JetBlue Airlines 2006 Annual Report Download - page 14

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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 to our leadership team that we believe have positioned us to increase revenues while reducing
costs and enhancing the JetBlue Experience for our customers. Our leadership team strives to
communicate on a regular basis with all JetBlue employees, keeping them informed about JetBlue
events and soliciting feedback for ways to improve our service, teamwork and employees’ work
environment.
Well-Positioned in New York Metropolitan Area, the Nation’s Largest Travel Market. Our primary
base of operations is JFK, which provides us access to a market of over 21 million potential customers
in the New York metropolitan area and approximately seven million potential customers within
15 miles of the airport. JFK is the largest airport in the New York metropolitan area, based on
passengers served, and is the only airport in the New York metropolitan area with the real estate to
provide for significant expansion potential. JFK’s infrastructure includes four runways, large facilities
and a direct light-rail connection to the New York City subway system and Long Island Rail Road.
Because of JFK’s capacity to support future growth, in November 2005, we entered into a 30-year
lease for the construction and operation of a new terminal at JFK, which, when completed in late
2008, will enable us to significantly increase the number of flights we offer.
In addition, our location at JFK has allowed us to provide reliable service to our customers.
Historically, JFK generally only experienced congestion from the late afternoon to the early evening
when international traffic and the domestic traffic that feeds it were at their peak. Accordingly, we
schedule approximately two-thirds of our JFK flights outside of this traditionally congested period.
However, as a result of an increase in total departures and various construction activities, JFK has
become increasingly busy throughout the entire day. We are working actively with the Port Authority
of New York and New Jersey, or PANYNJ, and the Federal Aviation Administration, or FAA, on
solutions to ease this congestion.
We also serve Newark’s Liberty International Airport and New York’s LaGuardia Airport and, in
December 2006, we expanded our New York operations with the addition of service from Newburgh’s
Stewart International Airport. In March 2007, we plan to commence service from Westchester County
Airport in White Plains, New York.
Our Industry
The passenger airline industry in the United States has traditionally been dominated by the major
U.S. airlines, the largest of which are American Airlines, Continental Airlines, Delta Air Lines,
Northwest Airlines, Southwest Airlines, United Air Lines and US Airways. The DOT defines the
major U.S. airlines as those airlines with annual revenues of over $1 billion. Currently, there are 16
major passenger airlines. These airlines offer scheduled flights to most large cities within the United
States and abroad and also serve numerous smaller cities. The seven largest major U.S. airlines, other
than Southwest, have adopted the traditional ‘‘hub and spoke’’ network route system, or traditional
network. This type of system concentrates most of an airline’s operations at a limited number of hub
cities, serving the majority of other destinations in the system by providing one-stop or connecting
service through the hub.
Regional airlines, such as SkyWest Airlines and Mesa Airlines, typically operate smaller aircraft
on lower-volume routes than do traditional network airlines. In contrast to low-cost airlines, regional
airlines generally do not try to establish an independent route system. Rather, regional airlines
typically enter into relationships with one or more traditional network airlines under which the
regional airline agrees to use its smaller aircraft to carry passengers booked and ticketed by the
traditional network airline between their hubs and a smaller outlying city. There are currently five
regional major U.S. airlines.
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