JetBlue Airlines 2013 Annual Report Download - page 33

JETBLUE AIRWAYS CORPORATION-2013Annual Report 27
PART II
ITEM7Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
Year 2013 Compared to Year 2012
Operating Revenues
(Revenue in millions) 2013 2012
Year-over-Year Change
$%
Passenger Revenue $ 4,971 $ 4,550 $ 421 9.3
Other Revenue 470 432 38 8.8
Operating Revenues $ 5,441 $ 4,982 $ 459 9.2
Average Fare $ 163.19 $ 157.11 $ 6.08 3.9
Yield per passenger mile
(cents) 13.87 13.55 0.32 2.4
Passenger revenue per ASM
(cents) 11.61 11.35 0.26 2.3
Operating revenue per ASM
(cents) 12.71 12.43 0.28 2.2
Average stage length
(miles) 1,090 1,085 5 0.5
Revenue passengers
(thousands) 30,463 28,956 1,507 5.2
Revenue passenger miles
(millions) 35,836 33,563 2,273 6.8
Available Seat Miles (ASMs)
(millions) 42,824 40,075 2,749 6.9
Load Factor 83.7% 83.8% (0.1) pts
Passenger revenue is our primary source of revenue and accounted for
over 91% of our total operating revenues for the year ended December
31, 2013. As well as seat revenue it includes revenue from our ancillary
product offerings such as EvenMore™ Space. Revenues generated
from international routes, including Puerto Rico, accounted for 28% of
our passenger revenues in 2013. Revenue is recognized either when
transportation is provided or after the ticket or customer credit expires.
We measure capacity in terms of available seat miles, which represents
the number of seats available for passengers multiplied by the number
of miles the seats are flown. Yield, or the average amount one passenger
pays to fly one mile, is calculated by dividing passenger revenue by revenue
passenger miles. We attempt to increase passenger revenue primarily by
increasing our yield per flight which produces higher revenue per available
seat mile, or RASM. Our objective is to optimize our fare mix to increase
our overall average fare while continuing to provide our customers with
competitive fares.
In 2013, the increase in passenger revenues was mainly attributable to
the increased capacity and increase in yield. Our largest ancillary product
remains the EvenMore™ Space seats, generating approximately $170million
in revenue, an increase of over 13% compared to 2012.
The primary component of other revenue is the fees from reservation
changes and excess baggage charged to customers in accordance
with our published policies. We also include the marketing component
of TrueBlue point sales, on-board product sales, transportation of mail
and cargo, Charters, ground handling fees of other airlines and rental
income. We additionally include the revenues earned by our subsidiary,
LiveTV, LLC, for the sale of in-flight entertainment systems and on-going
services provided for these systems on other airlines in Other Revenue.
In 2013, other revenue increased by $38 million compared to 2012. This
was primarily due an increase in fees revenue, a factor of which was a
change in our fee structure policy over the summer period. Further increases
were seen in the marketing component of TrueBlue. These increases were
offset slightly by a decrease in LiveTV revenue.
Operating Expenses
(in millions; per ASM data in cents) 2013 2012
Year-over-Year Change per ASM
$%2013 2012 % Change
Aircraft fuel and related taxes $ 1,899 $ 1,806 $ 93 5.1 4.43 4.50 (1.6)
Salaries, wages and benefits 1,135 1,044 91 8.7 2.65 2.60 1.9
Landing fees and other rents 305 277 28 10.1 0.71 0.69 2.9
Depreciation and amortization 290 258 32 12.5 0.68 0.65 4.6
Aircraft rent 128 130 (2) (1.5) 0.30 0.33 (9.1)
Sales and marketing 223 204 19 9.2 0.52 0.51 2.0
Maintenance materials and repairs 432 338 94 28.0 1.01 0.84 20.2
Other operating expenses 601 549 52 9.5 1.41 1.37 2.9
TOTAL OPERATING EXPENSES $ 5,013 $ 4,606 $ 407 8.8 11.71 11.49 1.9