JetBlue Airlines 2008 Annual Report Download - page 24

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result of these circumstances, as of December 31, 2008, we have adjusted the carrying value of these
investments through a net impairment charge of approximately $53 million. We continue to monitor the
markets for our auction rate securities and any changes in their fair values may result in further impairment
charges.
We rely heavily on automated systems to operate our business and any failure of these systems could
harm our business.
We are dependent on automated systems and technology to operate our business, enhance customer
service and achieve low operating costs. These systems include our computerized airline reservation system,
flight operations system, telecommunications systems, website, maintenance systems, check-in kiosks and
in-flight entertainment systems. Since we only issue electronic tickets, our website and reservation system, the
latter of which we have recently decided to replace, must be able to accommodate a high volume of traffic
and deliver important flight information. These systems require upgrades or replacement periodically, which
involve implementation and other operational risks, and our business may be harmed if we fail to replace or
upgrade systems successfully.
The performance and reliability of our automated systems is critical to our ability to operate our business
and compete effectively. We rely on the providers of our current automated systems for technical support, even
in the event we select new systems and service providers to meet our future needs. If the current provider
were to fail to adequately provide technical support for any one of our key existing systems, we could
experience service disruptions, which, if they were to occur, could result in the loss of important data, increase
our expenses, decrease our revenues and generally harm our business and reputation. Furthermore, our
automated systems cannot be completely protected against events that are beyond our control, including
natural disasters, computer viruses or telecommunications failures. Substantial or sustained system failures
could impact customer service and result in our customers purchasing tickets from other airlines. We have
implemented security measures and change control procedures and have disaster recovery plans; however, we
cannot assure you that these measures are adequate to prevent disruptions, which, if they were to occur, could
result in the loss of important data, increase our expenses, decrease our revenues and generally harm our
business and reputation.
Our liquidity could be adversely impacted in the event one or more of our credit card processors were
to impose material reserve requirements for payments due to us from credit card transactions.
We currently have agreements with organizations that process credit card transactions arising from
purchases of air travel tickets by our customers. Credit card processors have financial risk associated with
tickets purchased for travel, which can occur several weeks after the purchase. Our credit card processing
agreements provide for reserves to be deposited with the processor in certain circumstances. We currently have
a reserve posted for our major credit card processor; if circumstances were to occur that would require us to
deposit additional reserves with one or more of our major processors, the negative impact on our liquidity
could be significant, which could materially adversely affect our business.
Our maintenance costs will increase as our fleet ages.
Because the average age of our aircraft is 3.6 years, our aircraft require less maintenance now than they
will in the future. We have incurred lower maintenance expenses because most of the parts on our aircraft are
under multi-year warranties. Our maintenance costs will increase significantly, both on an absolute basis and
as a percentage of our operating expenses, as our fleet ages and these warranties expire.
If we are unable to attract and retain qualified personnel or fail to maintain our company culture, our
business could be harmed.
We compete against the other major U.S. airlines for pilots, mechanics and other skilled labor and some
of them offer wage and benefit packages that exceed ours. We may be required to increase wages and/or
benefits in order to attract and retain qualified personnel or risk considerable employee turnover. If we are
unable to hire, train and retain qualified employees, our business could be harmed and we may be unable to
complete our growth plans.
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