Jetblue Airways Annual Report 2016

FY2016 Annual Report · Jetblue Airways
Loading PDF…
Dear Fellow Shareholders:

We are pleased to report the progress we made in 2016, culminating in one of the best years for JetBlue 
since the airline was founded 17 years ago. We’ve demonstrated that we can produce above average industry 
margins by offering a quality product at a competitive price. We believe this is a formula that will create value 
for our shareholders over the years to come. 

During 2016, we achieved many notable accomplishments including:
 ✓ Generated revenues of over $6.6 billion, up 3.4% year over year
 ✓ Earned net income of $759 million, an annual increase of 12.0%
 ✓ Reduced total debt to $1.4 billion, achieving a debt to capitalization ratio of 35%
 ✓ Increased our return on invested capital, or ROIC, by 60 bps to 14.3%

Our Strategy

We continued with our targeted growth strategy, further strengthening our position in our focus cities and 
offering our over 38 million annual customers a better travel experience at a reasonable price. We also continue 
to execute on the revenue initiatives we announced in 2014, further developing fare options, our co-branded 
credit card, and our highly proﬁtable Mint franchise while beginning our cabin restyling effort. We’ve developed a 
versatile ‘toolkit’ that we believe allows us to proﬁtably grow in markets that have been historically underserved 
by traditional low cost carrier and legacy airline models. 

Cost Initiatives

At our Investor Day in 2016, we launched a structural cost initiative that will further create shareholder value, even 
as we improve our customer experience. We’ve committed to achieving total cost savings of $250-300 million 
by 2020. The four areas we outlined include:
 (cid:116) Technical operations, focused on driving efﬁciencies in maintenance 
 (cid:116) Planning, automation and execution in airport operations 
 (cid:116) Finding further efﬁciencies through sourcing and in our support centers
 (cid:116) Decreasing our distribution costs
Our cost advantage over larger legacy airlines is what allows for proﬁtable growth with an industry-leading 
product. We believe our structural cost initiatives will add to the unit cost beneﬁt we expect to generate from 
our ongoing cabin restyling program. Both efforts underpin our expectations for ﬂat to plus one percent unit 
cost ex-fuel growth from 2018 to 2020.

Our Product

JetBlue differentiates itself from legacy airlines and other low cost airlines by offering a high-quality product at a 
reasonable price point. In order to offer this competitive value proposition, we are reconﬁguring and modernizing 
our ﬂeet through a multi-year cabin restyling program. We expect these efforts to further strengthen our product 
advantage and enhance the JetBlue experience while reducing unit costs. 

In 2016, we kicked off this program by converting all core A321 aircraft from 190 to 200 seats. We are proud 
to continue to offer the most legroom in coach of any airline in North America. The reconﬁgured cabin includes 
lighter and more comfortable seats, larger television screens with more entertainment options and power ports 
accessible to all customers. In 2017, we will begin bringing the same cabin upgrade to our A320 ﬂeet, increasing 
from 150 to 162 seats and adding the same features our customers love on the A321.

Another signiﬁcant effort in 2016 was the expansion of our industry-leading Mint premium experience. Mint is 
a best-in-class experience that serves business travelers and value-driven leisure customers. This product has 
exceeded expectations and is helping to drive improved margins in key transcontinental routes. We will continue 
bringing our Mint service to more markets in the next few years to help drive increased margins. In 2016, we 
accelerated our expansion of Mint, ending the year with 17 Mint aircraft and an additional 14 Mint aircraft to 
be delivered in 2017. 

Lastly, we continue adding value to our ancillary product portfolio. In 2016, we created a strong partnership 
between TrueBlue, our customer loyalty program, and Amazon, and continued to grow our co-branded 
credit card business. We continuously seek new ways to improve these and other consumer offerings to create 
shareholder value. 

Targeted Growth

Over the last ﬁve years, we’ve targeted our growth on a small number of strategic efforts, particularly Mint, 
New York, Boston and increasingly Ft. Lauderdale. Boston is now our highest margin focus city and we 
expect to grow our 150 ﬂights a day to 200 over the coming years. We added our 62nd Boston destination, 
New York LaGuardia, in 2016. Our Ft. Lauderdale franchise reached 100 ﬂights a day in 2016 as we continue 
to grow toward becoming the carrier of choice in South Florida. In 2016, we also announced our intention to 
organically grow our west coast presence by expanding our Mint offering to more transcontinental routes. As a  
point-to-point carrier, our growing presence is helping drive relevance and customer preference in our focus cities.

Our Culture

Our culture is what differentiates JetBlue from our competitors. Our mission is to Inspire Humanity and our 
customers recognize us as an airline that cares for them with this goal in mind. We ranked ﬁrst in customer 
satisfaction among low cost carriers for the 12th consecutive year by J.D. Power. In addition, in 2016 we were 
named by Forbes as one of the Top 10 ‘Best Places to Work’ in the United States, and the #1 company in the 
transportation and logistics category. 

These distinctions allow us to succeed in attracting and retaining top talent in a competitive market. We believe 
that our culture continues to set apart the JetBlue brand and is a powerful asset for shareholders. We are thankful 
to our over 20,000 JetBlue crewmembers for their hard work in delivering customers the JetBlue experience. 

A Look Ahead

Our 2016 performance reﬂects the strength of an always improving business model. In everything we do, our 
focus is to be the preferred airline for our customers, which we think in turn results in shareholder value. In 2017, 
we will take further steps to improve our value proposition to our customers. We will begin the implementation 
of our structural cost program, take further steps with our on-time performance efforts begun in 2016 and, 
lastly, continue with our targeted growth strategy.   

On behalf of our 20,000 engaged Crewmembers, thank you for your continued support.

Most sincerely,

Robin Hayes
President and Chief Executive Ofﬁcer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the ﬁscal year ended December 31, 2016

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission ﬁle number 000-49728

JETBLUE AIRWAYS CORPORATION

(Exact name of registrant as speciﬁed in its charter)

DELAWARE 
(State or other jurisdiction of incorporation or organization)
27-01 Queens Plaza North, Long Island City, New York 11101
(Address, including zip code, of registrant’s principal executive ofﬁces)

87-0617894
(I.R.S. Employer Identiﬁcation No.)
11101
(Zip Code)

(718) 286-7900
Registrant’s telephone number, including area code:

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class
Common Stock, $0.01 par value

Name of each exchange on which registered
The NASDAQ Global Select Market

Indicate by check mark 

YES

NO

 (cid:116) if the registrant is a well-known seasoned issuer, as deﬁned in Rule 405 of the Securities Act.

 (cid:116) if the registrant is not required to ﬁle reports pursuant to Section 13 or Section 15(d) of the Act.
 (cid:116) whether the registrant (1) has ﬁled all reports required to be ﬁled by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was 
required to ﬁle such reports), and (2) has been subject to such ﬁling requirements for the past 90 days.
 (cid:116) whether the registrant has submitted electronically and posted on its corporate Website, if any, every 
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required 
to submit and post such ﬁles).

 (cid:116) if disclosure of delinquent ﬁlers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not 
contained herein, and will not be contained, to the best of registrant’s knowledge, in deﬁnitive proxy or 
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this 
Form 10-K.

 (cid:116) whether the registrant is a large accelerated ﬁler, an accelerated ﬁler, a non-accelerated ﬁler, or a smaller reporting company. See the deﬁnitions 

of ‘’large accelerated ﬁler,” “accelerated ﬁler’’ and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated ﬁler 

Accelerated ﬁler 

Non-accelerated ﬁler 

Smaller reporting company 

 (cid:116) whether the registrant is a shell company (as deﬁned in Rule 12b-2 of the Exchange Act). 

The aggregate market value of the registrant’s common stock held by non-afﬁliates of the registrant as of June 30, 2016 was approximately 
$5.3 billion (based on the last reported sale price on the NASDAQ Global Select Market on that date). The number of shares outstanding of 
the registrant’s common stock as of January 31, 2017 was 337,036,221 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Designated portions of the Registrant’s Proxy Statement for its 2017 Annual Meeting of Stockholders, which is to be ﬁled subsequent to the 
date hereof, are incorporated by reference into Part III of this Annual Report on Form 10-K, or the Report, to the extent described therein.

Table of Contents

PART I. 

6

ITEM 1. 

Business ..................................................................................................................................................................................................................................................................................................6
Overview ..........................................................................................................................................................................................................................................................................................6
2016 Operational Highlights  ............................................................................................................................................................................................................................6
JetBlue Experience.........................................................................................................................................................................................................................................................7
Operations and Cost Structure ....................................................................................................................................................................................................................9
Culture ..........................................................................................................................................................................................................................................................................................12
Regulation ...............................................................................................................................................................................................................................................................................13
Where You Can Find Other Information .....................................................................................................................................................................................14
ITEM 1A.  Risk Factors ................................................................................................................................................................................................................................................................................15
Risks Related to JetBlue ...................................................................................................................................................................................................................................15
Risks Associated with the Airline Industry .............................................................................................................................................................................18
ITEM 1B.  Unresolved Staff Comments  ......................................................................................................................................................................................................................19
Properties ........................................................................................................................................................................................................................................................................................19
ITEM 2. 
Legal Proceedings ..........................................................................................................................................................................................................................................................20
ITEM 3. 
ITEM 4.  Mine Safety Disclosures .......................................................................................................................................................................................................................................20

PART II. 

21

ITEM 5.  Market for Registrant’s Common Equity; Related Stockholder Matters  

and Issuer Purchases of Equity Securities .........................................................................................................................................................................21
Selected Financial Data ........................................................................................................................................................................................................................................23
ITEM 6. 
ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations .........25
Overview ....................................................................................................................................................................................................................................................................................25
Results of Operations ............................................................................................................................................................................................................................................26
Liquidity and Capital Resources............................................................................................................................................................................................................30
Contractual Obligations ......................................................................................................................................................................................................................................32
Off-Balance Sheet Arrangements .......................................................................................................................................................................................................33
Critical Accounting Policies and Estimates ..........................................................................................................................................................................33
Regulation G Reconciliations of Non-GAAP Financial Measures .......................................................................................................34
ITEM 7A.  Quantitative and Qualitative Disclosures About Market Risk ...........................................................................................................36
Financial Statements and Supplementary Data ........................................................................................................................................................37
ITEM 8. 
Reports of Independent Registered Public Accounting Firm ....................................................................................................................37
Consolidated Balance Sheets ...................................................................................................................................................................................................................38
Consolidated Statements of Operations ..................................................................................................................................................................................40
Consolidated Statements of Comprehensive Income..........................................................................................................................................41
Consolidated Statements of Cash Flows ................................................................................................................................................................................42
Consolidated Statements of Stockholders’ Equity ...................................................................................................................................................43
Notes to Consolidated Financial Statements ....................................................................................................................................................................44

02

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

   
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ........60
ITEM 9. 
ITEM 9A.  Controls and Procedures ....................................................................................................................................................................................................................................60
ITEM 9B.  Other Information ..............................................................................................................................................................................................................................................................60

PART III. 

61

ITEM 10.  Directors, Executive Officers and Corporate Governance .....................................................................................................................61
Executive Compensation....................................................................................................................................................................................................................................62
ITEM 11. 
ITEM 12.  Security Ownership of Certain Beneficial Owners and Management  

and Related Stockholder Matters .......................................................................................................................................................................................................62
ITEM 13.  Certain Relationships and Related Transactions, and Director Independence ................................................62
ITEM 14.  Principal Accounting Fees and Services ................................................................................................................................................................................62

PART IV. 

63

ITEM 15. 
ITEM 16. 

Exhibits and Financial Statement Schedules .................................................................................................................................................................63
Form 10-K Summary ..................................................................................................................................................................................................................................................63

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

03

This page intentionally left blank.

04

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

Forward-Looking Information

Statements in this Report (or otherwise made by JetBlue or on JetBlue’s 
behalf) contain various forward-looking statements within the meaning of 
Section 27A of the Securities Act of 1933, as amended, or the Securities 
Act, and Section 21E of the Securities Exchange Act of 1934, as amended, 
or the Exchange Act, which represent our management’s beliefs and 
assumptions concerning future events. When used in this document and 
in documents incorporated herein by reference, the words “expects,” 
“plans,” “anticipates,” “indicates,” “believes,” “forecast,” “guidance,” 
“outlook,” “may,” “will,” “should,” “seeks,” “targets” and similar expressions 
are intended to identify forward-looking statements. Forward-looking 
statements involve risks, uncertainties and assumptions, and are based 
on information currently available to us. Actual results may differ materially 
from those expressed in the forward-looking statements due to many 
factors, including, without limitation, our extremely competitive industry; 
volatility in ﬁnancial and credit markets which could affect our ability to 
obtain debt and/or lease ﬁnancing or to raise funds through debt or 
equity issuances; volatility in fuel prices, maintenance costs and interest 
rates; our ability to implement our growth strategy; our signiﬁcant ﬁxed 
obligations and substantial indebtedness; our ability to attract and retain 
qualiﬁed personnel and maintain our culture as we grow; our reliance 
on high daily aircraft utilization; our dependence on the New York and 
Boston metropolitan markets and the effect of increased congestion in 
these markets; our reliance on automated systems and technology; our 
being subject to potential unionization, work stoppages, slowdowns or 
increased labor costs; our reliance on a limited number of suppliers; our 
presence in some international emerging markets that may experience 

political or economic instability or may subject us to legal risk; reputational 
and business risk from information security breaches or cyber-attacks; 
changes in or additional domestic or foreign government regulation; 
changes in our industry due to other airlines’ ﬁnancial condition; acts of 
war or terrorism; global economic conditions or an economic downturn 
leading to a continuing or accelerated decrease in demand for air travel; 
the spread of infectious diseases; adverse weather conditions or natural 
disasters; and external geopolitical events and conditions. It is routine for 
our internal projections and expectations to change as the year or each 
quarter in the year progresses, and therefore it should be clearly understood 
that the internal projections, beliefs and assumptions upon which we base 
our expectations may change prior to the end of each quarter or year.

Given the risks and uncertainties surrounding forward-looking statements, 
you should not place undue reliance on these statements. You should 
understand that many important factors, in addition to those discussed 
or incorporated by reference in this Report, could cause our results to 
differ materially from those expressed in the forward-looking statements. 
Potential factors that could affect our results include, in addition to others 
not described in this Report, those described in Item 1A of this Report 
under “Risks Related to JetBlue” and “Risks Associated with the Airline 
Industry.” In light of these risks and uncertainties, the forward-looking events 
discussed in this Report might not occur. Our forward-looking statements 
speak only as of the date of this Report. Other than as required by law, we 
undertake no obligation to update or revise forward-looking statements, 
whether as a result of new information, future events, or otherwise.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

05

   
  
PART I

ITEM 1.  Business

Overview

General

JetBlue Airways Corporation, or JetBlue, is New York’s Hometown Airline™. 
In 2016, JetBlue carried over 38 million Customers with an average of 
925 daily ﬂights and served 100 destinations in the United States, the 
Caribbean and Latin America.

JetBlue was incorporated in Delaware in August 1998 and commenced 
service on February 11, 2000. As of the end of 2016, we are the sixth 
largest passenger carrier in the U.S. based on available seat miles, or 
ASMs. We believe our differentiated product and culture combined with 
our competitive cost structure enables us to compete effectively in the 
high-value geographies we serve. Looking to the future, we plan to continue 
to grow in our high-value geographies, invest in industry leading products 
and provide award winning service by our more than 20,000 dedicated 
employees, whom we refer to as Crewmembers. Going forward we believe 
we will continue to differentiate ourselves from other airlines enabling us 
to continue to attract a greater mix of Customers and to drive further 
proﬁtable growth. We are focused on driving to deliver solid results for 
our shareholders, our Customers and our Crewmembers. 

 As used in this Report, the terms “JetBlue,” the “Company,” “we,” “us,” 
“our” and similar terms refer to JetBlue Airways Corporation and its 
subsidiaries, unless the context indicates otherwise. Our principal executive 
ofﬁces are located at 27-01 Queens Plaza North, Long Island City, New 
York 11101 and our telephone number is (718) 286-7900.

Our Industry and Competition

The U.S. airline industry is extremely competitive, challenging and results 
are often volatile. It is uniquely susceptible to external factors such as 
downturns in domestic and international economic conditions, weather-
related disruptions, the spread of infectious diseases, the impact of airline 
restructurings or consolidations, military actions or acts of terrorism. We 
operate in a capital and energy intensive industry that has high ﬁxed 
costs as well as heavy taxation and fees. Airline returns are sensitive to 
slight changes in fuel prices, average fare levels and passenger demand. 
The industry’s principal competitive factors include fares, brand and 
customer service, route networks, ﬂight schedules, aircraft types, safety 
records, code-sharing and interline relationships, in-ﬂight entertainment 
and connectivity systems and frequent ﬂyer programs.

Price competition is intense in our industry. Our ability to operate successfully 
and grow in this environment depends on, among other things, our ability 
to operate at costs equal to or lower than our competitors.

Since 2001, the majority of traditional network airlines have undergone 
signiﬁcant ﬁnancial restructuring including bankruptcies, mergers and 
consolidations. These types of restructurings typically result in a lower cost 
structure through a reduction of labor costs, restructuring of commitments 
including debt terms, leases and ﬂeet, modiﬁcation or termination of 
pension plans, increased workforce ﬂexibility, and innovative offerings. 
These actions also have provided the restructuring airline signiﬁcant 
opportunities for realignment of route networks, alliances and frequent 
ﬂyer programs. Each factor has had a signiﬁcant inﬂuence on the industry’s 
improved proﬁtability.

2016 Operational Highlights

We believe our differentiated product and culture, competitive costs and 
high-value geography relative to other airlines contributed to our continued 
success in 2016. Our 2016 operational highlights include:

since 2015. Our ﬁrst Fly-Fi™ enabled Embraer E190 aircraft made its 
inaugural commercial ﬂight in October 2015. During 2016, we retroﬁtted 
the remaining 53 Embraer E190 aircraft with Fly-Fi™. 

 (cid:116) Product enhancements – Throughout 2016 we continued to invest in 
industry-leading products which we believe will continue to differentiate 
our product offering from the other airlines. 
 – In June 2014, we launched our premium transcontinental product 
called Mint™. It includes 16 fully lie-ﬂat seats, four of which are in 
suites with a privacy door, a ﬁrst in the U.S. domestic market. During 
2016, we began Mint™ service from Boston’s Logan International 
Airport, and we added two seasonal international Mint™ destinations, 
St. Lucia and St. Maarten. In addition, we also announced plans to 
further expand Mint™ service to additional domestic routes.

 – During 2016, free Fly-Fi™ in-ﬂight internet service became available 
on our entire ﬂeet. Fly-Fi™ has been available across our Airbus ﬂeet 

 – We introduced Fare Options during the second quarter of 2015. 2016 
was our ﬁrst full year with Fare Options, which give our Customers a 
choice to purchase tickets from three branded fares: Blue, Blue Plus, 
and Blue Flex. Each fare includes different offerings, such as free 
checked bags, reduced change fees, and additional TrueBlue® points. 
Since the introduction of Fare Options, the program has exceeded 
our initial expectations.

