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JetB

lue

Airw

ays -

Pre

ss R

elea

ses

●O

ur c

ompa

ny

●W

hy y

ou'll

like

us

●Pr

ess

room

●Pr

omot

ions

●C

omm

unity

rela

tions

●W

ork

here

●JB

LU in

vest

or re

latio

ns❍

Sha

reho

lder

Info

rmat

ion

❍A

nnua

l Rep

orts

❍In

tera

ctiv

e A

nnua

l Rep

orts

❍Pr

ess

Rel

ease

s ❍

Aud

io A

rchi

ves

❍B

oard

of D

irect

ors

❍M

anag

emen

t❍

Ana

lyst

Cov

erag

e❍

Sto

ck Q

uote

❍S

tock

Cha

rt❍

Firs

t Cal

l Est

imat

es❍

SE

C F

iling

s❍

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ail A

lerts

❍C

alen

dar o

f Eve

nts

❍In

vest

or U

pdat

e❍

Cor

pora

te G

over

nanc

e❍

FAQ

s

●C

orpo

rate

trav

el

●Sh

opB

lue

Pres

s R

elea

ses

Vie

w p

rinte

r-fri

endl

y ve

rsio

n

<<B

ack

JetB

lue

Stat

emen

t Reg

ardi

ng O

pera

tiona

l Im

pact

Tod

ayN

EW

YO

RK

, Feb

. 14,

200

7 (P

RIM

E N

EW

SW

IRE

) -- J

etB

lue

Airw

ays

issu

es th

e fo

llow

ing

stat

emen

t reg

ardi

ng o

pera

tiona

l dis

rupt

ions

cau

sed

by a

win

ter w

eath

er s

yste

m:

"Jet

Blu

e ap

olog

izes

to c

usto

mer

s w

ho w

ere

impa

cted

by

the

ice

stor

m a

t our

hom

e ba

se o

f op

erat

ions

in N

ew Y

ork,

spe

cific

ally

at J

ohn

F. K

enne

dy In

tern

atio

nal A

irpor

t. O

f the

505

dai

ly

fligh

ts o

pera

ted

by J

etB

lue,

mor

e th

an 2

50 fl

ight

s w

ere

canc

elle

d, a

nd a

ppro

xim

atel

y 10

flig

hts

wer

e si

gnifi

cant

ly d

elay

ed a

t JFK

with

cus

tom

ers

on b

oard

. The

se fl

ight

s w

ere

a co

mbi

natio

n of

sc

hedu

led

depa

rture

s fro

m J

FK th

at w

ere

not a

ble

to ta

ke o

ff du

e to

the

ever

-cha

ngin

g w

eath

er

cond

ition

s, a

nd a

rriv

als

that

we

wer

e un

able

to m

ove

to a

gat

e w

ithin

a re

ason

able

am

ount

of t

ime,

du

e to

all

gate

s be

ing

occu

pied

.

"Thi

s re

sulte

d in

una

ccep

tabl

e de

lays

for o

ur c

usto

mer

s.

"Jet

Blu

e si

ncer

ely

apol

ogiz

es to

all

cust

omer

s im

pact

ed b

y to

day'

s w

eath

er a

nd w

ill b

e is

suin

g a

full

refu

nd a

nd a

free

roun

dtrip

flig

ht to

cus

tom

ers

dela

yed

onbo

ard

any

airc

raft

in e

xces

s of

thre

e ho

urs.

Jet

Blu

e's

cust

omer

com

mitm

ent t

eam

will

be

cont

actin

g th

ese

cust

omer

s as

soo

n as

po

ssib

le."

The

JetB

lue

logo

is a

vaila

ble

at h

ttp://

ww

w.p

rimen

ewsw

ire.c

om/n

ewsr

oom

/prs

/?pk

gid=

795

CONTACT: JetBlue Corporate Communications

(718) 709-3089

© 2

006

JetB

lue

Airw

ays

Esp

añol

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k he

reC

onta

ct u

sPriv

acy

polic

yLeg

alC

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trav

elA

bout

Jet

Blu

e

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vest

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e.co

m/p

hoen

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l?c=

1310

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p=iro

l-new

sArti

cle&

ID=9

6345

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ghlig

ht=4

/19/

2007

1:1

8:42

PM

JetB

lue

Airw

ays -

Pre

ss R

elea

ses

●O

ur c

ompa

ny

●W

hy y

ou'll

like

us

●Pr

ess

room

●Pr

omot

ions

●C

omm

unity

rela

tions

●W

ork

here

●JB

LU in

vest

or re

latio

ns❍

Sha

reho

lder

Info

rmat

ion

❍A

nnua

l Rep

orts

❍In

tera

ctiv

e A

nnua

l Rep

orts

❍Pr

ess

Rel

ease

s ❍

Aud

io A

rchi

ves

❍B

oard

of D

irect

ors

❍M

anag

emen

t❍

Ana

lyst

Cov

erag

e❍

Sto

ck Q

uote

❍S

tock

Cha

rt❍

Firs

t Cal

l Est

imat

es❍

SE

C F

iling

s❍

E-M

ail A

lerts

❍C

alen

dar o

f Eve

nts

❍In

vest

or U

pdat

e❍

Cor

pora

te G

over

nanc

e❍

FAQ

s

●C

orpo

rate

trav

el

●Sh

opB

lue

Pres

s R

elea

ses

Vie

w p

rinte

r-fri

endl

y ve

rsio

n

<<B

ack

JetB

lue

Ann

ounc

es th

e Je

tBlu

e C

usto

mer

Bill

of R

ight

sN

ew Y

ork-

Bas

ed L

ow F

are

Airl

ine

Expe

cts

to O

pera

te a

100

Per

cent

Sch

edul

e To

day

NE

W Y

OR

K, F

eb. 2

0, 2

007

(PR

IME

NE

WS

WIR

E) -

- Jet

Blu

e A

irway

s (N

asda

q:JB

LU) t

oday

an

noun

ces

a co

mpr

ehen

sive

cus

tom

er p

rom

ise

and

com

pens

atio

n pr

ogra

m c

alle

d "T

he J

etB

lue

Cus

tom

er B

ill o

f Rig

hts.

"

To v

iew

Jet

Blu

e's

Cus

tom

er B

ill o

f Rig

hts,

clic

k he

re:h

ttp://

med

ia.p

rimez

one.

com

/cac

he/2

989/

file/

3787

.pdf

Key

pro

visi

ons

of th

e Je

tBlu

e C

usto

mer

Bill

of R

ight

s ar

e be

low

, and

hav

e be

en m

ade

retro

activ

e to

Feb

. 14,

200

7:

-- JetBlue will notify customers of the following:

- Delays prior to scheduled departure

- Cancellations and their cause

- Diversions and their cause

-- JetBlue will take the necessary action to deplane customers if

an aircraft is ground-delayed for five hours. JetBlue Captains

have discretion if the aircraft is positioned and almost ready

for take-off.

-- If a flight lands and is unable to taxi in to a gate right away,

the following compensation will be made for customers:

Delayed 30-60 minutes

Customers receive a $25 voucher valid toward the purchase of

their next JetBlue flight

Delayed 1-2 hours

Customers receive a $100 voucher

Delayed 2-3 hours

Customers receive a voucher for the full amount of their

one-way fare.

Delayed more than 4 hours

Customers receive a voucher for the full amount of their

round trip.

Note: JetBlue fares are all one-way; round trip purchase is

never required.

-- If a flight has a ground delay on departure, the following

compensation applies:

Delayed 3-4 hours

Customers receive a $100 voucher

http

://in

vest

or.je

tblu

e.co

m/p

hoen

ix.z

htm

l?c=

1310

45&

p=iro

l-new

sArti

cle&

ID=9

6505

2&hi

ghlig

ht=

(1 o

f 3)4

/19/

2007

1:1

3:45

PM

JetB

lue

Airw

ays -

Pre

ss R

elea

ses

Delayed more than 4 hours

Customers receive a voucher in the full amount of the

customer's original round trip.

-- If a flight is cancelled within 12 hours of scheduled

departure, and it is a situation within the control of the

company (as opposed to weather or ATC delays), customers may

choose a full refund or a full credit, as well as a voucher

valued at the cost of their original round-trip.

-- If JetBlue delays a flight in a situation within the company's

control, customers can expect the following compensation:

Delayed 1-2 hours

Customers receive $25 voucher

Delayed 2-4 hours

Customers receive $50 voucher

Delayed 4-6 hours

Customers receive a voucher valid for the full amount of their

one-way fare.

Note: JetBlue fares are all one-way; round trip purchase is

never required.

Delayed more than 6 hours

Customers will receive a voucher for the full amount of their

round trip.

"Thi

s w

as a

big

wak

e-up

cal

l for

Jet

Blu

e," s

aid

JetB

lue

Foun

der a

nd C

EO

Dav

id N

eele

man

. "If

ther

e's

a si

lver

lini

ng, i

t is

the

fact

that

our

airl

ine

is g

oing

to b

e st

rong

er a

nd e

ven

bette

r pre

pare

d to

ser

ve o

ur c

usto

mer

s. In

add

ition

, I w

ant t

o pu

blic

ly a

polo

gize

to J

etB

lue'

s cr

ewm

embe

rs --

the

best

in th

e in

dust

ry --

and

I pr

omis

e to

get

the

right

reso

urce

s, to

ols

and

supp

ort f

or th

em g

oing

fo

rwar

d, s

o th

at th

ey in

turn

can

del

iver

the

JetB

lue

Exp

erie

nce

you

have

com

e to

exp

ect f

rom

us.

"

In a

dditi

on to

the

key

prov

isio

ns o

f the

Jet

Blu

e C

usto

mer

Bill

of R

ight

s lis

ted

abov

e, th

e ai

rline

will

fo

rm a

cus

tom

er a

dvis

ory

coun

cil,

who

will

be

cons

ulte

d w

ith re

gard

ing

ongo

ing

impr

ovem

ent

prog

ram

s.

JetB

lue

is ta

king

imm

edia

te a

ctio

ns to

add

ress

inef

ficie

ncie

s in

its

resp

onse

pla

ns. A

ctio

ns a

lread

y ta

ken

incl

ude

new

com

mun

icat

ion

stra

tegi

es w

ith in

fligh

t and

pilo

t cre

wm

embe

rs in

the

even

t of a

sy

stem

dis

rupt

ion,

so

that

the

airli

ne c

an re

set t

he o

pera

tion

fast

er, a

fter t

he e

xter

nal d

isru

ptio

n ev

ent e

nds.

Oth

er a

reas

und

er im

med

iate

revi

ew in

clud

e:

-- Cross-training non-operational crewmembers and assigning

secondary responsibilities to support the operation in the

event of a significant disruption

-- Improving functionality on jetblue.com to support customer needs

and allow JetBlue reservations and central baggage to maintain

low on-hold time for customers

-- Improving communications at the airport, so information on

available aircraft, flight crews and ground conditions is

uniformly shared and decisions based on the most reliable data

Ple

ase

visi

t ww

w.je

tblu

e.co

m/p

rom

ise

for m

ore

info

rmat

ion

and

upda

tes.

The

airli

ne w

ill h

ost a

tele

-con

fere

nce

with

new

s m

edia

that

will

be

sim

ulta

neou

sly

web

cast

. Ple

ase

liste

n vi

a: h

ttp://

w.o

n24.

com

/r.ht

m?e

=385

99&

s=1&

k=F7

8D8A

E98

0D12

A00

7E8E

CE

1955

AF4

77D

JetB

lue

Airw

ays

is fo

cuse

d on

cre

atin

g a

new

airl

ine

cate

gory

-- a

n ai

rline

that

offe

rs v

alue

, ser

vice

an

d st

yle.

Bas

ed in

New

Yor

k C

ity, a

nd n

ow in

its

seve

nth

year

, the

low

-cos

t car

rier c

urre

ntly

http

://in

vest

or.je

tblu

e.co

m/p

hoen

ix.z

htm

l?c=

1310

45&

p=iro

l-new

sArti

cle&

ID=9

6505

2&hi

ghlig

ht=

(2 o

f 3)4

/19/

2007

1:1

3:45

PM

JetB

lue

Airw

ays -

Pre

ss R

elea

ses

serv

es 5

0 de

stin

atio

ns w

ith m

ore

than

500

flig

hts

daily

. Jet

Blu

e ha

s th

e m

ost l

egro

om in

coa

ch(a

). In

add

ition

to it

s si

gnat

ure

seat

back

tele

visi

on s

ervi

ce fr

om D

IRE

CTV

(r)(

b), J

etB

lue

also

offe

rs a

se

lect

ion

of fi

rst-r

un m

ovie

s an

d bo

nus

feat

ures

from

FO

X In

Flig

ht(tm

) on

fligh

ts lo

nger

than

two

hour

s. T

he lo

w-fa

re, h

igh-

valu

e ai

rline

offe

rs c

usto

mer

s ge

nero

us b

rand

nam

e sn

acks

and

be

vera

ges,

incl

udin

g fre

shly

bre

wed

Dun

kin'

Don

uts(

r) c

offe

e, a

nd d

elic

ious

win

es s

elec

ted

by th

e ai

rline

's L

ow F

are

Som

mel

ier,

Josh

Wes

son

from

Bes

t Cel

lars

(r).

With

Jet

Blu

e, a

ll se

ats

are

assi

gned

, all

trave

l is

ticke

tless

, all

fare

s ar

e on

e-w

ay, a

nd a

n ov

erni

ght s

tay

is n

ever

requ

ired.

For

in

form

atio

n or

rese

rvat

ions

cal

l 1-8

00-J

ETB

LUE

(1-8

00-5

38-2

583)

or v

isit

ww

w.je

tblu

e.co

m.

(a) J

etB

lue

has

the

mos

t leg

room

in c

oach

, bas

ed o

n av

erag

e fle

et-w

ide

seat

pitc

h fo

r U.S

. ai

rline

s.

(b) D

IRE

CTV

(r) s

ervi

ce is

not

ava

ilabl

e on

flig

hts

outs

ide

the

cont

inen

tal U

nite

d S

tate

s; h

owev

er,

whe

re a

pplic

able

FO

X In

Flig

ht(tm

) is

offe

red

com

plim

enta

ry o

n th

ese

rout

es. F

OX

InFl

ight

(tm) i

s a

trade

mar

k of

Tw

entie

th C

entu

ry F

ox F

ilm C

orpo

ratio

n. J

etB

lue'

s in

-flig

ht e

nter

tain

men

t is

pow

ered

by

Liv

eTV

, a w

holly

ow

ned

subs

idia

ry o

f Jet

Blu

e.

