JetBlue Airlines 2006 Annual Report Download - page 12

Our Strategy
Our goal is to establish JetBlue as a high quality, low-fare, low-cost passenger airline. We intend
to maintain a growth plan that takes advantage of our competitive strengths. The key elements of our
strategy are:
Stimulate Demand with Low Fares. Our low fares are designed to stimulate demand, particularly
from fare-conscious leisure and business travelers who might otherwise have used alternative forms of
transportation or would not have traveled at all. We are using our new 100-seat EMBRAER 190
aircraft, for which we were the launch customer in 2005, to stimulate demand in many mid-sized
markets and to further increase the frequency of flights on our existing routes.
In considering new markets, we focus on those that have high average fares. In this process, we
analyze publicly available data from the U.S. Department of Transportation, or DOT, showing the
historical number of passengers, capacity and average fares over time. Using this data, combined with
our knowledge and experience about how comparable markets have reacted in the past when prices
were increased or decreased, we forecast the level of demand in a particular market expected to result
from the introduction of our service and lower prices, as well as the anticipated response of existing
airlines in that market.
Commitment to Low Costs. Our low costs have allowed us to offer fares low enough to stimulate
new demand and to attract customers away from higher-priced competitors. We expect to continue to
aggressively control costs and maintain our focus on low-cost carrier spending habits.
Offer High Quality Service and Product. We believe that a key element of our current and
long-term success is that, in addition to offering low fares, we offer customers a better alternative for
air travel. Onboard JetBlue, customers enjoy a distinctive flying experience, which we refer to as the
‘‘JetBlue Experience’’, that includes friendly, customer service-oriented employees, new aircraft, roomy
leather seats with 36 channels of free LiveTV, 100 channels of free XM satellite radio and movie
channel offerings from FOX InFlight. Our onboard offerings include generous brand name snacks,
premium beverages and specially designed products for our overnight flights. Based on customer
feedback, we believe that the JetBlue Experience is an important reason why our customers choose us
over other airlines.
We strive to communicate openly and honestly with customers about delays, especially when
weather or mechanical problems disrupt service. We do not cancel flights, unless absolutely necessary,
in order to fulfill our commitment of getting customers to their destination even if it means getting
them there late. In 2006, we completed 99.6%of our scheduled flights, the highest percentage of any
major airline. Unlike most other airlines, we have a policy of not overbooking our flights.
All of our aircraft are equipped with leather seats in a comfortable single class layout. The Airbus
A320 aircraft has a wider cabin than both the Boeing 737 and 757, two comparable types of aircraft
operated by many of our competitors. The EMBRAER 190 aircraft has 100 seats that are wider than
those currently in use in our Airbus A320 aircraft, arranged in a two-by-two seating configuration with
either 32 or 33 inches between rows of seats. We continually search for ways to improve our product.
In an effort to increase customer comfort, in January 2007, we began to remove one row of seats from
our Airbus A320 aircraft, which will reduce the total number of seats to 150 from 156. The
reconfigured cabin will have at least 36 inches between rows 1-11 and at least 34 inches between 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. Since our inception, we have
focused our primary operations in New York City, the nation’s largest travel market. We are the
largest airline at New York’s John F. Kennedy International Airport, or JFK, as measured by
passengers and, by the end of 2006, our domestic operations at JFK were almost equal to those of all
the other airlines combined. We believe that by building our operations in the nation’s largest travel
market, more market opportunities will become available to us than if we focused our operations
elsewhere. Although an increase in connecting traffic is a byproduct of our growing flight
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