 (cid:116) Fleet – In conjunction with our intention to expand our Mint™ experience, 
we amended our purchase agreement with Airbus in July 2016 to add 
30 incremental Airbus A321 aircraft to our order book. These aircraft are 
scheduled to be delivered between 2017 and 2023. We believe these 
incremental aircraft will allow us to continue to grow proﬁtably, particularly 
in the transcontinental market.

06

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART I  
ITEM 1 Business

We expanded our portfolio of commercial airline partnerships throughout 
2016 and announced code-sharing agreements with Azul Brazilian 
Airlines and Cape Air.

We are always working to make traveling easier and more affordable, 
and our 2016 partnership with Lyft is just the latest step. Customers 
can link their TrueBlue® account with Lyft, to take advantage of unique 
discounts, travel perks, and earn TrueBlue® loyalty points on any Lyft 
ride to and from any airport nationwide.

During 2016, we expanded our partnership with Amazon which already 
delivered Customers unlimited streaming entertainment over JetBlue’s 
acclaimed free Fly-Fi™. The expanded partnership offers TrueBlue® 
members who shop on Amazon, in the air or on the ground using a 
unique JetBlue link, the ability to earn three TrueBlue® points for every 
eligible dollar spent on Amazon.com.

 (cid:116) Customer Service – JetBlue and our Crewmembers were recognized 

in 2016 for industry leading customer service.
 – J.D. Power and Associates recognized JetBlue and our Crewmembers 
for the 12th consecutive year as the “Highest in Airline Customer 
Satisfaction among Low-Cost Carriers.” JetBlue also achieved the 
highest scores in the Aircraft and In-Flight Services categories.

 – JetBlue also received the top score on the American Customer 
Satisfaction Index (ACSI) among airlines. Our score of 80 was the 
best in the domestic airline industry. Additionally, we received 7 out 
of 7 stars for safety, and 5 out of 5 stars for our product offering from 
Airline Ratings.

 (cid:116) Our Crewmembers – During 2016, our Crewmembers recognized 
JetBlue as one of America’s “Best Employers” by Forbes. JetBlue ranked 
#8 through a survey that asked individuals how likely they would be to 
recommend their employer to someone else. We are proud that for a 
ﬁfth year we’ve achieved a top score of 100 on the Corporate Equality 
Index, which rates major U.S. companies and their policies and practices 
related to the LGBT community, earning us the designation of one of 
the “Best Places to Work for LGBT Equality.”

During 2016, we announced that effective January 1, 2017, proﬁt sharing 
eligible Crewmembers would receive an 8% raise and a modiﬁed proﬁt 
sharing plan. We believe this recognition and change to our compensation 
structure reﬂects industry trends and ensures that our Crewmember 
compensation and rewards are fair and competitive.

In support of our long-term transcontinental plans we currently expect 15 
of the incremental 30 Airbus A321 aircraft to be delivered with the current 
engine option (A321ceo) beginning in 2017. Our amendment includes 
ﬂexibility to take these deliveries in our Mint or all-core conﬁguration. We 
anticipate the remaining 15 aircraft to be Airbus A321 new engine option 
(A321neo), scheduled to be delivered beginning in 2020. Starting after 
June 2019, we have the option to take any or all of our A321neo deliveries 
with the long range conﬁguration, the A321-LR.

During 2016, we took delivery of 10 Airbus A321 aircraft, six of which 
were equipped with our Mint™ cabin layout. In addition, we ﬁnalized lease 
agreements for two additional Airbus A321 aircraft which we took delivery 
of during the fourth quarter of 2016. We bought out the leases on nine 
Airbus A320 aircraft in 2016. 

During the second half of 2016, we introduced Airbus’ new innovative 
galley and lavatory module on our single cabin layout Airbus A321with 
200 seats. Our cabin restyling program across our Airbus ﬂeet will enable 
an improved customer experience while freeing up valuable onboard 
space. We completed retroﬁtting our existing Airbus A321 single cabin 
layout aircraft to the 200 seats conﬁguration during 2016.

 (cid:116) Network – We continued to expand and grow in our high-value geography. 
In 2016, we expanded our network with eight new BlueCities, bringing 
our total as of the end of December 2016 to 100 BlueCities, and added 
several connect-the-dot routes. 

During 2016, we operated the ﬁrst commercial U.S. ﬂight to Cuba in 
50 years with our inaugural ﬂight from Fort Lauderdale-Hollywood to 
Santa Clara. We also began service to Camagüey and Holguin. We 
launched service to our 100th BlueCity, Havana, with the historical ﬁrst 
commercial ﬂight to Cuba from the New York area since scheduled service 
resumed in 2016. This marked the ﬁrst day of U.S. commercial service to 
the Cuban capital in more than 50 years. The New York metropolitan area 
is home to the second-largest Cuban-American population in the U.S.

During 2016, we announced the addition of six daily ﬂights from Boston 
to LaGuardia, one of the most requested destinations for our Boston 
business Customers.

 (cid:116) TrueBlue® and partnerships – During 2016, we launched a new  
co-branded credit card partnership with Barclaycard® on the MasterCard® 
network. We also have separate agreements with American Express® 
that allows any American Express® cardholder to convert Membership 
Rewards® points into TrueBlue® points, and new for 2016 we added a 
partnership agreement with Citibank® to convert Citi ThankYou® Rewards 
points into TrueBlue® points.

JetBlue Experience

We offer our Customers a distinctive ﬂying experience which we refer 
to as the “JetBlue Experience.” We believe we deliver award winning 
service that focuses on the entire customer experience, from booking 
their itinerary to arrival at their ﬁnal destination. Typically, our Customers 
are neither high-trafﬁc business travelers nor ultra-price sensitive travelers. 
Rather, we believe we are the carrier of choice for the majority of travelers 
who have been underserved by other airlines as we offer a differentiated 
product and award winning customer service.

Differentiated Product and Culture

Delivering the JetBlue Experience to our Customers through our differentiated 
product and culture is core to our mission to inspire humanity. We look 
to attract new Customers to our brand and provide current Customers 
reasons to come back by continuing to innovate and evolve the JetBlue 
Experience. We believe we can adapt to the changing needs of our 
Customers and a key element of our success is the belief that competitive 
fares and quality air travel need not be mutually exclusive.

Our award winning service begins from the moment our Customers purchase 
a ticket through one of our distribution channels such as www.jetblue.com, 
our mobile applications or our reservations centers. In the second quarter 
of 2015, we launched our new pricing model, Fare Options. Customers 
can now purchase tickets at one of three branded fares: Blue, Blue Plus, 
and Blue Flex. Each fare includes different offerings such as free checked 
bags, reduced change fees, and additional TrueBlue® points, with all fares 
including our core offering of free in-ﬂight entertainment, free brand name 
snacks and free non-alcoholic beverages. Customers can choose to “buy 
up” to an option with additional offerings. These fares allow Customers 
to select the products or services they need or value when they travel, 
without having to pay for the things they do not need or value.

Upon arrival at the airport, our Customers are welcomed by our dedicated 
Crewmembers and can choose to purchase one or more of our ancillary 
options such as Even More™ Speed, allowing them to enjoy an expedited 
security experience in most domestic JetBlue locations. Customers 
who select our Blue Flex option or purchase a Mint™ seat receive Even 
More™ Speed as part of their fare. We additionally have mobile applications 
for both Apple and Android devices which have robust features including 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

07

PART I  
ITEM 1 Business

real-time ﬂight information updates and mobile check-in for certain routes. 
Our applications are designed to enhance our Customers’ travel experience 
and are in keeping with the JetBlue Experience.

Our Airbus A321 aircraft in a single cabin layout have 200 seats and those 
with our Mint™ offering have 159 seats. Our Airbus A320 aircraft have 
150 seats while our Embraer E190 aircraft have 100 seats.

During 2016, we launched our self-service initiative in select BlueCities that 
redesigned the physical layout of the airport lobby and the way our Customers 
travel through it. Our new user-friendly kiosks are the ﬁrst point of contact 
for each Customer traveling through the lobby. While all Customers are 
encouraged to use the kiosks, our new lobby layout allows them to choose 
the check-in experience they prefer. For a virtually queue-less experience, 
the kiosk is the way to go. For Customers who prefer a more traditional 
experience, our Help Desk offers full-service check-in. The self-service model 
allows Crewmembers to get out from behind the ticket counter and move 
through the lobby to guide our Customers through the check-in process. 
The self-service lobby opens up the opportunity for our Crewmembers to 
make personal connections with our Customers, to assist with bag tagging, 
to answer customer questions and direct them to their next step.

Once onboard our aircraft, Customers enjoy seats in a comfortable layout 
with the most legroom in the main cabin of all U.S. airlines, based on 
average ﬂeet-wide seat pitch. Our Even More™ Space seats are available 
for purchase across our ﬂeet, giving Customers the opportunity to enjoy 
additional legroom. Customers on certain transcontinental or Caribbean 
ﬂights have the option to purchase our premium service, Mint™, which 
has 16 fully lie-ﬂat seats, including four suites with privacy doors.

Our in-ﬂight entertainment system onboard our Airbus A320 and Embraer 
E190 aircraft includes 36 channels of free DIRECTV®, 100 channels of 
free SiriusXM® satellite radio and premium movie channel offerings from 
JetBlue Features®. Customers on our Airbus A321 aircraft have access 
to 100 channels of DIRECTV®, 100+ channels of SiriusXM® radio and 
premium movie channel offerings from JetBlue Features®. Our Mint™ 
Customers enjoy 15-inch ﬂat screen televisions to experience our in-ﬂight 
entertainment offerings. In December 2013, we began to retroﬁt our 
Airbus ﬂeet with Fly-Fi™, a broadband product, with connectivity that we 
believe is signiﬁcantly faster than airlines featuring KU-band satellites and 
older ground to air technology. Our entire Airbus ﬂeet was equipped with 
Fly-Fi™ the entire year and we ﬁnished retroﬁtting our Embraer E190 ﬂeet 
during 2016. Since 2014, our Customers have enjoyed the Fly-Fi™ Hub, 
a content portal where Customers can access a wide range of movies, 
television shows and additional content from their own personal devices.

All Customers may enjoy an assortment of free and unlimited brand name 
snacks and non-alcoholic beverages and have the option to purchase 
additional products such as blankets, pillows, headphones, premium 
beverages and premium food selections. Our Mint™ Customers have 
access to an assortment of complimentary food, beverages and products 
including a small-plates menu, artisanal snacks, alcoholic beverages, a 
blanket, pillows and headphones.

Our cabin restyling program across our Airbus ﬂeet will enable an improved 
customer experience while freeing up valuable onboard space. As part of 
our cabin restyling program we expect to increase the seat density on our 
Airbus A320 ﬂeet. Commencing in 2017, we plan to reconﬁgure our Airbus 
A320 aircraft with new seats, larger TV screens with up to 100 channels 
of free DIRECTV®, and free gate-to-gate Fly-Fi™. Our reconﬁguring of 
our Airbus A320 aircraft will result in 162 seats. During the second half of 
2016, we took delivery of single cabin layout Airbus A321 aircraft which 
introduced Airbus’ new innovative galley and lavatory module with 200 
seats. We completed retroﬁtting our existing Airbus A321 single cabin 
layout aircraft from 190 seats to the 200 seats conﬁguration during 2016. 

Because of our network strength in leisure destinations, we also sell vacation 
packages through JetBlue® Vacations, a one-stop, value-priced vacation service 
for self-directed packaged travel planning. These packages offer competitive 
fares for air travel on JetBlue along with a selection of JetBlue-recommended 
hotels and resorts, car rentals and local attractions. During 2016, we rebanded 
JetBlue Getaways™ to JetBlue® Vacations to communicate more clearly to 
our Customers our many exciting leisure offerings, especially in our growing 
network in top leisure destinations like Florida and the Caribbean.

We work to provide a superior air travel experience, including communicating 
openly and honestly with Customers about delays and service disruptions. 
We are the only major U.S. airline to have a Customer Bill of Rights. This 
program was introduced in 2007 to provide compensation to Customers 
who experience inconveniences. This Customer Bill of Rights commits 
us to high service standards and holds us accountable if we fall short.

In 2016, we completed 98.7% of our scheduled ﬂights. Unlike most other 
airlines, we have a policy of not overbooking ﬂights.

Our Customers have repeatedly indicated the distinctive JetBlue Experience 
is an important reason why they select us over other carriers. We measure 
and monitor customer feedback regularly which helps us to continuously 
improve customer satisfaction. One way we do so is by measuring our 
net promoter score, or NPS. This metric is used by companies in a broad 
range of industries to measure and monitor the customer experience. Many 
of the leading consumer brands that are recognized for great customer 
service receive high NPS scores. We believe a higher NPS score has positive 
effects on customer loyalty and ultimately leads to increased revenue.

Network/ High-Value Geography

We are a predominately point-to-point system carrier, with the majority 
of our routes touching at least one of our six Focus Cities: New York, 
Boston, Fort Lauderdale-Hollywood, Orlando, Long Beach and San 
Juan, Puerto Rico. During 2016, over 94.5% of our Customers ﬂew on 
non-stop itineraries. 

Leisure traveler focused airlines are often faced with high seasonality. As a 
result, we continually work to manage our mix of Customers to include both 
business travelers and travelers visiting friends and relatives, or VFR. VFR 
travelers tend to be slightly less seasonal and less susceptible to economic 
downturns than traditional leisure destination travelers. Understanding the 
purpose of our Customers’ travel helps us optimize destinations, strengthen 
our network and increase unit revenues. All six of our Focus Cities are in 
regions with a diverse mix of trafﬁc and were proﬁtable in 2016.

As of December 31, 2016, our network served 100 BlueCities in 29 states, 
the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin 
Islands, and 21 countries in the Caribbean and Latin America. In 2016, we 
commenced service to eight new BlueCities including four destinations 
in Cuba and Quito, Ecuador. 

We also made changes across our network by announcing new routes 
between existing BlueCities. We group our capacity distribution based 
upon geographical regions rather than on a mileage or a length-of-haul 
basis. The historic distribution of ASMs, or capacity, by region for the 
years ending December 31 was:

2014
Capacity Distribution
31.4%
Caribbean & Latin America(1)
29.3
Florida
26.3
Transcontinental
5.7
East
4.7
Central
2.6
West
TOTAL
100.0%
(1)  Domestic operations as defined by the U.S. Department of Transport, or DOT, include Puerto Rico and the U.S. Virgin Islands, but for the purposes of the capacity distribution table above we 

2015
30.2%
29.2
28.5
5.7
3.8
2.6
100.0%

2016
30.1%
29.1
28.8
5.4
4.1
2.5
100.0%

have included these locations in the Caribbean and Latin America region.

08

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART I  
ITEM 1 Business

During the past decade we invested in our network, which had been 
dominated by the New York area with over half of our ASMs. Our network 
growth over the past few years has been focused on the business traveler in 
Boston as well as travelers to the Caribbean and Latin America region. We 
expect to focus on increasing our presence in Fort Lauderdale-Hollywood 
where we believe there is an opportunity to increase our operations to 
destinations throughout the Caribbean and Latin America. Our plan is 

supported by signiﬁcant investment from the Broward County Aviation 
Department in the airport and surrounding facilities. Our increased focus on 
Boston and Fort Lauderdale-Hollywood makes our ASMs more balanced 
and the overall network is stronger.

In 2017, we anticipate further expanding our network and have previously 
announced service to the following new destination:

Destination
Atlanta, GA

Service Commenced or Scheduled to Commence
March 30, 2017

Airline Commercial Partnerships

Airlines frequently participate in commercial partnerships with other carriers 
in order to increase customer convenience by providing interline-connectivity, 
code-sharing, coordinated ﬂight schedules, frequent ﬂyer program reciprocity 
and other joint marketing activities. As of December 31, 2016, we had 
48 airline commercial partnerships. Our commercial partnerships typically 
begin as an interline agreement allowing a customer to book one itinerary 
with tickets on multiple airlines. During 2016, we entered into ﬁve new 
interline agreements and four new code-sharing agreements. Code-sharing 
is a practice by which one airline places its name and ﬂight number on 
ﬂights operated by another airline. In 2017, we expect to continue to 
seek additional strategic opportunities through new commercial partners 
as well as assess ways to deepen select current airline partnerships. 
We plan to do this by expanding code-share relationships and other 
areas of cooperation such as frequent ﬂyer programs. We believe these 
commercial partnerships allow us to better leverage our strong network 
and drive incremental trafﬁc and revenue while improving off-peak travel.

Marketing

JetBlue is a widely recognized and respected global brand. JetBlue created 
a new category in air travel and our brand stands for high service quality at 
a reasonable cost. This brand has evolved into an important and valuable 
asset which identiﬁes us as a safe, reliable, high value airline. Similarly, we 
believe customer awareness of our brand has contributed to the success 
of our marketing efforts. It enables us to promote ourselves as a preferred 
marketing partner with companies across many different industries.

We market our services through advertising and promotions in various 
media forms including popular social media outlets. We engage in large 
multi-market programs, local events and sponsorships across our route 
network as well as mobile marketing programs. Our targeted public and 
community relations efforts reﬂect our commitment to the communities 
we serve, as well as promoting brand awareness and complementing 
our strong reputation.

Distribution

Our primary and preferred distribution channel to Customers is through 
our website, www.jetblue.com, our lowest cost channel. Our website 
allows us to more closely control and deliver the JetBlue Experience 
while also offering the full suite of JetBlue Fare Options, EvenMore™ 
Space and Speed, and other ancillary services. In the ﬁrst half of 2015, 
we introduced a new merchandising platform for www.jetblue.com with 
our business partner Datalex in addition to merchandising capabilities on 
our kiosks and in our self-service channels with our business partner IBM.

Our participation in global distribution systems, or GDS, supports our 
proﬁtable growth, particularly in the business market. We ﬁnd business 

Operations and Cost Structure

Customers are more likely to book through a travel agency or a booking 
product which relies on a GDS platform. Although the cost of sales 
through this channel is higher than through our website, the average fare 
purchased through GDS is generally higher and often covers the increased 
distribution costs. We currently participate in several major GDS and online 
travel agents, or OTA. Due to the majority of our Customers booking travel 
on our website, we maintain relatively low distribution costs despite our 
increased participation in GDS and OTA in recent years.

Customer Loyalty Program

TrueBlue® is our customer loyalty program designed to reward and 
recognize loyal Customers. Members earn points based upon the amount 
paid for JetBlue ﬂights and services from certain commercial partners. 
Our points do not expire, the program has no black-out dates or seat 
restrictions, and any JetBlue destination can be booked if the TrueBlue® 
member has enough points to exchange for the value of an open seat. 
Mosaic® is an additional level for our most loyal Customers who either 
(1) ﬂy a minimum of 30 times with JetBlue and acquire at least 12,000 
base ﬂight points within a calendar year or (2) accumulate 15,000 base 
ﬂight points within a calendar year. Over 1.6 million TrueBlue® one-way 
redemption awards were ﬂown during 2016, representing approximately 
4% of our total revenue passenger miles. 

