds from maturities of held-to-maturity investments Purchase of available-for-sale securities...Sale of available-for-sale securities ...Increase in restricted cash and other assets ... ... $ (1) $ (20) $ 46 ... ... ... ... 10 136 18 21 (12) (28) 97...

  • Page 57
    JETBLUE AIRWAYS CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In millions) Accumulated Other Additional Common Comprehensive Paid-In Retained Unearned Shares Stock Capital Earnings Compensation Income (Loss) Total Balance at December 31, 2003 ...Net income...Change in fair value of ...

  • Page 58
    ... 31, 2006 JetBlue Airways Corporation is a low-cost passenger airline that provides high quality customer service at low fares primarily on point-to-point routes. We offer our customers a high quality product with new aircraft, leather seats, free in-ï¬,ight entertainment at every seat, pre-assigned...

  • Page 59
    ... A320 aircraft. These agreements require monthly payments at rates based either on the number of cycles each aircraft was operated during each month or the number of ï¬,ight hours each engine was operated during each month, subject to annual escalations. These payments are expensed as the related...

  • Page 60
    ... 123(R), Share-Based Payment, and related interpretations, or SFAS 123(R), to account for stock-based compensation using the modified prospective transition method and therefore will not restate our prior period results. SFAS 123(R) supersedes Accounting Principles Board Opinion 25, Accounting for...

  • Page 61
    ... avoid recognizing the related compensation cost in our future consolidated financial statements upon our adoption of SFAS 123(R). Our policy is to issue new shares for purchases under our CSPP and exercises of stock options under our 2002 Plan. New Accounting Standards: In July 2006, the Financial...

  • Page 62
    ...scheduled to be paid in a lump sum on the applicable maturity dates. The interest rate for all certificates is based on three month LIBOR plus a margin. Interest is payable quarterly. (4) In December 2006, the New York City Industrial Development Agency issued special facility revenue bonds for JFK...

  • Page 63
    ... to our sale in one or more public offerings of debt securities, pass-through certificates, common stock, preferred stock and/or other securities. Through December 31, 2006, we had issued a total of $124 million in securities under this registration statement. Note 3-Leases We lease aircraft, as...

  • Page 64
    ... rent payments based on LIBOR. Forty aircraft leases generally can be renewed at rates based on fair market value at the end of the lease term for one or two years. Thirty-seven aircraft leases have purchase options at the end of the lease term at fair market value and a one-time fixed price option...

  • Page 65
    ... the acquiring company having a market value of twice the exercise price of the rights. The rights expire on April 17, 2012 and may be redeemed by the Company at a price of $.01 per right prior to the time they become exercisable. As of December 31, 2006, we had a total of 74.8 million shares of our...

  • Page 66
    ... average market price of our common stock or they were otherwise anti-dilutive. Note 7-Stock-Based Compensation Fair Value Assumptions: We use a Black-Scholes-Merton option pricing model to estimate the fair value of share-based awards under SFAS 123(R) for issuances under our CSPP and our 2002 Plan...

  • Page 67
    ... trading day in December of the prior calendar year. In no event will any such annual increase exceed 9.1 million shares. The plan will terminate no later than the last business day of April 2012. The plan has a series of successive overlapping 24-month offering periods, with a new offering period...

  • Page 68
    ... trading day in December of the prior calendar year. In no event will any such annual increase exceed 12.2 million shares. The 2002 Plan will terminate no later than December 31, 2011. The following is a summary of stock option activity for the years ended December 31: 2006 Weighted Average Exercise...

  • Page 69
    ... aircraft scheduled to be installed through 2012, with options for 187 additional installations through 2017. Revenues in 2006, 2005 and 2004 were $29 million, $19 million and $6 million, respectively. Deferred profit on hardware sales and advance deposits for future hardware sales included...

  • Page 70
    ... of future years. The net operating loss carryforwards begin to expire in 2021 for federal purposes and between 2010 and 2027 for state purposes. Note 10-Employee Retirement Plan We sponsor a retirement savings 401(k) defined contribution plan, or the Plan, covering all of our employees. We match...

