JetBlue Airlines 2006 Annual Report Download - page 20

and seasonal trends to forecast anticipated demand. We combine these historical forecasts with current
bookings, upcoming events, competitive pressures and other pertinent factors to establish a mix of
fares that is designed to maximize revenue. This ability to adjust seat allocations based on fluctuating
demand patterns allows us to balance loads and capture more revenue from existing capacity. During
2006, we modified our revenue management practices to price our inventory to achieve a higher yield
while relinquishing some of our load factor. While we continue to provide our customers with
competitive fares, particularly in light of recent reductions in domestic capacity across the industry,
our yield for the year ended December 31, 2006 increased 19%compared to 2005, primarily as a result
of our efforts at fare optimization.
People
We believe that one of the factors differentiating us from our competitors is the high quality
service provided to our customers by our employees, whom we refer to as crewmembers. Experience
indicates that our customers return not only because we offer low fares, but also because we provide
them with a more enjoyable air travel experience. Hiring the best people and treating them as we
expect our customers to be treated are essential to achieving this goal.
We believe that we carefully select, train and maintain a flexible and diverse workforce of caring,
passionate, fun and friendly people who want to provide our customers with the best flying experience
possible. Our hiring process is rigorous and includes behavioral interviews and peer assessments. We
assist our employees by offering them flexible work hours, initial paid training, a uniform allowance
and benefits. We also provide extensive training for our pilots, flight attendants, technicians, airport
agents, dispatchers and reservation agents which emphasizes the importance of safety. We provide
leadership training for all supervisors and managers, with the active participation of our senior
management, to help ensure that we have the right leaders in place across our organization to
maintain our unique company culture and commitment to our customers. Effective and frequent
communication throughout the organization is fostered through periodic employee satisfaction surveys,
a quarterly magazine, active leadership participation in new hire orientations and monthly open
meetings, called ‘‘pocket sessions’’, which are videotaped and posted on our intranet.
An important part of our 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 of our employees, including FAA-licensed employees, participate in our
stock option plan. We review our compensation packages on a regular basis in an effort to ensure that
we remain competitive and are able to hire and retain the best people possible.
We enter into individual employment agreements with each of our FAA-licensed employees,
which consist of pilots, dispatchers and technicians. Each employment agreement is for a term of five
years and automatically renews for an additional five-year term unless either the employee or we elect
not to renew it by giving notice before the end of the relevant term. 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
of income and to continue their benefits. In addition, in the event we are sold to or consolidate with
another company, we must request that the successor company place these employees on a
preferential hiring list. If such employees are not hired by the successor company, in some cases they
will be entitled to a severance payment of up to one year’s salary.
None of our employees are currently unionized. In May 2006, the International Association of
Machinists and Aerospace Workers, filed a petition with the National Mediation Board, or NMB,
seeking to represent our ground operations, provisioning and related-position employees. In July 2006,
the NMB dismissed the petition because the minimum number of employees in the targeted group did
not support holding an election. We believe that a direct relationship with JetBlue leadership, and not
third-party representation, is in the best interests of our employees.
Our full-time equivalent employees at December 31, 2006 consisted of 1,545 pilots, 2,082 flight
attendants, 2,546 airport operations personnel, 426 technicians, whom others refer to as mechanics,
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