We currently have co-branded loyalty credit cards available to eligible 
U.S. residents, as well as co-brand agreements in Puerto Rico and 
the Dominican Republic to allow cardholders to earn TrueBlue® points. 
During 2016, we launched a new co-branded credit card partnership with 
Barclaycard® on the MasterCard® network. To date, our new co-brand 
offerings exceeded expectations for conversion rates from the former co-
branded American Express® cardholders and new member enrollments. 
We also have co-branded loyalty credit cards issued by Banco Santander 
Puerto Rico and MasterCard® in Puerto Rico as well as Banco Popular 
Dominicano and MasterCard® in the Dominican Republic. These credit 
cards allow Customers in Puerto Rico and the Dominican Republic to 
take full advantage of our TrueBlue® loyalty program.

We have a separate agreement with American Express® that allows any 
American Express® cardholder to convert Membership Rewards® points 
into TrueBlue® points. During 2016, we added a partnership agreement with 
Citibank® to convert Citi ThankYou® Rewards points into TrueBlue® points. 
We have various agreements with other loyalty partners, including hotels 
and car rental companies, that allow their Customers to earn TrueBlue® 
points through participation in our partners’ programs. Starting in 2016, 
Customers can link their TrueBlue account with Lyft, to take advantage 
of unique discounts, travel perks, and earn TrueBlue loyalty points on 
any Lyft ride to and from any airport nationwide. We intend to continue 
to develop the footprint of our co-branded credit cards and pursue other 
loyalty partnerships in the future.

Historically, our cost structure has allowed us to price fares lower than 
many of our competitors and is a principal reason for our proﬁtable growth. 
Our current cost advantage relative to some of our competitors is due 
to, among other factors, high aircraft utilization, new and efﬁcient aircraft, 

relatively low distribution costs, and a productive workforce. Because our 
network initiatives and growth plans require a low cost platform, we strive 
to stay focused on our competitive costs, operational excellence, efﬁciency 
improvements and enhancing critical elements of the JetBlue Experience.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

09

PART I  
ITEM 1 Business

During 2016 we introduced our initiative to reduce our structural cost with 
the goal of saving $250 to $300 million by 2020. The program aims to cover 
all categories of our costs including our technical operations, corporate 
services, airports and our distribution network. Through a combination of 
strategic sourcing, planning, automation and a review of our distribution 
channel strategy we anticipate delivering structural cost savings which will 
continue to allow us to deliver the JetBlue Experience to our Customers 
while maintaining a competitive cost structure.

Route Structure

Our point-to-point system is the foundation of our operational structure, 
with the majority of our routes touching at least one of our six focus 
cities. This structure allows us to optimize costs as well as accommodate 
Customers’ preference for non-stop itineraries. A vast majority of our 
operations are centered in and around the heavily populated northeast 
corridor of the U.S., which includes the New York and Boston metropolitan 
areas. This airspace is some of the world’s most congested and drives 
certain operational constraints.

Our peak levels of trafﬁc over the course of the year vary by route; the 
East Coast to Florida/Caribbean routes peak from October through April 
and the West Coast routes peak in the summer months. Many of our 
areas of operations in the Northeast experience poor winter weather 
conditions, resulting in increased costs associated with de-icing aircraft, 
canceled ﬂights and accommodating displaced Customers. Many of our 
Florida and Caribbean routes experience bad weather conditions in the 
summer and fall due to thunderstorms and hurricanes. As we enter new 
markets we could be subject to additional seasonal variations along with 
competitive responses by other airlines.

 (cid:116) New York metropolitan area – We are New York’s Hometown Airline™. 
The majority of our ﬂights originate in the New York metropolitan area, 
the nation’s largest travel market. John F. Kennedy International Airport, 
or JFK, is New York’s largest airport, and we are the second largest 
airline at JFK as measured by domestic seats and our 2016 operations 
accounted for more than 37% of seats offered on domestic routes from 
JFK. As JFK is a slot controlled airport we have been able to continue 
to grow our operations by adding more seats per departure with the 
delivery of 37 Airbus A321 aircraft in total as of December 31, 2016, 
as well as continuing to optimize routes based upon load factor and 
costs. We operate from Terminal 5, or T5, and in November 2014 we 
opened T5i, an international arrivals facility that expands our current T5 
footprint. We believe T5i will enable us to increase operational efﬁciencies, 
provide savings, streamline our operations and improve the overall travel 
experience for our Customers arriving from international destinations. 
We also serve New Jersey’s Newark Liberty International Airport, or 
Newark, New York City’s LaGuardia Airport, or LaGuardia, Newburgh, 
New York’s Stewart International Airport and White Plains, New York’s 
Westchester County Airport. We are the leading carrier in the average 
number of ﬂights ﬂown per day between the New York metropolitan 
area and Florida. 

 (cid:116) Boston – We are the largest carrier in terms of ﬂights and capacity at 
Boston’s Logan International Airport. By the end of 2016 we ﬂew to 62 
non-stop destinations from Boston and served more than twice as many 
non-stop destinations than any other airline. Our operations accounted 
for more than 25% of all seats offered. We continue to capitalize on 
opportunities in the changing competitive landscape by adding routes, 
frequencies and increasing our relevance to local travelers. Our plan is 
to grow Boston with a general target of 200 ﬂights per day. In 2016, 
we launched Boston Mint™ service to San Francisco and Los Angeles, 
as well as seasonal international service to Barbados. In September 
2016, we announced nonstop service will be offered to Atlanta in the 
ﬁrst quarter of 2017. With the success of our existing Boston Mint™ 
routes, we announced additional Mint™ service between Boston and 
San Francisco in the third quarter of 2017. During 2016, we announced 
the addition of six daily ﬂights from Boston to LaGuardia, one of the most 
requested destinations for our Boston business Customers.

10

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

In November 2015, we unveiled Phase I of our $50 million Logan Terminal C 
upgrade which included new kiosks and ticket counters. Twenty-ﬁve kiosks 
and thirty check-in counters are in use in the North Pod of the terminal. 
Phase II of the upgrade, funded by the Massachusetts Port Authority, or 
Massport, was completed on the South Pod in 2016 which mirrors the 
check-in experience of the North Pod. Updated digital ﬂight information 
displays and a connector between Terminal C and international ﬂights 
at Terminal E were also completed during 2016.

 (cid:116) Caribbean and Latin America – At the end of 2016 we had 37 BlueCities 
in the Caribbean and Latin America and we expect our presence to 
continue to grow. San Juan, Puerto Rico is our only focus city outside 
of the Continental U.S. We are the largest airline in Puerto Rico serving 
more non-stop destinations than any other carrier. We are also the largest 
airline in the Dominican Republic, serving ﬁve airports in the country in 
2016, as we consolidated ﬂying to the Dominican Republic by closing 
Samana. While the Caribbean and Latin American region is a growing 
part of our network, operating in this region can present operational 
challenges, including working with less developed airport infrastructure, 
political instability and vulnerability to corruption. 

During 2016, we operated the ﬁrst commercial U.S. ﬂight to Cuba in 
50 years with our inaugural ﬂight from Fort Lauderdale-Hollywood to 
Santa Clara. We also began service to Camagüey and Holguin. We 
launched service to our 100t h BlueCity, Havana, with our historical 
ﬁrst scheduled commercial ﬂight to Cuba from the New York area 
since scheduled service resumed in 2016 marking the ﬁrst day of U.S. 
commercial service to the Cuban Capital in more than 50 years. The New 
York metropolitan area is home to the second-largest Cuban-American 
population in the U.S.

 (cid:116) Fort Lauderdale-Hollywood – We are the largest carrier at Fort 
Lauderdale-Hollywood International Airport, with approximately 25% 
of all seats offered in 2016. During 2016, we started service to eleven 
new destinations and grew departures by approximately 19%. We 
expect Fort Lauderdale-Hollywood to continue to be our fastest growing 
focus city in 2017. Flying out of Fort Lauderdale-Hollywood instead 
of nearby Miami International Airport helps preserve our competitive 
cost advantage through lower enplanement costs. In 2012, Broward 
County authorities commenced a multi-year, $2.3 billion refurbishment 
effort at the airport and surrounding facilities including the construction 
of a new south runway. We operate primarily out of Terminal 3 which 
is scheduled to be refurbished and connected to the upgraded and 
expanded international terminal by 2018. We will have additional facilities 
in the new international terminal to support our international arrivals. 
Terminal 3 allows for easy access to the expanded and enhanced airﬁeld. 
We expect the connection of these terminals to streamline operations for 
both Crewmembers and Customers. Due to these factors, it’s an ideal 
location between the U.S. and Latin America as well as South Florida’s 
high-value geography. We intend to focus on Fort Lauderdale-Hollywood 
growth going forward. During 2016, we announced that we expect to 
launch service from Fort Lauderdale-Hollywood to Aruba during the ﬁrst 
quarter of 2017, which would allow our Customers easier access to 
Aruba. We announced an expansion of our successful Mint™ offering to 
Fort Lauderdale-Hollywood with destinations of LAX and San Francisco 
expected during 2017.

 (cid:116) Orlando – We are the third largest carrier in terms of capacity at Orlando 
International Airport, or Orlando, with 13% of all seats offered in 2016. 
Orlando is JetBlue’s fourth largest focus city with 28 non-stop destinations 
and a growing mix of trafﬁc including leisure, VFR and business travelers. 
Our centralized training center, known as JetBlue University, is based 
in Orlando. In 2015, we opened the Lodge at OSC which is adjacent 
to our training center and is used for lodging our Crewmembers when 
they attend training. 

 (cid:116) Los Angeles area – We are the sixth largest carrier in the Los Angeles 
area measured by seats, operating from Long Beach Airport, or Long 
Beach, Los Angeles International Airport, or LAX, and Burbank’s Bob 
Hope Airport. We are the largest carrier in Long Beach, with almost 
77% of all seats offered in 2016 being operated by JetBlue. We had 

worked with the city of Long Beach and the community to request 
the U.S. Customs and Border Protection to add a Federal Inspection 
Site, or FIS, at the airport, which would have enabled us to serve 
international destinations from Long Beach. However during January 
2017, the Long Beach City Council voted against moving forward 
with the plans for the FIS facility. Long Beach remains an important 
BlueCity for JetBlue and is part of our broader strategy. In June 2014, 
we started operating our premium transcontinental service, Mint™, 
from LAX, which has continued to grow during 2016. We currently 
offer ten daily round trips between JFK and LAX and three daily round 
trips between BOS and LAX. In July 2016, we announced Mint™ will 
be offered on ﬂights from Fort Lauderdale to LAX expected to begin 
the ﬁrst quarter of 2017.

Fleet Structure

We currently operate Airbus A321, Airbus A320 and Embraer E190 aircraft 
types. In 2016, our ﬂeet had an average age of 8.9 years and operated an 
average of 12.0 hours per day. By scheduling and operating our aircraft 
more efﬁciently we are able to spread related ﬁxed costs over a greater 
number of ASMs. 

The reliability of our ﬂeet is essential to ensuring our operations run efﬁciently 
and we are continually working with our aircraft and engine manufacturers 
to enhance our performance.

We are working with the Federal Aviation Administration, or FAA, in efforts 
towards implementing the Next Generation Air Transportation System, or 
NextGen, by 2020. NextGen technology is expected to improve operational 
efﬁciency in the congested airspaces in which we operate. In 2012, we 
equipped 35 of our Airbus A320 aircraft to test ADS-B Out, a satellite 
based technology aimed to facilitate the communication between pilots 
and air trafﬁc controllers. Even though it is still in the testing phase we 
have already seen beneﬁts from the ADS-B Out equipment including being 
able to reroute ﬂights over the Gulf of Mexico to avoid bad weather, an 
area where the current FAA radar coverage is not complete. In 2012, we 
also became the ﬁrst FAA certiﬁed Airbus A320 carrier in the U.S. to use 
satellite-based Special Required Navigation Performance Authorization 
Required, or RNP AR, approaches at two of JFK’s prime and most used 
runways, 13L and 13R.

PART I  
ITEM 1 Business

Fleet Maintenance

Consistent with our core value of safety, our FAA-approved maintenance 
programs are administered by our technical operations department. We 
use qualiﬁed maintenance personnel and ensure they have comprehensive 
training. We maintain our aircraft and associated maintenance records in 
accordance with, if not exceeding, FAA regulations. Fleet maintenance 
work is divided into three categories: line maintenance, heavy maintenance 
and component maintenance.

The bulk of our line maintenance is handled by JetBlue technicians 
and inspectors. It consists of daily checks, overnight and weekly checks, 
“A” checks, diagnostics and routine repairs.

Heavy maintenance checks, or “C” checks, consist of a series of more 
complex tasks taking from one to four weeks to accomplish and are typically 
performed once every 15 months. All of our aircraft heavy maintenance 
work is performed by third party FAA-approved facilities such as Embraer, 
Haeco, Aeromantenimiento S.A. and Lufthansa Technik AG, and are subject 
to direct oversight by JetBlue personnel. We outsource heavy maintenance 
as the costs are lower than if we performed the tasks internally.

Component maintenance on equipment such as engines, auxiliary power 
units, landing gears, pumps and avionic computers are all performed by 
a number of different FAA-approved third party repair stations. We have 
maintenance agreements with MTU Maintenance Hannover GmbH, or MTU, 
for our Airbus aircraft engines and with GE Engine Services, LLC for our 
Embraer E190 aircraft engines. We also have an agreement with Lufthansa 
Technik AG for the repair, overhaul, modiﬁcation and logistics of certain Airbus 
components. Many of our maintenance service agreements are based on 
a ﬁxed cost per ﬂight hour. These ﬁxed costs vary based upon the age of 
the aircraft and other operating factors impacting the related component. 
Required maintenance not otherwise covered by these agreements is 
performed on a time and materials basis. All other maintenance activities are 
sub-contracted to qualiﬁed maintenance, repair and overhaul organizations.

Aircraft Fuel

Aircraft fuel continues to be one of our largest expenses. Its price and 
availability has been extremely volatile due to global economic and 
geopolitical factors which we can neither control nor accurately predict. 
We use a third party to assist with fuel management service and to procure 
most of our fuel. Our historical fuel consumption and costs for the years 
ended December 31 were:

Gallons consumed (millions)
Total cost (millions)(1)
Average price per gallon(1)
Percent of operating expenses
(1)  Total cost and average price per gallon each include related fuel taxes as well as effective fuel hedging gains and losses.

2016
760
$ 1,074
1.41
$
20.2%

2015
700
$ 1,348
1.93
$
25.9%

2014
639
$ 1,912
2.99
$
36.1%

We attempt to protect ourselves against the volatility of fuel prices by 
entering into a variety of derivative instruments. These include swaps, caps, 
collars, and basis swaps with underlyings of jet fuel, crude and heating oil.

Financial Health

We strive to maintain ﬁnancial strength and a cost structure that enables 
us to grow proﬁtably and sustainably. In the ﬁrst years of our history, we 
relied upon ﬁnancing activities to fund much of our growth. Starting in 2007, 
growth has largely been funded through internally generated cash from 
operations. Since 2012, while we have invested approximately $4.3 billion 
in capital assets, we have also generated approximately $5.6 billion in 
cash from operations, resulting in approximately $1.3 billion in free cash 
ﬂow. Our improved ﬁnancial results have resulted in better credit ratings, 
which in turn allows for more attractive ﬁnancing terms. Since 2012, we 
have also reduced our total debt balance by nearly $1.5 billion.

JetBlue Technology Ventures

In November 2015, JetBlue created a new wholly-owned subsidiary, 
JetBlue Technology Ventures, LLC, or JTV. JTV incubates, invests in and 
partners with early stage startups at the intersection of technology, travel 
and hospitality.

TWA Flight Center Hotel Development

In 2015, the Board of Commissioners of the Port Authority of New York 
& New Jersey, or the PANYNJ approved a construction plan to redevelop 
the TWA Flight Center at JFK on its nearly six-acre site into a hotel with 
over 500 rooms, meeting spaces, restaurants, a spa and an observation 
deck. The complex is planned to feature two six-story hotel towers. As 
part of the plan, a 75-year lease agreement involves Flight Center Hotel 
LLC, a partnership of MCR Development, LLC and JetBlue. We estimate 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

11

PART I  
ITEM 1 Business

our ultimate ownership in the hotel to be approximately 5% to 10% of 
the ﬁnal total investment. During December 2016, the TWA Flight Center 
Hotel ofﬁcially broke ground.

LiveTV

LiveTV, LLC, or LiveTV, was formerly a wholly owned subsidiary of JetBlue. 
It provides in-ﬂight entertainment and connectivity solutions for various 
commercial airlines including JetBlue. In June 2014, we sold LiveTV and 

its subsidiaries LTV Global, Inc., and LiveTV International, Inc., to Thales 
Holding Corporation, or Thales. In September 2014, following the receipt 
of regulatory approval, we sold LiveTV Satellite Communications, LLC, a 
subsidiary of LiveTV, to Thales. Following the completion of these sales, 
LiveTV operations ceased to be subsidiaries of JetBlue and are no longer 
presented in our consolidated ﬁnancial statements. JetBlue, ViaSat Inc. and 
LiveTV have worked together to develop and support in-ﬂight broadband 
connectivity for JetBlue which is being marketed as Fly-Fi™. JetBlue 
expects to continue to be a signiﬁcant customer of LiveTV through its 
in-ﬂight entertainment and onboard connectivity products and services.

Culture

Our People

Our success depends on our Crewmembers delivering a terriﬁc customer 
experience in the sky and on the ground. One of our competitive strengths 
is a service orientated culture grounded in our ﬁve key values: safety, caring, 
integrity, passion and fun. We believe a highly productive and engaged 
workforce enhances customer loyalty. Our goal is to hire, train and retain 
a diverse workforce of caring, passionate, fun and friendly people who 
share our mission to inspire humanity.

Our culture is ﬁrst introduced to new Crewmembers during the screening 
process and then at an extensive new hire orientation program at JetBlue 
University, our training center in Orlando. Orientation focuses on the JetBlue 
strategy and emphasizes the importance of customer service, productivity 
and cost control. We provide continuous training for our Crewmembers 
including technical training, a specialized captain leadership training 
program unique in the industry, a leadership program for current company 
managers, an emerging managers program, regular training focused on 
the safety value and front line training for our customer service teams.

Our growth plans necessitate and facilitate opportunities for talent 
development. In 2008, we launched the University Gateway Program, 
one of our many pilot recruitment initiatives, which made us the ﬁrst airline 
to provide a training program for undergraduate students interested in 
becoming JetBlue First Ofﬁcers. During 2016 we launched Gateway Select, 
a program for prospective pilots to join us for a rigorous, approximately 
four-year long training program that incorporates classroom learning, 
extensive real-world ﬂying experience and instruction in full ﬂight simulators.

