JetBlue Airlines 2013 Annual Report Download - page 13

PART I
JETBLUE AIRWAYS CORPORATION-2013Annual Report 07
ITEM 1Business
than those offered by other U.S. airlines. We expect to complete the
retrofit of our Airbus fleet with Fly-Fi
™
by the end of 2014 and anticipate
retrofitting the Embraer fleet shortly thereafter. We announced our premium
transcontinental service, Mint
™
, which is scheduled to commence
June2014. Mint™ is designed to include 16 fully lie-flat beds, four of which
will be in suites with privacy door a first in the U.S. domestic market.
• Network - We continued to expand and grow in our high-value geography.
Specifically, we grew our Boston network with nearly 80,000 flights in
2013. We are now the largest carrier in Boston and account for more
than 30% of all flights by U.S. carriers from this airport. We expanded
operations in San Juan, Puerto Rico and built relationships with smaller
airlines throughout the Caribbean to help feed these operations. We
are working with the local authorities of Broward County, Florida,
who have committed to runway and terminal expansion plans at Fort
Lauderdale-Hollywood Airport. These plans align with our future plans
at Fort Lauderdale-Hollywood of growing to 100 flights per day.
•TrueBlue and partnerships - In June we announced members of our
TrueBlue frequent flyer program could earn and keep points without
expiration. In October we became the first U.S. airline to offer family
pooling where families and small groups can now elect to earn and share
TrueBlue points, free of charge. Our customers determine their own
“family”. Additionally, we expanded our portfolio of commercial airline
partnerships throughout the year and began codeshare agreements
with current partners Emirates in October and South African Airways
in December.
• Customer Service - We were recognized by J.D. Power and Associates for
the ninth 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.
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 which
focuses on the customer experience from booking their itinerary to arrival
at their final destination. Typically our customers are neither the high-traffic
business travelers nor the ultra-price sensitive travelers. Rather, we believe
we are the carrier of choice for delivering a differentiated product, brand and
award winning customer service to the majority of travelers who have been
underserved by the other airlines.
Differentiated Product and Service
Delivering the JetBlue Experience to our customers through our differentiated
product and service 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. 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 across a variety of our distribution channels such as
www.jetblue.com, our mobile applications or our reservations centers. Upon
arrival at the airport they are welcomed by our dedicated Crewmembers
and can experience a variety of products including having their first checked
bag for free. They can also 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, customers enjoy leather seats in a comfortable single
class layout and the most legroom in the main cabin of all U.S. airlines
(based on average fleet-wide seat pitch). Customers who have purchased
our Even More™ Space seats enjoy additional legroom; these seats
are available on all of our aircraft. Our in-flight entertainment system include
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. All customers can enjoy an assortment of free
and unlimited brand name snacks and beverages as well as having the
option to purchase premium beverages and food selections. They also
have the option to purchase specially-tailored products such as our
“blanket & pillow” set. In December 2013 we began to retrofit our fleet with
Fly-Fi™. This connectivity is significantly faster than the in-flight connections
offered by other U.S. airlines and allows for high-quality video streaming
for all customers onboard. We expect installations to be completed on
our Airbus fleet in 2014, after which we plan to begin installations on our
EMBRAER 190 fleet.
Our Airbus A320 aircraft have 150 seats and a wider cabin than both the
Boeing 737 and 757 aircraft operated by many of our competitors on their
domestic routes. Our EMBRAER 190 aircraft have 100 seats arranged in
a two-by-two seating configuration. In October 2013 we received delivery
of the first Airbus A321 aircraft in our fleet, which was placed into service
in December 2013 with 190 seats. Beginning in June 2014 we plan to
introduce a number of Airbus A321 aircraft which include our premium
transcontinental service, Mint™. We anticipate this service will include 16
fully lie-flat beds, four of which will be in suites with privacy doors, a first
in the U.S. domestic market. We intend that Mint™ customers will have
access to a 15-inch flat screen with up to 100 channels of DIRECTV®, 100+
channels of SiriusXM
®
radio and access to an assortment of complimentary
food and beverages.
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.
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 U.S. major airline to have a Customer Bill of Rights, a
program introduced in 2007 to provide for compensation to customers
who experience avoidable inconveniences as well as some unavoidable
circumstances. It also commits us to high service standards and holds us
accountable if we do not. In 2013, we completed 99.2% 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 choose to fly us over other carriers. We
measure and monitor our 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 many industries to measure and monitor 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 leads to increased revenue.
Network/ High-Value Geography
We are predominately a point-to-point system carrier, with the majority
of our routes touching at least one of our six focus cities. During 2013
approximately 90% of our customers flew on non-stop itineraries.
Airlines with a strong leisure traveler focus are often faced with high
seasonality. As a result we are continually working to manage our mix of
customers to include business travelers as well as travelers visiting friends
and relatives (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.