JetBlue Airlines 2007 Annual Report Download - page 19

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5%discount on JetBlue travel and automatic enrollment in the American Express OPEN Savings®
program. In addition, small business owners with any American Express OPEN small business card
receive a 3%discount on JetBlue travel. Every time cardmembers holding either a JetBlue Card or a
JetBlue Business Card from American Express earn the equivalent of one TrueBlue point or purchase
travel on JetBlue before their points expire, all the points in their TrueBlue account are extended for
another 12 months. We also have an agreement with American Express allowing its cardholders to
convert their Membership Reward points into JetBlue TrueBlue points. We intend to pursue other
marketing partnerships in the future.
Pricing
Our low cost structure allows us to offer simplified, low fares to our customers. We offer a range
of fares, including 21-day, 14-day, 7-day and 3-day advance purchase fares and day-of-flight, or
walk-up, fares, depending on the market. Generally, our fares increase as the number of days prior to
travel decreases. In addition to our regular fare structure, we frequently offer sale fares in most of the
markets we serve and match the sale fares offered by other airlines. We are committed to offering our
customers lower fares, especially with respect to our walk-up fares, than those of our competitors. We
believe that in most of our markets, the difference between our lowest and highest fare for a given
flight is smaller than our competitors.
All of our fares are one-way and never require an overnight stay. We offer refundable and
non-refundable fares that must be purchased at the time of reservation. Our non-refundable booking
can be changed or cancelled prior to departure for a nominal fee. Based on published fares at our
time of entry, our advance purchase fares have been 20%to 30%below those existing in markets prior
to our entry, while our walk-up fares have generally been up to 20%to 30%below other major
U.S. airlines’ unrestricted ‘‘full coach’’ fares.
Revenue Management
Revenue management is a process that helps enable us to maximize passenger revenues by flight,
by market and across our entire network. Our revenue management team strives to increase our
overall average fare through optimizing our fare mix while continuing to provide our customers with
low fares and, in certain markets, by using our network to maximize connecting opportunities.
We determine the number of seats offered at each fare through a continual process of forecasting,
optimization and competitive analysis. Generally, in established markets we use past booking history
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. In addition to our regular fare structure, we frequently
offer sale fares with shorter advance purchase requirements in most of the markets we serve and
match the sale fares offered by other airlines. This ability to adjust seat allocations based on
fluctuating demand patterns allows us to balance loads and capture more revenue from existing
capacity. We balance our yield, which is the amount that one passenger pays to fly one mile, and our
load factors to maximize passenger revenues. While we continue to provide our customers with
competitive fares, our yield for the year ended December 31, 2007 increased 7.4%compared to 2006,
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
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