We believe a direct relationship between Crewmembers and our leadership 
is in the best interests of our Crewmembers, our Customers and our 
shareholders. Except for our pilots, our Crewmembers do not have third-
party representation. In April 2014, JetBlue pilots elected to be solely 
represented by the Air Line Pilots Association, or ALPA. The National 
Mediation Board, or NMB, certiﬁed ALPA as the representative body for 
JetBlue pilots and we are working with ALPA to reach our ﬁrst collective 
bargaining agreement. We have individual employment agreements with 
each of our non-unionized FAA licensed Crewmembers which consist 
of dispatchers, technicians, inspectors and air trafﬁc controllers. Each 
employment agreement is for a term of ﬁve years and renews for an 
additional ﬁve-year term, unless the Crewmember is terminated for cause 
or the Crewmember elects not to renew. Pursuant to these employment 
agreements, Crewmembers can only be terminated for cause. In the event 
of a downturn in our business, resulting in a reduction of ﬂying and related 
work hours, we are obligated to pay these Crewmembers a guaranteed 
level of income and to continue their beneﬁts. We believe that through 
these agreements we provide what we believe to be industry-leading job 
protection language. We believe these agreements provide JetBlue and 
Crewmembers ﬂexibility and allow us to react to Crewmember needs 
more efﬁciently than collective bargaining agreements.

A key feature of the direct relationship with our Crewmembers is our Values 
Committees which are made up of peer-elected frontline Crewmembers 
from each of our major work groups, other than pilots. They represent the 

12

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

interests of our workgroups and help us run our business in a productive 
and efﬁcient way. We believe this direct relationship with Crewmembers 
drives higher levels of engagement and alignment with JetBlue’s strategy, 
culture and overall goals.

We believe the efﬁciency and engagement of our Crewmembers is a result of 
our ﬂexible and productive work rules. We are cognizant of the competition 
for productive labor in key industry positions and new government rules 
requiring higher qualiﬁcations as well as more restricted hours that may 
result in potential labor shortages in the upcoming years.

Our leadership team communicates on a regular basis with all Crewmembers 
in order to maintain this direct relationship and to keep them informed 
about news, strategy updates and challenges affecting the airline and the 
industry. Effective and frequent communication throughout the organization 
is fostered through various means including email messages from our CEO 
and other senior leaders at least weekly, weekday news updates to all 
Crewmembers, employee engagement surveys, a quarterly Crewmember 
magazine and active leadership participation in new hire orientations. 
Leadership is also heavily involved in periodic open forum meetings across 
our network, called “pocket sessions” which are often videotaped and 
posted on our intranet. By soliciting feedback for ways to improve our 
service, teamwork and work environment, our leadership team works 
to keep Crewmembers engaged and makes our business decisions 
transparent. Additionally we believe cost and revenue improvements are 
best recognized by Crewmembers on the job.

Our average number of full-time equivalent employees for the year ended 
December 31, 2016 consisted of 3,037 pilots, 3,670 ﬂight attendants, 4,233 
airport operations personnel, 554 technicians (whom other airlines may refer 
to as mechanics), 1,307 reservation agents, and 2,895 management and 
other personnel. For the year ended December 31, 2016, we employed 
an average of 13,566 full-time and 4,840 part-time Crewmembers.

Crewmember Programs

We are committed to supporting our Crewmembers through a number 
of programs including:

 (cid:116) Crewmember Resource Groups (CRGs) – These are groups of 
Crewmembers formed to act as a resource for both the group members 
as well as JetBlue. The groups serve as an avenue to embrace and 
encourage different perspectives, thoughts and ideas. At the end of 
2016, we had four CRGs in place: JetPride, Women in Flight, Vets in 
Blue, and BlueConexion.

 (cid:116) JetBlue Crewmember Crisis Fund (JCCF) – This organization was 
formed in 2002 as a non-proﬁt corporation independent from JetBlue 
and recognized by the IRS as of that date as a tax-exempt entity. JCCF 
was created to assist JetBlue Crewmembers and their immediate family 
members (IRS Dependents) in times of crisis. Funds for JCCF grants 
come directly from Crewmember donations via a tax-deductible payroll 
deduction. The assistance process is conﬁdential with only the fund 
administrator and coordinator knowing the identity of the Crewmembers 
in need.

PART I  
ITEM 1 Business

 (cid:116) JetBlue Scholars – Developed in 2015, this program offers a new and 
innovative model to our Crewmembers wishing to further their education. 
Crewmembers enrolled in the program can earn a bachelor’s degree 
through self-directed online college courses facilitated by JetBlue. The 
ﬁrst class of JetBlue Scholars graduated in September 2016 with 50 
Crewmembers completing their undergraduate college degrees.

 (cid:116) Lift Recognition Program – Formed in 2012, this Crewmember recognition 
program encourages Crewmembers to celebrate their peers for living 
JetBlue’s values by sending e-thanks through an on-line platform. Our 
senior leadership team, periodically hosts an event for the Crewmembers 
who receive the highest number of Lift award recognitions in each quarter 
of the year. In 2016, we saw more than 100,000 Lift awards.

Community Programs

JetBlue is strongly committed to supporting the communities and BlueCities 
we serve through a variety of community programs including:

 (cid:116) Corporate Social Responsibility (CSR) – The CSR team supports not-
for-proﬁt organizations focusing on youth and education, environment, 
and community in the BlueCities we serve. The team organizes and 
supports community service projects, charitable giving and non-proﬁt 
partnerships such as KaBOOM! and Soar with Reading.

 (cid:116) JetBlue Foundation – Organized in 2013 as a non-proﬁt corporation, this 
foundation is a JetBlue-sponsored organization to advance aviation-related 

education and to continue our efforts to promote aviation as a career 
choice for students. The foundation intends to do this by igniting interest 
in science, technology, engineering and mathematics. The foundation is 
legally independent from JetBlue and has a Board of Directors as well as 
an Advisory Committee, both of which are made up of Crewmembers. 
The foundation is recognized by the IRS as a tax-exempt entity.

 (cid:116) USO Center T5/JFK – Continuing our tradition of proudly supporting 
the men, women and families of the U.S. military, in September 2014 we 
opened a USO Center in T5 at JFK. The Center is open seven days a 
week, 365 days per year for military members and their families traveling 
on any airline at JFK, not just JetBlue. This center is fully stocked with 
computers, televisions, gaming devices/stations, furniture, iPads, food, 
beverages and much more. In conjunction with leading airport design ﬁrm 
Gensler, Turner Construction Company, the PANYNJ and more than 28 
contractors and individual donors, 100% of the space, services, labor 
and materials were donated to ensure the USO Center would be free of 
any ﬁnancial burden. Crewmembers donate time to help run the center.
 (cid:116) T5 Farm – Creating a healthier airport environment is a core pillar of 
JetBlue’s sustainability philosophy. Through a partnership with TERRA 
brand and support from GrowNYC and the PANYNJ, we created the T5 
Farm, a blue potato farm and produce garden at T5. The T5 Farm aims 
to serve as an agricultural and educational resource for the community, 
as well as absorb rainwater and runoff, reducing the possibility of 
ﬂooding in the adjacent areas. Produce from the T5 Farm is donated 
to local food pantries.

Regulation

Airlines are heavily regulated, with rules and regulations set by various 
federal, state and local agencies. We also operate under speciﬁc regulations 
due to our operations within the high density airspace of the northeast 
U.S. Most of our airline operations are regulated by U.S. governmental 
agencies including:

DOT – The DOT primarily regulates economic issues affecting air service 
including, but not limited to, certiﬁcation and ﬁtness, insurance, consumer 
protection and competitive practices. They set the requirement that carriers 
cannot permit domestic ﬂights to remain on the tarmac for more than three 
hours. The DOT also requires that the advertised price for an airfare or a 
tour package including airfare, e.g., a hotel/air vacation package, has to 
be the total price to be paid by the customer, including all government 
taxes and fees. It has the authority to investigate and institute proceedings 
to enforce its economic regulations and may assess civil penalties, revoke 
operating authority and seek criminal sanctions.

FAA – The FAA primarily regulates ﬂight operations, in particular, matters 
affecting air safety. This includes but is not limited to airworthiness 
requirements for aircraft, the licensing of pilots, mechanics and dispatchers, 
and the certiﬁcation of ﬂight attendants. It requires each airline to obtain an 
operating certiﬁcate authorizing the airline to operate at speciﬁc airports 
using speciﬁed equipment. Like all U.S. certiﬁed carriers, JetBlue cannot 
ﬂy to new destinations without the prior authorization of the FAA. After 
providing notice and a hearing, it has the authority to modify, suspend 
temporarily or revoke permanently our authority to provide air transportation 
or that of our licensed personnel for failure to comply with FAA regulations. 
It can additionally assess civil penalties for such failures as well as institute 
proceedings for the imposition and collection of monetary ﬁnes for the 
violation of certain FAA regulations. When signiﬁcant safety issues are 
involved, it can revoke a U.S. carrier’s authority to provide air transportation 
on an emergency basis, without providing notice and a hearing. It monitors 
our compliance with maintenance as well as ﬂight operations and safety 
regulations. It maintains on-site representatives and performs frequent 
spot inspections of our aircraft, Crewmembers and records. It also has 
the authority to issue airworthiness directives and other mandatory orders. 
This includes the inspection of aircraft and engines, ﬁre retardant and 
smoke detection devices, collision and windshear avoidance systems, 
noise abatement and the mandatory removal and replacement of aircraft 

parts that have failed or may fail in the future. We have and maintain FAA 
certiﬁcates of airworthiness for all of our aircraft and have the necessary 
FAA authority to ﬂy to all of the destinations we currently serve.

TSA and U.S. Customs and Border Protection – The TSA and the U.S. 
Customs and Boarder Protection, or CBP, operate under the Department 
of Homeland Security and are responsible for all civil aviation security. This 
includes passenger and baggage screening; cargo security measures; 
airport security; assessment and distribution of intelligence; security 
research and development; international passenger screening; customs; 
and agriculture. It also has law enforcement powers and the authority 
to issue regulations, including in cases of national emergency, without 
a notice or comment period. It can also assess civil penalties for such 
failures as well as institute proceedings for the imposition and collection 
of monetary ﬁnes for the violation of certain regulations.

Taxes & Fees – The airline industry is one of the most heavily taxed in 
the U.S., with taxes and fees accounting for approximately 17% of the 
total fare charged to a customer. Airlines are obligated to fund all of these 
taxes and fees regardless of their ability to pass these charges on to the 
customer. The TSA sets the September 11, or 9/11, Security Fee which 
is passed through to the customer. On July 21, 2014, the 9/11 Security 
Fee was increased from $2.50 per enplanement, with a maximum of $5 
per one-way trip, to $5.60 per enplanement, regardless of the number of 
connecting ﬂights. On December 19, 2014, the fee was amended and a 
round trip was limited to a maximum of $11.20. Effective December 28, 
2015, the Animal and Plant Health Inspection Service Aircraft Inspection fee 
increased from $70.75 to $225 per international aircraft arriving in the U.S.

State and Local – We are subject to state and local laws and regulations 
in a number of states in which we operate and the regulations of various 
local authorities operating the airports we serve.

Airport Access – JFK, LaGuardia, and Ronald Reagan Washington 
National Airport, or Reagan National, are Slot-controlled airports subject 
to the “High Density Rule” and successor rules issued by the FAA. These 
rules were implemented due to the high volume of trafﬁc at these popular 
airports located in the northeast corridor airspace. The rules limit the air 
trafﬁc in and out of these airports during speciﬁc times; however, even 
with the rules in place, delays remain among the highest in the nation due 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

13

PART I  
ITEM 1 Business

to continuing airspace congestion. We additionally have Slots at other 
Slot-controlled airports governed by unique local ordinances not subject 
to the High Density Rule, including Westchester County Airport in White 
Plains, NY and Long Beach (California) Municipal Airport.

Airport Infrastructure – The northeast corridor of the U.S. contains some 
of the most congested airspaces in the world. The airports in this region 
are some of the busiest in the country, the majority of which are more than 
60 years old. Due to high usage and aging infrastructure, issues arise at 
these airports that are not necessarily seen in other parts of the country. 
At JFK, the completion of high-speed taxiways, in addition to the runway 
renovations ﬁnished in 2015, enables landing aircraft the ability to exit the 
runway faster. We renovated our lobby layout as part of our self-service 
initiative with our new user friendly kiosks. At LaGuardia, construction of a 
new terminal B, from which we operate, will feature one security checkpoint 
providing travelers with access to all concourses, pedestrian bridges 
where Customers can walk above aircraft taxi lanes to move between the 
terminal and two new island concourses, a ﬁrst for LaGuardia. The project 
is expected to be complete in the next three to ﬁve years.

Foreign Operations – International air transportation is subject to 
extensive government regulation. The availability of international routes to 
U.S. airlines is regulated by treaties and related agreements between the 
U.S. and foreign governments. We currently operate international service 
to Antigua and Barbuda, Aruba, the Bahamas, Barbados, Bermuda, the 
Cayman Islands, Colombia, Costa Rica, Cuba, Curaçao, the Dominican 
Republic, Ecuador, Grenada, Haiti, Jamaica, Mexico, Peru, Saint Lucia, 
St. Maarten, Trinidad and Tobago and the Turks and Caicos Islands. To 
the extent we seek to provide air transportation to additional international 
markets in the future, we would be required to obtain necessary authority 
from the DOT and the applicable foreign government.

We believe we are operating in material compliance with DOT, FAA, TSA, 
CBP and applicable international regulations as well as hold all necessary 
operating and airworthiness authorizations and certiﬁcates. Should any of 
these authorizations or certiﬁcates be modiﬁed, suspended or revoked, 
our business could be materially adversely affected.

Other

Environmental – We are subject to various federal, state and local laws 
relating to the protection of the environment. This includes the discharge 
or disposal of materials and chemicals as well as the regulation of aircraft 
noise administered by numerous state and federal agencies.

The Airport Noise and Capacity Act of 1990 recognizes the right of airport 
operators with special noise problems to implement local noise abatement 
procedures as long as those procedures do not interfere unreasonably 
with the interstate and foreign commerce of the national air transportation 
system. Certain airports, including San Diego and Long Beach airports in 
California, have established restrictions to limit noise which can include 
limits on the number of hourly or daily operations and the time of such 
operations. These limitations are intended to protect the local noise-
sensitive communities surrounding the airport. Our scheduled ﬂights 
at Long Beach and San Diego are in compliance with the noise curfew 
limits, but on occasion when we experience irregular operations we may 
violate these curfews. We have agreed to a payment structure with the 
Long Beach City Prosecutor for any violations which we pay quarterly to 

Where You Can Find Other Information

the Long Beach Public Library Foundation. The payment is based on the 
number of infractions in the preceding quarter. This local ordinance has not 
had, and we believe it will not have, a negative effect on our operations.

We use our JetBlue Sustainability program on www.jetblue.com/green/ to 
educate our Customers and Crewmembers about environmental issues and 
to inform the public about our environmental protection initiatives. Our most 
recent corporate sustainability report is available on our website and addresses 
our environmental programs, including those aimed at curbing greenhouse 
emissions, our recycling efforts and our focus on corporate social responsibility.

During 2016, we entered into a partnership to buy renewable jet fuel 
produced from biological resources, like plant material. This marked the 
largest, long-term, commitment globally by any airline for a jet fuel based 
on fatty acids.

Foreign Ownership – Under federal law and DOT regulations, we must 
be controlled by U.S. citizens. In this regard, our president and at least 
two-thirds of our board of directors must be U.S. citizens. Further, no 
more than 24.99% of our outstanding common stock may be voted by 
non-U.S. citizens. We believe we are currently in compliance with these 
ownership provisions.

Other Regulations – All airlines are subject to certain provisions of 
the Communications Act of 1934 due to their extensive use of radio 
and other communication facilities. They are also required to obtain an 
aeronautical radio license from the FCC. To the extent we are subject 
to FCC requirements, we take all necessary steps to comply with those 
requirements.

Our labor relations are covered under Title II of the Railway Labor Act of 
1926 and are subject to the jurisdiction of the NMB. In addition, during 
periods of fuel scarcity, access to aircraft fuel may be subject to federal 
allocation regulations.

Civil Reserve Air Fleet – We are a participant in the Civil Reserve Air 
Fleet Program, which permits the U.S. Department of Defense to utilize 
our aircraft during national emergencies when the need for military airlift 
exceeds the capability of military aircraft. By participating in this program, 
we are eligible to bid on and be awarded peacetime airlift contracts with 
the U.S. military.

Insurance

We carry insurance of types customary in the airline industry and at amounts 
deemed adequate to protect us and our property as well as comply with 
both federal regulations and certain credit and lease agreements. As a result 
of the terrorist attacks of September 11, 2001, aviation insurers signiﬁcantly 
reduced the amount of insurance coverage available to commercial airlines 
for liability to persons other than Crewmembers or passengers for claims 
resulting from acts of terrorism, war or similar events. This is known as war 
risk coverage. At the same time, these insurers signiﬁcantly increased the 
premiums for aviation insurance in general. The U.S. government agreed 
to provide commercial war-risk insurance for U.S. based airlines, covering 
losses to Crewmembers, passengers, third parties and aircraft. Prior to the 
end of U.S. government war-risk insurance coverage, JetBlue obtained 
comparable coverage in the commercial market starting in 2014 as part 
of our overall hull and liability insurance coverage.

Our website is www.jetblue.com. Information contained on our website is 
not part of this Report. Information we furnish or ﬁle with the SEC, including 
our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current 
Reports on Form 8-K and any amendments to or exhibits included in these 
reports are available for download, free of charge, on our website soon 
after such reports are ﬁled with or furnished to the SEC. Our SEC ﬁlings, 
including exhibits ﬁled therewith, are also available at the SEC’s website 

at www.sec.gov. You may obtain and copy any document we furnish or 
ﬁle with the SEC at the SEC’s public reference room at 100 F Street, NE, 
Room 1580, Washington, D.C. 20549. You may obtain information on 
the operation of the SEC’s public reference facilities by calling the SEC 
at 1-800-SEC-0330. You may request copies of these documents, upon 
payment of a duplicating fee, by writing to the SEC at its principal ofﬁce 
at 100 F Street, NE, Room 1580, Washington, D.C. 20549.

14

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

ITEM 1A. Risk Factors

Risks Related to JetBlue

We operate in an extremely competitive industry.

The domestic airline industry is characterized by low proﬁt margins, high 
ﬁxed costs and signiﬁcant price competition in an increasingly concentrated 
competitive ﬁeld. We currently compete with other airlines on all of our routes. 
Most of our competitors are larger and have greater ﬁnancial resources and 
name recognition than we do. Following our entry into new markets or expansion 
of existing markets, some of our competitors have chosen to add service or 
engage in extensive price competition. Unanticipated shortfalls in expected 
revenues as a result of price competition or in the number of passengers 
carried would negatively impact our ﬁnancial results and harm our business. 
The extremely competitive nature of the airline industry could prevent us 
from attaining the level of passenger trafﬁc or maintaining the level of fares 
required to maintain proﬁtable operations in new and existing markets and 
could impede our proﬁtable growth strategy, which would harm our business.