  • Page 71
    ... have the practical effect of increasing the interest rate on our debt if they were to be triggered. In all cases, we have the right to repay the loan and avoid the increased costs. The term of these indemnities matches the length of the related loan up to 12 years. Under both aircraft leases with...

  • Page 72
    ... years ended December 31, 2006, 2005 or 2004. Contractual maturities of available-for-sale securities at December 31, 2006 consisted of $52 million maturing in 2007 and $624 million maturing after 2024. We are exposed to the effect of changes in the price and availability of aircraft fuel. To manage...

  • Page 73
    ... increase in average fuel prices. We have agreements whereby cash deposits are required if market risk exposure exceeds a specified threshold amount. The fair values of our financial derivative instruments are estimated through the use of standard option value models and/or present value methods...

  • Page 74
    ... in development costs related to a maintenance and inventory tracking system that was not implemented. The sum of the quarterly earnings per share amounts does not equal the annual amount reported since per share amounts are computed independently for each quarter and for the full year based on...

  • Page 75
    ...in 2006 the Company changed its method of accounting for share-based compensation. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of JetBlue Airways Corporation's internal control over financial reporting as...

  • Page 76
    ... related consolidated statements of operations, stockholders' equity, and cash ï¬,ows for each of the three years in the period ended December 31, 2006 of JetBlue Airways Corporation and our report dated February 12, 2007 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP New York, New...

  • Page 77
    ... the Exchange Act is recorded, processed, summarized and reported as specified in the SEC's rules and forms and that such information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Of...

  • Page 78
    ...nitive proxy statement for our 2007 Annual Meeting of Stockholders to be held on May 9, 2007 to be filed with the SEC pursuant to Regulation 14A within 120 days after the end of our 2006 fiscal year, or our Proxy Statement. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item will...

  • Page 79
    ...-For the years ended December 31, 2006, 2005 and 2004 Notes to Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm Financial Statement Schedule: Report of Independent Registered Public Accounting Firm on S-1 Financial Statement Schedule Schedule II-Valuation...

  • Page 80
    ...undersigned, thereunto duly authorized. JETBLUE AIRWAYS CORPORATION (Registrant) Date: February 14, 2007 By: /s/ HOLLY NELSON Senior Vice President and Controller (principal accounting officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by...

  • Page 81
    ...dated as of July 15, 2003, among the Company and Morgan Stanley & Co. Incorporated, Raymond James & Associates, Inc. and Blaylock & Partners, L.P.-incorporated by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2003. Summary of Rights to Purchase...

  • Page 82
    4.5 4.6 Stockholder Rights Agreement-incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K for the year ended December 31, 2002. Indenture, dated as of July 15, 2003, between JetBlue Airways Corporation and Wilmington Trust Company, as Trustee, relating to the Company's 31⁄2%...

  • Page 83
    ... Global Markets Inc. and Credit Lyonnais Securities (USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through Trust 2004-1G-1-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent-incorporated...

  • Page 84
    ...27 to our Current Report on Form 8-K dated March 24, 2004. Note Purchase Agreement, dated as of March 24, 2004, among JetBlue Airways Corporation, Wilmington Trust Company, in its separate capacities as Pass Through Trustee, as Subordination Agent, as Escrow Agent and as Paying Agent-incorporated by...

  • Page 85
    ... reference to Exhibit 4.6 to our Current Report on Form 8-K dated November 9, 2004. Revolving Credit Agreement (2004-2C), dated as of November 15, 2004, between Wilmington Trust Company, as Subordination Agent, as agent and trustee for the JetBlue Airways 2004-2C Pass Through Trust, as Borrower, and...

  • Page 86
    ...Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through Trust 2004-2G-2-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent...

  • Page 87
    ...Provider, MBIA Insurance Corporation, as Policy Provider, and Wilmington Trust Company, as Subordination Agent-incorporated by reference to Exhibit 4.24 to our Current Report on Form 8-K dated November 9, 2004. Note Purchase Agreement, dated as of November 15, 2004, among JetBlue Airways Corporation...

