JetBlue Airlines 2006 Annual Report Download - page 11

ITEM 1. BUSINESS
Overview
JetBlue Airways Corporation, or JetBlue, is a low-cost passenger 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 flights. We focus on serving markets that have had high average fares.
We currently serve 50 destinations in 21 states, Puerto Rico, Mexico and the Caribbean, with 98%of
our flights having as an origin or destination one of our four focus cities: New York, Los Angeles
(Long Beach/Burbank), Boston or Washington, D.C. For the year ended December 31, 2006, JetBlue
was the 8th largest passenger carrier in the United States based on revenue passenger miles.
We had a net loss of $1 million and $20 million for the years ended December 31, 2006 and 2005,
respectively. We generated operating margins of 5.4%in 2006 and 2.8%in 2005, which were the third
and second highest operating margins, respectfully, among all traditional network and low-cost major
U.S. airlines. Although this was our second consecutive year of losses, which resulted primarily from
continued record high fuel prices, during 2006 we introduced initiatives to reduce fuel consumption
through more fuel efficient operating practices, renewed our focus on low-cost carrier spending habits
and implemented more efficient staffing in all aspects of our business. We also modified our revenue
management practices to price our inventory to achieve a higher yield while relinquishing some of our
load factor (the percentage of aircraft seating capacity actually utilized). As a result, our load factor
decreased 3.6 points to 81.6%during 2006, which was still higher than all but two of the major U.S.
airlines, whose weighted average load factor was 79.2%. In 2006, we attained the highest completion
factor and fewest incidents of delayed, mishandled or lost bags among all major U.S. airlines. We are
committed to operating our scheduled flights whenever possible; however, this commitment to
customer service, along with operating at three of the most congested and delay-prone domestic
airports, contributed to a 72.9%on-time performance in 2006, which was lower than all but one major
U.S. airline.
As a result of our low costs, we are able to offer low fares designed to stimulate demand in our
markets, which we have demonstrated through our ability to increase passenger traffic in the markets
we serve. The efficient scheduling and operation of our aircraft and low distribution costs contribute
to our low operating costs. We have a flexible workforce that strives to offer high quality customer
service, while at the same time operating efficiently. We offer our customers a high quality product,
including new aircraft, roomy leather seats, reliable operating performance, 36 channels of free
LiveTV (a satellite TV service with programming provided by DIRECTV
®
), movie selections from
FOX InFlight at every seat and 100 channels of free XM Satellite Radio. We are scheduled to add
80 new Airbus A320 aircraft and 78 EMBRAER 190 aircraft to our current operating fleet of 98
Airbus A320 and 23 EMBRAER 190 aircraft by the end of 2014.
JetBlue was incorporated in Delaware in August 1998 and commenced service in February 2000.
Our principal executive offices are located at 118-29 Queens Boulevard, Forest Hills, New York 11375
and our telephone number is [phone]. Our filings with the Securities and Exchange
Commission, or the SEC, are accessible free of charge at our website http://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.
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