The

JetB

lue

logo

is a

vaila

ble

at h

ttp://

ww

w.p

rimen

ewsw

ire.c

om/n

ewsr

oom

/prs

/?pk

gid=

795

This

pre

ss re

leas

e co

ntai

ns s

tate

men

ts o

f a fo

rwar

d-lo

okin

g na

ture

whi

ch re

pres

ent o

ur

man

agem

ent's

bel

iefs

and

ass

umpt

ions

con

cern

ing

futu

re e

vent

s. F

orw

ard-

look

ing

stat

emen

ts

invo

lve

risks

, unc

erta

intie

s an

d as

sum

ptio

ns, a

nd a

re b

ased

on

info

rmat

ion

curr

ently

ava

ilabl

e to

us

. Act

ual r

esul

ts m

ay d

iffer

mat

eria

lly fr

om th

ose

expr

esse

d in

the

forw

ard-

look

ing

stat

emen

ts

due

to m

any

fact

ors,

incl

udin

g, w

ithou

t lim

itatio

n, o

ur e

xtre

mel

y co

mpe

titiv

e in

dust

ry; i

ncre

ases

in

fuel

pric

es, m

aint

enan

ce c

osts

and

inte

rest

rate

s; o

ur a

bilit

y to

impl

emen

t our

gro

wth

stra

tegy

, in

clud

ing

the

inte

grat

ion

of th

e E

MB

RA

ER

190

airc

raft

into

our

ope

ratio

ns; o

ur s

igni

fican

t fix

ed

oblig

atio

ns; o

ur a

bilit

y to

attr

act a

nd re

tain

qua

lifie

d pe

rson

nel a

nd m

aint

ain

our c

ultu

re a

s w

e gr

ow; o

ur re

lianc

e on

hig

h da

ily a

ircra

ft ut

iliza

tion;

our

dep

ende

nce

on th

e N

ew Y

ork

met

ropo

litan

m

arke

t; ou

r rel

ianc

e on

aut

omat

ed s

yste

ms

and

tech

nolo

gy; o

ur b

eing

sub

ject

to p

oten

tial

unio

niza

tion;

our

relia

nce

on a

lim

ited

num

ber o

f sup

plie

rs; c

hang

es in

or a

dditi

onal

gov

ernm

ent

regu

latio

n; c

hang

es in

our

indu

stry

due

to o

ther

airl

ines

' fin

anci

al c

ondi

tion;

and

ext

erna

l ge

opol

itica

l eve

nts

and

cond

ition

s. F

urth

er in

form

atio

n co

ncer

ning

thes

e an

d ot

her f

acto

rs is

co

ntai

ned

in th

e C

ompa

ny's

Sec

uriti

es a

nd E

xcha

nge

Com

mis

sion

filin

gs, i

nclu

ding

but

not

lim

ited

to, t

he C

ompa

ny's

200

5 A

nnua

l Rep

ort o

n Fo

rm 1

0-K

and

Qua

rterly

Rep

orts

on

Form

10-

Q. W

e un

derta

ke n

o ob

ligat

ion

to u

pdat

e an

y fo

rwar

d-lo

okin

g st

atem

ents

to re

flect

eve

nts

or

circ

umst

ance

s th

at m

ay a

rise

afte

r the

dat

e of

this

rele

ase.

CONTACT: JetBlue

Corporate Communications

(718) 709-3089

[email protected]

www.jetblue.com

© 2

006

JetB

lue

Airw

ays

Esp

añol

Wor

k he

reC

onta

ct u

sPriv

acy

polic

yLeg

alC

orpo

rate

trav

elA

bout

Jet

Blu

e

http

://in

vest

or.je

tblu

e.co

m/p

hoen

ix.z

htm

l?c=

1310

45&

p=iro

l-new

sArti

cle&

ID=9

6505

2&hi

ghlig

ht=

(3 o

f 3)4

/19/

2007

1:1

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str

ive

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you

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ce a

s s

imp

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re

su

lt, w

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act

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u c

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Vo

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fo

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lue

in t

he

am

ou

nt

p

aid

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cu

sto

me

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e r

ou

nd

trip

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r th

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ne

wa

y

tr

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ocu

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rese

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5

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etB

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arr

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Page

s 34

thro

ugh

61 r

edac

ted

for

the

follo

win

g re

ason

s:-

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

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-(b

)(4)

Prin

t Pag

eC

lose

Win

dow

Pres

s R

elea

ses

JetB

lue

Ann

ounc

es th

e Je

tBlu

e C

usto

mer

Bill

of R

ight

sN

ew Y

ork-

Bas

ed L

ow F

are

Airl

ine

Expe

cts

to O

pera

te a

100

Per

cent

Sch

edul

e To

day

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W Y

OR

K, F

eb. 2

0, 2

007

(PR

IME

NE

WS

WIR

E) -

- Jet

Blu

e A

irway

s (N

asda

q:JB

LU) t

oday

ann

ounc

es a

com

preh

ensi

ve c

usto

mer

pro

mis

e an

d co

mpe

nsat

ion

prog

ram

cal

led

"The

Jet

Blu

e C

usto

mer

Bill

of R

ight

s."

To v

iew

Jet

Blu

e's

Cus

tom

er B

ill of

Rig

hts,

clic

k he

re:h

ttp://

med

ia.p

rimez

one.

com

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he/2

989/

file/

3787

.pdf

Key

pro

visi

ons

of th

e Je

tBlu

e C

usto

mer

Bill

of R

ight

s ar

e be

low

, and

hav

e be

en m

ade

retro

activ

e to

Feb

. 14,

200

7:

-- JetBlue will notify customers of the following:

- Delays prior to scheduled departure

- Cancellations and their cause

- Diversions and their cause

-- JetBlue will take the necessary action to deplane customers if

an aircraft is ground-delayed for five hours. JetBlue Captains

have discretion if the aircraft is positioned and almost ready

for take-off.

-- If a flight lands and is unable to taxi in to a gate right away,

the following compensation will be made for customers:

Delayed 30-60 minutes

Customers receive a $25 voucher valid toward the purchase of

their next JetBlue flight

Delayed 1-2 hours

Customers receive a $100 voucher

Delayed 2-3 hours

Customers receive a voucher for the full amount of their

one-way fare.

Delayed more than 4 hours

Customers receive a voucher for the full amount of their

round trip.

Note: JetBlue fares are all one-way; round trip purchase is

never required.

-- If a flight has a ground delay on departure, the following

compensation applies:

Delayed 3-4 hours

Customers receive a $100 voucher

Delayed more than 4 hours

Customers receive a voucher in the full amount of the

customer's original round trip.

-- If a flight is cancelled within 12 hours of scheduled

departure, and it is a situation within the control of the

company (as opposed to weather or ATC delays), customers may

choose a full refund or a full credit, as well as a voucher

valued at the cost of their original round-trip.

-- If JetBlue delays a flight in a situation within the company's

control, customers can expect the following compensation:

Delayed 1-2 hours

Customers receive $25 voucher

Delayed 2-4 hours

Customers receive $50 voucher

Page

1of

3Je

tBlu

e A

irway

s - P

ress

Rel

ease

s

8/9/

2007

http

://in

vest

or.je

tblu

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m/p

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l?c=

1310

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p=iro

l-new

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t&ID

=965

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high

light

=

Delayed 4-6 hours

Customers receive a voucher valid for the full amount of their

one-way fare.

Note: JetBlue fares are all one-way; round trip purchase is

never required.

Delayed more than 6 hours

Customers will receive a voucher for the full amount of their

round trip.

"Thi

s w

as a

big

wak

e-up

cal

l for

Jet

Blu

e," s

aid

JetB

lue

Foun

der a

nd C

EO

Dav

id N

eele

man

. "If

ther

e's

a si

lver

lini

ng, i

t is

the

fact

that

our

ai

rline

is g

oing

to b

e st

rong

er a

nd e

ven

bette

r pre

pare

d to

ser

ve o

ur c

usto

mer

s. In

add

ition

, I w

ant t

o pu

blic

ly a

polo

gize

to J

etB

lue'

s cr

ewm

embe

rs --

the

best

in th

e in

dust

ry --

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I pr

omis

e to

get

the

right

reso

urce

s, to

ols

and

supp

ort f

or th

em g

oing

forw

ard,

so

that

they

in

turn

can

del

iver

the

JetB

lue

Exp

erie

nce

you

have

com

e to

exp

ect f

rom

us.

"

In a

dditi

on to

the

key

prov

isio

ns o

f the

Jet

Blu

e C

usto

mer

Bill

of R

ight

s lis

ted

abov

e, th

e ai

rline

will

form

a c

usto

mer

adv

isor

y co

unci

l, w

ho w

ill

be c

onsu

lted

with

rega

rdin

g on

goin

g im

prov

emen

t pro

gram

s.

JetB

lue

is ta

king

imm

edia

te a

ctio

ns to

add

ress

inef

ficie

ncie

s in

its

resp

onse

pla

ns. A

ctio

ns a

lread

y ta

ken

incl

ude

new

com

mun

icat

ion

stra

tegi

es w

ith in

fligh

t and

pilo

t cre

wm

embe

rs in

the

even

t of a

sys

tem

dis

rupt

ion,

so

that

the

airli

ne c

an re

set t

he o

pera

tion

fast

er, a

fter t

he

exte

rnal

dis

rupt

ion

even

t end

s.

Oth

er a

reas

und

er im

med

iate

revi

ew in

clud

e:

-- Cross-training non-operational crewmembers and assigning

secondary responsibilities to support the operation in the

event of a significant disruption

-- Improving functionality on jetblue.com to support customer needs

and allow JetBlue reservations and central baggage to maintain

low on-hold time for customers

-- Improving communications at the airport, so information on

available aircraft, flight crews and ground conditions is

uniformly shared and decisions based on the most reliable data

Ple

ase

visi

t ww

w.je

tblu

e.co

m/p

rom

ise

for m

ore

info

rmat

ion

and

upda

tes.

The

airli

ne w

ill h

ost a

tele

-con

fere

nce

with

new

s m

edia

that

will

be

sim

ulta

neou

sly

web

cast

. Ple

ase

liste

n vi

a: h

ttp://

w.o

n24.

com

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k=F7

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JetB

lue

Airw

ays

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cuse

d on

cre

atin

g a

new

airl

ine

cate

gory

-- a

n ai

rline

that

offe

rs v

alue

, ser

vice

and

sty

le. B

ased

in N

ew Y

ork

City

, and

no

w in

its

seve

nth

year

, the

low

-cos

t car

rier c

urre

ntly

ser

ves

50 d

estin

atio

ns w

ith m

ore

than

500

flig

hts

daily

. Jet

Blu

e ha

s th

e m

ost l

egro

om in

co

ach(

a). I

n ad

ditio

n to

its

sign

atur

e se

atba

ck te

levi

sion

ser

vice

from

DIR

EC

TV(r

)(b)

, Jet

Blu

e al

so o

ffers

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elec

tion

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rst-r

un m

ovie

s an

d bo

nus

feat

ures

from

FO

X In

Flig

ht(tm

) on

fligh

ts lo

nger

than

two

hour

s. T

he lo

w-fa

re, h

igh-

valu

e ai

rline

offe

rs c

usto

mer

s ge

nero

us b

rand

na

me

snac

ks a

nd b

ever

ages

, inc

ludi

ng fr

eshl

y br

ewed

Dun

kin'

Don

uts(

r) c

offe

e, a

nd d

elic

ious

win

es s

elec

ted

by th

e ai

rline

's L

ow F

are

Som

mel

ier,

Josh

Wes

son

from

Bes

t Cel

lars

(r).

With

Jet

Blu

e, a

ll se

ats

are

assi

gned

, all

trave

l is

ticke

tless

, all

fare

s ar

e on

e-w

ay, a

nd a

n ov

erni

ght s

tay

is n

ever

requ

ired.

For

info

rmat

ion

or re

serv

atio

ns c

all 1

-800

-JE

TBLU

E (1

-800

-538

-258

3) o

r vis

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ww

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at h

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forw

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with

out

limita

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petit

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stry

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fuel

pric

es, m

aint

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ce c

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inte

rest

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bilit

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impl

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gr

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ludi

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EMBR

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airc

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into

our

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ratio

ns; o

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ed o

blig

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ur a

bilit

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at

tract

and

reta

in q

ualif

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pers

onne

l and

mai

ntai

n ou

r cul

ture

as

we

grow

; our

relia

nce

on h

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daily

airc

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utili

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ur d

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denc

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th

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met

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bei

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con

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Com

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ludi

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ut n

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Com

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Ann

ual R

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Form

10 -

K an

d Q

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n Fo

rm 1

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unde

rtake

no

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upd

ate

any

forw

ard-

look

ing

stat

emen

ts to

refle

ct e

vent

s or

circ

umst

ance

s

Page

2of

3Je

tBlu

e A

irway

s - P

ress

Rel

ease

s

8/9/

2007

http

://in

vest

or.je

tblu

e.co

m/p

hoen

ix.z

htm

l?c=

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p=iro

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high

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that

may

aris

e af

ter t

he d

ate

of th

is re

leas

e.

CONTACT: JetBlue

cations

[email protected]

www.jetblue.com

Page

3of

3Je

tBlu

e A

irway

s - P

ress

Rel

ease

s

8/9/

2007

http

://in

vest

or.je

tblu

e.co

m/p

hoen

ix.z

htm

l?c=

1310

45&

p=iro

l-new

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=965

052&

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light

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(b)(

6)

Dea

rF

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We

face

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chal

leng

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2006

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spir

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true

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orig

inal

mis

sion

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man

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toai

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back

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inue

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way

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enha

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Cos

tR

educ

tion

s

Our

Ret

urn

toP

rofit

abili

typl

anhe

lped

usre

focu

son

low

-cos

tca

rrie

rsp

endi

ngha

bits

.For

exam

ple,

we

impl

emen

ted

seve

ral

init

iati

ves

toco

nser

vefu

elan

dim

prov

efu

elef

ficie

ncy,

incl

udin

gin

crea

sed

use

ofsi

ngle

-eng

ine

taxi

and

grou

ndpo

wer

.We

also

mad

ea

conc

erte

def

fort

toin

crea

sepr

oduc

tivi

ty.

Our

crew

mem

bers

met

the

chal

leng

eof

wor

king

smar

ter

and

we

ende

dth

eye

arw

ith

78fu

ll-ti

me

equi

vale

ntem

ploy

ees,

orF

TE

s,pe

rai

rcra

ft.T

his

sign

ifica

ntly

exce

eded

our

init

ial

year

-end

2007

targ

etof

80F

TE

spe

rai

rcra

ft.A

ddit

iona

lly,t

hrou

ghth

eha

rdw

ork

ofou

rcr

ewm

embe

rs,w

ere

duce

dou

rst

age

leng

thad

just

edop

erat

ing

cost

per

avai

labl

ese

atm

ile(e

xclu

ding

fuel

)1.

4pe

rcen

tye

ar-o

ver-

year

asw

eco

ntin

ued

todr

ive

effic

ienc

yac

ross

our

airl

ine.