Furthermore, there have been numerous mergers and acquisitions within 
the airline industry in recent years. The industry may continue to change. 
Any business combination could signiﬁcantly alter industry conditions 
and competition within the airline industry and could cause fares of our 
competitors to be reduced. Additionally, if a traditional network airline 
were to fully develop a low cost structure, or if we were to experience 
increased competition from low cost carriers, our business could be 
materially adversely affected.

Our business is highly dependent on the availability of fuel and fuel is 
subject to price volatility.

Our results of operations are heavily impacted by the price and availability 
of fuel. Fuel costs comprise a substantial portion of our total operating 
expenses. Historically, fuel costs have been subject to wide price ﬂuctuations 
based on geopolitical factors as well as supply and demand. The availability 
of fuel is not only dependent on crude oil but also on reﬁning capacity. 
When even a small amount of the domestic or global oil reﬁning capacity 
becomes unavailable, supply shortages can result for extended periods of 
time. The availability of fuel is also affected by demand for home heating 
oil, gasoline and other petroleum products, as well as crude oil reserves, 
dependence on foreign imports of crude oil and potential hostilities in oil 
producing areas of the world. Because of the effects of these factors 
on the price and availability of fuel, the cost and future availability of fuel 
cannot be predicted with any degree of certainty.

Our aircraft fuel purchase agreements do not protect us against price increases 
or guarantee the availability of fuel. Additionally, some of our competitors 
may have more leverage than we do in obtaining fuel. We have and may 
continue to enter into a variety of option contracts and swap agreements 
for crude oil, heating oil, and jet fuel to partially protect against signiﬁcant 
increases in fuel prices. However, such contracts and agreements do not 
completely protect us against price volatility, are limited in volume and 
duration in the respective contract, and can be less effective during volatile 
market conditions and may carry counterparty risk. Under the fuel hedge 
contracts we may enter from time to time, counterparties to those contracts 
may require us to fund the margin associated with any loss position on the 
contracts if the price of crude oil falls below speciﬁed benchmarks. Meeting 
our obligations to fund these margin calls could adversely affect our liquidity.

Due to the competitive nature of the domestic airline industry, at times we 
have not been able to adequately increase our fares to offset the increases 
in fuel prices nor may we be able to do so in the future. Future fuel price 
increases, continued high fuel price volatility or fuel supply shortages may 
result in a curtailment of scheduled services and could have a material 
adverse effect on our ﬁnancial condition and results of operations.

We have a signiﬁcant amount of ﬁxed obligations and we will incur 
signiﬁcantly more ﬁxed obligations which could harm our ability to service 
our current obligations or satisfy future ﬁxed obligations.

PART I  
ITEM 1A Risk Factors

As of December 31, 2016, our debt of $1.4 billion accounted for 27% of 
our total capitalization. In addition to long-term debt, we have a signiﬁcant 
amount of other ﬁxed obligations under operating leases related to our aircraft, 
airport terminal space, airport hangers, other facilities and ofﬁce space. As 
of December 31, 2016, future minimum payments under noncancelable 
leases and other ﬁnancing obligations were approximately $4.6 billion for 
2017 through 2021 and an aggregate of $2.2 billion for the years thereafter. 
T5 at JFK is under a lease with the PANYNJ that ends on the 28th anniversary 
of the date of beneﬁcial occupancy of T5i. The minimum payments under 
this lease are being accounted for as a ﬁnancing obligation and have been 
included in the future minimum payment totals above.

As of December 31, 2016, we had commitments of approximately $8.1 billion 
to purchase 135 additional aircraft, ten spare engines and various aircraft 
modiﬁcations through 2023, including estimated amounts for contractual 
price escalations. We may incur additional debt and other ﬁxed obligations 
as we take delivery of new aircraft and other equipment and continue to 
expand into new or existing markets. In an effort to limit the incurrence of 
signiﬁcant additional debt, we may seek to defer some of our scheduled 
deliveries, sell or lease aircraft to others, or pay cash for new aircraft, to the 
extent necessary or possible. The amount of our existing debt, and other 
ﬁxed obligations, and potential increases in the amount of our debt and 
other ﬁxed obligations could have important consequences to investors and 
could require a substantial portion of cash ﬂows from operations for debt 
service payments, thereby reducing the availability of our cash ﬂow to fund 
working capital, capital expenditures and other general corporate purposes.

Our level of debt and other ﬁxed obligations could:

 (cid:116) impact our ability to obtain additional ﬁnancing to support capital expansion 
plans and for working capital and other purposes on acceptable terms 
or at all;

 (cid:116) divert substantial cash ﬂow from our operations, execution of our 
commercial initiatives and expansion plans in order to service our ﬁxed 
obligations;

 (cid:116) require us to incur signiﬁcantly more interest expense than we currently 
do if rates were to increase, since approximately 14% of our debt has 
ﬂoating interest rates; and

 (cid:116) place us at a possible competitive disadvantage compared to less 
leveraged competitors and competitors with better access to capital 
resources or more favorable ﬁnancing terms.

Our ability to make scheduled payments on our debt and other ﬁxed 
obligations will depend on our future operating performance and cash ﬂows, 
which in turn will depend on prevailing economic and political conditions and 
ﬁnancial, competitive, regulatory, business and other factors, many of which 
are beyond our control. We are principally dependent upon our operating 
cash ﬂows and access to the capital markets to fund our operations and 
to make scheduled payments on debt and other ﬁxed obligations. We 
cannot assure you we will be able to generate sufﬁcient cash ﬂows from our 
operations or from capital market activities to pay our debt and other ﬁxed 
obligations as they become due. If we fail to do so our business could be 
harmed. If we are unable to make payments on our debt and other ﬁxed 
obligations, we could be forced to renegotiate those obligations or seek to 
obtain additional equity or other forms of additional ﬁnancing.

Our level of indebtedness may limit our ability to incur additional debt 
to obtain future ﬁnancing needs.

We typically ﬁnance our aircraft through either secured debt, lease ﬁnancing 
or through cash from operations. The impact on ﬁnancial institutions from 
global economic conditions may adversely affect the availability and cost of 
credit to JetBlue as well as to prospective purchasers of our aircraft should 
we undertake to sell in the future, including ﬁnancing commitments we have 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

15

PART I  
ITEM 1A Risk Factors

already obtained for purchases of new aircraft or ﬁnancing or reﬁnancing of 
existing aircraft. To the extent we ﬁnance our activities with additional debt, 
we may become subject to ﬁnancial and other covenants that may restrict 
our ability to pursue our strategy or otherwise constrain our operations.

Our maintenance costs will increase as our ﬂeet ages.

Our maintenance costs will increase as our ﬂeet ages. In the past, we have 
incurred lower maintenance expenses because most of the parts on our 
aircraft were under multi-year warranties and many of these warranties 
have expired. If any maintenance provider with whom we have a ﬂight 
hour agreement fails to perform or honor such agreements, we will incur 
higher interim maintenance costs until we negotiate new agreements.

Furthermore we expect to implement various ﬂeet modiﬁcations over the next 
several years to ensure our aircraft’s continued efﬁciency, modernization, 
brand consistency and safety. Our plans to restyle our Airbus aircraft 
with new cabins, for example, may require signiﬁcant modiﬁcation time. 
These ﬂeet modiﬁcations may require signiﬁcant investment over several 
years, including taking aircraft out of service for several weeks at a time.

Our salaries, wages and beneﬁts costs will increase as our workforce ages.

As our Crewmembers’ tenure with JetBlue matures, our salaries, wages 
and beneﬁts costs increase. As our overall workforce ages, we expect 
our medical and related beneﬁts to increase as well, despite an increased 
corporate focus on Crewmember wellness.

We may be subject to unionization, work stoppages, slowdowns or 
increased labor costs and the unionization of the Company’s pilots could 
result in increased labor costs.

Our business is labor intensive and the unionization of any of our Crewmembers 
could result in demands that may increase our operating expenses and 
adversely affect our ﬁnancial condition and results of operations. Any of the 
different crafts or classes of our Crewmembers could unionize at any time, 
which would require us to negotiate in good faith with the Crewmember 
group’s certiﬁed representative concerning a collective bargaining agreement. 
In addition, we may be subject to disruptions by unions protesting the 
non-union status of our other Crewmembers. Any of these events would 
be disruptive to our operations and could harm our business.

In general, unionization has increased costs in the airline industry. On 
April 22, 2014, approximately 74% of our pilots voted to be represented by 
the Airlines Pilot Association, or ALPA. During 2015, we began negotiations 
with the union regarding a collective bargaining agreement which continued 
through 2016. If we are unable to reach agreement on the terms of a 
collective bargaining agreement in the future, or we experience wide-spread 
Crewmember dissatisfaction, we could be subject to adverse actions. Any 
of these events could result in increased labor costs or reduced efﬁciency, 
which could have a material adverse effect on the Company’s business, 
ﬁnancial condition and results of operations.

There are risks associated with our presence in some of our international 
emerging markets, including political or economic instability and failure 
to adequately comply with existing legal and regulatory requirements.

Expansion into new international emerging markets may have risks due to 
factors speciﬁc to those markets. Emerging markets are countries which 
have less developed economies and may be vulnerable to economic and 
political instability, such as signiﬁcant ﬂuctuations in gross domestic product, 
interest and currency exchange rates, civil disturbances, government 
instability, nationalization and expropriation of private assets, trafﬁcking and 
the imposition of taxes or other charges by governments. The occurrence 
of any of these events in markets served by us and the resulting instability 
may adversely affect our business.

We have expanded and expect to continue to expand our service to countries 
in the Caribbean and Latin America, some of which have less developed legal 
systems, ﬁnancial markets, and business and political environments than 
the United States, and therefore present greater political, legal, regulatory, 
economic and operational risks. We emphasize legal compliance and have 
implemented and continue to implement and refresh policies, procedures 
and certain ongoing training of Crewmembers with regard to business ethics, 

16

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

anti-corruption policies and many key legal requirements; however, there can 
be no assurance our Crewmembers or third party service providers in such 
locations will adhere to our code of business conduct, anti-corruption policies, 
other Company policies, or other legal requirements. If we fail to enforce 
our policies and procedures properly or maintain adequate record-keeping 
and internal accounting practices to accurately record our transactions, 
we may be subject to sanctions. In the event we believe or have reason to 
believe our Crewmembers have or may have violated applicable laws or 
regulations, we may be subject to investigation costs, potential penalties 
and other related costs which in turn could negatively affect our reputation, 
and our results of operations and cash ﬂow.

In addition, to the extent we continue to grow our business both domestically 
and internationally, opening new markets requires us to commit a substantial 
amount of resources even before the new services commence. Expansion 
is also dependent upon our ability to maintain a safe and secure operation 
and requires additional personnel, equipment and facilities.

Our high aircraft utilization rate helps us keep our costs low, but also 
makes us vulnerable to delays and cancellations; such delays and 
cancellations could reduce our proﬁtability.

We maintain a high daily aircraft utilization rate which is the amount of 
time our aircraft spend in the air carrying passengers. High daily aircraft 
utilization is achieved in part by reducing turnaround times at airports so 
we can ﬂy more hours on average in a day. Aircraft utilization is reduced by 
delays and cancellations from various factors, many of which are beyond 
our control, including adverse weather conditions, security requirements, 
air trafﬁc congestion and unscheduled maintenance events. The majority 
of our operations are concentrated in the Northeast and Florida, which 
are particularly vulnerable to weather and congestion delays. Reduced 
aircraft utilization may limit our ability to achieve and maintain proﬁtability 
as well as lead to customer dissatisfaction.

Our business is highly dependent on the New York metropolitan market 
and increases in competition or congestion or a reduction in demand 
for air travel in this market, or governmental reduction of our operating 
capacity at JFK, would harm our business.

We are highly dependent on the New York metropolitan market where we 
maintain a large presence with approximately one-half of our daily ﬂights 
having JFK, LaGuardia, Newark, Westchester County Airport or Newburgh’s 
Stewart International Airport as either their origin or destination. We have 
experienced an increase in ﬂight delays and cancellations at these airports 
due to airport congestion which has adversely affected our operating 
performance and results of operations. Our business could be further 
harmed by an increase in the amount of direct competition we face in the 
New York metropolitan market or by continued or increased congestion, 
delays or cancellations. Our business would also be harmed by any 
circumstances causing a reduction in demand for air transportation in the 
New York metropolitan area, such as adverse changes in local economic 
conditions, health concerns, negative public perception of New York City, 
acts of terrorism or signiﬁcant price or tax increases linked to increases in 
airport access costs and fees imposed on passengers.

Extended interruptions or disruptions in service at one or more of our 
focus cities could have a material adverse impact on our operations.

Our business is heavily dependent on our operations in the New York 
Metropolitan area, particularly at JFK, and at our other focus cities in 
Boston, Orlando, Fort Lauderdale, the Los Angeles basin and San Juan, 
Puerto Rico. Each of these operations includes ﬂights that gather and 
distribute trafﬁc to other major cities. A signiﬁcant interruption or disruption 
in service at one or more of our focus cities could have a serious impact 
on our business, ﬁnancial condition and results of operations.

We rely heavily on automated systems to operate our business; any 
failure of these systems could harm our business.

We are dependent on automated systems and technology to operate our 
business, enhance the JetBlue Experience and achieve low operating costs. 
The performance and reliability of our automated systems and data centers 
is critical to our ability to operate our business and compete effectively. 

These systems include our computerized airline reservation system, ﬂight 
operations system, telecommunications systems, website, maintenance 
systems, check-in kiosks, and our primary and redundant data centers. Our 
website and reservation system must be able to securely accommodate a 
high volume of trafﬁc and deliver important ﬂight information. These systems 
require upgrades or replacement periodically, which involve implementation 
and other operational risks. Our business may be harmed if we fail to operate, 
replace or upgrade our systems or data center infrastructure successfully.

We rely on third party providers of our current automated systems and 
data center infrastructure for technical support. If our current providers 
were to fail to adequately provide technical support for any one of our key 
existing systems or if new or updated components were not integrated 
smoothly, we could experience service disruptions, which could result in 
the loss of important data, increase our expenses, decrease our revenues 
and generally harm our business, reputation and brand. Furthermore, our 
automated systems cannot be completely protected against events beyond 
our control, including natural disasters, computer viruses, cyber-attacks, 
other security breaches, or telecommunications failures. Substantial or 
sustained system failures could impact customer service and result in our 
Customers purchasing tickets from other airlines. We have implemented 
security measures and change control procedures and have disaster 
recovery plans. We also require our third party providers to have disaster 
recovery plans; however, we cannot assure you these measures are 
adequate to prevent disruptions, which, if they were to occur, could result in 
the loss of important data, increase our expenses, decrease our revenues 
and generally harm our business, reputation and brand.

We may be impacted by increases in airport expenses relating to 
infrastructure and facilities.

In order to operate within our current markets as well as continue to 
grow in new markets, we must be able to obtain adequate infrastructure 
and facilities within the airports we serve. This includes gates, check-in 
facilities, operations facilities and landing slots, where applicable. The costs 
associated with these airports are often negotiated on a short-term basis 
with the airport authority and we could be subject to increases in costs 
on a regular basis with or without our approval.

In addition, our operations concentrated in older airports may be harmed 
if the infrastructure at those older airports fails to operate as expected due 
to age, overuse or signiﬁcant unexpected weather events.

Our reputation and business may be harmed and we may be subject to 
legal claims if there is loss, unlawful disclosure or misappropriation of, or 
unsanctioned access to, our Customers’, Crewmembers’, business partners’ 
or our own information or other breaches of our information security.

We make extensive use of online services and centralized data processing, 
including through third party service providers or business providers. The 
secure maintenance and transmission of Customer and Crewmember 
information is a critical element of our operations. Our information technology 
and other systems and those of service providers or business partners, 
that maintain and transmit customer information, may be compromised by 
a malicious third party penetration of our network security, or of a business 
partner, or impacted by deliberate or inadvertent actions or inactions by 
our Crewmembers, or those of a business partner. As a result, personal 
information may be lost, disclosed, accessed or taken without consent.

We transmit conﬁdential credit card information by way of secure private 
retail networks and rely on encryption and authentication technology licensed 
from third parties to provide the security and authentication necessary to 
effect secure transmission and storage of conﬁdential information, such 
as Customer credit card information. The Company has made signiﬁcant 
efforts to secure its computer network. If any compromise of our security 
or computer network were to occur, it could have a material adverse effect 
on the reputation, business, operating results and ﬁnancial condition of 
the Company, and could result in a loss of Customers. Additionally, any 
material failure by the Company to achieve or maintain compliance with 
the Payment Card Industry, or PCI, security requirements or rectify a 
security issue may result in ﬁnes and the imposition of restrictions on the 
Company’s ability to accept credit cards as a form of payment.

PART I  
ITEM 1A Risk Factors

Any such loss, disclosure or misappropriation of, or access to, Customers’, 
Crewmembers’ or business partners’ information or other breach of our 
information security can result in legal claims or legal proceedings, including 
regulatory investigations and actions, may have a negative impact on 
our reputation, may lead to regulatory enforcement actions against us, 
and may materially adversely affect our business, operating results and 
ﬁnancial condition. Furthermore, the loss, disclosure or misappropriation 
of our business information may materially adversely affect our business, 
operating results and ﬁnancial condition. The regulations in this area continue 
to develop and evolve. International regulation adds complexity as we 
expand our service and include more passengers from other countries.

Data security compliance requirements could increase our costs, and 
any signiﬁcant data breach could disrupt our operations and harm our 
reputation, business, results of operations and ﬁnancial condition.

Our business requires the appropriate and secure utilization of Customer, 
Crewmember, business partner and other sensitive information. We cannot 
be certain that advances in criminal capabilities (including cyber-attacks or 
cyber intrusions over the Internet, malware, computer viruses and the like), 
discovery of new vulnerabilities or attempts to exploit existing vulnerabilities 
in our systems, other data thefts, physical system or network break-ins 
or inappropriate access, or other developments will not compromise or 
breach the technology protecting the networks that access and store 
sensitive information. The risk of a security breach or disruption, particularly 
through cyber-attack or cyber intrusion, including by computer hackers, 
foreign governments and cyber terrorists, has increased as the number, 
intensity and sophistication of attempted attacks and intrusions from 
around the world have increased. Furthermore, there has been heightened 
legislative and regulatory focus on data security in the U.S. and abroad, 
including requirements for varying levels of customer notiﬁcation in the 
event of a data breach.

In addition, many of our commercial partners, including credit card 
companies, have imposed data security standards that we must meet. 
In particular, we are required by the Payment Card Industry Security 
Standards Council, founded by the credit card companies, to comply 
with their highest level of data security standards. While we continue 
our efforts to meet these standards, new and revised standards may be 
imposed that may be difﬁcult for us to meet and could increase our costs.

