JetBlue Airlines 2015 Annual Report Download - page 12

JETBLUE AIRWAYS CORPORATION-2015Annual Report
PART I
ITEM 1Business
08
on our single cabin layout Airbus A321 aircraft. Beginning in July 2016,
future deliveries of our single cabin layout Airbus A321 will arrive with 200
seats. We expect to complete retrofitting our existing Airbus A321 single
cabin layout aircraft to the 200 seats configuration by the end of 2016.
As part of our cabin restyling program we expect to increase the seat density
on our Airbus A320 fleet. Commencing in 2017, we plan to reconfigure
our Airbus A320 aircraft with new seats, larger TV screens with up to 100
channels of free DIRECTV
®
, and free gate-to-gate Fly-Fi™. We anticipate
reconfiguring our Airbus A320 aircraft to have 162 seats.
Because of our network strength in leisure destinations, 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 local attractions.
We work to provide a superior air travel experience, including communicating
openly and honestly with customers about delays and service disruptions.
We are the only major U.S. airline to have a Customer Bill of Rights. This
program was introduced in 2007 to provide compensation to customers
who experience inconveniences. This Customer Bill of Rights commits
us to high service standards and holds us accountable if we fall short.
In 2015, we completed 98.6% of our scheduled flights. Unlike most other
airlines, we have a policy of not overbooking flights.
Our customers have repeatedly indicated the distinctive JetBlue Experience
is an important reason why they select us over other carriers. We measure
and monitor customer feedback regularly which helps us to continuously
improve customer satisfaction. One way we do so is by measuring our net
promoter score, or NPS. This metric is used by companies in a broad range
of industries to measure and monitor the customer experience. Many of the
leading consumer brands that are recognized for great customer service
receive high NPS scores. We believe a higher NPS score has positive
effects on customer loyalty and ultimately leads to increased revenue.
Network/ High-Value Geography
We are a predominately point-to-point system carrier, with the majority of
our routes touching at least one of our six focus cities: New York, Boston,
Fort Lauderdale-Hollywood, Orlando, Long Beach and San Juan, Puerto
Rico. During 2015, over 86% of our customers flew on non-stop itineraries.
Leisure traveler focused airlines are often faced with high seasonality. As a
result, we continually work to manage our mix of customers to include both
business travelers and travelers visiting friends and relatives, or VFR. VFR
travelers tend to be slightly less seasonal and less susceptible to economic
downturns than traditional leisure destination travelers. Understanding the
purpose of our customers’ travel helps us optimize destinations, strengthen
our network and increase unit revenues. All six of our focus cities are in
regions with a diverse mix of traffic and were profitable in 2015.
As of December 31, 2015, our network served 93 BlueCities in 28 states,
the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin
Islands, and 19 countries in the Caribbean and Latin America. In 2015, we
commenced service to six new BlueCities including Antigua, our 34
th
BlueCity
in the Caribbean and Latin America. We also made changes across our
network by announcing new routes between existing BlueCities. We group
our capacity distribution based upon geographical regions rather than on
a mileage or a length-of-haul basis. The historic distribution of ASMs, or
capacity, by region for the years ending December 31 was:
Capacity Distribution 2015 2014 2013
Caribbean & Latin America(1) 30.2% 31.4% 28.1%
Florida 29.2 29.3 30.9
Transcontinental 28.5 26.3 27.9
East 5.7 5.7 5.0
Central 3.8 4.7 5.2
West 2.6 2.6 2.9
TOTAL 100.0% 100.0% 100.0%
(1) Domestic operations as defined by the Department of Transport, or DOT, include Puerto Rico and the U.S. Virgin Islands, but for the purposes of the capacity distribution table above we have
included these locations in the Caribbean and Latin America region.
Our network growth over the past few years has been focused on the business traveler in Boston as well as travelers to the Caribbean and Latin
America region. We expect to focus on increasing our presence in Fort Lauderdale-Hollywood where we believe there is an opportunity to increase
our operations to destinations throughout the Caribbean and Latin America. Our plan is supported by significant investment from the Broward County
Aviation Department in the airport and surrounding facilities.
With the decision by the United States and Cuban authorities to allow scheduled air service to resume between the two nations, we are currently reviewing the
formal application to schedule JetBlue service to Cuba. We believe our experience operating charter flights to Cuba and our historical success in other Caribbean
and Latin American markets, such as Puerto Rico and the Dominican Republic, will position us to be the air carrier of choice in Cuba.
In 2016, we anticipate further expanding our network and have previously announced service to the following new destinations:
Destination Service Commenced or Scheduled to Commence
Daytona Beach, FL January 7, 2016
Palm Springs, CA January 14, 2016
Quito, Ecuador February 25, 2016
Nashville, TN May 5, 2016
Airline Commercial Partnerships
Airlines frequently participate in commercial partnerships with other
carriers in order to increase customer convenience by providing inter-
connectivity, code-sharing, coordinated flight schedules, frequent flyer
program reciprocity and other joint marketing activities. As of December 31,
2015, we had 43 airline commercial partnerships. Our commercial
partnerships typically begin as an interline agreement allowing a customer
to book one itinerary with tickets on multiple airlines. During 2015, we
entered into seven new interline agreements and four new code-sharing
agreements. Code-sharing is a practice by which one airline places its
name and flight number on flights operated by another airline. In 2016, we
expect to continue to seek additional strategic opportunities through new
commercial partners as well as assess ways to deepen select current airline