JetBlue Airlines 2014 Annual Report Download - page 13

PART I
JETBLUE AIRWAYS CORPORATION-2014Annual Report
ITEM 1Business
07
additionally converted three Airbus A320 aircraft orders in 2016 to Airbus
A321 aircraft orders. In 2014, we took delivery of nine Airbus A321 aircraft,
all equipped with our Mint™ cabin layout.
•Airport Infrastructure Investments – In November 2014, we opened
T5i, an extension to our existing Terminal, or T5, at John F. Kennedy
International Airport, or JFK, in New York City. This extension consists
of six international arrivals gates, three of which are new and three of
which are converted from the original terminal building. T5i further houses
an international arrivals hall with U.S. Customs and Border Protection
services for customers arriving on international flights. This addition
to our terminal facilities at JFK allows our international customers to
depart and arrive under the one roof and enhances the award-winning
JetBlue Experience at all points along their journey. In September 2014,
we announced the opening of a new USO Center in T5. The center was
100% donated by JetBlue, Gensler, Turner Construction Company and
the Port Authority of New York & New Jersey, or PANYNJ, as well as
over 28 contractors and individual donors. The center will be open seven
days a week, 365 days per year for any troops and their families to relax
before or after flights and during layovers.
• Network – We continued to expand and grow in our high-value geography
in 2014. We are working with the local authorities of Broward County,
Florida, who have commenced runway and terminal expansion plans
at Fort Lauderdale-Hollywood Airport. These plans align with our future
plans of growing to 100 flights per day at Fort Lauderdale-Hollywood.
In March 2014, we completed the purchase of 24 High Density Slots,
or Slots, at Ronald Reagan National Airport in Washington, D.C., or
Reagan National. Slots limit the air traffic in and out of high volume traffic
airports located in the northeast corridor airspace during specific times.
We started using these Slots in the second half of 2014 and continue
to announce new route pairings.
• TrueBlue and partnerships – We expanded our portfolio of commercial
airline partnerships throughout the year and announced a code-sharing
agreement with current partner El Al Airlines. In November 2014, South
African Airways joined the TrueBlue loyalty program, with TrueBlue
members now being able to earn points when they travel on any flight
operated by South African Airways. In December 2014, we launched
the TrueBlue points donation platform so members can now choose
to donate points to a number of charities and non-profits. Each charity
may then use the points for travel for their organization.
• Customer Service – We were recognized by J.D. Power and Associates
for the tenth consecutive year as the “Highest in Airline Customer
Satisfaction among Low-Cost Carriers.” We were additionally recognized
by Airline Ratings as the “Best Low Cost Airline – The Americas” receiving
7/7 stars for safety, and 5/5 stars for our product offering for the second
consecutive year.
The JetBlue Experience and Strategy
We offer our customers a distinctive flying experience which we refer to
as the “JetBlue Experience”. We believe we deliver award winning service
that focuses on the customer experience from booking their itinerary to
arrival at their final destination. Typically, our customers are neither high-
traffic business travelers nor ultra-price sensitive travelers. Rather, we
believe we are the carrier of choice for the majority of travelers who have
been underserved by other airlines as we offer differentiated product and
award winning customer service.
Differentiated Product and Culture
Delivering the JetBlue Experience to our customers through our differentiated
product and culture is core to our mission to inspire humanity. We look to
attract new customers to our brand and provide current customers reasons
to come back to us by continuing to innovate our customer experience.
We believe that we can adapt to the changing needs of our customers
and a key element of our success is the belief that competitive fares and
quality air travel need not be mutually exclusive.
Our award winning service begins from the moment our customers purchase
a ticket from one of our distribution channels such as www.jetblue.com,
our mobile applications or our reservations centers. In the first half of 2015,
we are anticipating the role out of our new pricing model, Fare Families.
Customers will be presented with a choice of fare options, with all fares
including our core offering of free in-flight entertainment, free brand name
snacks and free non-alcoholic beverages. Customers can choose to “buy
up” to an option with additional offerings. We believe this system will allow
customers to select the products or services they need or value the most
when they travel, without paying for the things they don’t need or value.
Upon arrival at the airport our customers are welcomed by our dedicated
Crewmembers and are able choose to purchase one of our ancillary options
such as Even More™ Speed, which allows them to enjoy an expedited
security experience in most domestic JetBlue locations.
Once onboard our aircraft, customers enjoy seats in a comfortable layout
and the most legroom in the main cabin of all U.S. airlines, based on
average fleet-wide seat pitch. Our Even More™ Space seats are available
for purchase across our fleet, giving customers the opportunity to enjoy
additional legroom. Customers on certain transcontinental flights have the
option to purchase our premium service, Mint™, which has 16 fully lie-flat
seats, including four that are in suites with privacy doors.
Our in-flight entertainment system onboard our Airbus A320 and
EMBRAER190 aircraft includes 36 channels of free DIRECTV
®
, 100channels
of free SiriusXM
®
satellite radio and premium movie channel offerings
from JetBlue Features®, our source of first run films. Customers on our
Airbus A321 aircraft have access to 100 channels of DIRECTV® and
100+channels of SiriusXM® radio. Our Mint™ customers enjoy 15-inch
flat screen televisions to experience our in-flight entertainment offerings.
In December 2013, we began to retrofit our Airbus fleet with Fly-Fi™,
a broadband product, with connectivity that is significantly faster than
competing KU-band satellites and older ground to air technology. We
expect installations to be completed on our Airbus fleet in the first half
of 2015, after which we plan to begin installations on our EMBRAER
190 fleet. In November 2014, we announced the introduction of Fly-Fi™
Hub, a content portal where customers can access a wide range of
movies, television shows and additional content from their own personal
devices. Current partners include Coursera, FOX, HarperCollins Publishers,
National Geographic, Rouxbe and Time Inc. We expect to add PBS,
Random House and The Wall Street Journal in the first quarter of 2015.
All customers may enjoy an assortment of free and unlimited brand name
snacks and non-alcoholic beverages as well as having the option to
purchase premium beverages and food selections. Our Mint™ customers
have access to an assortment of complimentary food and beverages which
include a small-plates menu, artisanal snacks and alcoholic beverages.
All customers also have the option to purchase additional products such
as a blanket or headphones.
Our Airbus A321 aircraft in a single cabin layout have 190 seats and
those with our Mint™ offering have 159 seats. Our Airbus A320 aircraft
have 150 seats while our EMBRAER 190 aircraft have 100 seats. At our
Investor Day in November 2014, we announced a cabin refresh program
across our fleet that we expect to commence in the second half of 2016.
As part of this program we are expecting to increase the seat density on
our Airbus A320 fleet.
In addition to our core products we also sell vacation packages through
JetBlue Getaways™, a one-stop, value-priced vacation service for
self-directed packaged travel planning. These packages offer competitive
fares for air travel on JetBlue along with a selection of JetBlue recommended
hotels and resorts, car rentals and attractions.