JetBlue Airlines 2011 Annual Report Download - page 17

matured more quickly in terms of cash break-even and profitability than mainland flights of
comparable distances. As of December 31, 2011, approximately 25% of our capacity was in the
Caribbean and Latin America; we expect this number to continue to grow as we continue to seize
opportunities. VFR traffic strongly complements leisure travel in the Caribbean region allowing for our
profitable growth and success in this area of our network. Additionally, competitive landscape changes
in San Juan, Puerto Rico have allowed us to increase significantly our presence. We continue to invest
in our Caribbean operations, including introducing new intra-island service out of Puerto Rico. We are
the largest airline in terms of seats and capacity serving all of Puerto Rico. During 2011, we began
offering service to and from our fifth destination in the Dominican Republic and are now the largest
airline in terms of capacity serving the Dominican Republic.
Commercial Partnerships. Airlines frequently participate in marketing alliances which generally provide
for code-sharing, frequent flyer program reciprocity, coordinated flight schedules that provide for convenient
connections and other joint marketing activities. These commercial agreements are typically structured in one of
three ways: 1) an interline agreement which allows for a customer to book one ticket with itineraries on multiple
airlines; 2) a codeshare in which one airline places its name and flight number on flights operated by another
airline; and 3) capacity purchase agreements. The benefits of broad networks offered to customers could attract
more customers to these networks as well as our growing network. We currently participate in several marketing
partnerships, primarily interline agreements, and will continue to seek additional strategic opportunities as they
arise to leverage our strong network and drive incremental traffic and revenue. We believe these commercial
partnerships help with yield management, which is improved with our commercial partnerships in a variety of
ways, including the more advanced purchase than is typical of our own booking curve, the array of new
destinations that we can provide to customers via connections to our airline partners, and the different of travel
period helps us improve our off-peak periods.
Our partnerships, of which there are currently 16, are structured primarily using our New York’s JFK
gateway with additional focus on Boston’s Logan International Airport, Newark, NJ’s Newark International
Airport, Orlando, FL’s Orlando International Airport, Fort Myers, FL’s Southwest Florida International Airport,
San Juan, Puerto Rico’s San Juan International Airport, Los Angeles, CA’s Los Angeles International Airport or
Washington D.C.’s Dulles International Airport, allowing international travelers, whom we do not otherwise
serve, to easily access many of our key domestic and Caribbean routes. Our partners include many notable
international carriers, and we plan on continuing to add partners throughout 2012.
Customer Loyalty Program. TrueBlue is an online program designed to reward and recognize our most
loyal customers. The program offers incentives to increase members’ travel on JetBlue. TrueBlue members earn
points based upon the amount paid for the flight. Member accounts accumulate points which do not expire as
long as new flight points are earned at least once in a 12-month period. Redemption of points for a one-way flight
can begin once a member attains as few as 5,000 points. There are no black-out dates or seat restrictions and any
JetBlue destination can be booked if the member has enough points to exchange for the value of an open seat.
There were approximately 580,000 travel segments flown during 2011. TrueBlue award miles flown
represent approximately 2% of our total revenue passenger miles. Since re-launching the TrueBlue program in
November 2009, membership has increased approximately 30%.
We have an agreement with American Express under which they issue JetBlue co-branded American
Express credit cards, allowing cardmembers to earn TrueBlue points. We have a separate agreement with
American Express, which allows any American Express cardholder to convert their Membership Rewards points
into TrueBlue points. Additionally, we have agreements with other loyalty partners, including hotels and car
rental companies, which allow their customers to earn TrueBlue points through participation in the partners’
programs. We intend to pursue other loyalty partnerships in the future.
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