JetBlue Airlines 2015 Annual Report Download - page 14

JETBLUE AIRWAYS CORPORATION-2015Annual Report10
PART I
ITEM 1Business
New Jersey’s Newark Liberty International Airport, or Newark, New York
City’s LaGuardia Airport, or LaGuardia, Newburgh, New York’s Stewart
International Airport and White Plains, New York’s Westchester County
Airport. We are the leading carrier in the average number of flights flown
per day between the New York metropolitan area and Florida.
• Boston – We are the largest carrier in terms of flights and capacity at
Boston’s Logan International Airport. By the end of 2015 we flew to 59
non-stop destinations from Boston and served almost twice as many
non-stop destinations than any other airline. Our operations accounted
for more than 26% of all seats offered. We continue to capitalize on
opportunities in the changing competitive landscape by adding routes,
frequencies and increasing our relevance to local travelers. In 2015, we
continued to see a boost in the Boston market with two airline partners
starting international routes directly to Boston, bringing the total number
of airline partners flying routes to Boston to 14 by the end of the year.
Our plan is to grow Boston with a general target of 150 flights per day.
In June 2015, we announced Mint™ will be offered on flights to San
Francisco in the first quarter of 2016, Los Angeles in fall 2016, as well
as seasonal international service to Barbados. In November 2015, we
unveiled Phase I of our $50 million Terminal C upgrade which included
new kiosks and ticket counters. Twenty-five kiosks and thirty check-in
counters are in use in the North Pod of the terminal. Phase II of the
upgrade, funded by the Massachusetts Port Authority, or Massport,
has begun on the South Pod which is aimed to mirror the check-in
experience of the North Pod. Updated digital flight information displays
and a connector between Terminal C and international flights at Terminal
E are also expected to be completed during 2016. Additionally Massport
recent and planned future investments in Boston include a new Centralized
Baggage Inspection System during 2015 and a post-secure connection
to the International Terminal planned for 2016.
• Caribbean and Latin America – At the end of 2015 we had 34 BlueCities
in the Caribbean and Latin America and we expect our presence to
continue to grow. Our only focus city outside of the Continental U.S. is
San Juan, Puerto Rico. We are the largest airline in Puerto Rico serving
more non-stop destinations than any other carrier. We are also the largest
airline in the Dominican Republic, serving six airports in the country in
2015. While the Caribbean and Latin American region is a growing
part of our network, operating in this region can present operational
challenges, including working with less developed airport infrastructure,
political instability and vulnerability to corruption. In July 2015, we began
charter flights between New York and Havana, Cuba. As of December
31, 2015, we had six weekly round trips to Cuba, including flights from
Tampa and Fort Lauderdale-Hollywood with various charter partners.
As the second largest U.S. airline to the Caribbean, we believe Cuba
will one day play an important role in our overall network in the region.
• Fort Lauderdale-Hollywood – We are the largest carrier at Fort
Lauderdale-Hollywood International Airport, with approximately 22%
of all seats offered in 2015. During 2015, we started service to eight
new destinations and grew departures by approximately 15%. We
expect Fort Lauderdale-Hollywood to continue to be our fastest growing
focus city in 2016. Flying out of Fort Lauderdale-Hollywood instead of
nearby Miami International Airport helps preserve our competitive cost
advantage through lower cost per enplanement. In 2012, Broward
County authorities commenced a multi-year, $2.3 billion refurbishment
effort at the airport and surrounding facilities including the construction
of a new south runway. We operate primarily out of Terminal 3 which
is scheduled to be refurbished and connected to the upgraded and
expanded international terminal by 2018. We will have additional facilities
in the new international terminal to support our international arrivals.
Our primary Terminal 3 allows for easy access to the expanded and
enhanced airfield. We expect the connection of these terminals will
streamline operations for both Crewmembers and customers. Due to
these factors, it’s ideal location between the U.S. and Latin America as
well as South Florida’s high-value geography, we intend to focus on Fort
Lauderdale-Hollywood growth going forward.
•
Orlando – We are the second largest carrier in terms of capacity at
Orlando International Airport, or Orlando, with 13% of all seats offered
in 2015. Orlando is JetBlue’s fourth largest focus city with 27 non-stop
destinations and a growing mix of traffic including leisure, VFR and
business travelers. Our centralized training center, known as JetBlue
University, is based in Orlando. In 2015, we opened the Lodge at OSC
which is adjacent to our training center and is used for lodging our
Crewmembers when they attend training.
• Los Angeles area – We are the sixth largest carrier in the Los Angeles
area measured by seats, operating from Long Beach Airport, or Long
Beach, Los Angeles International Airport, or LAX, and Burbank’s Bob
Hope Airport. We are the largest carrier in Long Beach, with almost 84%
of all seats offered in 2015 being operated by JetBlue. We are currently
working with the city of Long Beach and the community to ensure a
request is made to the U.S. Customs and Border Protection to add a
Federal Inspection Site at the airport, which would enable us to serve
international destinations from Long Beach. In June 2014, we started
operating our premium transcontinental service, Mint™, from LAX, which
has continued to grow during 2015, with up to ten daily round trips
between JFK and LAX expected in 2016. In June 2015, we announced
Mint™ will be offered on flights from Boston to LAX in fall 2016.
Fleet Structure
We currently operate Airbus A321, Airbus A320 and Embraer E190 aircraft
types. In 2015, our fleet had an average age of 8.3 years and operated an
average of 11.9 hours per day. By scheduling and operating our aircraft
more efficiently we are able to spread related fixed costs over a greater
number of ASMs.
The reliability of our fleet is essential to ensuring our operations run efficiently
and we are continually working with our aircraft and engine manufacturers
to enhance our performance.
We are working with the Federal Aviation Administration, or FAA, in efforts
towards implementing the Next Generation Air Transportation System, or
NextGen, by 2020. NextGen technology is expected to improve operational
efficiency in the congested airspaces in which we operate. In 2012, we
equipped 35 of our Airbus A320 aircraft to test ADS-B Out, a satellite
based technology aimed to facilitate the communication between pilots
and air traffic controllers. Even though it is still in the testing phase we
have already seen benefits from the ADS-B Out equipment including being
able to reroute flights over the Gulf of Mexico to avoid bad weather, an
area where the current FAA radar coverage is not complete. In 2012, we
also became the first FAA certified Airbus A320 carrier in the U.S. to use
satellite-based Special Required Navigation Performance Authorization
Required, or RNP AR, approaches at two of JFK’s prime and most used
runways, 13L and 13R.
Fleet Maintenance
Consistent with our core value of safety, our FAA-approved maintenance
programs are administered by our technical operations department. We
use qualified maintenance personnel and ensure they have comprehensive
training. We maintain our aircraft and associated maintenance records in
accordance with, if not exceeding, FAA regulations. Fleet maintenance
work is divided into three categories: line maintenance, heavy maintenance
and component maintenance.
The bulk of our line maintenance is handled by JetBlue technicians and
inspectors. It consists of daily checks, overnight and weekly checks, “A”
checks, diagnostics and routine repairs.
Heavy maintenance checks, or “C” checks, consist of a series of more
complex tasks taking from one to four weeks to accomplish and are typically
performed once every 15 months. All of our aircraft heavy maintenance
work is performed by third party FAA-approved facilities such as Embraer,