JetBlue Airlines 2007 Annual Report Download - page 18

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Marketing and Distribution
Our marketing objectives are to attract new customers to our brand and give our customers
reasons to come back to us again and again. Our key value proposition and marketing message is that
low fares and quality air travel need not be mutually exclusive. Our low fares, high quality product
and outstanding customer service create the overall JetBlue Experience that we believe is unique in
the domestic airline industry.
We market our services through advertising and promotions in newspapers, magazines, television,
radio, through the internet, outdoor billboards, and through targeted public relations and promotions.
We engage in large multi-market programs, as well as many local events and sponsorships and mobile
marketing programs. Our targeted public and community relations efforts promote brand awareness
and complement our strong word-of-mouth channel.
Our primary distribution strategy is to have our customers purchase their flights direct to ensure
they get as pleasant an experience booking their travel as they do in the air. The percentage of our
total sales booked on our website averaged 76%for the year ended December 31, 2007. Our second
largest distribution channel is our agents, who accounted for 16%of our sales. We booked the
remaining 8%of our 2007 sales through global distribution systems, or GDSs and online travel
agencies, or OTAs. Our re-entry into GDSs in 2007 has supported our growth in the corporate market
and bookings through these channels have resulted in higher average fares, offsetting the increased
distribution costs. As a result, we now participate in all four major GDSs and four major OTAs. We
continue to evaluate opportunities to broaden our distribution channels based on cost and yield. Our
distribution mix creates significant cost savings and enables us to continue to build loyalty through
increased customer interaction.
We sell vacation packages through JetBlue Getaways, a one-stop, value-priced vacation website
designed to meet customers’ demand for self-directed packaged travel planning. Getaways packages
offer competitive fares for air travel on JetBlue, a selection of JetBlue-recommended hotels and
resorts, car rentals and attractions. In January 2007, we introduced JetBlue Cruises, which offers
customers the ability to purchase cruises through our website, with or without the purchase of a
JetBlue flight.
In November 2006, we began offering the JetBlue Gift Card, which has no expiration date and
may be used toward the purchase of air-only travel to any of the destinations JetBlue serves. JetBlue
Gift Cards are available for purchase in denominations from $10 to $1,000 online at www.jetblue.com
and in select retail locations nationwide in $50 or $100 denominations.
Customer Loyalty Program
JetBlue’s customer loyalty program, TrueBlue Flight Gratitude, or TrueBlue, is an online program
designed to reward and recognize our most loyal customers. The program offers incentives to increase
travel on JetBlue and provides our customers with additional services. TrueBlue members earn points
for each one-way trip flown based on the length of the trip. Points are accumulated in an account for
each member and expire after 12 months. A free round trip award to any JetBlue destination is
earned after attaining 100 points within a consecutive 12 month period. Awards are automatically
generated and are valid for one year. We now have over five million TrueBlue members. We expect
our TrueBlue membership will continue to grow.
The number of estimated travel awards outstanding at December 31, 2007 was approximately
221,000 awards and includes an estimate for partially earned awards. The number of travel awards
used on JetBlue during 2007 was approximately 217,000, which represented 3%of our total revenue
passenger miles. Due to the structure of the program and low level of redemptions as a percentage of
total travel, the displacement of revenue passengers by passengers using TrueBlue awards has been
minimal to date.
We have an agreement with American Express, under which it issues co-branded credit cards
allowing cardmembers to earn points in TrueBlue. In September 2006, we expanded our offerings with
American Express to include the JetBlue Business Card, which provides small business owners with a
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