A signiﬁcant data security breach or our failure to comply with applicable 
U.S. or foreign data security regulations or other data security standards 
may expose us to litigation, claims for contract breach, ﬁnes, sanctions or 
other penalties, which could disrupt our operations, harm our reputation 
and materially and adversely affect our business, results of operations and 
ﬁnancial condition. Failure to address these issues appropriately could 
also give rise to additional legal risks, which, in turn, could increase the 
size and number of litigation claims and damages asserted or subject us 
to enforcement actions, ﬁnes and penalties and cause us to incur further 
related costs and expenses.

Our liquidity could be adversely impacted in the event one or more of our 
credit card processors were to impose material reserve requirements 
for payments due to us from credit card transactions.

We currently have agreements with organizations that process credit card 
transactions arising from purchases of air travel tickets by our Customers. 
Credit card processors have ﬁnancial risk associated with tickets purchased 
for travel which can occur several weeks after the purchase. Our credit 
card processing agreements provide for reserves to be deposited with the 
processor in certain circumstances. We do not currently have reserves 
posted for our credit card processors. If circumstances were to occur 
requiring us to deposit reserves, the negative impact on our liquidity 
could be signiﬁcant which could materially adversely affect our business.

If we are unable to attract and retain qualiﬁed personnel or fail to maintain 
our company culture, our business could be harmed.

We compete against other major U.S. airlines for pilots, mechanics and other 
skilled labor; some of them offer wage and beneﬁt packages exceeding 
ours. As more pilots in the industry approach mandatory retirement age, 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

17

PART I  
ITEM 1A Risk Factors

the U.S. airline industry may be affected by a pilot shortage. We may be 
required to increase wages and/or beneﬁts in order to attract and retain 
qualiﬁed personnel or risk considerable Crewmember turnover. If we are 
unable to hire, train and retain qualiﬁed Crewmembers, our business 
could be harmed and we may be unable to implement our growth plans.

In addition, as we hire more people and grow, we believe it may be increasingly 
challenging to continue to hire people who will maintain our company culture. 
We believe one of our competitive strengths is our service-oriented company 
culture which emphasizes friendly, helpful, team-oriented and customer-
focused Crewmembers. Our company culture is important to providing high 
quality customer service and having a productive workforce in order to help 
keep our costs low. As we continue to grow, we may be unable to identify, 
hire or retain enough people who meet the above criteria, including those in 
management or other key positions. Our company culture could otherwise 
be adversely affected by our growing operations and broader geographic 
diversity. If we fail to maintain the strength of our company culture, our 
competitive ability and our business may be harmed.

Our results of operations ﬂuctuate due to seasonality, weather and 
other factors.

We expect our quarterly operating results to ﬂuctuate due to seasonality 
including high vacation and leisure demand occurring on our Florida routes 
between October and April and on our western routes during the summer. 
Actions of our competitors may also contribute to ﬂuctuations in our results. 
We are more susceptible to adverse weather conditions, including snow 
storms and hurricanes, as a result of our operations being concentrated on 
the East Coast, than some of our competitors. Our Florida and Caribbean 
operations are subject to hurricanes. As we enter new markets we could be 
subject to additional seasonal variations along with any competitive responses 
to our entry by other airlines. Price changes in aircraft fuel as well as the timing 
and amount of maintenance and advertising expenditures also impact our 
operations. As a result of these factors, quarter-to-quarter comparisons of 
our operating results may not be a good indicator of our future performance. 
In addition, it is possible in any future period our operating results could be 
below the expectations of investors and any published reports or analysis 
regarding JetBlue. In such an event, the price of our common stock could 
decline, perhaps substantially.

We are subject to the risks of having a limited number of suppliers for 
our aircraft, engines and our Fly-Fi™ product.

Our current dependence on three types of aircraft and engines for all of 
our ﬂights makes us vulnerable to signiﬁcant problems associated with 
the International Aero Engines, or IAE V2533-A5 engine on our Airbus 
A321 ﬂeet, the International Aero Engines, or IAE V2527-A5 engine on our 
Airbus A320 ﬂeet and the General Electric Engines CF34-10 engine on our 
Embraer E190 ﬂeet. This could include design defects, mechanical problems, 
contractual performance by the manufacturers, or adverse perception by 
the public which would result in Customer avoidance or in actions by the 

FAA resulting in an inability to operate our aircraft. Carriers operating a more 
diversiﬁed ﬂeet are better positioned than we are to manage such events.

Our Fly-Fi™ service uses technology and satellite access through our 
agreement with LiveTV. An integral component of the Fly-Fi™ system is 
the antenna, which is supplied to us by LiveTV. If LiveTV were to stop 
supplying us with its antennas for any reason, we would have to incur 
signiﬁcant costs to procure an alternate supplier. Additionally, if the satellites 
Fly-Fi™ uses were to become inoperable for any reason, we would have 
to incur signiﬁcant costs to replace the service.

Our reputation and ﬁnancial results could be harmed in the event of an 
accident or incident involving our aircraft.

An accident or incident involving one of our aircraft could involve signiﬁcant 
potential claims of injured passengers or others in addition to repair or 
replacement of a damaged aircraft and its consequential temporary or 
permanent loss from service. We are required by the DOT to carry liability 
insurance. Although we believe we currently maintain liability insurance in 
amounts and of the type generally consistent with industry practice, the 
amount of such coverage may not be adequate and we may be forced 
to bear substantial losses from an accident or incident. Substantial claims 
resulting from an accident or incident in excess of our related insurance 
coverage would harm our business and ﬁnancial results. Moreover, any aircraft 
accident or incident, even if fully insured, could cause a public perception we 
are less safe or reliable than other airlines which would harm our business.

Our business depends on our strong reputation and the value of the 
JetBlue brand.

The JetBlue brand name symbolizes high-quality friendly customer 
service, innovation, fun, and a pleasant travel experience. JetBlue is a 
widely recognized and respected global brand; the JetBlue brand is one 
of our most important and valuable assets. The JetBlue brand name and 
our corporate reputation are powerful sales and marketing tools and we 
devote signiﬁcant resources to promoting and protecting them. Adverse 
publicity, whether or not justiﬁed, relating to activities by our Crewmembers, 
contractors or agents could tarnish our reputation and reduce the value of 
our brand. Damage to our reputation and loss of brand equity could reduce 
demand for our services and thus have an adverse effect on our ﬁnancial 
condition, liquidity and results of operations, as well as require additional 
resources to rebuild our reputation and restore the value of our brand.

We may be subject to competitive risks due to the long term nature of 
our ﬂeet order book.

At present, we have existing aircraft commitments through 2023. As 
technological evolution occurs in our industry, through the use of composites 
and other innovations, we may be competitively disadvantaged because 
we have existing extensive ﬂeet commitments that would prohibit us from 
adopting new technologies on an expedited basis.

Risks Associated with the Airline Industry

The airline industry is particularly sensitive to changes in economic 
condition.

Fundamental and permanent changes in the domestic airline industry have 
been ongoing over the past several years as a result of several years of 
repeated losses, among other reasons. These losses resulted in airlines 
renegotiating or attempting to renegotiate labor contracts, reconﬁguring ﬂight 
schedules, furloughing or terminating Crewmembers, as well as considering 
other efﬁciency and cost-cutting measures. Despite these actions, several 
airlines have reorganized under Chapter 11 of the U.S. Bankruptcy Code to 
permit them to reduce labor rates, restructure debt, terminate pension plans 
and generally reduce their cost structure. Since 2005, the U.S. airline industry 
has experienced signiﬁcant consolidation and liquidations. A global economic 
recession and related unfavorable general economic conditions, such as 
higher unemployment rates, a constrained credit market, housing-related 
pressures, and increased business operating costs can reduce spending 
for both leisure and business travel. Unfavorable economic conditions 

18

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

could also impact an airline’s ability to raise fares to counteract increased 
fuel, labor, and other costs. It is possible that further airline reorganizations, 
consolidation, bankruptcies or liquidations may occur in the current global 
economic environment, the effects of which we are unable to predict. We 
cannot assure you the occurrence of these events, or potential changes 
resulting from these events, will not harm our business or the industry.

A future act of terrorism, the threat of such acts or escalation of U.S. 
military involvement overseas could adversely affect our industry.

Acts of terrorism, the threat of such acts or escalation of U.S. military 
involvement overseas could have an adverse effect on the airline industry. In 
the event of an act of terrorism, whether or not successful, the airline industry 
would likely experience increased security requirements and signiﬁcantly 
reduced demand. We cannot assure you these actions, or consequences 
resulting from these actions, will not harm our business or the industry.

PART I  
ITEM 2 Properties

Changes in government regulations imposing additional requirements 
and restrictions on our operations could increase our operating costs 
and result in service delays and disruptions.

Airlines are subject to extensive regulatory and legal requirements, both 
domestically and internationally, involving signiﬁcant compliance costs. In 
the last several years, Congress has passed laws, and the agencies of the 
federal government, including, but not limited to, the DOT, FAA, CBP and 
the TSA have issued regulations relating to the operation of airlines that have 
required signiﬁcant expenditures. We expect to continue to incur expenses 
in connection with complying with government regulations. Additional laws 
including executive orders, regulations, taxes and airport rates and charges 
have been proposed from time to time that could signiﬁcantly increase the 
cost of airline operations or reduce the demand for air travel. If adopted 
or materially amended, these measures could have the effect of raising 
ticket prices affecting the perception of the airline industry, reducing air 
travel demand and/or revenue and increasing costs. We cannot assure 
you these and other laws including executive orders, regulations or taxes 
enacted in the future will not harm our business.

In addition, the U.S. Environmental Protection Agency, or EPA, has 
proposed changes to underground storage tank regulations that could 
affect certain airport fuel hydrant systems. In addition to the proposed 
EPA and state regulations, several U.S. airport authorities are actively 
engaged in efforts to limit discharges of de-icing ﬂuid to local groundwater, 
often by requiring airlines to participate in the building or reconﬁguring of 
airport de-icing facilities.

Federal budget constraints or federally imposed furloughs due to budget 
negotiation deadlocks may adversely affect our industry, business, results 
of operations and ﬁnancial position.

Many of our airline operations are regulated by governmental agencies, 
including the FAA, the DOT, the CBP, the TSA and others. If the federal 
government were to experience issues in reaching budgetary consensus in 
the future resulting in mandatory furloughs and/or other budget constraints, 
our operations and results of operations could be materially negatively 
impacted. The travel behaviors of the ﬂying public could also be affected, 
which may materially adversely impact our industry and our business.

Compliance with future environmental regulations may harm our business.

Many aspects of airlines’ operations are subject to increasingly stringent 
environmental regulations, and growing concerns about climate change 
may result in the imposition of additional regulation. Since the domestic 
airline industry is increasingly price sensitive, we may not be able to 
recover the cost of compliance with new or more stringent environmental 
laws and regulations from our Customers, which could adversely affect 
our business. Although it is not expected the costs of complying with 
current environmental regulations will have a material adverse effect on 
our ﬁnancial position, results of operations or cash ﬂows, no assurance 
can be made the costs of complying with environmental regulations in 
the future will not have such an effect.

We could be adversely affected by an outbreak of a disease or an 
environmental disaster that signiﬁcantly affects travel behavior.

Any outbreak of a disease affecting travel behavior could have a material 
adverse impact on airlines. In addition, outbreaks of disease could result in 
quarantines of our personnel or an inability to access facilities or our aircraft, 
which could adversely affect our operations. Similarly, if an environmental 
disaster were to occur and adversely impact any of our destination cities, 
travel behavior could be affected and in turn, could materially adversely 
impact our business.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 2.  Properties

Aircraft

As of December 31, 2016, we operated a ﬂeet consisting of 37 Airbus A321 aircraft, 130 Airbus A320 aircraft and 60 Embraer E190 aircraft as summarized below:

Aircraft
Airbus A320
Airbus A321
Embraer E190

Seating 
Capacity
150(1)
200 / 159(2)
100

Owned
111
33
30
174

Capital  
Leased
4
2
—
6

Operating 
Leased
15
2
30
47

Total
130
37
60
227

Average Age  
in Years
11.3
1.5
8.2
8.9

(1)  During the fourth quarter of 2016, we completed the buy out of nine of our aircraft leases.
(2)  Our Airbus A321 with a single cabin layout has a seating capacity of 200 seats. Our Airbus A321 with our Mint™ premium service has a seating capacity of 159 seats.

As of December 31, 2016, our aircraft leases had an average remaining term of approximately 7 years, with expiration dates between 2018 and 2028. We have 
the option to extend most of these leases for additional periods or to purchase the aircraft at the end of the related lease term. 77 of our 174 owned aircraft 
are subject to secured debt ﬁnancing; 97 of our owned aircraft and all of our 32 owned spare engines are unencumbered.

In November 2014, we amended our purchase agreement with Airbus by deferring 13 Airbus A321 aircraft deliveries and eight Airbus A320 aircraft deliveries 
from 2016-2020 to 2020-2023. Of these deferrals, ten Airbus A321current engine option (A321ceo) aircraft deliveries were converted to A321neo and ﬁve Airbus 
A320neo aircraft deliveries were converted to Airbus A321neo aircraft. We additionally converted three Airbus A320 aircraft deliveries in 2016 to Airbus A321 aircraft. 

In July 2016, we further amended our purchase agreement with Airbus by adding 30 incremental Airbus A321 aircraft deliveries between 2017 and 2023; 15 of 
these aircraft are scheduled to be A321ceo to be delivered between 2017 and 2019 and the remaining 15 are scheduled to be A321neos to be delivered between 
2020 and 2023. Starting after June 2019, we would have the option to take any or all of our A321neo deliveries with the Long Range conﬁguration, the A321-LR.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

19

PART I  
ITEM 3 Legal Proceedings

As of December 31, 2016, we had 135 aircraft on order scheduled for delivery through 2023. Our future aircraft delivery schedule is as follows:

Year
2017
2018
2019
2020
2021
2022
2023
TOTAL

Ground Facilities

Airports
All of our facilities at the airports we serve are under leases or other 
occupancy agreements. This space is leased directly or indirectly from the 
local airport authority on varying terms dependent on prevailing practices 
at each airport. Our passenger terminal service facilities consisting of 
ticket counters, gate space, operations support area and baggage service 
ofﬁces generally have agreement terms ranging from less than one year to 
ﬁve years. They can contain provisions for periodic adjustments of rental 
rates, landing fees and other charges applicable under the type of lease. 
Under some of these agreements we are responsible for the maintenance, 
insurance, utilities and certain other facility-related expenses and services.

A summary of our most signiﬁcant lease agreements are:
 (cid:116) JFK – We have a lease agreement with the PANYNJ for T5 and T5i. 
We have the option to terminate the agreement in 2033, ﬁve years prior 
to the end of the original scheduled lease term of October 2038. In 
December 2010, we executed a supplement to this lease agreement 
for the T6 property, our original base of operations at JFK, for a term of 
ﬁve years, which afforded us the exclusive right to develop on the T6 
property. In 2012, we commenced construction of T5i, an expansion of 
T5 that we use as an international arrivals facility. Another supplement 
of the original T5 lease was executed in 2013. The lease, as amended, 
now incorporates a total of approximately 19 acres of space for our T5 
facilities. The T5i section of T5 opened to Customers in November 2014.
 (cid:116) Boston – We had an initial ﬁve year lease agreement with Massport for ﬁve 
gates in Terminal C that started on May 1, 2005 and allowed JetBlue to 
grow to 11 gates by 2008. We negotiated an extension as of May 1, 2010 
whereby the lease had 20 successive one-year automatic renewals, each 
from May 1 through to April 30. With the continued growth of our operations 
in Boston, we increased the number of leased gates from Massport to 16 
and signed an amendment in May 2014 to lease an additional eight gates 
and related support spaces in Terminal C that were previously occupied by 
United Airlines. As of December 31, 2016, we leased 24 gates in Terminal C. 

We have entered into use arrangements at each of the airports we serve 
providing for the non-exclusive use of runways, taxiways and other airport 
facilities. Landing fees under these agreements are typically based on the 
number of aircraft landings and the weight of the aircraft.

Airbus 
A320neo
—
—
—
6
16
3
—
25

Airbus  
A321ceo
15
8
3
—
—
—
—
26

Airbus  
A321neo
—
3
18
12
4
17
6
60

Embraer  
190
—
—
—
10
7
7
—
24

Total
15
11
21
28
27
27
6
135

Other
We lease the following hangars and airport support facilities at our focus cities:
 (cid:116) New York – At JFK we have a ground lease agreement which expires 
in 2030 for an aircraft maintenance hangar, an adjacent ofﬁce and 
warehouse facility, and an adjacent storage facility for aircraft parts. 
These facilities accommodate our technical support operations. We 
also lease a building from the PANYNJ which is mainly used for ground 
equipment maintenance work.

 (cid:116) Boston – We have a ground lease agreement which expires in 2017 for 
a building which includes an aircraft maintenance hangar and support 
space. We anticipate exercising a ﬁve year lease option prior to lease 
expiration. We also have a lease for a facility to accommodate our ground 
support equipment maintenance.

 (cid:116) Orlando – We have a ground lease agreement for a hanger which 
expires in 2035. Previously, the hangar was shared between LiveTV 
and JetBlue. When we sold LiveTV in June 2014, JetBlue took over 
the entire hangar complex. We also occupy a training center, JetBlue 
University, with a lease agreement expiring in 2035 which we use for 
the initial and recurrent training of our pilots and in-ﬂight crew, as well 
as support training for our technical operations and airport crew. This 
facility is equipped with six full ﬂight simulators, nine cabin trainers, a 
training pool, classrooms and support areas. In 2015, we opened the 
Lodge at OSC which is adjacent to JetBlue University and is used for 
lodging our Crewmembers when they attend training.

Our primary corporate ofﬁces are located in Long Island City, New York 
with our lease expiring in 2023. Our ofﬁces in Salt Lake City, Utah contain a 
core team of Crewmembers who are responsible for group sales, customer 
service, at-home reservation agent supervision, disbursements and certain 
other ﬁnance functions. The lease for our Salt Lake City facility expires in 
2022. We also maintain other facilities that are necessary to support our 
operations in the cities we serve.

ITEM 3.  Legal Proceedings

In the ordinary course of our business, we are party to various legal proceedings and claims which we believe are incidental to the operation of our 
business. Other than as described under Note 11 to our consolidated ﬁnancial statements included in Part II, Item 8 of this Annual Report on Form 10-K, 
we believe the ultimate outcome of these proceedings to which we are currently a party will not have a material adverse effect on our business, ﬁnancial 
position, results of operations or cash ﬂows.

ITEM 4.  Mine Safety Disclosures

Not applicable.

20

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II

ITEM 5.  Market for Registrant’s Common Equity; 
Related Stockholder Matters and Issuer 
Purchases of Equity Securities

Market Information and Stockholder Matters

Our common stock is traded on the NASDAQ Global Select Market under the symbol JBLU. The table below shows the high and low closing prices 
for our common stock.