AL

ook

Ahe

ad

In20

07,w

ein

stit

utio

naliz

edth

esp

irit

ofou

rR

etur

nto

Pro

fitab

ility

plan

into

our

annu

alop

erat

ing

plan

.In

doin

gso

,we

impl

emen

ted

anon

goin

gco

mm

itm

ent

tolo

w-c

ost

carr

ier

spen

ding

habi

ts,a

mod

erat

edgr

owth

plan

,and

reve

nue

opti

miz

atio

n,al

lw

hile

mai

ntai

ning

our

stro

ngan

dvi

bran

tse

rvic

e-or

ient

edcu

ltur

ean

dde

liver

ingThe

JetB

lueExp

erienc

eto

23m

illio

ncu

stom

ers

this

year

.

We

have

mor

ew

ork

todo

,but

we

are

plea

sed

wit

hth

edi

rect

ion

inw

hich

we

are

head

ed.G

oing

forw

ard,

we

com

mit

toyo

uth

atJe

tBlu

ew

illco

ntin

ueit

sfo

cus

onfin

anci

aldi

scip

line,

oper

atio

nal

relia

bilit

yan

dcu

stom

eran

dcr

ewm

embe

rsa

tisf

acti

on.T

heac

tion

sw

eta

keto

day

dete

rmin

eou

rfu

ture

.The

hard

wor

kan

dde

dica

tion

ofou

rcr

ewm

embe

rsw

illke

epJe

tBlu

ea

diff

eren

tki

ndof

airl

ine.

We

belie

vew

eha

veth

ebe

stcr

ewm

embe

rs,s

ervi

cean

dpr

oduc

tin

the

skie

san

dw

ear

eex

cite

dab

out

the

futu

re.W

eal

sobe

lieve

we

have

the

righ

tpl

anin

plac

eto

cont

inue

togr

owpr

ofita

bly,

impr

ove

our

oper

atio

nal

and

finan

cial

heal

than

dfu

rthe

rst

reng

then

our

com

peti

tive

posi

tion

.

On

beha

lfof

our

11,0

00de

dica

ted

crew

mem

bers

,we

than

kyo

ufo

ryo

urco

ntin

ued

supp

ort.

Mos

tSi

ncer

ely,

Dav

idN

eele

man

Cha

irm

anan

dC

hief

Exe

cuti

veO

ffice

r

Dav

eB

arge

rP

resi

dent

ITE

M1.

BU

SIN

ESS

Ove

rvie

w

JetB

lue

Air

way

sC

orpo

rati

on,o

rJe

tBlu

e,is

alo

w-c

ost

pass

enge

rai

rlin

eth

atpr

ovid

eshi

ghqu

alit

ycu

stom

erse

rvic

eat

low

fare

spr

imar

ilyon

poin

t-to

-poi

ntro

utes

.As

ofF

ebru

ary

14,2

007,

we

oper

ated

ato

tal

of50

2da

ilyfli

ghts

.We

focu

son

serv

ing

mar

kets

that

have

had

high

aver

age

fare

s.W

ecu

rren

tly

serv

e50

dest

inat

ions

in21

stat

es,P

uert

oR

ico,

Mex

ico

and

the

Car

ibbe

an,w

ith

98%

ofou

rfli

ghts

havi

ngas

anor

igin

orde

stin

atio

non

eof

our

four

focu

sci

ties

:New

Yor

k,L

osA

ngel

es(L

ong

Bea

ch/B

urba

nk),

Bos

ton

orW

ashi

ngto

n,D

.C.F

orth

eye

aren

ded

Dec

embe

r31

,200

6,Je

tBlu

ew

asth

e8t

hla

rges

tpa

ssen

ger

carr

ier

inth

eU

nite

dSt

ates

base

don

reve

nue

pass

enge

rm

iles.

We

had

ane

tlo

ssof

$1m

illio

nan

d$2

0m

illio

nfo

rth

eye

ars

ende

dD

ecem

ber

31,2

006

and

2005

,re

spec

tive

ly.W

ege

nera

ted

oper

atin

gm

argi

nsof

5.4%

in20

06an

d2.

8%in

2005

,whi

chw

ere

the

thir

dan

dse

cond

high

est

oper

atin

gm

argi

ns,r

espe

ctfu

lly,a

mon

gal

ltr

adit

iona

lne

twor

kan

dlo

w-c

ost

maj

orU

.S.a

irlin

es.A

ltho

ugh

this

was

our

seco

ndco

nsec

utiv

eye

arof

loss

es,w

hich

resu

lted

prim

arily

from

cont

inue

dre

cord

high

fuel

pric

es,d

urin

g20

06w

ein

trod

uced

init

iati

ves

tore

duce

fuel

cons

umpt

ion

thro

ugh

mor

efu

elef

ficie

ntop

erat

ing

prac

tice

s,re

new

edou

rfo

cus

onlo

w-c

ost

carr

ier

spen

ding

habi

tsan

dim

plem

ente

dm

ore

effic

ient

staf

fing

inal

las

pect

sof

our

busi

ness

.We

also

mod

ified

our

reve

nue

man

agem

ent

prac

tice

sto

pric

eou

rin

vent

ory

toac

hiev

ea

high

eryi

eld

whi

lere

linqu

ishi

ngso

me

ofou

rlo

adfa

ctor

(the

perc

enta

geof

airc

raft

seat

ing

capa

city

actu

ally

utili

zed)

.As

are

sult

,our

load

fact

orde

crea

sed

3.6

poin

tsto

81.6

%du

ring

2006

,whi

chw

asst

illhi

gher

than

all

but

two

ofth

em

ajor

U.S

.ai

rlin

es,w

hose

wei

ghte

dav

erag

elo

adfa

ctor

was

79.2

%.I

n20

06,w

eat

tain

edth

ehi

ghes

tco

mpl

etio

nfa

ctor

and

few

est

inci

dent

sof

dela

yed,

mis

hand

led

orlo

stba

gsam

ong

all

maj

orU

.S.a

irlin

es.W

ear

eco

mm

itte

dto

oper

atin

gou

rsc

hedu

led

fligh

tsw

hene

ver

poss

ible

;how

ever

,thi

sco

mm

itm

ent

tocu

stom

erse

rvic

e,al

ong

wit

hop

erat

ing

atth

ree

ofth

em

ost

cong

este

dan

dde

lay-

pron

edo

mes

tic

airp

orts

,con

trib

uted

toa

72.9

%on

-tim

epe

rfor

man

cein

2006

,whi

chw

aslo

wer

than

all

but

one

maj

orU

.S.a

irlin

e.

As

are

sult

ofou

rlo

wco

sts,

we

are

able

toof

fer

low

fare

sde

sign

edto

stim

ulat

ede

man

din

our

mar

kets

,whi

chw

eha

vede

mon

stra

ted

thro

ugh

our

abili

tyto

incr

ease

pass

enge

rtr

affic

inth

em

arke

tsw

ese

rve.

The

effic

ient

sche

dulin

gan

dop

erat

ion

ofou

rai

rcra

ftan

dlo

wdi

stri

buti

onco

sts

cont

ribu

teto

our

low

oper

atin

gco

sts.

We

have

afle

xibl

ew

orkf

orce

that

stri

ves

toof

fer

high

qual

ity

cust

omer

serv

ice,

whi

leat

the

sam

eti

me

oper

atin

gef

ficie

ntly

.We

offe

rou

rcu

stom

ers

ahi

ghqu

alit

ypr

oduc

t,in

clud

ing

new

airc

raft

,roo

my

leat

her

seat

s,re

liabl

eop

erat

ing

perf

orm

ance

,36

chan

nels

offr

eeL

iveT

V(a

sate

llite

TV

serv

ice

wit

hpr

ogra

mm

ing

prov

ided

byD

IRE

CT

),m

ovie

sele

ctio

nsfr

omF

OX

InF

light

atev

ery

seat

and

100

chan

nels

offr

eeX

MSa

telli

teR

adio

.We

are

sche

dule

dto

add

80ne

wA

irbu

sA

320

airc

raft

and

78E

MB

RA

ER

190

airc

raft

toou

rcu

rren

top

erat

ing

fleet

of98

Air

bus

A32

0an

d23

EM

BR

AE

R19

0ai

rcra

ftby

the

end

of20

14.

JetB

lue

was

inco

rpor

ated

inD

elaw

are

inA

ugus

t19

98an

dco

mm

ence

dse

rvic

ein

Feb

ruar

y20

00.

Our

prin

cipa

lex

ecut

ive

offic

esar

elo

cate

dat

118-

29Q

ueen

sB

oule

vard

,For

est

Hill

s,N

ewY

ork

1137

5an

dou

rte

leph

one

num

ber

is(7

18)

286-

7900

.Our

filin

gsw

ith

the

Secu

riti

esan

dE

xcha

nge

Com

mis

sion

,or

the

SEC

,are

acce

ssib

lefr

eeof

char

geat

our

web

site

http://inve

stor.je

tblue.co

m.

Info

rmat

ion

cont

aine

don

our

web

site

isno

tin

corp

orat

edby

refe

renc

ein

this

repo

rt.A

sus

edin

this

For

m10

-K,t

hete

rms

‘‘Jet

Blu

e’’,

‘‘we’

’,‘‘u

s’’,

‘‘our

’’an

dsi

mila

rte

rms

refe

rto

JetB

lue

Air

way

sC

orpo

rati

onan

dit

ssu

bsid

iari

es,u

nles

sth

eco

ntex

tin

dica

tes

othe

rwis

e.

1

Our

Stra

tegy

Our

goal

isto

esta

blis

hJe

tBlu

eas

ahi

ghqu

alit

y,lo

w-f

are,

low

-cos

tpa

ssen

ger

airl

ine.

We

inte

ndto

mai

ntai

na

grow

thpl

anth

atta

kes

adva

ntag

eof

our

com

peti

tive

stre

ngth

s.T

heke

yel

emen

tsof

our

stra

tegy

are:

Stim

ulat

eD

eman

dw

ith

Low

Far

es.

Our

low

fare

sar

ede

sign

edto

stim

ulat

ede

man

d,pa

rtic

ular

lyfr

omfa

re-c

onsc

ious

leis

ure

and

busi

ness

trav

eler

sw

hom

ight

othe

rwis

eha

veus

edal

tern

ativ

efo

rms

oftr

ansp

orta

tion

orw

ould

not

have

trav

eled

atal

l.W

ear

eus

ing

our

new

100-

seat

EM

BR

AE

R19

0ai

rcra

ft,f

orw

hich

we

wer

eth

ela

unch

cust

omer

in20

05,t

ost

imul

ate

dem

and

inm

any

mid

-siz

edm

arke

tsan

dto

furt

her

incr

ease

the

freq

uenc

yof

fligh

tson

our

exis

ting

rout

es.

Inco

nsid

erin

gne

wm

arke

ts,w

efo

cus

onth

ose

that

have

high

aver

age

fare

s.In

this

proc

ess,

we

anal

yze

publ

icly

avai

labl

eda

tafr

omth

eU

.S.D

epar

tmen

tof

Tra

nspo

rtat

ion,

orD

OT,

show

ing

the

hist

oric

alnu

mbe

rof

pass

enge

rs,c

apac

ity

and

aver

age

fare

sov

erti

me.

Usi

ngth

isda

ta,c

ombi

ned

wit

hou

rkn

owle

dge

and

expe

rien

ceab

out

how

com

para

ble

mar

kets

have

reac

ted

inth

epa

stw

hen

pric

esw

ere

incr

ease

dor

decr

ease

d,w

efo

reca

stth

ele

vel

ofde

man

din

apa

rtic

ular

mar

ket

expe

cted

tore

sult

from

the

intr

oduc

tion

ofou

rse

rvic

ean

dlo

wer

pric

es,a

sw

ell

asth

ean

tici

pate

dre

spon

seof

exis

ting

airl

ines

inth

atm

arke

t.

Com

mit

men

tto

Low

Cos

ts.

Our

low

cost

sha

veal

low

edus

toof

fer

fare

slo

wen

ough

tost

imul

ate

new

dem

and

and

toat

trac

tcu

stom

ers

away

from

high

er-p

rice

dco

mpe

tito

rs.W

eex

pect

toco

ntin

ueto

aggr

essi

vely

cont

rol

cost

san

dm

aint

ain

our

focu

son

low

-cos

tca

rrie

rsp

endi

ngha

bits

.

Off

erH

igh

Qua

lity

Serv

ice

and

Pro

duct

.W

ebe

lieve

that

ake

yel

emen

tof

our

curr

ent

and

long

-ter

msu

cces

sis

that

,in

addi

tion

toof

feri

nglo

wfa

res,

we

offe

rcu

stom

ers

abe

tter

alte

rnat

ive

for

air

trav

el.O

nboa

rdJe

tBlu

e,cu

stom

ers

enjo

ya

dist

inct

ive

flyin

gex

peri

ence

,whi

chw

ere

fer

toas

the

‘‘Jet

Blu

eE

xper

ienc

e’’,

that

incl

udes

frie

ndly

,cus

tom

erse

rvic

e-or

ient

edem

ploy

ees,

new

airc

raft

,roo

my

leat

her

seat

sw

ith

36ch

anne

lsof

free

Liv

eTV

,100

chan

nels

offr

eeX

Msa

telli

tera

dio

and

mov

iech

anne

lof

feri

ngs

from

FO

XIn

Flig

ht.O

uron

boar

dof

feri

ngs

incl

ude

gene

rous

bran

dna

me

snac

ks,

prem

ium

beve

rage

san

dsp

ecia

llyde

sign

edpr

oduc

tsfo

rou

rov

erni

ght

fligh

ts.B

ased

oncu

stom

erfe

edba

ck,w

ebe

lieve

that

the

JetB

lue

Exp

erie

nce

isan

impo

rtan

tre

ason

why

our

cust

omer

sch

oose

usov

erot

her

airl

ines

.

We

stri

veto

com

mun

icat

eop

enly

and

hone

stly

wit

hcu

stom

ers

abou

tde

lays

,esp

ecia

llyw

hen

wea

ther

orm

echa

nica

lpr

oble

ms

disr

upt

serv

ice.

We

dono

tca

ncel

fligh

ts,u

nles

sab

solu

tely

nece

ssar

y,in

orde

rto

fulfi

llou

rco

mm

itm

ent

ofge

ttin

gcu

stom

ers

toth

eir

dest

inat

ion

even

ifit

mea

nsge

ttin

gth

emth

ere

late

.In

2006

,we

com

plet

ed99

.6%

ofou

rsc

hedu

led

fligh

ts,t

hehi

ghes

tpe

rcen

tage

ofan

ym

ajor

airl

ine.

Unl

ike

mos

tot

her

airl

ines

,we

have

apo

licy

ofno

tov

erbo

okin

gou

rfli

ghts

.