  • Page 88
    ...of November 14, 2006, among MBIA Insurance Corporation, as Policy Provider, JetBlue Airways Corporation and Wilmington Trust Company, as Subordination Agent and Trustee-incorporated by reference to Exhibit 4.7 to our Current Report on Form 8-K dated November 14, 2006. Guarantee, dated as of November...

  • Page 89
    ..., 2002-incorporated by reference to Exhibit 10.4 to our Annual Report on Form 10-K for the year ended December 31, 2002. Amendment No. 15 to Airbus A320 Purchase Agreement between AVSA, S.A.R.L. and JetBlue Airways Corporation, dated February 10, 2003-incorporated by reference to Exhibit 10.5 to our...

  • Page 90
    ... 2003. Amendment No. 17 to Airbus A320 Purchase Agreement between AVSA, S.A.R.L. and JetBlue Airways Corporation, dated October 1, 2003-incorporated by reference to Exhibit 10.7 to our Annual Report on Form 10-K for the year ended December 31, 2003. Amendment No. 18 to Airbus A320 Purchase Agreement...

  • Page 91
    ... to Airbus A320 Purchase Agreement between AVSA, S.A.R.L., and JetBlue Airways Corporation, dated December 1, 2006. Letter Agreement, dated April 23, 2003, between AVSA, S.A.R.L. and JetBlue Airways Corporation-incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated June 30...

  • Page 92
    ... dated July 21, 2004, between JetBlue Airways Corporation and David Neeleman-incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004. Employment Agreement, dated October 14, 1998, between JetBlue Airways Corporation and David Barger...

  • Page 93
    ...to our Annual Report on Form 10-K for the year ended December 31, 2005. Amendment No. 3 to Purchase Agreement DCT-025/2003, dated as of December 4, 2006, between Embraer-Empresa Brasileria de Aeronautica S.A. and JetBlue Airways Corporation. Letter Agreement DCT-026/2003, dated June 9, 2003, between...

  • Page 94
    ... March 24, 2004. Agreement of Lease (Port Authority Lease No. AYD-350), dated November 22, 2005, between The Port Authority of New York and New Jersey and JetBlue Airways Corporation-incorporated by reference to Exhibit 10.30 to our Annual Report on Form 10-K for the year ended December 31, 2005...

  • Page 95
    ... 4.4 to our Current Report on Form 8-K dated November 9, 2004 (which exhibit relates to formation of JetBlue Airways Pass Through Trust, Series 2004-2G-1-O and the issuance of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-2G-1-O, Pass Through Certificates) have...

  • Page 96
    ... Report on Form 10-K. This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. As discussed in Note 1 to the consolidated financial statements, in 2006 the Company changed its method of accounting for share-based compensation...

  • Page 97
    JetBlue Airways Corporation Schedule II - Valuation and Qualifying Accounts (in thousands) Balance at beginning of period Additions Charged to Charged to Costs and Other Expenses Accounts Balance at end of period Description Deductions Year Ended December 31, 2006 Allowances deducted from asset ...

  • Page 98
    Exhibit 12.1 JETBLUE AIRWAYS CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (in millions, except ratios) 2006 Year Ended December 31, 2005 2004 2003 2002 Earnings: Income (loss) before income taxes...Less: capitalized interest ...Add: Fixed charges ...Amortization of capitalized ...

  • Page 99
    ... the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of JetBlue Airways Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2006. /s/ Ernst & Young LLP New York, New York February 14...

  • Page 100
    ... to record, process, summarize and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. b) Dated: February 14, 2007 /s/ DAVID NEELEMAN David...

  • Page 101
    ...'s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Dated: February 14, 2007 /s/ JOHN HARVEY...

  • Page 102
    ... Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of JetBlue Airways Corporation. Date: February 14, 2007 By: /s/ DAVID NEELEMAN David Neeleman Chief Executive...

  • Page 103

  • Page 104