2016 Quarter Ended
March 31
June 30
September 30
December 31
2015 Quarter Ended
March 31
June 30
September 30
December 31

High

Low

$ 23.37
21.33
18.71
22.79

$ 19.58
21.83
27.02
26.86

$ 19.34
15.15
15.76
16.93

$ 14.38
18.56
20.06
22.65

As of January 31, 2017, there were approximately 460 holders of record of our common stock.

We have not paid cash dividends on our common stock and have no current intention to do so. Any future determination to pay cash dividends would 
be at the discretion of our Board of Directors, subject to applicable limitations under Delaware law. This decision would be dependent upon our results 
of operations, ﬁnancial condition and other factors deemed relevant by our Board of Directors.

Purchases of Equity Securities by the Issuer and Afﬁliated Purchases

In September 2015, the Board of Directors authorized a three year share repurchase program starting in 2016, of up to $250 million worth of shares. 
This authorization replaced the 2012 authorization. On December 7, 2016, the Board approved changes to our share repurchase program to increase 
the aggregate authorization in the value of the program, to $500 million worth of shares, and extended the term of the program through December 31, 
2019. The current program includes authorization for repurchases in open market transactions or privately-negotiated transactions, including accelerated 
stock repurchase transactions. We may adjust or change our share repurchase practices based on market conditions and other alternatives. During 
2016, the following shares were repurchased under the program (in millions, except per share data):

Average Price 
Paid Per Share
(1) (2)

Total Number of 
Shares Purchased
5.4
0.4
5.8

Period
November 2016
December 2016
TOTAL
(1)  On November 7, 2016, JetBlue entered into an accelerated share repurchase, or ASR, agreement with Goldman, Sachs & Co. paying $60 million for an initial delivery of approximately 
2.7  million  shares. The  term  of  the ASR  concluded  on  December  29,  2016  with  Goldman,  Sachs  &  Co.  delivering  approximately  0.2  million  additional  shares  to  JetBlue. A  total  of 
approximately 2.9 million shares was repurchased under the agreement at an average price per share of $20.74. The total shares purchased by JetBlue were based on the volume weighted 
average prices of JetBlue’s common stock during the term of the ASR.

Total Number of Shares Purchased as 
Part of Publicly Announced Plans
5.4
0.4
5.8

Approximate Dollar Value of Shares  
that May Yet be Purchased Under the 
Plans or Programs(3)
380
380

(1) (2)

$

(2)  On November 7, 2016, JetBlue entered into an accelerated share repurchase, or ASR, agreement with Morgan Stanley & Co. LLC paying $60 million for an initial delivery of approximately 
2.7 million shares. The term of the ASR concluded on December 30, 2016 with Morgan Stanley & Co. LLC delivering approximately 0.2 million additional shares to JetBlue. A total of 
approximately 2.9 million shares was repurchased under the agreement at an average price per share of $20.93. The total shares purchased by JetBlue were based on the volume weighted 
average prices of JetBlue’s common stock during the term of the ASR.
In September 2015, the Board of Directors authorized a three year repurchase program starting in 2016, of up to $250 million worth of shares. This authorization replaced the 2012 
authorization. On December 7, 2016, the Board approved changes to our share repurchase program to increase the aggregate authorization in the value of the program, to up to $500 million 
worth of shares. As of December 31, 2016, we have repurchased a total of approximately $120 million worth of shares of our common stock at an average price of $20.84 per share. 

(3) 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

21

PART II  
ITEM 5 Market for Registrant’s Common Equity; Related Stockholder Matters and Issuer Purchases of Equity Securities

Convertible Debt Redemption

In April 2015, holders of our 5.5% Convertible Debentures due 2038 (Series B) voluntarily converted approximately $26 million in principal amount into 
shares of our common stock at a rate of 225.2252 shares per $1,000 debenture for a total of approximately 5.8 million shares. During the fourth quarter 
of 2015, all holders elected to convert their remaining holdings of approximately $42 million in principal amount. As a result, we issued an additional 
9.4 million shares of our common stock. In January 2016, Morgan Stanley terminated our share lending agreement and returned 1.4 million shares 
outstanding to us.

During 2016, holders of our 6.75% Convertible Debentures due 2039 (Series B) voluntarily converted approximately $86 million in principal amount 
into shares of our common stock at a rate of 204.6036 shares per $1,000 debenture. As a result, we issued approximately 17.6 million shares of our 
common stock during the fourth quarter of 2016. 

We have no convertible debentures outstanding as of December 31, 2016.

Stock Performance Graph

This performance graph shall not be deemed “ﬁled” with the SEC or subject to Section 18 of the Exchange Act, nor shall it be deemed incorporated by 
reference in any of our ﬁlings under the Securities Act of 1933, as amended.

The following line graph compares the cumulative total stockholder return on our common stock with the cumulative total return of the Standard & 
Poor’s 500 Stock Index and the NYSE Arca Airline Index from December 31, 2012 to December 31, 2016. The comparison assumes the investment of 
$100 in our common stock and in each of the foregoing indices and reinvestment of all dividends. The stock performance shown represents historical 
performance and is not representative of future stock performance.

In $

430

380

330

280

230

180

130

80

12/31/12

12/31/13

12/31/14

12/31/15

12/31/16

JetBlue Airways Corporation

S&P 500 Stock Index

NYSE Arca Airline Index

JetBlue Airways Corporation
S&P 500 Stock Index
NYSE Arca Airline Index

$

12/31/2012
100
100
100

$

12/31/2013
149
130
158

$

12/31/2014
277
144
235

$

12/31/2015
396
143
197

$

12/31/2016
392
157
251

22

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

ITEM 6.  Selected Financial Data

The following ﬁnancial information for each of the prior ﬁve years ending on December 31 has been derived from our consolidated ﬁnancial statements. 
This information should be read in conjunction with the consolidated ﬁnancial statements and related notes thereto included elsewhere in this report.

PART II  
ITEM 6 Selected Financial Data

(in millions except per share data)
Statements of Operations Data
Operating revenues
Operating expenses:

Aircraft fuel and related taxes
Salaries, wages and beneﬁts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance, materials and repairs
Other operating expenses
Total operating expenses

Operating income
Other income (expense)(1)
Income before income taxes
Income tax expense
NET INCOME
Earnings per common share:

Basic
Diluted

Other Financial Data:
Operating margin
Pre-tax margin(1)
Ratio of earnings to ﬁxed charges
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in ﬁnancing activities
(1) 

2016

2015

2014

2013

2012

$ 6,632

$

6,416

$

5,817

$

5,441

$

4,982

1,074
1,698
357
393
110
259
563
866
5,320
1,312
(96)
1,216
457
759

2.32
2.22

$

$
$

19.8%
18.3%
7.03x
$ 1,632
(1,045)
(472)

1,348
1,540
342
345
122
264
490
749
5,200
1,216
(119)
1,097
420
677

2.15
1.98

19.0%
17.1%
5.71x
1,598
(1,134)
(487)

$

$
$

$

1,912
1,294
321
320
124
231
418
682
5,302
515
108
623
222
401

1.36
1.19

8.9%
10.7%
3.59x
912
(379)
(417)

$

$
$

$

1,899
1,135
305
290
128
223
432
601
5,013
428
(149)
279
111
168

0.59
0.52

7.9%
5.1%
2.05x
758
(476)
(239)

$

$
$

$

1,806
1,044
277
258
130
204
338
549
4,606
376
(167)
209
81
128

0.45
0.40

7.5%
4.2%
1.75x
698
(867)
(322)

$

$
$

$

In 2014, we had a gain of $241 million from the sale of LiveTV. Pre-tax margin excluding the gain on the sale of LiveTV is 6.6%.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

23

PART II  
ITEM 6 Selected Financial Data

(in millions)
Balance Sheet Data:
Cash and cash equivalents
Investment securities
Total assets(2)
Total long-term debt and capital leases(2)
Common stockholders’ equity

$

2016

433
628
9,487
1,384
4,013

2016

$

2015

318
607
8,644
1,827
3,210

2015

$

2014

341
427
7,817
2,211
2,529

2014

$

2013

225
516
7,323
2,558
2,134

2013

$

2012

182
685
7,047
2,828
1,888

2011

28,956
33,563
40,075

32,078
37,813
44,994

35,101
41,711
49,258

30,463
35,836
42,824

38,263
45,619
53,620

85.1%
12.0
$ 157.14
13.18
11.21
12.37
9.92

Operating Statistics:
Revenue passengers (thousands)
Revenue passenger miles (millions)
Available seat miles (ASMs) (millions)
Load factor
Aircraft utilization (hours per day)
Average fare
Yield per passenger mile (cents)
Passenger revenue per ASM (cents)
Operating revenue per ASM (cents)
Operating expense per ASM (cents)
Operating expense per ASM, excluding fuel and related 
taxes (cents)
Operating expense per ASM, excluding fuel, proﬁt sharing 
and related taxes (cents)
Airline operating expense per ASM (cents)(1)
Departures
Average stage length (miles)
Average number of operating aircraft during period
Average fuel cost per gallon, including fuel taxes
Fuel gallons consumed (millions)
Average number of full-time equivalent Crewmembers(1)
(1)  Excludes results of operations and employees of LiveTV, LLC, which were unrelated to our airline operations and are immaterial to our consolidated operating results. As of June 10, 2014, 

83.8%
11.8
$ 157.11
13.55
11.35
12.43
11.49

83.7%
11.9
$ 163.19
13.87
11.61
12.71
11.71

84.7%
11.9
$ 167.89
14.13
11.96
13.03
10.56

84.0%
11.8
$ 166.57
14.13
11.88
12.93
11.78

7.51
10.56
316,505
1,092
207.9
1.93
700
14,537

6.98
11.34
264,600
1,085
173.9
3.21
563
12,035

7.25
11.56
282,133
1,090
185.2
3.14
604
12,447

7.48
11.70
294,800
1,088
196.2
2.99
639
13,280

7.59
9.92
337,302
1,093
218.9
1.41
760
15,696

7.92

7.82

7.53

7.28

6.99

$

$

$

$

$

employees of LiveTV, LLC were no longer part of JetBlue.

(2)  Retrospective application to all prior periods as required under ASU 2015-03 Interest - Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs. See Note 1 to the 

Consolidated Financial Statements for additional information.

Glossary of Airline terminology

Airline terminology used in this section and elsewhere in this Report:

 (cid:116) Aircraft utilization – The average number of block hours operated per 

day per aircraft for the total ﬂeet of aircraft.

 (cid:116) Available seat miles – The number of seats available for passengers 

multiplied by the number of miles the seats are ﬂown.

 (cid:116) Average fare – The average one-way fare paid per ﬂight segment by 

a revenue passenger.

 (cid:116) Average fuel cost per gallon – Total aircraft fuel costs, including fuel 
taxes and effective portion of fuel hedging, divided by the total number 
of fuel gallons consumed.

 (cid:116) Average stage length – The average number of miles ﬂown per ﬂight.

 (cid:116) Load factor – The percentage of aircraft seating capacity actually utilized, 
calculated by dividing revenue passenger miles by available seat miles.

 (cid:116) Operating expense per available seat mile – Operating expenses 

divided by available seat miles.

 (cid:116) Operating expense per available seat mile, excluding fuel and related 
taxes – Operating expenses, less aircraft fuel and related taxes, divided 
by available seat miles.

 (cid:116) Operating expense per available seat mile, excluding fuel, proﬁt 
sharing and related taxes – Operating expenses, less aircraft fuel, proﬁt 
sharing and related taxes, divided by available seat miles.

 (cid:116) Operating revenue per available seat mile – Operating revenues 

divided by available seat miles.

 (cid:116) Passenger revenue per available seat mile – Passenger revenue 

divided by available seat miles.

 (cid:116) Revenue passengers – The total number of paying passengers ﬂown 

on all ﬂight segments.

 (cid:116) Revenue passenger miles – The number of miles ﬂown by revenue 

passengers.

 (cid:116) Yield per passenger mile – The average amount one passenger pays 

to ﬂy one mile.

24

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7.  Management’s Discussion and Analysis of 

Financial Condition and Results of Operations

Overview

In 2016, we experienced the continuation of uncertain economic conditions and the persistent competitiveness of the airline industry. Even with these external 
factors, 2016 was the most proﬁtable year in our history and is our ﬁfth consecutive year of net income growth. We generated operating revenue growth of 
almost 3.4% year-over-year and reported our highest ever net income which beneﬁted signiﬁcantly from a rapid decline in fuel prices. We are committed 
to delivering a safe and reliable JetBlue Experience for our Customers as well as increasing returns for our shareholders. We believe our continued focus 
on cost discipline, product innovation and network enhancements, combined with our commitment to service excellence, will drive our future success.

2016 Financial Highlights

 (cid:116) We reported our highest ever net income of $759 million, an increase 
of $82 million compared to 2015. This increase was principally driven 
by a reduction in aircraft fuel expenses and higher passenger revenue, 
partially offset by an increase in controllable costs.

 (cid:116) We generated over $6.6 billion in operating revenue, an increase of 
$216 million compared to 2015 due primarily to a 9.0% increase in 
revenue passengers partially offset by a 6.4% decrease in the average fare.

 (cid:116) Operating margin increased by 0.8 points to 19.8% and we improved 
our return on invested capital, or ROIC, by 0.6 points to 14.3% primarily 
driven by a reduction in aircraft fuel expenses, higher revenue, and 
continued balance sheet improvement. 

 (cid:116) Our earnings per diluted share were $2.22, the highest in our history.

 (cid:116) We generated $1.6 billion in cash from operations. The signiﬁcant 
amount of cash we generated provided the opportunity to pay cash for 
all 2016 aircraft deliveries, buy out nine aircraft leases, reduce existing 
debt balances and execute share repurchases.

 (cid:116) Operating expenses per available seat mile decreased 6.0% to 9.92 cents, 
primarily driven by a reduction in aircraft fuel expenses. Excluding fuel, 
proﬁt sharing and related taxes our cost per available seat mile increased 
1.1% in 2016.

Company Initiatives

Strengthening of our Balance Sheet

Throughout 2016 we continued to focus on strengthening our balance 
sheet. We ended the year with unrestricted cash, cash equivalents and 
short-term investments of $971 million and undrawn lines of credit of 
approximately $600 million. At year end 2016, unrestricted cash, cash 
equivalents and short-term investments was approximately 15% of trailing 
twelve months revenue. We reduced our overall debt and capital lease 
obligations by $443 million which included the ﬁnal maturity of our 2004 
EETC of $185 million. As a result, 15 aircraft became unencumbered. We 
have increased the number of unencumbered aircraft in 2016 bringing total 
unencumbered aircraft to 97 and spare engines to 32 as of December 31, 
2016. In 2016, the holders of our 6.75% Convertible Debentures due 
2039 (Series B) converted their securities into approximately 17.6 million 
shares of our common stock. During 2016, we acquired approximately 
5.8 million shares of our common stock for approximately $120 million 
under our share repurchase program.

Aircraft

During 2016, we took delivery of 12 Airbus A321 aircraft, 10 purchases 
and 2 leases. In November 2014, we amended our purchase agreement 
with Airbus deferring 13 Airbus A321 aircraft deliveries and eight Airbus 
A320 aircraft deliveries from 2016-2020 to 2020-2023. Of these deferrals, 
ten Airbus A321 aircraft deliveries were converted to A321neo and ﬁve 
Airbus A320neo aircraft deliveries were converted to Airbus A321neo 
aircraft. We additionally converted three Airbus A320 aircraft deliveries 
in 2016 to Airbus A321 aircraft. In July 2016, we further amended our 
purchase agreement with Airbus by adding 30 incremental Airbus A321 
aircraft deliveries between 2017 and 2023; 15 of these aircraft will be 
A321ceo to be delivered between 2017 and 2019 and the remaining 15 
will be A321neos to be delivered between 2020 and 2023.

Airport Infrastructure Investments

In November 2015, we unveiled Phase I of our $50 million Terminal C 
upgrade at Boston Logan International Airport. This upgrade included 
new kiosks and ticket counters. Twenty-ﬁve kiosks and thirty check-in 
counters are in use in the North Pod of the terminal. Phase II of the 
upgrade, funded by the Massachusetts Port Authority, or Massport, 
was completed on the South Pod in 2016 which mirrors the check-in 
experience of the North Pod. Updated digital ﬂight information displays 
and a connector between Terminal C and international ﬂights at Terminal 
E were also completed during 2016.

We introduced self-tagging kiosks to four BlueCities in 2016: Albany, 
NY; San Juan, Puerto Rico; John F. Kennedy Airport in New York; and 
Fort Lauderdale, FL. We believe these kiosks will streamline the airport 
experience for our Customers and plan to introduce them in Boston and 
other BlueCities in 2017.

Network

As part of our ongoing network initiatives and route optimization efforts 
we continued to make schedule and frequency adjustments throughout 
2016. We added eight new BlueCities to our network: Daytona Beach, 
FL; Palm Springs, CA; Quito, Ecuador; Nashville, TN; Santa Clara, Cuba; 
Camagüey, Cuba; Holguín, Cuba; and Havana, Cuba. We also added new 
routes between existing BlueCities. 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

25

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Outlook for 2017 

We believe we will improve our long term return for shareholders as we 
implement our structural cost initiatives. We plan to add new destinations and 
route pairings based upon market demand, having previously announced 
Atlanta as our next BlueCity scheduled for March 2017. We are continuously 
looking to expand our other ancillary revenue opportunities, improve 
our TrueBlue® loyalty program and deepen our portfolio of commercial 

partnerships. As in the past, we intend to invest in infrastructure and 
product enhancements which we believe will enable us to reap future 
beneﬁts. We also remain committed to strengthening the balance sheet.

For the full year 2017, we estimate our operating capacity will increase by 
approximately 5.5% to 7.5% over 2016 with the addition of 15 Airbus A321 
aircraft to our operating ﬂeet. We are expecting our cost per available seat 
mile, excluding fuel and related taxes, for 2017 to increase by between 
approximately 1.5% to 3.5% over the level in 2016.

Results of Operations

Year 2016 compared to Year 2015

Overview

We reported net income of $759 million, operating income of $1,312 million 
and operating margin of 19.8% for the year ended December 31, 2016. 
This compares to net income of $677 million, operating income of $1,216 
million and operating margin of 19.0% for the year ended December 31, 
2015. Diluted earnings per share were $2.22 for 2016 compared to $1.98 
for the same period in 2015. 

Approximately 77% of our operations are centered in and around the 
heavily populated northeast corridor of the U.S., which includes the New 
York and Boston metropolitan areas. During the ﬁrst quarter of 2015, a 
series of winter storms impacted the New York and Boston metropolitan 
areas, with Boston’s Logan Airport experiencing record breaking snowfall 
totals. Despite the adverse weather conditions, our operational performance 
improved over prior years with fewer ﬂight cancellations. We estimate that 
winter storms reduced our operating income by approximately $10 million 
in the ﬁrst quarter of 2015.