All

ofou

rai

rcra

ftar

eeq

uipp

edw

ith

leat

her

seat

sin

aco

mfo

rtab

lesi

ngle

clas

sla

yout

.The

Air

bus

A32

0ai

rcra

ftha

sa

wid

erca

bin

than

both

the

Boe

ing

737

and

757,

two

com

para

ble

type

sof

airc

raft

oper

ated

bym

any

ofou

rco

mpe

tito

rs.T

heE

MB

RA

ER

190

airc

raft

has

100

seat

sth

atar

ew

ider

than

thos

ecu

rren

tly

inus

ein

our

Air

bus

A32

0ai

rcra

ft,a

rran

ged

ina

two-

by-t

wo

seat

ing

confi

gura

tion

wit

hei

ther

32or

33in

ches

betw

een

row

sof

seat

s.W

eco

ntin

ually

sear

chfo

rw

ays

toim

prov

eou

rpr

oduc

t.In

anef

fort

toin

crea

secu

stom

erco

mfo

rt,i

nJa

nuar

y20

07,w

ebe

gan

tore

mov

eon

ero

wof

seat

sfr

omou

rA

irbu

sA

320

airc

raft

,whi

chw

illre

duce

the

tota

lnu

mbe

rof

seat

sto

150

from

156.

The

reco

nfigu

red

cabi

nw

illha

veat

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thei

rhu

bsan

da

smal

ler

outl

ying

city

.The

rear

ecu

rren

tly

five

regi

onal

maj

orU

.S.a

irlin

es.

4

Low

-cos

tai

rlin

esla

rgel

yde

velo

ped

inth

ew

ake

ofde

regu

lati

onof

the

U.S

.air

line

indu

stry

in19

78,w

hich

perm

itte

dco

mpe

titi

onon

man

yro

utes

for

the

first

tim

e.So

uthw

est

Air

lines

pion

eere

dth

elo

w-c

ost

mod

el,w

hich

enab

led

them

toof

fer

fare

sth

atw

ere

sign

ifica

ntly

low

erth

anth

ose

char

ged

bytr

adit

iona

lne

twor

kai

rlin

es.I

nclu

ding

JetB

lue,

ther

ear

ecu

rren

tly

four

low

-cos

tm

ajor

U.S

.air

lines

.

Fol

low

ing

the

Sept

embe

r11

,200

1te

rror

ist

atta

cks,

low

-cos

tai

rlin

esw

ere

able

tofil

la

sign

ifica

ntca

paci

tyvo

idle

ftby

trad

itio

nal

netw

ork

airl

ine

capa

city

redu

ctio

ns.L

ower

fare

san

din

crea

sed

low

-cos

tai

rlin

eca

paci

tycr

eate

dan

unpr

ofita

ble

oper

atin

gen

viro

nmen

tfo

rth

etr

adit

iona

lne

twor

kai

rlin

es.S

ince

2001

,the

maj

orit

yof

trad

itio

nal

netw

ork

airl

ines

have

unde

rgon

esi

gnifi

cant

finan

cial

rest

ruct

urin

g,in

clud

ing

bank

rupt

cies

,mer

gers

and

cons

olid

atio

ns.T

hese

rest

ruct

urin

gsha

veal

low

edth

emto

redu

cela

bor

cost

s,re

stru

ctur

ede

bt,t

erm

inat

epe

nsio

npl

ans

and

gene

rally

redu

ceth

eir

cost

stru

ctur

e,in

crea

sew

orkf

orce

flexi

bilit

yan

dpr

ovid

ein

nova

tive

offe

ring

ssi

mila

rto

thos

eof

the

low

-cos

tai

rlin

es,w

hile

still

mai

ntai

ning

thei

rex

pans

ive

rout

ene

twor

ks,a

llian

ces

and

freq

uent

flier

prog

ram

s.A

ltho

ugh

our

cost

sre

mai

nlo

wer

than

thos

eof

our

larg

est

com

peti

tors

,the

gap

betw

een

low

-cos

tai

rlin

esan

dtr

adit

iona

lne

twor

kai

rlin

esha

sdi

min

ishe

d.

Com

peti

tion

The

airl

ine

indu

stry

ishi

ghly

com

peti

tive

.Air

line

profi

tsar

ese

nsit

ive

toev

ensl

ight

chan

ges

infu

elco

sts,

aver

age

fare

leve

lsan

dpa

ssen

ger

dem

and.

Pas

seng

erde

man

dan

dfa

rele

vels

hist

oric

ally

have

been

influ

ence

dby

,am

ong

othe

rth

ings

,the

gene

ral

stat

eof

the

econ

omy,

inte

rnat

iona

lev

ents

,in

dust

ryca

paci

tyan

dpr

icin

gac

tion

sta

ken

byot

her

airl

ines

.The

prin

cipa

lco

mpe

titi

vefa

ctor

sin

the

airl

ine

indu

stry

are

fare

pric

ing,

cust

omer

serv

ice,

rout

esse

rved

,flig

htsc

hedu

les,

type

sof

airc

raft

,sa

fety

reco

rdan

dre

puta

tion

,cod

e-sh

arin

gre

lati

onsh

ips,

capa

city

,in-

fligh

ten

tert

ainm

ent

syst

ems

and

freq

uent

flyer

prog

ram

s.In

addi

tion

,the

mig

rati

onof

fare

-con

scio

ustr

avel

ers

away

from

trad

itio

nal

netw

ork

airl

ines

and

thei

rde

teri

orat

ing

mar

ket

shar

eha

sfo

rced

som

eof

thes

eai

rlin

esto

unde

rtak

ebr

oad

cost

-cut

ting

mea

sure

san

dto

reev

alua

teth

eir

basi

cbu

sine

ssm

odel

s.

Our

com

peti

tors

and

pote

ntia

lco

mpe

tito

rsin

clud

etr

adit

iona

lne

twor

kai

rlin

es,l

ow-c

ost

airl

ines

,re

gion

alai

rlin

esan

dne

wen

tran

tai

rlin

es.S

even

ofth

eot

her

maj

orU

.S.a

irlin

esar

ege

nera

llyla

rger

,ha

vegr

eate

rfin

anci

alre

sour

ces

and

serv

em

ore

rout

esth

anw

edo

.Our

com

peti

tors

also

use

som

eof

the

sam

ead

vanc

edte

chno

logi

esth

atw

edo

,suc

has

tick

etle

sstr

avel

,lap

top

com

pute

rsin

the

cock

pit

and

web

site

book

ings

.Sin

cede

regu

lati

onof

the

airl

ine

indu

stry

in19

78,t

here

has

been

cons

olid

atio

nin

the

dom

esti

cai

rlin

ein

dust

ry.I

n20

05an

d20

06,t

heU

.S.a

irlin

ein

dust

ryex

peri

ence

dfu

rthe

rco

nsol

idat

ion

and

ther

ew

ere

repo

rts

ofot

her

pote

ntia

lco

nsol

idat

ion

inth

efo

urth

quar

ter

of20

06.

Fur

ther

indu

stry

cons

olid

atio

nsor

rest

ruct

urin

gsco

uld

resu

ltin

our

com

peti

tors

havi

nga

mor

era

tion

aliz

edro

ute

stru

ctur

ean

dlo

wer

oper

atin

gco

sts,

whi

chco

uld

enab

leth

emto

com

pete

mor

eag

gres

sive

ly.

Pri

ceco

mpe

titi

onoc

curs

thro

ugh

pric

edi

scou

ntin

g,fa

rem

atch

ing,

incr

ease

dca

paci

ty,t

arge

ted

sale

prom

otio

nsan

dfr

eque

ntfly

ertr

avel

init

iati

ves,

all

ofw

hich

are

usua

llym

atch

edby

othe

rai

rlin

esin

orde

rto

mai

ntai

nth

eir

shar

eof

pass

enge

rtr

affic

.Are

lati

vely

smal

lch

ange

inpr

icin

gor

inpa

ssen

ger

traf

ficco

uld

have

adi

spro

port

iona

teef

fect

onan

airl

ine’

sop

erat

ing

and

finan

cial

resu

lts.

Our

abili

tyto

mee

tth

ispr

ice

com

peti

tion

depe

nds

on,a

mon

got

her

thin

gs,o

urab

ility

toop

erat

eat

cost

seq

ual

toor

low

erth

anou

rco

mpe

tito

rs.A

llot

her

fact

ors

bein

geq

ual,

we

belie

vecu

stom

ers

ofte

npr

efer

JetB

lue

and

the

JetB

lue

Exp

erie

nce.

Dur

ing

2006

,mos

ttr

adit

iona

lne

twor

kai

rlin

esin

crea

sed

capa

city

onth

eir

inte

rnat

iona

lro

utes

and

decr

ease

ddo

mes

tic

capa

city

.Dur

ing

the

sam

epe

riod

,som

eof

our

com

peti

tors

,not

ably

Del

taA

irL

ines

and

its

disc

onti

nued

low

-far

eop

erat

ion,

Song

,shi

fted

som

eof

thei

rdo

mes

tic

capa

city

out

ofm

arke

tsw

here

they

had

com

pete

ddi

rect

lyw

ith

us.T

hese

deve

lopm

ents

,in

conj

unct

ion

wit

hou

rsh

ift

ofca

paci

tyfr

omtr

ansc

onti

nent

alfli

ghts

tosh

ort-

and

med

ium

-hau

lro

utes

,res

ulte

din

our

achi

evin

ghi

gher

yiel

dson

our

fligh

ts.A

ltho

ugh

we

expe

rien

ced

impr

oved

yiel

dsin

2006

,we

anti

cipa

teth

eex

trem

ely

com

peti

tive

natu

reof

the

indu

stry

toco

ntin

ue.

Air

lines

also

freq

uent

lypa

rtic

ipat

ein

mar

keti

ngal

lianc

es,w

hich

gene

rally

prov

ide

for

code

-sha

ring

,fre

quen

tfly

erpr

ogra

mre

cipr

ocit

y,co

ordi

nate

dfli

ght

sche

dule

sth

atpr

ovid

efo

rco

nven

ient

conn

ecti

ons

and

othe

rjo

int

mar

keti

ngac

tivi

ties

.The

seal

lianc

esal

sope

rmit

anai

rlin

eto

5

mar

ket

fligh

tsop

erat

edby

othe

ral

lianc

eai

rlin

esas

its

own.

The

bene

fits

ofbr

oad

netw

orks

offe

red

tocu

stom

ers

coul

dat

trac

tm

ore

cust

omer

sto

thes

ene

twor

ks.W

edo

not

curr

entl

ypa

rtic

ipat

ein

any

mar

keti

ngal

lianc

es,i

nter

line

orof

fer

join

tfa

res

wit

hot

her

airl

ines

,nor

dow

eha

vean

yco

mm

uter

feed

erre

lati

onsh

ips,

othe

rth

anou

rre

cent

anno

unce

men

tto

part

ner

wit

hC

ape

Air

,an

airl

ine

that

serv

esde

stin

atio

nsou

tof

Bos

ton

and

San

Juan

,Pue

rto

Ric

o.W

epl

anto

purs

ueot

her

allia

nces

wit

hin

tern

atio

nal

airl

ines

tole

vera

geou

rpr

esen

ceat

JFK

.

Rou

teN

etw

ork

Our

oper

atio

nspr

imar

ilyco

nsis

tof

tran

spor

ting

pass

enge

rson

our

airc

raft

,wit

hdo

mes

tic

U.S

.op

erat

ions

,inc

ludi

ngP

uert

oR

ico,

acco

unti

ngfo

r97

.1%

ofou

rca

paci

tyin

2006

.The

dist

ribu

tion

ofou

rav

aila

ble

seat

mile

s,or

capa

city

,by

regi

onis

:

Yea

rE

nded

Dec

embe

r31

,

Cap

acit

yD

istr

ibut

ion

2006

2005

2004

Eas

tC

oast

—W

este

rnU

.S..

....

....

....

....

....

....

51.7

%55

.1%

55.1

%N

orth

east

—F

lori

da..

....

....

....

....

....

....

....

.31

.833

.532

.7M

ediu

m—

haul

....

....

....

....

....

....

....

....

...

1.3

1.1

1.2

Shor

t—ha

ul..

....

....

....

....

....

....

....

....

...

6.6

3.9

4.5

Car

ibbe

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nclu

ding

Pue

rto

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o..

....

....

....

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8.6

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Tot

al..

....

....

....

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.10

0.0%

100.

0%10

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We

curr

entl

ypr

ovid

ese

rvic

eto

50de

stin

atio

nsin

21st

ates

,Pue

rto

Ric

o,M

exic

oan

dth

eC

arib

bean

.We

bega

nse

rvic

eto

17ne

wde

stin

atio

nssi

nce

Dec

embe

r31

,200

5,as

set

fort

hin

the

follo

win

gta

ble: D

esti

nati

onSe

rvic

eC

omm

ence

d

Aus

tin,

Tex

asJa

nuar

y20

06R

ichm

ond,

Vir

gini

aM

arch

2006

Ham

ilton

,Ber

mud

aM

ay20

06P

ortl

and,

Mai

neM

ay20

06Ja

ckso

nvill

e,F

lori

daJu

ne20

06P

itts

burg

h,P

enns

ylva

nia

June

2006

Cha

rlot

te,N

orth

Car

olin

aJu

ly20

06R

alei

gh-D

urha

m,N

orth

Car

olin

aJu

ly20

06N

ashv

ille,

Ten

ness

eeA

ugus

t20

06H

oust

on,T

exas

Sept

embe

r20

06O

ranj

esta

d,A

ruba

Sept

embe

r20

06Sa

raso

taB

rade

nton

,Flo

rida

Sept

embe

r20

06T

ucso

n,A

rizo

naSe

ptem

ber

2006

Col

umbu

s,O

hio

Oct

ober

2006

Can

cun,

Mex

ico

Nov

embe

r20

06N

ewbu

rgh,

New

Yor

kD

ecem

ber

2006

Chi

cago

,Illi

nois

Janu

ary

2007

InM

arch

2007

,we

plan

toco

mm

ence

serv

ice

from

Wes

tche

ster

Cou

nty

Air

port

inW

hite

Pla

ins,

New

Yor

kto

Flo

rida

and,

inM

ay20

07,w

epl

anto

com

men

cese

rvic

efr

omJF

Kto

San

Fra

ncis

coIn

tern

atio

nal

Air

port

.We

are

JFK

’sla

rges

tai

rlin

eba

sed

onto

tal

pass

enge

rsca

rrie

dan

dw

ear

eth

ele

adin

gca

rrie

rin

num

ber

offli

ghts

flow

npe

rda

ybe

twee

nth

eN

ewY

ork

met

ropo

litan

area

and

Flo

rida

.

6

Hig

hQ

ualit

yC

usto

mer

Serv

ice

We

devo

tea

grea

tde

alof

tim

ean

dat

tent

ion

tohi

ring

empl

oyee

sw

how

illtr

eat

cust

omer

sin

afr

iend

lyan

dre

spec

tful

man

ner.

