JetBlue Airlines 2008 Annual Report Download - page 2

Dear Fellow Shareholders,
2008 was a challenging year for the airline industry as high fuel prices and a weakening economy
transformed the landscape. Fuel prices reached record levels, forcing airlines around the world to cease
operations, seek financial protection and consolidate. Despite these challenges, 2008 was a successful year for
JetBlue.
We took action on multiple fronts to manage the impact of high fuel prices and an uncertain economic
environment, while continuing to provide our customers with the award-winning product and service we are
known for. As a result of these efforts, we led the industry in unit revenue growth throughout the year. Our
strong revenue performance, however, did not keep pace with the unprecedented spike in fuel prices, which
cost us an additional $400 million compared to 2007. Yet, despite record fuel prices and turmoil in the
financial markets, we ended the year with one of the strongest liquidity positions, relative to our size, in the
industry.
The JetBlue Experience
In 2008, we marked the beginning of a new chapter in JetBlue’s history with the opening of our new
Terminal 5 facility at JFK Airport. This project, a partnership with the Port Authority of New York &
New Jersey, involved six years of planning and construction and includes 26 gates, new roadways, a parking
structure, and a connector to the AirTrain. As the seventh largest airline in the United States, we are truly
excited to be able to offer our customers and our crewmembers a world-class airport experience at our home
base of operations. We believe we have a tremendous advantage being based in New York, the largest travel
market in the world, and Terminal 5 gives us the opportunity to provide superior customer service on the
ground that matches our award-winning experience in the air.
We continue to strengthen the JetBlue brand, and our 11,000+ crewmembers – at the core of this effort –
continue to be recognized for exceptional customer service. For the fourth year in a row, JetBlue achieved the
number one customer service ranking among low cost carriers by J.D. Power and Associates. This award, and
many others, is a testament to the dedication of our crewmembers who do a tremendous job delivering The
JetBlue Experience to our 22 million customers.
During 2008, we continued to improve the travel experience for our customers onboard our aircraft. For
example, we modified our fleet with a product we call Even More Legroom. Even More Legroom seats
provide our customers with 38 inches of pitch in selected rows for a modest fee. We believe our cabin
experience, which includes the most legroom in coach (based on average fleet-wide seat pitch for
U.S. airlines) and DIRECTV and Sirius XM Radio installed by our LiveTV subsidiary, to be “best in class”
across the industry.
Network Optimization
We took delivery of 18 new aircraft in 2008. As part of a more disciplined growth strategy, however, we
managed our capacity through aircraft sales, deferrals and leases. During the year, we sold nine of our older
Airbus A320 aircraft and leased two of our EMBRAER 190 aircraft to a third party. We also modified our
aircraft order book, deferring delivery of aircraft. We believe our revised fleet plan allows us to better position
ourselves for long-term growth. At the same time, we believe our fleet order book, including the availability
of aircraft purchase options, provides us with the ability to quickly react to changing economic conditions and
seize market opportunities.
Slower growth has afforded us the opportunity to focus on strengthening our core network. During 2008,
we reduced our flying in longer haul east-west markets, which have more exposure to fuel prices, while
increasing our presence in north-south and Caribbean markets – where the yields have historically been better.
As part of our ongoing network optimization, we suspended service to Ontario, CA and Tucson, AZ, as these