JetBlue Airlines 2011 Annual Report Download - page 3

Dear Fellow Shareholders,
2011 was a very good year for JetBlue. In addition to running a great operation, we continued to successfully
execute our network strategy in key markets while maintaining a low cost advantage. These actions resulted in
record revenues and one of the most profitable years in our Company’s history.
Despite higher fuel expense of nearly $550 million compared to 2010, we delivered four quarters of profitability
and finished the year with $86 million of net income and an operating margin of 7.1%. Additionally, we ended
the year with $1.2 billion in cash and short-term investments – among the best liquidity positions in the industry
– and achieved a third consecutive year of positive free cash flow.
Throughout 2011, we maintained our focus on profitable growth by leveraging the three main building blocks of
our business model, which we refer to as offerings, culture and foundation.
Offerings
Products & Services: JetBlue’s success depends on running a safe, reliable, customer-focused operation. We
believe the JetBlue Experience, which includes more legroom than any other domestic airline’s coach product
and free DIRECTV and Sirius XM Radio, to be the best in the industry. Our customers are willing to pay for
products and services which enhance their travel experience and complement the superior core of the JetBlue
Experience.
We continued to improve the travel experience for our customers in 2011: We re-branded our popular Even More
Legroom offering, now known as Even More Space, to include extra legroom plus early boarding and early
access to overhead bin space. Customer response to Even More Space has continued to exceed expectations,
driving more than $120 million of incremental revenue in 2011. Additionally, we introduced Even More Speed,
which offers customers the option to enjoy an expedited security experience in select JetBlue airports.
We also began developing with ViaSat Inc. a state of the art in-flight broadband connectivity technology, which
we believe will provide the most speed and flexibility of any wi-fi inflight technology currently available. We
plan to introduce broadband connectivity on our aircraft beginning in late 2012.
The JetBlue Experience is an important reason why our customers choose us over other airlines. Our 14,000
crewmembers – at the forefront of this effort – continue to be recognized for exceptional customer service. In
2011, JetBlue achieved the number one customer service ranking among low cost carriers by J.D. Power and
Associates for the seventh year in a row, a remarkable achievement. We are very pleased to be in the company of
some of the most prestigious and respected brands in the world who also have received this recognition.
Network: Throughout 2011, we continued to focus on strengthening the profitability of our network, particularly
in Boston and the Caribbean & Latin America. In Boston, we capitalized on opportunities in the changing
competitive landscape by increasing our presence and relevance with business and leisure customers. In 2011, we
launched new service from Boston’s Logan Airport to five destinations. By the end of the year, we served over
40 destinations from Boston and our domestic operations accounted for more than 20% of all domestic flights at
Logan Airport. As we increase relevance in Boston, our percentage of higher yielding business customers has
increased to about 30% of all traffic carried. This in turn helps smooth the seasonality of our historically leisure-
focused traffic and drive revenue.