The

impo

rtan

ceof

prov

idin

gca

ring

cust

omer

serv

ice

isem

phas

ized

intr

aini

ng.I

nad

diti

on,o

urpo

licie

san

dpr

oced

ures

are

desi

gned

tobe

cust

omer

-fri

endl

yan

din

clud

e:

•al

lse

ats

are

pre-

assi

gned

;

•al

ltr

avel

isti

cket

less

,usi

ngel

ectr

onic

tick

ets;

•ou

rpo

licy

isno

tto

over

book

fligh

ts;

•fa

res

are

base

don

one-

way

trav

el;

•no

Satu

rday

nigh

tst

ayis

requ

ired

;and

•ch

ange

fees

are

only

$30

per

pass

enge

r($

25if

done

thro

ugh

our

web

site

)co

mpa

red

wit

hth

e$5

0to

$100

usua

llych

arge

dby

othe

rm

ajor

U.S

.air

lines

.

Our

cust

omer

com

mit

men

tis

also

dem

onst

rate

dby

our

relia

ble

oper

atio

nal

perf

orm

ance

.For

the

year

ende

dD

ecem

ber

31,2

006,

base

don

our

data

com

pare

dto

the

othe

rm

ajor

U.S

.air

lines

:

•be

caus

ew

eha

vea

polic

yof

not

over

book

ing

our

fligh

ts,w

eha

dvi

rtua

llyno

inci

denc

esof

pass

enge

rde

nied

boar

ding

and,

ther

efor

e,le

dth

ein

dust

ryin

this

DO

Tm

etri

c;

•ou

rco

mpl

etio

nfa

ctor

of99

.6%

was

the

high

est

asco

mpa

red

toot

her

maj

orU

.S.a

irlin

es,

whi

chha

dan

aver

age

com

plet

ion

fact

orof

98.3

%,a

ccor

ding

toth

eD

OT.

We

are

com

mit

ted

toop

erat

ing

fligh

tsw

hene

ver

poss

ible

and

not

canc

elin

g;ho

wev

er,o

urco

mm

itm

ent

tocu

stom

erse

rvic

e,al

ong

wit

hop

erat

ing

atth

ree

ofth

em

ost

cong

este

dan

dde

lay-

pron

eai

rpor

tsin

the

U.S

.(N

ewar

k,L

aGua

rdia

and

JFK

),ha

saf

fect

edou

ron

-tim

epe

rfor

man

ce,

whi

chat

72.9

%w

aslo

wer

than

all

but

one

maj

orU

.S.a

irlin

e;

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rin

cide

nce

ofde

laye

d,m

isha

ndle

dor

lost

bags

of4.

09pe

r1,

000

cust

omer

sw

asth

elo

wes

tas

com

pare

dto

othe

rm

ajor

U.S

.air

lines

,whi

chha

dan

aver

age

of6.

86de

laye

d,m

isha

ndle

dor

lost

bags

per

1,00

0cu

stom

ers,

acco

rdin

gto

the

DO

T;a

nd

•ou

rra

teof

cust

omer

com

plai

nts

toth

eD

OT

per

100,

000

pass

enge

rsof

0.40

was

the

thir

dlo

wes

tas

com

pare

dto

the

othe

rm

ajor

U.S

.air

lines

,whi

chha

dan

aver

age

of0.

88co

mpl

aint

s,ac

cord

ing

toth

eD

OT.

Safe

tyan

dSe

curi

ty

We

are

dedi

cate

dto

ensu

ring

the

safe

tyan

dse

curi

tyof

our

cust

omer

san

dem

ploy

ees.

We

have

take

nnu

mer

ous

mea

sure

s,vo

lunt

arily

and

asre

quir

edby

regu

lato

ryau

thor

itie

s,to

incr

ease

both

the

safe

tyan

dse

curi

tyof

our

oper

atio

ns.

Our

ongo

ing

focu

son

safe

tyre

lies

onhi

ring

the

best

peop

le,t

rain

ing

them

toap

plic

able

stan

dard

s,an

dpr

ovid

ing

them

wit

hth

em

ost

adva

nced

tool

san

deq

uipm

ent.

Safe

tyin

the

wor

kpla

ceta

rget

sfiv

ear

eas

ofou

rop

erat

ion:

fligh

top

erat

ions

,mai

nten

ance

,infl

ight

,dis

patc

han

dcu

stom

erse

rvic

e.W

eco

ntin

ueto

expa

ndou

rpa

rtic

ipat

ion

invo

lunt

ary

prog

ram

sin

part

ners

hip

wit

hth

eFA

A,

incl

udin

gA

viat

ion

Safe

tyA

ctio

nP

rogr

ams

and

Flig

htO

pera

tion

alQ

ualit

yA

ssur

ance

data

gath

erin

g.T

hese

volu

ntar

ypr

ogra

ms

are

the

resu

ltof

FAA

-spo

nsor

edin

itia

tive

sto

rais

esa

fety

perf

orm

ance

thro

ugh

awar

enes

sof

safe

tytr

ends

inth

ew

orkp

lace

.We

also

equi

pou

ren

tire

Air

bus

A32

0fle

etw

ith

the

Em

erge

ncy

Vis

ion

Ass

uran

cesy

stem

,or

EV

AS,

whi

chpr

ovid

esou

rfli

ght

crew

sw

ith

the

abili

tyto

see

crit

ical

fligh

tin

stru

men

tssh

ould

the

cock

pit

fill

wit

hsm

oke.

Fur

ther

,we

emph

asiz

ebo

thoc

cupa

tion

alan

den

viro

nmen

tal

safe

tyac

ross

our

netw

ork.

Sinc

ein

trod

ucin

gen

hanc

edph

ysic

alab

iliti

este

stin

gfo

rth

ose

wor

kgr

oups

atgr

eate

stri

skof

ergo

nom

icin

juri

es,w

eha

vese

ensi

gnifi

cant

year

-ove

r-ye

arde

crea

ses

inlo

st-w

ork

inju

ries

.Add

itio

nally

,Jet

Blu

eha

sjo

ined

wit

hot

her

airl

ines

and

the

Occ

upat

iona

lSa

fety

and

Hea

lth

Adm

inis

trat

ion

invo

lunt

ary

part

ners

hips

that

are

focu

sed

onre

duci

nger

gono

mic

sin

juri

esan

dim

prov

ing

airp

ort

ram

psa

fety

.

7

The

Avi

atio

nan

dT

rans

port

atio

nSe

curi

tyA

ct,o

rth

eA

viat

ion

Secu

rity

Act

,was

enac

ted

inN

ovem

ber

2001

and

fede

raliz

edsu

bsta

ntia

llyal

las

pect

sof

civi

lav

iati

onse

curi

tyan

dre

quir

ed,a

mon

got

her

thin

gs,t

hecr

eati

onof

the

Tra

nspo

rtat

ion

Secu

rity

Adm

inis

trat

ion,

orth

eT

SA,t

oov

erse

eal

lav

iati

onse

curi

ty,a

ndth

eim

plem

enta

tion

ofce

rtai

nse

curi

tym

easu

res

byai

rlin

esan

dai

rpor

ts,s

uch

asth

ere

quir

emen

tth

atal

lpa

ssen

ger

bags

besc

reen

edfo

rex

plos

ives

.Fun

ding

for

airl

ine

and

airp

ort

secu

rity

unde

rth

ela

wis

prim

arily

prov

ided

bya

$2.5

0pe

ren

plan

emen

tti

cket

tax,

wit

hau

thor

ity

gran

ted

toth

eT

SAto

impo

sead

diti

onal

fees

onth

eai

rca

rrie

rsif

nece

ssar

yto

cove

rad

diti

onal

fede

ral

avia

tion

secu

rity

cost

s.Si

nce

2002

,the

TSA

has

impo

sed

anA

viat

ion

Secu

rity

Infr

astr

uctu

reF

eeon

all

airl

ines

toas

sist

inth

eco

stof

prov

idin

gav

iati

onse

curi

ty.T

hefe

esas

sess

edar

eba

sed

onai

rlin

es’

actu

al20

00se

curi

tyco

sts.

The

TSA

has

anno

unce

dth

atth

isfe

est

ruct

ure

will

rem

ain

inpl

ace

unti

lfu

rthe

rno

tice

.

We

have

volu

ntar

ilyim

plem

ente

dad

diti

onal

secu

rity

mea

sure

s,in

clud

ing

the

inst

alla

tion

offo

urca

bin

secu

rity

cam

eras

onea

chai

rcra

ftw

ith

aliv

evi

deo

feed

toth

eco

ckpi

tcr

ewan

da

24-h

our

secu

rity

oper

atio

nsde

sk,w

hich

asse

sses

and

man

ages

thre

ats,

reco

rds

and

mon

itor

ssu

spic

ious

acti

vity

wit

hin

the

JetB

lue

oper

atin

gsy

stem

,and

serv

esas

apr

ime

com

mun

icat

ion

chan

nel

betw

een

usan

dou

rla

wen

forc

emen

tan

dav

iati

onse

curi

tybu

sine

sspa

rtne

rs.I

nad

diti

onto

thes

evo

lunt

ary

mea

sure

s,w

eha

veco

mpl

ied

wit

hal

lne

wT

SAse

curi

tyre

quir

emen

ts.

Mar

keti

ngan

dD

istr

ibut

ion

Our

mar

keti

ngob

ject

ives

are

toat

trac

tne

wcu

stom

ers

toou

rbr

and

and

give

our

cust

omer

sre

ason

sto

com

eba

ckto

usag

ain

and

agai

n.O

urke

yva

lue

prop

osit

ion

and

mar

keti

ngm

essa

geis

that

low

fare

san

dqu

alit

yai

rtr

avel

need

not

bem

utua

llyex

clus

ive.

Our

low

fare

s,hi

ghqu

alit

ypr

oduc

tan

dou

tsta

ndin

gcu

stom

erse

rvic

ecr

eate

the

over

all

JetB

lue

Exp

erie

nce

that

we

belie

veis

uniq

uein

the

dom

esti

cai

rlin

ein

dust

ry.

We

mar

ket

our

serv

ices

thro

ugh

adve

rtis

ing

and

prom

otio

nsin

new

spap

ers,

mag

azin

es,t

elev

isio

n,ra

dio,

thro

ugh

the

inte

rnet

,out

door

billb

oard

s,an

dth

roug

hta

rget

edpu

blic

rela

tion

san

dpr

omot

ions

.W

een

gage

inla

rge

mul

ti-m

arke

tpr

ogra

ms,

asw

ell

asm

any

loca

lev

ents

and

spon

sors

hips

and

mob

ilem

arke

ting

prog

ram

s.O

urta

rget

edpu

blic

and

com

mun

ity

rela

tion

sef

fort

spr

omot

ebr

and

awar

enes

san

dco

mpl

emen

tou

rst

rong

wor

d-of

-mou

thch

anne

l.

Our

prim

ary

dist

ribu

tion

stra

tegy

isto

have

our

cust

omer

spu

rcha

seth

eir

fligh

tsdi

rect

toen

sure

they

get

aspl

easa

ntan

expe

rien

cebo

okin

gth

eir

trav

elas

they

doin

the

air.

The

perc

enta

geof

our

tota

lsa

les

book

edon

our

web

site

aver

aged

79%

for

the

year

ende

dD

ecem

ber

31,2

006.

Our

seco

ndla

rges

tdi

stri

buti

onch

anne

lis

our

agen

tsw

hoac

coun

ted

for

19%

ofou

rsa

les.

The

rem

aini

ng2%

ofou

rsa

les

in20

06w

ere

book

edth

roug

hgl

obal

dist

ribu

tion

syst

ems,

orG

DSs

.Our

re-e

ntry

into

GD

Ssin

2006

has

supp

orte

dou

rgr

owth

inth

eco

rpor

ate

mar

ket

and

book

ings

thro

ugh

thes

ech

anne

lsha

vere

sult

edin

high

erav

erag

efa

res,

offs

etti

ngth

ein

crea

sed

dist

ribu

tion

cost

s.A

sa

resu

lt,w

eno

wpa

rtic

ipat

ein

all

four

maj

orG

DSs

.In

addi

tion

,we

bega

npa

rtic

ipat

ing

ona

test

basi

sin

Tra

velo

city

,am

ajor

onlin

etr

avel

agen

cy.W

eco

ntin

ueto

eval

uate

oppo

rtun

itie

sto

broa

den

our

dist

ribu

tion

chan

nels

base

don

cost

and

yiel

d.O

urdi

stri

buti

onm

ixcr

eate

ssi

gnifi

cant

cost

savi

ngs

and

enab

les

usto

cont

inue

tobu

ildlo

yalt

yth

roug

hin

crea

sed

cust

omer

inte

ract

ion.

We

sell

vaca

tion

pack

ages

thro

ugh

JetB

lue

Get

away

s,a

one-

stop

,val

ue-p

rice

dva

cati

onw

ebsi

tede

sign

edto

mee

tcu

stom

ers’

dem

and

for

self

-dir

ecte

dpa

ckag

edtr

avel

plan

ning

.Get

away

spa

ckag

esof

fer

com

peti

tive

fare

sfo

rai

rtr

avel

onJe

tBlu

e,a

sele

ctio

nof

JetB

lue-

reco

mm

ende

dho

tels

and

reso

rts,

car

rent

als

and

attr

acti

ons.

InJa

nuar

y20

07,w

ein

trod

uced

JetB

lue

Cru

ises

,whi

chof

fers

cust

omer

sth

eab

ility

topu

rcha

secr

uise

sth

roug

hou

rw

ebsi

te,w

ith

orw

itho

utth

epu

rcha

seof

aJe

tBlu

efli

ght.

InN

ovem

ber

2006

,we

bega

nof

feri

ngth

eJe

tBlu

eG

ift

Car

d,w

hich

has

noex

pira

tion

date

and

may

beus

edto

war

dth

epu

rcha

seof

air-

only

trav

elto

any

ofth

ede

stin

atio

nsJe

tBlu

ese

rves

.Jet

Blu

eG

ift

Car

dsar

eav

aila

ble

for

purc

hase

inde

nom

inat

ions

from

$10

to$1

,000

onlin

eat

www.je

tblue.co

man

din

sele

ctre

tail

loca

tion

sna

tion

wid

ein

$50

or$1

00de

nom

inat

ions

.

8

Cus

tom

erL

oyal

tyP

rogr

am

JetB

lue’

scu

stom

erlo

yalt

ypr

ogra

m,T

rueB

lue,

isan

onlin

epr

ogra

mde

sign

edto

rew

ard

and

reco

gniz

eou

rm

ost

loya

lcu

stom

ers.

The

prog

ram

offe

rsin

cent

ives

toin

crea

setr

avel

onJe

tBlu

ean

dpr

ovid

esou

rcu

stom

ers

wit

had

diti

onal

serv

ices

.Tru

eBlu

em

embe

rsea

rnpo

ints

for

each

one-

way

trip

flow

nba

sed

onth

ele

ngth

ofth

etr

ip.P

oint

sar

eac

cum

ulat

edin

anac

coun

tfo

rea

chm

embe

ran

dex

pire

afte

rtw

elve

mon

ths.

