JetBlue Airlines 2006 Annual Report Download - page 13

concentration at JFK and at our other focus cities, 87%of our passengers and 91%of our passenger
revenue in 2006 resulted from point-to-point travel. We also intend to grow our network by increasing
the number of flights in select markets we currently serve by adding new routes between cities already
in our system and extending service to new markets.
Operate new and efficient aircraft. We maintain a fleet consisting of only two types of aircraft,
the Airbus A320 and the EMBRAER 190, which, with an average age of only 2.6 years, is the newest
fleet of any major U.S. airline. We believe that operating a newer fleet, which employs the latest
technologies, results in our aircraft being more efficient and dependable than older aircraft. We have
the best dispatch reliability of all U.S major Airbus A320 aircraft operators.
Our Competitive Strengths
Low Operating Costs. For the year ended December 31, 2006, our cost per available seat mile,
excluding fuel, of 5.19 cents was lower than all of the other major U.S. airlines. Some of the factors
that contribute to 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 flights and available seat miles. For the year
ended December 31, 2006, our aircraft operated an average 12.7 hours per day, which we
believe was higher than that of any other major U.S. airline. We operate a number of ‘‘red
eye’’ flights, which enable a portion of our fleet to remain productive through the night. Our
efficient airport operations allow us to schedule our aircraft with minimum ground time.
•Low distribution costs. Our distribution costs are low for several reasons. We utilize only
electronic tickets, which saves paper, postage, employee time and back-office processing
expense. For the year ended December 31, 2006, 79%of our sales were booked on
www.jetblue.com, our least expensive form of distribution, while 19%were booked through
our agents.
•Productive workforce. Our employee efficiency results from fewer unproductive labor work
rules, effective use of part-time employees and the use of labor-saving technology. For
example, most of our reservation sales agents work from their homes, providing better
scheduling flexibility and allowing employees to customize their desired schedules. By the end
of February 2007, with the removal of one row of seats from our Airbus A320 aircraft, we
will be able to reduce the number of onboard flight attendants from four to three. We are
continually looking for ways to make our workforce more efficient through the use of
technology without compromising our commitment to customer service.
•Only two aircraft types. Operating a limited number of aircraft types leads to increased cost
savings as maintenance issues are simplified, spare parts inventory requirements are reduced,
scheduling is more simplified and training costs are lower. We also believe our newer aircraft
are more fuel efficient than older aircraft operated by many other airlines.
Strong Brand. We believe that we have created a widely recognized brand that distinguishes us
from our competitors and identifies us as a safe, reliable, low-fare airline focused on customer service
and providing a high quality travel experience. Similarly, we believe that customer awareness of our
brand has contributed to our ability to leverage our brand preference in marketing efforts and
positions us to be a preferred marketing partner with companies across many different industries. In
2006, we were voted the best domestic airline in the Conde Nast Traveler’s Readers’ Choice Awards
for the fifth consecutive year and were rated the ‘‘World’s Best Domestic Airline’’ by readers of Travel
+ Leisure Magazine. In 2006, we also earned the ‘‘Passenger Service Award’’ from Air Transport
World.
Strength of Our People. We believe that we have developed a strong and vibrant service-oriented
company culture built around our five key values: safety, caring, integrity, fun and passion. Our success
depends on our ability to continue hiring and retaining people who are friendly, helpful, team-oriented
and committed to delivering the JetBlue Experience to our customers. Our culture is reinforced
through an extensive orientation program for our new employees that emphasizes the importance of
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