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Jetblue

Corporate finance

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Jetblue

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  1. jetBlue Airways By: Rachel Andersen, Joe Bossert, Jarvez Hall, Jeff Hensley, Brandon Kirkbride and Adam Tolman

  2. Agenda • Strategy • History • Competitors • Strengths/Weaknesses • Competitive Advantage • Facts • Financials • Advertising • Future of Company

  3. Strategy • “Our goal is to establish jetBlue as a leading low-fare, low-cost passenger airline by offering customers high-quality customer service and a differentiated product. We strive to offer low fares that stimulate market demand while maintaining a continuous focus on cost-containment and operating efficiencies. We intend to follow a controlled growth plan designed to take advantage of our competitive strengths. Our growth has occurred, and we believe it will continue to occur, by adding additional frequencies on existing routes, connecting new city pairs among the destinations we already serve and entering new markets often served by higher-cost, higher-fare airlines.”

  4. History • February 11, 2001 • CEO David Neeleman: “Bring humanity back to air travel”. • Executive Team • David Neeleman: Chief Executive Officer • Dave Barger: President & Chief Operating Officer • Thomas Kelly: Executive Vice President • John Owen: Executive Vice President & Chief Financial Officer

  5. More History • First and only U.S. start-up airline to launch with more than $100 million in capital • Began with service between New York City and Ft. Lauderdale, FL. • 2000: Flies its one millionth customer and reports $100 million in flown revenue for 2000. • 2001: Flies its two millionth customer. • 2002:Acquired 100% of the ownership interests in LiveTV. • 2003: Announces initial public offering of its common stock • 2004: Launches online flight check-in. • 2005: Receives FAA's highly coveted Diamond Certificate of Excellence Award.

  6. Southwest American Delta Northwest United Continental Pan Am Horizon/Alaskan Competitors

  7. Strengths Low Operating Costs 6.03 cents mile vs. 10.91 industry average 13.4 hrs average utilization per aircraft Productive workforce Low distribution costs Direct Bookings Single aircraft New Brand Strengths/Weaknesses • Weaknesses • Hubs • Destinations • Small Airlines • Single Class • Debt • Floating interest rates • Additional Financing problems • Maintenance Costs

  8. Competitive Advantages • Bulletproof Cockpits • Low fares • Experienced Management • Leather Seats • DirecTV • XM Radio coming soon!

  9. Facts FLEET: • 77 Airbus A320 aircraft , all powered by International Aero Engines (IAE) V2500 engines • JetBlue has orders with Airbus for a fleet of as many as 233 A320 aircraft and has placed an order with Embraer for a fleet of up to 200 EMBRAER 190 aircraft. The first EMBRAER 190 aircraft will be delivered in 2005. • JetBlue's A320 aircraft have a single-class configuration of 156 seats, while the EMBRAER 190 will have a single-class configuration of 100 seats. • All JetBlue's fleet is outfitted with leather seats with free DIRECTV programming® at every seat. JETBLUE -- FIRST AND ONLY: • First and only U.S. start-up airline to launch with more than $100 million in capital • First and only airline to offer 24-channels of live satellite television free at every seat • First and only airline to broadcast the Olympic Games live at every seat • First U.S. airline to introduce "paperless cockpit" flight technology • Only U.S. airline to be 100% ticketless • First U.S. airline to install bullet-proof cockpit doors across its fleet • First and only airline to install security cameras in passenger cabin for customer and crew safety

  10. Facts All JetBlue aircraft are equipped with an in-seat digital entertainment system (individual seatback monitors, armrest remotes with channel and volume controls) offering 36 channels of free DIRECTV® programming - no other airline offers more live satellite TV options. On flights longer than two hours, a selection of first-run movies and bonus features from FOX InFlight is also available. Over the next few months, we will be upgrading our entire fleet to include 100+ channels of XM Satellite Radio. INFLIGHT ENTERTAINMENT

  11. Cities Served • San Diego, CA • San Jose, CA • San Juan, Puerto Rico • Seattle, WA • Syracuse, NY • Tampa, FL • West Palm Beach, FL • Washington, DC • Aguadilla, Puerto Rico • Boston, MA • Buffalo, NY • Burbank, CA • Burlington, VT • Denver, CO • Fort Lauderdale, FL • Fort Myers, FL • Las Vegas, NV • Long Beach, CA (near Los Angeles) • Nassau, Bahamas • New Orleans, LA • New York City, NY (JFK) • New York City, NY (LaGuardia) • Newark, NJ (service starts October 5, 2005) • Oakland, CA (near San Francisco) • Ontario, CA (near Los Angeles) • Orlando, FL • Phoenix, AZ • Ponce, Puerto Rico • Portland, OR • Rochester, NY • Sacramento, CA • Santiago, Dominican Republic • Salt Lake City, UT

  12. Financials – Cost Structure

  13. Advertising Amy Curtis-McIntyre, VP of Marketing • “Advertising is the last thing you bring to the mix. You start by getting the product right, getting your attitude right, getting everyone internally understanding the mission. Then you move to telling the story through PR. You build the advertising last, and that way you can live on realistic budgets” • Commercials

  14. An Inside Look • Tour • In flight Entertainment • Blue Cities

  15. The Unadvertising • Hot Shorts

  16. AMERICAN EXPRESS AND JETBLUE® AIRWAYS EXTEND PARTNERSHIP WITH NEW COBRAND CREDIT CARD AGREEMENT • “Our partnership with JetBlue is another way we can offer consumers rewards products to fit their lifestyle with brands that have their loyalty.” Al Kelly, American Express. • “JetBlue is committed to finding new and innovative ways to offer our customers more ways to save and partnering with American Express will enable us to do just that.” David Neeleman, CEO, JetBlue

  17. You can purchase more than a flight

  18. Stock price

  19. Future of the Company • Expected Increase 4-5% • Expected Operating Capacity • 27-29% • 15 new aircrafts • 22% fuel costs hedged at $1.17 gal. • Expected Operating Margin 7-9%

  20. Sources • http://home3.americanexpress.com/corp/pc/2005/trueblue.asp • http://archives.californiaaviation.org/airport/jpg00600.jpg • http://www.jetblue.com/ • http://quotes.nasdaq.com/asp/summaryquote.asp?symbol=JBLU%60&selected=JBLU%60 • http://64.106.229.11/jetblue2004/balance.html • http://www.brandingblog.com/2004/05/branding_at_jet.html • http://www.sjc.org/AirportReport/Mar04/AR_content.html

  21. Just to end

  22. Questions?

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