Afr

eero

und

trip

awar

dto

any

JetB

lue

dest

inat

ion

isea

rned

afte

rat

tain

ing

100

poin

tsw

ithi

na

cons

ecut

ive

twel

ve-m

onth

peri

od.A

war

dsar

eau

tom

atic

ally

gene

rate

dan

dar

eva

lidfo

ron

eye

ar.W

eno

wha

veov

erfo

urm

illio

nT

rueB

lue

mem

bers

,whi

chw

eex

pect

will

cont

inue

togr

ow.

The

num

ber

ofes

tim

ated

trav

elaw

ards

outs

tand

ing

atD

ecem

ber

31,2

006

was

appr

oxim

atel

y18

8,00

0aw

ards

and

incl

udes

anes

tim

ate

for

part

ially

earn

edaw

ards

.The

num

ber

oftr

avel

awar

dsus

edon

JetB

lue

duri

ng20

06w

asap

prox

imat

ely

153,

000,

whi

chre

pres

ente

d2%

ofou

rto

tal

reve

nue

pass

enge

rm

iles.

Due

toth

est

ruct

ure

ofth

epr

ogra

man

dlo

wle

vel

ofre

dem

ptio

nsas

ape

rcen

tage

ofto

tal

trav

el,t

hedi

spla

cem

ent

ofre

venu

epa

ssen

gers

bypa

ssen

gers

usin

gT

rueB

lue

awar

dsha

sbe

enm

inim

alto

date

.

We

have

anag

reem

ent

wit

hA

mer

ican

Exp

ress

,und

erw

hich

itis

sues

co-b

rand

edcr

edit

card

sal

low

ing

card

mem

bers

toea

rnpo

ints

inT

rueB

lue.

InSe

ptem

ber

2006

,we

expa

nded

our

offe

ring

sw

ith

Am

eric

anE

xpre

ssto

incl

ude

the

JetB

lue

Bus

ines

sC

ard,

whi

chpr

ovid

essm

all

busi

ness

owne

rsw

ith

a5%

disc

ount

onJe

tBlu

etr

avel

and

auto

mat

icen

rollm

ent

inth

eA

mer

ican

Exp

ress

OP

EN

Savi

ngs®

prog

ram

.In

addi

tion

,sm

all

busi

ness

owne

rsw

ith

any

Am

eric

anE

xpre

ssO

PE

Nsm

all

busi

ness

card

will

rece

ive

a3%

disc

ount

onJe

tBlu

etr

avel

.Eve

ryti

me

card

mem

bers

hold

ing

eith

era

JetB

lue

Car

dor

aJe

tBlu

eB

usin

ess

Car

dfr

omA

mer

ican

Exp

ress

earn

the

equi

vale

ntof

one

Tru

eBlu

epo

int

orpu

rcha

setr

avel

onJe

tBlu

ebe

fore

thei

rpo

ints

expi

re,a

llth

epo

ints

inth

eir

Tru

eBlu

eac

coun

tar

eex

tend

edfo

ran

othe

r12

mon

ths.

We

also

have

anag

reem

ent

wit

hA

mer

ican

Exp

ress

allo

win

git

sca

rdho

lder

sto

conv

ert

thei

rM

embe

rshi

pR

ewar

dpo

ints

into

JetB

lue

Tru

eBlu

epo

ints

.We

inte

ndto

purs

ueot

her

mar

keti

ngpa

rtne

rshi

psin

the

futu

re.

Pri

cing O

urlo

wco

stst

ruct

ure

allo

ws

usto

offe

rsi

mpl

ified

,eve

ryda

ylo

wfa

res

toou

rcu

stom

ers.

We

offe

ra

rang

eof

fare

s,in

clud

ing

14-d

ay,7

-day

and

3-da

yad

vanc

epu

rcha

sefa

res

and

day-

of-fl

ight

,or

wal

k-up

,far

esin

each

ofou

rm

arke

ts.O

urfa

res

incr

ease

asth

enu

mbe

rof

days

prio

rto

trav

elde

crea

ses,

wit

hou

rhi

ghes

tw

alk-

upfa

rege

nera

llyat

appr

oxim

atel

yth

ree

tim

esth

eam

ount

ofou

rlo

wes

t14

-day

adva

nce

purc

hase

fare

.In

addi

tion

toou

rre

gula

rfa

rest

ruct

ure,

we

freq

uent

lyof

fer

sale

fare

sw

ith

shor

ter

adva

nce

purc

hase

requ

irem

ents

inm

ost

ofth

em

arke

tsw

ese

rve

and

mat

chth

esa

lefa

res

offe

red

byot

her

airl

ines

.We

are

com

mit

ted

toof

feri

ngou

rcu

stom

ers

low

erfa

res,

espe

cial

lyw

ith

resp

ect

toou

rw

alk-

upfa

res,

than

thos

eof

our

com

peti

tors

.We

belie

veth

edi

ffer

ence

betw

een

our

low

est

and

high

est

fare

for

agi

ven

fligh

tis

sign

ifica

ntly

smal

ler

than

our

com

peti

tors

.

All

ofou

rfa

res

are

one-

way

and

neve

rre

quir

ean

over

nigh

tst

ay.O

urfa

res

mus

tbe

purc

hase

dat

the

tim

eof

rese

rvat

ion

and

are

non-

refu

ndab

le,b

utan

ybo

okin

gca

nbe

chan

ged

orca

ncel

led

prio

rto

depa

rtur

efo

ra

nom

inal

fee.

Bas

edon

publ

ishe

dfa

res

atou

rti

me

ofen

try,

our

adva

nce

purc

hase

fare

sha

vebe

en50

%to

60%

belo

wth

ose

exis

ting

inm

arke

tspr

ior

toou

ren

try,

whi

leou

rw

alk-

upfa

res

have

gene

rally

been

upto

60%

to70

%be

low

othe

rm

ajor

U.S

.air

lines

’un

rest

rict

ed‘‘f

ull

coac

h’’

fare

s.

Rev

enue

Man

agem

ent

Rev

enue

man

agem

ent

isa

proc

ess

that

help

sen

able

usto

max

imiz

epa

ssen

ger

reve

nues

byfli

ght,

bym

arke

tan

dac

ross

our

enti

rene

twor

k.O

urre

venu

em

anag

emen

tte

amst

rive

sto

incr

ease

our

over

all

aver

age

fare

thro

ugh

opti

miz

ing

our

fare

mix

whi

leco

ntin

uing

topr

ovid

eou

rcu

stom

ers

wit

hlo

wfa

res

and,

ince

rtai

nm

arke

ts,b

yus

ing

our

netw

ork

tom

axim

ize

conn

ecti

ngop

port

unit

ies.

We

dete

rmin

eth

enu

mbe

rof

seat

sof

fere

dat

each

fare

thro

ugh

aco

ntin

ual

proc

ess

offo

reca

stin

g,op

tim

izat

ion

and

com

peti

tive

anal

ysis

.Gen

eral

ly,i

nes

tabl

ishe

dm

arke

tsw

eus

epa

stbo

okin

ghi

stor

y

9

and

seas

onal

tren

dsto

fore

cast

anti

cipa

ted

dem

and.

We

com

bine

thes

ehi

stor

ical

fore

cast

sw

ith

curr

ent

book

ings

,upc

omin

gev

ents

,com

peti

tive

pres

sure

san

dot

her

pert

inen

tfa

ctor

sto

esta

blis

ha

mix

offa

res

that

isde

sign

edto

max

imiz

ere

venu

e.T

his

abili

tyto

adju

stse

atal

loca

tion

sba

sed

onflu

ctua

ting

dem

and

patt

erns

allo

ws

usto

bala

nce

load

san

dca

ptur

em

ore

reve

nue

from

exis

ting

capa

city

.Dur

ing

2006

,we

mod

ified

our

reve

nue

man

agem

ent

prac

tice

sto

pric

eou

rin

vent

ory

toac

hiev

ea

high

eryi

eld

whi

lere

linqu

ishi

ngso

me

ofou

rlo

adfa

ctor

.Whi

lew

eco

ntin

ueto

prov

ide

our

cust

omer

sw

ith

com

peti

tive

fare

s,pa

rtic

ular

lyin

light

ofre

cent

redu

ctio

nsin

dom

esti

cca

paci

tyac

ross

the

indu

stry

,ou

ryi

eld

for

the

year

ende

dD

ecem

ber

31,2

006

incr

ease

d19

%co

mpa

red

to20

05,p

rim

arily

asa

resu

ltof

our

effo

rts

atfa

reop

tim

izat

ion.

Peo

ple We

belie

veth

aton

eof

the

fact

ors

diff

eren

tiat

ing

usfr

omou

rco

mpe

tito

rsis

the

high

qual

ity

serv

ice

prov

ided

toou

rcu

stom

ers

byou

rem

ploy

ees,

who

mw

ere

fer

toas

crew

mem

bers

.Exp

erie

nce

indi

cate

sth

atou

rcu

stom

ers

retu

rnno

ton

lybe

caus

ew

eof

fer

low

fare

s,bu

tal

sobe

caus

ew

epr

ovid

eth

emw

ith

am

ore

enjo

yabl

eai

rtr

avel

expe

rien

ce.H

irin

gth

ebe

stpe

ople

and

trea

ting

them

asw

eex

pect

our

cust

omer

sto

betr

eate

dar

ees

sent

ial

toac

hiev

ing

this

goal

.

We

belie

veth

atw

eca

refu

llyse

lect

,tra

inan

dm

aint

ain

afle

xibl

ean

ddi

vers

ew

orkf

orce

ofca

ring

,pa

ssio

nate

,fun

and

frie

ndly

peop

lew

how

ant

topr

ovid

eou

rcu

stom

ers

wit

hth

ebe

stfly

ing

expe

rien

cepo

ssib

le.O

urhi

ring

proc

ess

isri

goro

usan

din

clud

esbe

havi

oral

inte

rvie

ws

and

peer

asse

ssm

ents

.We

assi

stou

rem

ploy

ees

byof

feri

ngth

emfle

xibl

ew

ork

hour

s,in

itia

lpa

idtr

aini

ng,a

unif

orm

allo

wan

cean

dbe

nefit

s.W

eal

sopr

ovid

eex

tens

ive

trai

ning

for

our

pilo

ts,fl

ight

atte

ndan

ts,t

echn

icia

ns,a

irpo

rtag

ents

,dis

patc

hers

and

rese

rvat

ion

agen

tsw

hich

emph

asiz

esth

eim

port

ance

ofsa

fety

.We

prov

ide

lead

ersh

iptr

aini

ngfo

ral

lsu

perv

isor

san

dm

anag

ers,

wit

hth

eac

tive

part

icip

atio

nof

our

seni

orm

anag

emen

t,to

help

ensu

reth

atw

eha

veth

eri

ght

lead

ers

inpl

ace

acro

ssou

ror

gani

zati

onto

mai

ntai

nou

run

ique

com

pany

cult

ure

and

com

mit

men

tto

our

cust

omer

s.E

ffec

tive

and

freq

uent

com

mun

icat

ion

thro

ugho

utth

eor

gani

zati

onis

fost

ered

thro

ugh

peri

odic

empl

oyee

sati

sfac

tion

surv

eys,

aqu

arte

rly

mag

azin

e,ac

tive

lead

ersh

ippa

rtic

ipat

ion

inne

whi

reor

ient

atio

nsan

dm

onth

lyop

enm

eeti

ngs,

calle

d‘‘p

ocke

tse

ssio

ns’’,

whi

char

evi

deot

aped

and

post

edon

our

intr

anet

.

An

impo

rtan

tpa

rtof

our

busi

ness

plan

isto

rew

ard

our

empl

oyee

sby

prov

idin

gth

emw

ith

the

abili

tyto

alig

nth

eir

pers

onal

succ

esse

sw

ith

thos

eof

JetB

lue.

Our

com

pens

atio

npa

ckag

esin

clud

eco

mpe

titi

vesa

lari

es,w

ages

and

bene

fits,

profi

tsh

arin

gan

dan

empl

oyee

stoc

kpu

rcha

sepl

an.I

nad

diti

on,a

sign

ifica

ntnu

mbe

rof

our

empl

oyee

s,in

clud

ing

FAA

-lic

ense

dem

ploy

ees,

part

icip

ate

inou

rst

ock

opti

onpl

an.W

ere

view

our

com

pens

atio

npa

ckag

eson

are

gula

rba

sis

inan

effo

rtto

ensu

reth

atw

ere

mai

nco

mpe

titi

vean

dar

eab

leto

hire

and

reta

inth

ebe

stpe

ople

poss

ible

.

We

ente

rin

toin

divi

dual

empl

oym

ent

agre

emen

tsw

ith

each

ofou

rFA

A-l

icen

sed

empl

oyee

s,w

hich

cons

ist

ofpi

lots

,dis

patc

hers

and

tech

nici

ans.

Eac

hem

ploy

men

tag

reem

ent

isfo

ra

term

offiv

eye

ars

and

auto

mat

ical

lyre

new

sfo

ran

addi

tion

alfiv

e-ye

arte

rmun

less

eith

erth

eem

ploy

eeor

we

elec

tno

tto

rene

wit

bygi

ving

noti

cebe

fore

the

end

ofth

ere

leva

ntte

rm.P

ursu

ant

toth

ese

agre

emen

ts,

thes

eem

ploy

ees

can

only

bete

rmin

ated

for

caus

e.In

the

even

tof

ado

wnt

urn

inou

rbu

sine

ssth

atw

ould

requ

ire

are

duct

ion

inw

ork

hour

s,w

ear

eob

ligat

edto

pay

thes

eem

ploy

ees

agu

aran

teed

leve

lof

inco

me

and

toco

ntin

ueth

eir

bene

fits.

Inad

diti

on,i

nth

eev

ent

we

are

sold

toor

cons

olid

ate

wit

han

othe

rco

mpa

ny,w

em

ust

requ

est

that

the

succ

esso

rco

mpa

nypl

ace

thes

eem

ploy

ees

ona

pref

eren

tial

hiri

nglis

t.If

such

empl

oyee

sar

eno

thi

red

byth

esu

cces

sor

com

pany

,in

som

eca

ses

they

will

been

titl

edto

ase

vera

nce

paym

ent

ofup

toon

eye

ar’s

sala

ry.

