JetBlue Airlines 2010 Annual Report Download - page 23

investigation costs, potential penalties and other related costs which in turn could negatively affect our results
of operations and cash flow.
We may be subject to risks through the commitments and business of LiveTV, our wholly-owned
subsidiary.
LiveTV has agreements to provide in-flight entertainment products and services with seven other airlines.
At December 31, 2010, LiveTV services were available on 518 aircraft under these agreements, with firm
commitments for 143 additional aircraft through 2014 and with options for 91 additional installations through
2014. Performance under these agreements requires that LiveTV hire, train and retain qualified employees,
obtain component parts unique to its systems and services from their suppliers and secure facilities necessary
to perform installations and maintenance on those systems. Should LiveTV be unable to satisfy its
commitments under these third party contracts, our business could be harmed.
We may be subject to unionization, work stoppages, slowdowns or increased labor costs; recent changes
to the labor laws may make unionization easier to achieve.
Our business is labor intensive and, unlike most other airlines, we have a non-union workforce. The
unionization of any of our employees could result in demands that may increase our operating expenses and
adversely affect our financial condition and results of operations. Any of the different crafts or classes of our
employees could unionize at any time, which would require us to negotiate in good faith with the employee
group’s certified representative concerning a collective bargaining agreement. Further, in 2010, the National
Mediation Board changed its election procedures to permit a majority of those voting to elect to unionize
(from a majority of those in the craft or class). These rule changes fundamentally alter the manner in which
labor groups have been able to organize in our industry since the inception of the Railway Labor Act.
Ultimately, if we and a newly elected representative were unable to reach agreement on the terms of a
collective bargaining agreement and all of the major dispute resolution processes of the Railway Labor Act
were exhausted, we could be subject to work slowdowns or stoppages. In addition, we may be subject to
disruptions by organized labor groups protesting our non-union status. Any of these events would be disruptive
to our operations and could harm our business.
We rely on maintaining a high daily aircraft utilization rate to keep our costs low, which makes us
especially vulnerable to delays.
We maintain a high daily aircraft utilization rate (the amount of time that our aircraft spend in the air
carrying passengers). High daily aircraft utilization allows us to generate more revenue from our aircraft and is
achieved in part by reducing turnaround times at airports so we can fly more hours on average in a day.
Aircraft utilization is reduced by delays and cancellations from various factors, many of which are beyond our
control, including adverse weather conditions, security requirements, air traffic congestion and unscheduled
maintenance. The majority of our operations are concentrated in the Northeast and Florida, which are
particularly vulnerable to weather and congestion delays. Reduced aircraft utilization may limit our ability to
achieve and maintain profitability as well as lead to customer dissatisfaction.
Our business is highly dependent on the New York metropolitan market and increases in competition
or congestion or a reduction in demand for air travel in this market, or governmental reduction of our
operating capacity at JFK, would harm our business.
We are highly dependent on the New York metropolitan market where we maintain a large presence with
approximately 55% of our daily flights having JFK, LaGuardia, Newark, Westchester County Airport or
Newburgh’s Stewart International Airport as either their origin or destination. We have experienced an increase
in flight delays and cancellations at JFK due to airport congestion which has adversely affected our operating
performance and results of operations. Our business could be further harmed by an increase in the amount of
direct competition we face in the New York metropolitan market or by continued or increased congestion,
delays or cancellations. Our business would also be harmed by any circumstances causing a reduction in
demand for air transportation in the New York metropolitan area, such as adverse changes in local economic
conditions, negative public perception of New York City, terrorist attacks or significant price increases linked
to increases in airport access costs and fees imposed on passengers.
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