JetBlue Airlines 2014 Annual Report Download - page 19

JETBLUE AIRWAYS CORPORATION-2014Annual Report 13
PART I
ITEM 1Business
Rica, Curaçao, the Dominican Republic, Haiti, Jamaica, Mexico, Peru, Saint
Lucia, St. Maarten, Trinidad and Tobago and the Turks and Caicos Islands.
To the extent we seek to provide air transportation to additional international
markets in the future, we would be required to obtain necessary authority
from the DOT and the applicable foreign government.
We believe we are operating in material compliance with DOT, FAA, TSA
and applicable international regulations as well as hold all necessary
operating and airworthiness authorizations and certificates. Should any
of these authorizations or certificates be modified, suspended or revoked,
our business could be materially adversely affected.
Other
Environmental – We are subject to various federal, state and local laws
relating to the protection of the environment. This includes the discharge
or disposal of materials and chemicals as well as the regulation of aircraft
noise administered by numerous state and federal agencies.
The Airport Noise and Capacity Act of 1990 recognizes the right of airport
operators with special noise problems to implement local noise abatement
procedures as long as those procedures do not interfere unreasonably
with the interstate and foreign commerce of the national air transportation
system. Certain airports, including San Diego and Long Beach airports in
California, have established restrictions to limit noise which can include
limits on the number of hourly or daily operations and the time of such
operations. These limitations are intended to protect the local noise-sensitive
communities surrounding the airport. Our scheduled flights at Long Beach
and San Diego are in compliance with the noise curfew limits, but on
occasion when we experience irregular operations we may violate these
curfews. We have agreed to a payment structure with the Long Beach
City Prosecutor for any violations which we pay quarterly to the Long
Beach Public Library Foundation. The payment is based on the number
of infractions in the preceding quarter. This local ordinance has not had,
and we believe it will not have, a negative effect on our operations.
We use our JetBlue Sustainability program on www.jetblue.com/green/ to
educate our customers and Crewmembers about environmental issues
and to inform the public about our environmental protection initiatives.
Our most recent corporate sustainability report for 2013 is available on
our website and addresses our environmental programs, including those
aimed at curbing greenhouse emissions, our recycling efforts and our
focus on corporate social responsibility.
Foreign Ownership – Under federal law and DOT regulations, we must
be controlled by U.S. citizens. In this regard, our president and at least
two-thirds of our board of directors must be U.S. citizens. Further, no
more than 24.99% of our outstanding common stock may be voted by
non-U.S. citizens. We believe we are currently in compliance with these
ownership provisions.
Other Regulations – All airlines are subject to certain provisions of
the Communications Act of 1934 due of their extensive use of radio
and other communication facilities. They are also required to obtain an
aeronautical radio license from the FCC. To the extent we are subject
to FCC requirements, we take all necessary steps to comply with those
requirements. Our labor relations are covered under Title II of the Railway
Labor Act of 1926 and are subject to the jurisdiction of the NMB. In
addition, during periods of fuel scarcity, access to aircraft fuel may be
subject to federal allocation regulations.
Civil Reserve Air Fleet – We are a participant in the Civil Reserve Air
Fleet Program, which permits the U.S. Department of Defense to utilize
our aircraft during national emergencies when the need for military airlift
exceeds the capability of military aircraft. By participating in this program,
we are eligible to bid on and be awarded peacetime airlift contracts with
the military.
Insurance
We carry insurance of types customary in the airline industry and at amounts
deemed adequate to protect us and our property as well as comply with
both federal regulations and certain credit and lease agreements. As a result
of the terrorist attacks of September 11, 2001, aviation insurers significantly
reduced the amount of insurance coverage available to commercial airlines
for liability to persons other than employees or passengers for claims
resulting from acts of terrorism, war or similar events. This is known as
war risk coverage. At the same time, these insurers significantly increased
the premiums for aviation insurance in general. The U.S. government
agreed to provide commercial war-risk insurance for U.S. based airlines,
covering losses to employees, passengers, third parties and aircraft. This
coverage ended in December 2014. As of July 2014, JetBlue obtained
comparable coverage in the commercial market as part of our overall hull
and liability insurance coverage.
Iran Sanctions Disclosure
Pursuant to Section 13(r) of the Securities Exchange Act of 1934, or the
Exchange Act, if during 2014, JetBlue or any of its affiliates engaged in certain
transactions with Iran or with persons or entities designated under certain
executive orders, JetBlue would be required to disclose information regarding
such transactions in our Annual Report as required under Section 219
of the Iran Threat Reduction and Syria Human Rights Act of 2012, or ITRA.
During 2014, JetBlue did not engage in any reportable transactions with
Iran or with persons or entities related to Iran.
Deutsche Lufthansa AG, or Lufthansa, is a stockholder of approximately
15% of JetBlue’s outstanding shares of common stock and has two
representatives on our Board of Directors. Accordingly, it may be deemed
an “affiliate” of JetBlue, as the term is defined in Exchange Act Rule 12b-2.
In response to our inquiries, Lufthansa informed us it does not engage in
transactions that would be disclosable under ITRA Section 219. However,
Lufthansa informed us it does provide air transportation services from
Frankfurt, Germany to Tehran, Iran pursuant to Air Transport Agreements
between the respective governments. Accordingly, Lufthansa may have
agreements in place to support such air transportation services with the
appropriate agencies or entities, such as landing or overflight fees, handling
fees or technical/refueling fees. In addition, there may be additional civil
aviation related dealings with Iran Air as part of typical airline to airline
interactions. In response to our inquiry, Lufthansa did not specify the
total revenue it receives in connection with the foregoing transactions, but
confirmed the transactions are not prohibited under any applicable laws.
Where You Can Find Other Information
Our website is www.jetblue.com. Information contained on our website is
not part of this report. Information we furnish or file with the SEC, including
our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K and any amendments to or exhibits included in these
reports are available for download, free of charge, on our website soon
after such reports are filed with or furnished to the SEC. Our SEC filings,
including exhibits filed therewith, are also available at the SEC’s website
at www.sec.gov. You may obtain and copy any document we furnish or
file with the SEC at the SEC’s public reference room at 100 F Street, NE,
Room 1580, Washington, D.C. 20549. You may obtain information on
the operation of the SEC’s public reference facilities by calling the SEC
at 1-800-SEC-0330. You may request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC at its principal office
at 100 F Street, NE, Room 1580, Washington, D.C. 20549.