Non

eof

our

empl

oyee

sar

ecu

rren

tly

unio

nize

d.In

May

2006

,the

Inte

rnat

iona

lA

ssoc

iati

onof

Mac

hini

sts

and

Aer

ospa

ceW

orke

rs,fi

led

ape

titi

onw

ith

the

Nat

iona

lM

edia

tion

Boa

rd,o

rN

MB

,se

ekin

gto

repr

esen

tou

rgr

ound

oper

atio

ns,p

rovi

sion

ing

and

rela

ted-

posi

tion

empl

oyee

s.In

July

2006

,th

eN

MB

dism

isse

dth

epe

titi

onbe

caus

eth

em

inim

umnu

mbe

rof

empl

oyee

sin

the

targ

eted

grou

pdi

dno

tsu

ppor

tho

ldin

gan

elec

tion

.We

belie

veth

ata

dire

ctre

lati

onsh

ipw

ith

JetB

lue

lead

ersh

ip,a

ndno

tth

ird-

part

yre

pres

enta

tion

,is

inth

ebe

stin

tere

sts

ofou

rem

ploy

ees.

Our

full-

tim

eeq

uiva

lent

empl

oyee

sat

Dec

embe

r31

,200

6co

nsis

ted

of1,

545

pilo

ts,2

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fligh

tat

tend

ants

,2,5

46ai

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top

erat

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pers

onne

l,42

6te

chni

cian

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hom

othe

rsre

fer

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mec

hani

cs,

10

736

rese

rvat

ion

agen

ts,a

nd2,

180

man

agem

ent

and

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rpe

rson

nel.

At

Dec

embe

r31

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6,w

eem

ploy

ed8,

393

full-

tim

ean

d2,

231

part

-tim

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ploy

ees.

Mai

nten

ance

We

have

anFA

A-a

ppro

ved

mai

nten

ance

prog

ram

,whi

chis

adm

inis

tere

dby

our

tech

nica

lop

erat

ions

depa

rtm

ent.

Con

sist

ent

wit

hou

rco

reva

lue

ofsa

fety

,we

hire

qual

ified

mai

nten

ance

pers

onne

l,pr

ovid

eth

emw

ith

com

preh

ensi

vetr

aini

ngan

dm

aint

ain

our

airc

raft

and

asso

ciat

edm

aint

enan

cere

cord

sin

acco

rdan

cew

ith

FAA

regu

lati

ons.

The

mai

nten

ance

perf

orm

edon

our

airc

raft

can

bedi

vide

din

toth

ree

gene

ral

cate

gori

es:l

ine

mai

nten

ance

,mai

nten

ance

chec

ks,a

ndco

mpo

nent

over

haul

and

repa

ir.L

ine

mai

nten

ance

cons

ists

ofro

utin

eda

ilyan

dw

eekl

ysc

hedu

led

mai

nten

ance

chec

kson

our

airc

raft

,inc

ludi

ngpr

e-fli

ght,

daily

,w

eekl

yan

dov

erni

ght

chec

ks,a

ndan

ydi

agno

stic

san

dro

utin

ere

pair

s.A

ltho

ugh

the

maj

orit

yof

our

line

mai

nten

ance

ispe

rfor

med

byou

row

nte

chni

cian

s,w

eal

sosu

bcon

trac

tou

rlin

em

aint

enan

ceto

thir

d-pa

rty

orga

niza

tion

s.

Mai

nten

ance

chec

ksco

nsis

tof

mor

eco

mpl

exin

spec

tion

san

dse

rvic

ing

ofth

eai

rcra

ftth

atca

nnot

beac

com

plis

hed

duri

ngan

over

nigh

tvi

sit.

The

sech

ecks

occu

rat

leas

tev

ery

15m

onth

san

dca

nra

nge

indu

rati

onfr

oma

few

days

toap

prox

imat

ely

am

onth

,dep

endi

ngon

the

mag

nitu

deof

the

wor

kpr

escr

ibed

inth

epa

rtic

ular

chec

k.W

eus

eA

irC

anad

aan

dT

AC

A,i

nE

lSa

lvad

or,t

ope

rfor

mou

rm

aint

enan

cech

ecks

unde

rth

eov

ersi

ght

ofou

rpe

rson

nel.

Inad

diti

on,i

nD

ecem

ber

2006

,we

ente

red

into

anag

reem

ent

wit

hE

mpi

reA

ero

Cen

ter

inR

ome,

New

Yor

kto

prov

ide

heav

ym

aint

enan

cesu

ppor

tfo

rup

to12

Air

bus

A32

0ai

rcra

ftin

2007

.

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pone

ntov

erha

ulan

dre

pair

invo

lves

send

ing

engi

nes

and

cert

ain

part

s,su

chas

land

ing

gear

and

avio

nics

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thir

dpa

rty

FAA

-app

rove

dm

aint

enan

cere

pair

stat

ions

for

repa

iror

over

haul

.We

have

ate

n-ye

arse

rvic

eag

reem

ent

wit

hM

TU

Mai

nten

ance

Han

nove

rG

mbH

for

the

sche

dule

dan

dun

sche

dule

dre

pair

ofou

rA

irbu

sA

320

airc

raft

engi

nes.

We

also

have

sepa

rate

long

-ter

mar

rang

emen

tsw

ith

othe

rse

rvic

epr

ovid

ers

for

vari

ous

airf

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craf

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uel

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uel

cost

sco

ntin

ued

tobe

our

larg

est

oper

atin

gex

pens

edu

eto

high

aver

age

fuel

pric

es.

Fue

lpr

ices

and

avai

labi

lity

are

subj

ect

tow

ide

pric

eflu

ctua

tion

sba

sed

onge

opol

itic

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ctor

san

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we

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rol

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We

have

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mun

der

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ter

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atin

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lop

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eve

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inim

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rget

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posi

tion

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imat

ely

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rex

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ell

asX

MSa

telli

teR

adio

Serv

ice

and

cert

ain

othe

rpr

oduc

tsan

dse

rvic

es.L

iveT

Vco

ntin

ues

topu

rsue

addi

tion

alcu

stom

ers.

Gov

ernm

ent

Reg

ulat

ion

Gen

eral

.W

ear

esu

bjec

tto

regu

lati

onby

the

DO

T,th

eFA

A,t

heT

SAan

dot

her

gove

rnm

enta

lag

enci

es.T

heD

OT

prim

arily

regu

late

sec

onom

icis

sues

affe

ctin

gai

rse

rvic

e,su

chas

cert

ifica

tion

and

fitne

ss,i

nsur

ance

,con

sum

erpr

otec

tion

and

com

peti

tive

prac

tice

s.T

heD

OT

has

the

auth

orit

yto

inve

stig

ate

and

inst

itut

epr

ocee

ding

sto

enfo

rce

its

econ

omic

regu

lati

ons

and

may

asse

ssci

vil

pena

ltie

s,re

voke

oper

atin

gau

thor

ity

and

seek

crim

inal

sanc

tion

s.In

Feb

ruar

y20

00,t

heD

OT

gran

ted

usa

cert

ifica

teof

publ

icco

nven

ienc

ean

dne

cess

ity

auth

oriz

ing

usto

enga

gein

air

tran

spor

tati

onw

ithi

nth

eU

nite

dSt

ates

,its

terr

itor

ies

and

poss

essi

ons.

The

FAA

prim

arily

regu

late

sfli

ght

oper

atio

nsan

d,in

part

icul

ar,m

atte

rsaf

fect

ing

air

safe

ty,s

uch

asai

rwor

thin

ess

requ

irem

ents

for

airc

raft

,the

licen

sing

ofpi

lots

,mec

hani

csan

ddi

spat

cher

s,an

dth

ece

rtifi

cati

onof

fligh

tat

tend

ants

.The

civi

lav

iati

onse

curi

tyfu

ncti

ons

ofth

eFA

Aw

ere

tran

sfer

red

toth

eT

SAun

der

the

Avi

atio

nSe

curi

tyA

ct.T

heFA

Are

quir

esea

chai

rlin

eto

obta

inan

oper

atin

gce

rtifi

cate

auth

oriz

ing

the

airl

ine

toop

erat

eat

spec

ific

airp

orts

usin

gsp

ecifi

edeq

uipm

ent.

We

have

and

mai

ntai

nFA

Ace

rtifi

cate

sof

airw

orth

ines

sfo

ral

lof

our

airc

raft

and

have

the

nece

ssar

yFA

Aau

thor

ity

tofly

toal

lof

the

citi

esth

atw

ecu

rren

tly

serv

e.

Lik

eal

lU

.S.c

erti

fied

carr

iers

,we

cann

otfly

tone

wde

stin

atio

nsw

itho

utth

epr

ior

auth

oriz

atio

nof

the

FAA

.The

FAA

has

the

auth

orit

yto

mod

ify,

susp

end

tem

pora

rily

orre

voke

perm

anen

tly

our

auth

orit

yto

prov

ide

air

tran

spor

tati

onor

that

ofou

rlic

ense

dpe

rson

nel,

afte

rpr

ovid

ing

noti

cean

da

hear

ing,

for

failu

reto

com

ply

wit

hFA

Are

gula

tion

s.T

heFA

Aca

nas

sess

civi

lpe

nalt

ies

for

such

failu

res

orin

stit

ute

proc

eedi

ngs

for

the

impo

siti

onan

dco

llect

ion

ofm

onet

ary

fines

for

the

viol

atio

nof

cert

ain

FAA

regu

lati

ons.

The

FAA

can

revo

keou

rau

thor

ity

topr

ovid

eai

rtr

ansp

orta

tion

onan

emer

genc

yba

sis,

wit

hout

prov

idin

gno

tice

and

ahe

arin

g,w

here

sign

ifica

ntsa

fety

issu

esar

ein

volv

ed.

The

FAA

mon

itor

sou

rco

mpl

ianc

ew

ith

mai

nten

ance

,flig

htop

erat

ions

and

safe

tyre

gula

tion

s,m

aint

ains

onsi

tere

pres

enta

tive

san

dpe

rfor

ms

freq

uent

spot

insp

ecti

ons

ofou

rai

rcra

ft,e

mpl

oyee

san

dre

cord

s.

The

FAA

also

has

the

auth

orit

yto

issu

em

aint

enan

cedi

rect

ives

and

othe

rm

anda

tory

orde

rsre

lati

ngto

,am

ong

othe

rth

ings

,ins

pect

ion

ofai

rcra

ftan

den

gine

s,fir

ere

tard

ant

and

smok

ede

tect

ion

devi

ces,

incr

ease

dse

curi

typr

ecau

tion

s,co

llisi

onan

dw

inds

hear

avoi

danc

esy

stem

s,no

ise

abat

emen

tan

dth

em

anda

tory

rem

oval

and

repl

acem

ent

ofai

rcra

ftpa

rts

that

have

faile

dor

may

fail

inth

efu

ture

.

We

belie

veth

atw

ear

eop

erat

ing

inm

ater

ial

com

plia

nce

wit

hD

OT,

FAA

and

TSA

regu

lati

ons

and

hold

all

nece

ssar

yop

erat

ing

and

airw

orth

ines

sau

thor

izat

ions

and

cert

ifica

tes.

Shou

ldan

yof

thes

eau

thor

izat

ions

orce

rtifi

cate

sbe

mod

ified

,sus

pend

edor

revo

ked,

our

busi

ness

coul

dbe

mat

eria

llyad

vers

ely

affe

cted

.

The

TSA

oper

ates

unde

rth

eD

epar

tmen

tof

Hom

elan

dSe

curi

tyan

dis

resp

onsi

ble

for

all

civi

lav

iati

onse

curi

ty,i

nclu

ding

pass

enge

ran

dba

ggag

esc

reen

ing,

carg

ose

curi

tym

easu

res,

airp

ort

secu

rity

,as

sess

men

tan

ddi

stri

buti

onof

inte

llige

nce,

and

secu

rity

rese

arch

and

deve

lopm

ent.

The

TSA

also

has

law

enfo

rcem

ent

pow

ers

and

the

auth

orit

yto

issu

ere

gula

tion

s,in

clud

ing

inca

ses

ofna

tion

alem

erge

ncy,

wit

hout

ano

tice

orco

mm

ent

peri

od.

Env

iron

men

tal.

We

are

subj

ect

tova

riou

sfe

dera

l,st

ate

and

loca

lla

ws

rela

ting

toth

epr

otec

tion

ofth

een

viro

nmen

t,in

clud

ing

the

disc

harg

eor

disp

osal

ofm

ater

ials

and

chem

ical

san

dth

ere

gula

tion

ofai

rcra

ftno

ise,

whi

char

ead

min

iste

red

bynu

mer

ous

stat

ean

dfe

dera

lag

enci

es.

12

The

Air

port

Noi

sean

dC

apac

ity

Act

of19

90re

cogn

izes

the

righ

tof

airp

ort

oper

ator

sw

ith

spec

ial

nois

epr

oble

ms

toim

plem

ent

loca

lno

ise

abat

emen

tpr

oced

ures

aslo

ngas

thos

epr

oced

ures

dono

tin

terf

ere

unre

ason

ably

wit

hth

ein

ters

tate

and

fore

ign

com

mer

ceof

the

nati

onal

air

tran

spor

tati

onsy

stem

.Cer

tain

airp

orts

,inc

ludi

ngSa

nD

iego

and

Lon

gB

each

,hav

ees

tabl

ishe

dre

stri

ctio

nsto

limit

nois

e,w

hich

can

incl

ude

limit

son

the

num

ber

ofho

urly

orda

ilyop

erat

ions

and

the

tim

eof

such

oper

atio

ns.T

hese

limit

atio

nsse

rve

topr

otec

tth

elo

cal

nois

e-se

nsit

ive

com

mun

itie

ssu

rrou

ndin

gth

eai

rpor

t.O

ursc

hedu

led

fligh

tsat

Lon

gB

each

and

San

Die

goar

ein

com

plia

nce

wit

hth

eno

ise

curf

ewlim

its,

but

whe

nw

eex

peri

ence

irre

gula

rop

erat

ions

,on

occa

sion

we

viol

ate

thes

ecu

rfew

s.W

eha

veag

reed

toa

paym

ent

stru

ctur

ew

ith

the

Lon

gB

each

Cit

yP

rose

cuto

rfo

ran

yvi

olat

ions

,whi

chw

epa

yqu

arte

rly

toth

eL

ong

Bea

chP

ublic

Lib

rary

Fou

ndat

ion

and

are

base

don

the

num

ber

ofin

frac

tion

sin

the

prec

edin

gqu

arte

r.T

his

loca

lor

dina

nce

has

not

had,

and

we

belie

veth

atit

will

not

have

,ane

gati

veef

fect

onou

rop

erat

ions

.

Air

port

Acc

ess.

At

the

end

of20

06,t

heH

igh

Den

sity

Rul

e,es

tabl

ishe

dby

the

FAA

in19

68to

limit

the

num

ber

ofsc

hedu

led

fligh

tsat

JFK

from

3:00

p.m

.to

7:59

p.m

.,ex

pire

d.A

sa

resu

lt,l

ike

near

lyev

ery

othe

rai

rpor

t,th

enu

mbe

rof

fligh

tsat

JFK

isno

long

erre

gula

ted

and

airl

ines

are

able

tosc

hedu

lefli

ghts

wit

hout

rest

rict

ions

.Whi

leth

eH

igh

Den

sity

Rul

ew

asal

solif

ted

atL

aGua

rdia

,whe

rew

em

aint

ain

asm

all

pres

ence

,it

was

imm

edia

tely

repl

aced

byth

eFA

Aw

ith

ate

mpo

rary

rule

cont

inui

ngth

est

rict

limit

atio

nson

oper

atio

nsdu

ring

the

hour

sof

6:00

a.m

.to

9:59

p.m

.Thi

sru

leis

sche

dule

dto

expi

rein

late

2007

upon

the

enac

tmen

tof

ape

rman

ent

rule

rest

ruct

urin

gth

eri

ghts

ofca

rrie

rsto

oper

ate

atL

aGua

rdia

.Und

erth

ecu

rren

tru

le,o

urop

erat

ions

rem

ain

unaf

fect

ed.S

houl

dne

wru

les

beim

plem

ente

din

who

leor

inpa

rt,o

urab

ility

tom

aint

ain

afu

llsc

hedu

leat

LaG

uard

iaw

ould

likel

ybe

impa

cted

.

Lon

gB

each

Mun

icip

alA

irpo

rtis

asl

ot-c

ontr

olle

dai

rpor

tas

are

sult

ofa

1995

cour

tse

ttle

men

t.A

slot

isan

auth

oriz

atio

nto

take

off

orla

ndat

ade

sign

ated

airp

ort

wit

hin

asp

ecifi

edti

me

peri

od.

Und

erth

ese

ttle

men

t,th

ere

are

ato

tal

of41

daily

non-

com

mut

erde

part

ure

slot

san

da

sing

lesl

otis

requ

ired

for

ever

yco

mm

erci

alde

part

ure.

The

rear

eno

plan

sto

elim

inat

esl

otre

stri

ctio

nsat

the

Lon

gB

each

Mun

icip

alA

irpo

rt.I

nA

pril

2003

,the

FAA

appr

oved

ase

ttle

men

tag

reem

ent

amon

gth

eC

ity

ofL

ong

Bea

ch,A

mer

ican

Air

lines

,Ala

ska

Air

lines

and

JetB

lue

wit

hre

spec

tto

the

allo

cati

onof

the

slot

s,w

hich

also

prov

ides

for

apr

iori

tyal

loca

tion

proc

edur

esh

ould

supp

lem

enta

lsl

ots

abov

eth

e41

curr

ent

slot

sbe

com

eav

aila

ble.

We

have

28sl

ots

avai

labl

efo

rus

ean

dcu

rren

tly

oper

ate

25w

eekd

ayro

undt

rip

fligh

tsfr

omL

ong

Bea

chM

unic

ipal

Air

port

toni

nedo

mes

tic

citi

es.

For

eign

Ope

rati

ons.

Inte

rnat

iona

lai

rtr

ansp

orta

tion

issu

bjec

tto

exte

nsiv

ego

vern

men

tre

gula

tion

.The

avai

labi

lity

ofin

tern

atio

nal

rout

esto

U.S

.car

rier

sis

regu

late

dby

trea

ties

and

rela

ted

agre

emen

tsbe

twee

nth

eU

nite

dSt

ates

and

fore

ign

gove

rnm

ents

.We

curr

entl

yop

erat

ein

tern

atio

nal

serv

ice

toT

heB

aham

as,t

heD

omin

ican

Rep

ublic

,Ber

mud

a,A

ruba

and

Mex

ico.

To

the

exte

ntw

ese

ekto

prov

ide

air

tran

spor

tati

onto

addi

tion

alin

tern

atio

nal

mar

kets

inth

efu

ture

,we

will

bere

quir

edto

obta

inne

cess

ary

auth

orit

yfr

omth

eD

OT

and

the

appl

icab

lefo

reig

ngo

vern

men

t.

For

eign

Ow

ners

hip.

Und

erfe

dera

lla

wan

dth

eD

OT

regu

lati

ons,

we

mus

tbe

cont

rolle

dby

Uni

ted

Stat

esci

tize

ns.I

nth

isre

gard

,our

pres

iden

tan

dat

leas

ttw

o-th

irds

ofou

rbo

ard

ofdi

rect

ors

mus

tbe

Uni

ted

Stat

esci

tize

nsan

dno

tm

ore

than

25%

ofou

rou

tsta

ndin

gco

mm

onst

ock

may

bevo

ted

byno

n-U

.S.c

itiz

ens.

We

are

curr

entl

yin

com

plia

nce

wit

hth

ese

owne

rshi

ppr

ovis

ions

.

Oth

erR

egul

atio

ns.

All

air

carr

iers

are

also

subj

ect

toce

rtai

npr

ovis

ions

ofth

eC

omm

unic

atio

nsA

ctof

1934

beca

use

ofth

eir

exte

nsiv

eus

eof

radi

oan

dot

her

com

mun

icat

ion

faci

litie

s,an

dar

ere

quir

edto

obta

inan

aero

naut

ical

radi

olic

ense

from

the

FC

C.T

oth

eex

tent

we

are

subj

ect

toF

CC

requ

irem

ents

,we

will

take

all

nece

ssar

yst

eps

toco

mpl

yw

ith

thos

ere

quir

emen

ts.O

urla

bor

rela

tion

sar

eco

vere

dun

der

Tit

leII

ofth

eR

ailw

ayL

abor

Act

of19

26an

dar

esu

bjec

tto

the

juri

sdic

tion

ofth

eN

atio

nal

Med

iati

onB

oard

.In

addi

tion

,dur

ing

peri

ods

offu

elsc

arci

ty,a

cces

sto

airc

raft

fuel

may

besu

bjec

tto

fede

ral

allo

cati

onre

gula

tion

s.W

ear

eal

sosu

bjec

tto

stat

ean

dlo

cal

law

san

dre

gula

tion

sat

loca

tion

sw

here

we

oper

ate

and

the

regu

lati

ons

ofva

riou

slo

cal

auth

orit

ies

that

oper

ate

the

airp

orts

we

serv

e.

Civ

ilR

eser

veA

irF

leet

.W

ear

ea

part

icip

ant

inth

eC

ivil

Res

erve

Air

Fle

etP

rogr

amw

hich

perm

its

the

Uni

ted

Stat

esD

epar

tmen

tof

Def

ense

tout

ilize

our

airc

raft

duri

ngna

tion

alem

erge

ncie

sw

hen

the

need

for

mili

tary

airl

ift

exce

eds

the

capa

bilit

yof

mili

tary

airc

raft

.By

part

icip

atin

gin

this

prog

ram

,we

are

elig

ible

tobi

don

and

beaw

arde

dpe

acet

ime

airl

ift

cont

ract

sw

ith

the

mili

tary

.

13

ITE

M2.

PR

OP

ER

TIE

S

Air

craf

t

As

ofD

ecem

ber

31,2

006,

we

oper

ated

afle

etco

nsis

ting

of96

Air

bus

A32

0ai

rcra

ftpo

wer

edby

two

IAE

Inte

rnat

iona

lA

ero

Eng

ines

V25

27-A

5en

gine

san

d23

EM

BR

AE

R19

0ai

rcra

ftpo

wer

edby

two

Gen

eral

Ele

ctri

cE

ngin

esC

F-3

4-10

engi

nes,

asfo

llow

s:

Air

craf

tSe

atin

gC

apac

ity

Ow

ned

Cap

ital

Lea

sed

Ope

rati

ngL

ease

dTo

tal

Ave

rage

Age

inY

ears

Air

bus

A32

0...

....

....

....

....

156

(1)

692

2596

3.1

EM

BR

AE

R19

0..

....

....

....

.10

01

—22

230.

7

Tot

als.

....

....

....

....

....

..70

247

119

2.6

(1)

We

have

com

plet

edth

em

odifi

cati

onto

rem

ove

one

row

ofse

ats

from

our

Air

bus

A32

0ai

rcra

ft,

redu

cing

seat

ing

capa

city

to15

0se

ats.

Our

airc

raft

leas

esha

vean

aver

age

rem

aini

ngin

itia

lle

ase

term

ofap

prox

imat

ely

14ye

ars

atD

ecem

ber

31,2

006.

The

earl

iest

ofth

ese

term

sen

dsin

2009

and

the

late

sten

dsin

2024

.We

have

the

opti

onto

exte

ndm

ost

ofth

ese

leas

esfo

rad

diti

onal

peri

ods

orto

purc

hase

the

airc

raft

atth

een

dof

the

leas

ete

rm.A

ll70

ofou

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ned

airc

raft

and

our

15ow

ned

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gine

sar

esu

bjec

tto

secu

red

debt

finan

cing

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ofD

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ber

31,2

006,

we

had

onor

der

160

airc

raft

,whi

char

esc

hedu

led

for

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ery

thro

ugh

2014

ona

rela

tive

lyev

enba

sis

duri

ngea

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ar,w

ith

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ons

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bus

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2007

1210

141

——

141

2008

1210

163

—5

168

2009

1610

189

48

206

2010

1810

217

49

247

2011

1810

245

611

292

2012

611

262

1612

337

2013

—11

273

1814

380

2014

—6

279

—21

407

2015

——

279

—20

427

8278

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0

(1)

The

tota

lfle

etin

clud

edin

the

tabl

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ove

may

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erad

diti

onal

airc

raft

sale

s,as

sign

men

tsan

d/or

leas

es.

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umes

all

opti

ons

are

exer

cise

d.

Fac

iliti

es

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occu

pyal

lof

our

faci

litie

sat

each

ofth

eai

rpor

tsw

ese

rve

unde

rle

ases

orot

her

occu

panc

yag

reem

ents

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agre

emen

tsfo

rte

rmin

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ssen

ger

serv

ice

faci

litie

s,w

hich

incl

ude

tick

etco

unte

ran

dga

tesp

ace,

oper

atio

nssu

ppor

tar

eaan

dba

ggag

ese

rvic

eof

fices

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eral

lyha

vete

rms

rang

ing

from

less

than

one

year

tofiv

eye

ars,

and

cont

ain

prov

isio

nsfo

rpe

riod

icad

just

men

tsof

rent

alra

tes.

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also

are

resp

onsi

ble

for

mai

nten

ance

,ins

uran

ce,u

tilit

ies

and

cert

ain

othe

rfa

cilit

y-re

late

dex

pens

esan

dse

rvic

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eha

veen

tere

din

tous

ear

rang

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that

prov

ide

for

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non-

excl

usiv

eus

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runw

ays,

taxi

way

san

dot

her

airp

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faci

litie

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andi

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typi

cally

base

don

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num

ber

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eigh

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airc

raft

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19

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ovem

ber

2006

and

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inth

epr

oces

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nego

tiat

ing

anex

tens

ion

ofth

isle

ase

into

late

2008

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Nov

embe

r20

05,w

eex

ecut

eda

leas

eag

reem

ent

wit

hth

ePA

NY

NJ

for

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cons

truc

tion

and

oper

atio

nof

ane

wT

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inal

5at

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ase,

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plet

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leas

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eth

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esc

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led

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ew

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ntin

ueto

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ate

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isti

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cilit

ies

atT

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6an

da

tem

pora

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gate

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me

oper

atio

nal

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ne20

06,u

ntil

our

new

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isco

mpl

eted

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tC

oast

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atio

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atL

ong

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chM

unic

ipal

Air

port

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rves

the

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eles

area

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oper

atio

nsat

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ogan

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rnat

iona

lA

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sed

atT

erm

inal

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here

we

curr

entl

yop

erat

ese

ven

gate

san

d20

tick

etco

unte

rpo

siti

ons.

In20

07,w

ean

tici

pate

that

we

will

add

one

gate

inM

ayan

dan

addi

tion

alga

tein

Nov

embe

rat

Log

an.W

epl

anto

oper

ate

upto

11to

tal

gate

san

d28

tick

etco

unte

rpo

siti

ons

atth

isfa

cilit

yby

the

end

of20

08.O

urop

erat

ions

atW

ashi

ngto

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Dul

les

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rnat

iona

lA

irpo

rtar

eba

sed

atT

erm

inal

B,w

here

we

curr

entl

yop

erat

efo

urga

tes

and

eigh

tti

cket

coun

ter

posi

tion

s.

We

leas

ea

70,0

00sq

uare

foot

airc

raft

mai

nten

ance

hang

aran

dan

adja

cent

32,0

00sq

uare

foot

offic

ean

dw

areh

ouse

faci

lity

atJF

Kto

acco

mm

odat

eou

rte

chni

cal

supp

ort

oper

atio

nsan

dpa

ssen

ger

prov

isio

ning

pers

onne

l.T

hegr

ound

leas

efo

rth

issi

teex

pire

sin

2030

.In

addi

tion

,we

occu

pya

port

ion

ofa

build

ing

atJF

Kw

here

we

stor

eai

rcra

ftsp

are

part

san

dpe

rfor

mgr

ound

equi

pmen

tm

aint

enan

ce.

We

also

leas

ea

fligh

ttr

aini

ngce

nter

atO

rlan

doIn

tern

atio

nal

Air

port

,whi

chen

com

pass

es80

,000

squa

refe

etan

dis

equi

pped

wit

hsi

xfu

llfli

ght

sim

ulat

ors,

two

cabi

ntr

aine

rs,a

trai

ning

pool

,cl

assr

oom

san

dsu

ppor

tar

eas.

Thi

sfa

cilit

y,w

hich

isca

pabl

eof

hous

ing

eigh

tfu

llfli

ght

sim

ulat

ors,

isbe

ing

used

for

the

init

ial

and

recu

rren

ttr

aini

ngof

our

pilo

tsan

din

fligh

tcr

ew,a

sw

ell

assu

ppor

ttr

aini

ngfo

rou

rte

chni

cal

oper

atio

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dai

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nad

diti

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ele

ase

a70

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squa

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rlan

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tern

atio

nal

Air

port

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chis

used

byL

ive

TV

for

the

inst

alla

tion

and

mai

nten

ance

ofin

-flig

htsa

telli

tete

levi

sion

syst

ems

and

airc

raft

mai

nten

ance

.The

grou

ndle

ases

for

our

Orl

ando

faci

litie

sex

pire

in20

35.

Our

prim

ary

corp

orat

eof

fices

are

loca

ted

inF

ores

tH

ills,

New

Yor

k,w

here

we

occu

pysp

ace

unde

ra

leas

eth

atex

pire

sin

2012

,and

our

finan

cede

part

men

tis

base

din

Dar

ien,

Con

nect

icut

,whe

rew

eoc

cupy

spac

eun

der

ale

ase

that

expi

res

in20

11.O

urof

fice

inSa

ltL

ake

Cit

y,U

tah,

whe

rew

eoc

cupy

spac

eun

der

ale

ase

that

expi

res

in20

14,c

onta

ins

aco

rete

amof

empl

oyee

sw

hoar

ere

spon

sibl

efo

rgr

oup

sale

s,cu

stom

erse

rvic

ean

dat

-hom

ere

serv

atio

nag

ent

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rvis

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