Operating Revenues

(revenues in millions; percent changes based on unrounded numbers)
Passenger revenue
Other revenue
Operating revenues

Average fare
Yield per passenger mile (cents)
Passenger revenue per ASM (cents)
Operating revenue per ASM (cents)
Average stage length (miles)
Revenue passengers (thousands)
Revenue passenger miles (millions)
Available seat miles (ASMs) (millions)
Load factor

$

$

2016
6,013
619
6,632

157.14
13.18
11.21
12.37
1,093
38,263
45,619
53,620

$

2015
5,893
523
6,416

$ 167.89
14.13
11.96
13.03
1,092
35,101
41,711
49,258

85.1%

84.7%

Year-over-Year Change
% 
2.0
18.5
3.4

$
120
96
216

(10.75)
(0.95)
(0.75)
(0.66)
1
3,162
3,908
4,362

(6.4)
(6.7)
(6.3)
(5.0)
0.1
9.0
9.4
8.9
0.4pts

Passenger revenue accounted for 90.7% of our total operating revenue for 
the year ended December 31, 2016. As well as seat revenue, passenger 
revenue includes revenue from our ancillary product offerings such as 
EvenMore™ Space. Revenue generated from international routes, including 
Puerto Rico, accounted for 28.4% of our passenger revenues in 2016. 
Revenue is recognized either when transportation is provided or after 
the ticket or customer credit expires. We measure capacity in terms of 
available seat miles, which represents the number of seats available for 
passengers multiplied by the number of miles the seats are ﬂown. Yield, 
or the average amount one passenger pays to ﬂy one mile, is calculated 
by dividing Passenger revenue by Revenue passenger miles. We attempt 
to increase Passenger revenue primarily by increasing our yield per ﬂight 
which produces higher revenue per available seat mile. Our objective is to 
optimize our fare mix to increase our overall average fare while continuing 
to provide our Customers with competitive fares.

In 2016, the increase in Passenger revenue was mainly attributable to a 
9.0% increase in revenue passengers partially offset by a 6.4% decrease in 
average fare. Our largest ancillary product remains the EvenMore™ Space 
seats, generating approximately $238 million in revenue, an increase of 
over 4% compared to 2015. 

The primary component of Other revenue is the fees from reservation 
changes and excess baggage charged to Customers in accordance 
with our published policies. We also include the marketing component of 
TrueBlue® point sales, on-board product sales, charters, ground handling 
fees of other airlines and rental income.

In 2016, Other revenue increased by $96 million compared to 2015. The 
increase in Other revenue was primarily due to an increase in bag fees 
partly attributable to a full year of Fare Options pricing structure compared 
to half a year during 2015. 

26

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Operating Expenses

(in millions; per ASM data in cents; 
percentages based on unrounded numbers)
Aircraft fuel and related taxes
Salaries, wages and beneﬁts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance, materials and repairs
Other operating expenses
TOTAL OPERATING EXPENSES

2016
1,074
1,698
357
393
110
259
563
866
5,320

$

$

2015
1,348
1,540
342
345
122
264
490
749
5,200

$

$

Year-over-Year Change
$
$ (274)
158
15
48
(12)
(5)
73
117
$ 120

%
(20.3)
10.2
4.3
13.9
(9.6)
(1.7)
14.9
15.7
2.3

per ASM

2015 % Change
(26.8)
2.74
1.2
3.13
(4.2)
0.70
4.7
0.70
(17.0)
0.25
(9.7)
0.54
5.6
0.99
6.3
1.51
(6.0)
10.56

2016
2.00
3.17
0.67
0.73
0.21
0.48
1.04
1.62
9.92

Aircraft Fuel and Related Taxes

Depreciation and Amortization

Aircraft fuel and related taxes represented 20% of our total operating 
expenses in 2016 compared to 26% in 2015. The average fuel price 
decreased 26.9% in 2016 to $1.41 per gallon. This was partially offset by 
an increase in our fuel consumption of approximately 60 million gallons. 
Additional fuel consumption was mainly due to our increase in capacity. 
Based on our expected fuel volume for 2017, a 10% per gallon increase 
in the cost of aircraft fuel would increase our annual fuel expense by 
approximately $133 million. 

In 2016, we recorded fuel hedge gains of $9 million compared to $126 million 
in fuel hedge losses in 2015 which was recorded in Aircraft fuel and related 
taxes. We are unable to predict what the amount of ineffectiveness will 
be related to these instruments, or the potential loss of hedge accounting 
which is determined on a derivative-by-derivative basis, due to the volatility 
in the forward markets for these commodities.

Salaries, Wages and Beneﬁts

Salaries, wages and beneﬁts represent approximately 32% of our total 
operating expenses in 2016 compared to 30% in 2015. The increase in 
salaries, wages and beneﬁts was primarily driven by proﬁt sharing and an 
increase in our headcount. Our proﬁt sharing is calculated as 15% of adjusted 
pre-tax income, reduced by Retirement Plus contributions and special items. 
Proﬁt sharing increased by $25 million in 2016 compared to 2015, primarily 
driven by lower aircraft fuel and related taxes and increased revenues. 
During 2016, the average number of full-time equivalent Crewmembers 
increased by 8% and the average tenure of our Crewmembers was 6.3 years. 
Retirement Plus contributions, which equate to 5% of all of our eligible 
Crewmembers wages, increased by $4 million and our 3% retirement 
contribution for a certain portion of our FAA-licensed Crewmembers, 
which we refer to as Retirement Advantage, increased by approximately 
$1 million. The increasing tenure of our Crewmembers, rising healthcare 
costs and efforts to maintain competitiveness in our overall compensation 
packages will continue to pressure our costs in 2017. 

Landing Fees and Other Rents

Landing fees and other rents include landing fees, which are at a premium 
in the heavily trafﬁcked northeast corridor of the U.S. where approximately 
77% of our operations center. Other rents primarily consist of rent for 
airports in our 100 BlueCities. Landing fees and other rents increased 
$15 million, or 4.3%, in 2016 primarily due to our increased departures.

Depreciation and amortization primarily include depreciation for our owned 
and capital leased aircraft, engines, and in-ﬂight entertainment systems. 
Depreciation and amortization increased $48 million, or 13.9%, primarily 
due to our ten owned A321 deliveries during 2016 resulting in an average 
of 160 owned and capital leased aircraft in 2016 compared to 149 in 2015. 

Maintenance, Materials and Repairs

Maintenance, materials and repairs are generally expensed when incurred 
unless covered by a long-term ﬂight hour services contract. The average 
age of our aircraft in 2016 was 8.9 years which is relatively young compared 
to our competitors. However, as our ﬂeet ages our maintenance costs will 
increase signiﬁcantly, both on an absolute basis and as a percentage of 
our unit costs, as older aircraft require additional, more expensive repairs 
over time. We had an average of 11 additional total operating aircraft in 
2016 compared to 2015.

In 2016, Maintenance, materials and repairs increased by $73 million, or 
14.9% compared to 2015, primarily driven by increased ﬂight hours on 
our engine ﬂight-hour based maintenance repair agreements and by the 
number of airframe heavy maintenance repairs.

Other Operating Expenses

Other operating expenses consist of the following categories: outside services 
(including expenses related to fueling, ground handling, skycap, security 
and janitorial services), insurance, personnel expenses, professional fees, 
on-board supplies, shop and ofﬁce supplies, bad debts, communication 
costs and taxes other than payroll and fuel taxes.

In 2016, Other operating expenses increased by $117 million, or 15.7%, 
compared to 2015, primarily due to an increase in airport services and 
the non-recurrence of the $9 million gain in 2015 related to an insurance 
recovery for a damaged engine, a $6 million legal settlement and a $6 million 
gain on sale of an engine. 

Income Taxes

Our effective tax rate was 37.6% in 2016 and 38.3% in 2015. Our effective 
tax rate decreased primarily due to the adoption of Accounting Standards 
Update, or ASU, 2016-09, Improvements to Employee Share-Based 
Payment Accounting. See Note 1 to the Consolidated Financial Statements 
for additional information.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

27

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Year 2015 compared to Year 2014 

Overview

We reported net income of $677 million, operating income of $1.2 billion 
and operating margin of 19.0% for the year ended December 31, 2015. This 
compares to net income of $401 million, operating income of $515 million 
and operating margin of 8.9% for the year ended December 31, 2014. 
Diluted earnings per share were $1.98 for 2015 compared to $1.19 for 
the same period in 2014. Net income for the year ended December 31, 
2014 included the after tax gain on the sale of LiveTV of approximately 
$169 million or $0.49 per diluted share.

During the ﬁrst three months of 2014, the New York and Boston metropolitan 
areas experienced one of the most severe winters in 20 years, with 
New York and Boston each experiencing over 57 inches of snow. These 

weather conditions led to the cancellation of approximately 4,100 ﬂights. 
These cancellations resulted in a negative impact on our ﬁrst quarter 2014 
seat revenue as well as ancillary revenue such as change fees due to our 
policy of waiving these fees during severe weather events. During the ﬁrst 
quarter of 2015, a series of winter storms again impacted the New York 
and Boston metropolitan areas, with Boston’s Logan Airport experiencing 
record breaking snowfall totals. Despite the adverse weather conditions, 
our operational performance improved over the same period in 2014, 
resulting in approximately 37% fewer ﬂight cancellations. We estimate that 
winter storms reduced our operating income by approximately $10 million 
in the ﬁrst quarter of 2015 and $35 million in the ﬁrst quarter of 2014.

Operating Revenues

(revenues in millions; percent changes based on unrounded numbers)
Passenger revenue
Other revenue
Operating revenues

Average fare
Yield per passenger mile (cents)
Passenger revenue per ASM (cents)
Operating revenue per ASM (cents)
Average stage length (miles)
Revenue passengers (thousands)
Revenue passenger miles (millions)
Available seat miles (ASMs) (millions)
Load factor

$

2015
5,893
523
6,416

$ 167.89
14.13
11.96
13.03
1,092
35,101
41,711
49,258

$

2014
5,343
474
5,817

$ 166.57
14.13
11.88
12.93
1,088
32,078
37,813
44,994

84.7%

84.0%

$

Year-over-Year Change
%
10.3
10.4
10.3

$
550
49
599

$

1.32
—
0.08
0.10
4
3,023
3,898
4,264

0.8
—
0.7
0.8
0.4
9.4
10.3
9.5
0.7pts

Passenger revenue accounted for over 91.8% of our total operating 
revenues for the year ended December 31, 2015. As well as seat revenue, 
passenger revenue includes revenue from our ancillary product offerings 
such as EvenMore™ Space. Revenue generated from international routes, 
including Puerto Rico, accounted for 30% of our passenger revenues in 
2015. Revenue is recognized either when transportation is provided or 
after the ticket or passenger credit expires. We measure capacity in terms 
of available seat miles, which represents the number of seats available for 
passengers multiplied by the number of miles the seats are ﬂown. Yield, 
or the average amount one passenger pays to ﬂy one mile, is calculated 
by dividing Passenger revenue by Revenue passenger miles. We attempt 
to increase Passenger revenue primarily by increasing our yield per ﬂight 
which produces higher Revenue per available seat mile. Our objective is to 
optimize our fare mix to increase our overall average fare while continuing 
to provide our Customers with competitive fares.

In 2015, the increase in Passenger revenue was mainly attributable to a 
9.4% increase in revenue passengers and a 0.8% increase in average 
fare. Our largest ancillary product remains the EvenMore™ Space seats, 
generating approximately $228 million in revenue, an increase of over 
14% compared to 2014. 

In 2015, Other revenue increased by $49 million compared to 2014. The 
increase in Other revenue was primarily due to an increase in bag fees partly 
attributable to our new Fare Options pricing structure. Also contributing to 
the increase was revenues mainly from Getaways™, which was evolved 
during 2016 to JetBlue® Vacations sales and the marketing component 
of TrueBlue® point sales, which was offset by the $30 million of revenue 
prior to the sale of LiveTV in June 2014.

Operating Expenses

(in millions; per ASM data in cents; 
percentages based on unrounded numbers)
Aircraft fuel and related taxes
Salaries, wages and beneﬁts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance, materials and repairs
Other operating expenses
TOTAL OPERATING EXPENSES

Year-over-Year Change

per ASM

2015
1,348
1,540
342
345
122
264
490
749
5,200

$

$

2014
1,912
1,294
321
320
124
231
418
682
5,302

$

$

$
(564)
246
21
25
(2)
33
72
67
$ (102)

%
(29.5)
19.1
6.7
7.7
(1.8)
14.3
17.3
9.8
(1.9)

2015
2.74
3.13
0.70
0.70
0.25
0.54
0.99
1.51
10.56

2014 % Change
(35.6)
4.25
8.8
2.88
(2.5)
0.71
(1.6)
0.71
(10.3)
0.28
4.4
0.51
7.1
0.93
—
1.51
(10.4)
11.78

28

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Aircraft Fuel and Related Taxes

Depreciation and Amortization

Aircraft fuel and related taxes represented 26% of our total operating 
expenses in 2015 compared to 36% in 2014. The average fuel price 
decreased 35.6% in 2015 to $1.93 per gallon. This was partially offset by 
an increase in our fuel consumption of approximately 61 million gallons. 
Additional fuel consumption was mainly due to our increase in capacity 
and lower ﬂight cancellations during the ﬁrst quarter of 2015 compared to 
ﬂight cancellations during the ﬁrst quarter of 2014 as a result of the harsh 
winter weather. Based on our expected fuel volume for 2016, a 10% per 
gallon increase in the cost of aircraft fuel would increase our annual fuel 
expense by approximately $120 million. 

In 2015, we recorded fuel hedge losses of $126 million compared to 
$30 million in fuel hedge losses in 2014 which was recorded in Aircraft 
fuel and related taxes. Fuel derivatives not qualifying as cash ﬂow hedges 
resulted in a gain of $2 million in 2014 which were recorded in Interest 
income and other. Accounting ineffectiveness on fuel derivatives classiﬁed 
as cash ﬂow hedges resulted in losses of less than $1 million in both 
2015 and 2014 and were recorded in Interest income and other. We 
are unable to predict what the amount of ineffectiveness will be related 
to these instruments, or the potential loss of hedge accounting which is 
determined on a derivative-by-derivative basis, due to the volatility in the 
forward markets for these commodities.

Salaries, Wages and Beneﬁts

Salaries, wages and beneﬁts represent approximately 30% of our total 
operating expenses in 2015 compared to 24% in 2014. The increase in 
salaries, wages and beneﬁts was primarily driven by proﬁt sharing and 
an increase in our headcount. Our proﬁt sharing is calculated as 15% of 
adjusted pre-tax income, reduced by Retirement Plus contributions and 
special items. Proﬁt sharing increased by $126 million in 2015 compared 
to 2014, primarily driven by increased revenues and lower aircraft fuel and 
related taxes. During 2015, the average number of full-time equivalent 
employees increased by 9% and the average tenure of our Crewmembers 
increased to 6.3 years. Retirement Plus contributions, which equate to 
5% of all of our eligible Crewmembers wages, increased by $5 million and 
our 3% retirement contribution for a certain portion of our FAA-licensed 
Crewmembers, which we refer to as Retirement Advantage, increased 
by approximately $1 million. 

We agreed to provide our pilots with a 20% pay increase in their base 
rate over three years starting in 2014. In January 2014, the FAA’s rule 
amending the FAA’s ﬂight, duty, and rest regulations became effective. 
Among other things, the rule requires a ten hour minimum rest period prior 
to a pilot’s ﬂight duty period; mandates a pilot must have an opportunity 
for eight hours of uninterrupted sleep within the rest period; and imposes 
new pilot “ﬂight time” and “duty time” limitations based upon report times, 
the number of scheduled ﬂight segments, and other operational factors. 
We have hired additional pilots to address the requirements of the rule.

Landing Fees and Other Rents

Landing fees and other rents include landing fees, which are at a premium 
in the heavily trafﬁcked northeast corridor of the U.S. where approximately 
80% of our operations center. Other rents primarily consist of rent for 
airports in our 93 BlueCities.

Landing fees and other rents increased $21 million, or 6.7%, in 2015 
primarily due to increased departures.

Depreciation and amortization primarily include depreciation for our owned 
and capital leased aircraft, engines, and in-ﬂight entertainment systems.

Depreciation and amortization increased $25 million, or 7.7%, primarily 
due to an average of 149 owned and capital leased aircraft in 2015 
compared to 137 in 2014. Additionally, depreciation expense increased 
in 2015 due to the completion of our international arrivals facility, T5i, and 
additional gates at T5, which was completed in November 2014.

Maintenance, Materials and Repairs

Maintenance, materials and repairs are generally expensed when incurred 
unless covered by a long-term ﬂight hour services contract. The average 
age of our aircraft in 2015 was 8.3 years which is relatively young compared 
to our competitors. However, as our ﬂeet ages, our maintenance costs will 
increase signiﬁcantly, both on an absolute basis and as a percentage of 
our unit costs, as older aircraft require additional, more expensive repairs 
over time. We had an average of 11.7 additional total operating aircraft 
in 2015 compared to 2014.

In 2015, Maintenance, materials and repairs increased by $72 million, or 
17.3% compared to 2014, primarily driven by increased ﬂight hours on 
our engine ﬂight-hour based maintenance repair agreements and by the 
number of airframe heavy maintenance repairs.

Other Operating Expenses

Other operating expenses consist of the following categories: outside 
services (including expenses related to fueling, ground handling, skycap, 
security and janitorial services), insurance, personnel expenses, cost of 
goods sold to other airlines by LiveTVwhen LiveTV was a subsidiary of 
JetBlue, professional fees, on-board supplies, shop and ofﬁce supplies, bad 
debts, communication costs and taxes other than payroll and fuel taxes.

In 2015, Other operating expenses increased by $67 million, or 9.8%, 
compared to 2014, primarily due to an increase in airport services and 
passenger on-board supplies resulting from increased passengers ﬂown, 
partially offset by the non-recurrence of operating costs associated with 
LiveTV during the ﬁrst six months of 2014, a $9 million gain in 2015 
related to an insurance recovery for a damaged engine, a $6 million legal 
settlement and a $6 million gain on sale of an engine. Non-recurring items 
in 2014 included the sale of an engine for a gain of $3 million and a gain 
of $4 million relating to a legal settlement. 

Income Taxes

Our effective tax rate was 38.3% in 2015 and 35.7% in 2014. Our 2014 
effective tax rate differs from the statutory income tax rate primarily due to 
the release of the $19 million tax beneﬁt related to the utilization of a capital 
loss carryforward. We were able to utilize capital loss carryforwards due 
to the sale of our subsidiary, LiveTV. The rate was also affected by state 
income taxes and the non-deductibility of certain items for tax purposes. 
The relative size of these items compared to our pre-tax income also 
affect the rate.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

29

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

The airline business is capital intensive. Our ability to successfully execute 
our proﬁtable growth plans is largely dependent on the continued 
availability of capital on attractive terms. In addition, our ability to 
successfully operate our business depends on maintaining sufﬁcient 
liquidity. We believe we have adequate resources from a combination 
of cash and cash equivalents, investment securities on-hand and two 
available lines of credit. Additionally, as of December 31, 2016, we 
had 97 unencumbered aircraft and 32 unencumbered spare engines 
which we believe could be an additional source of liquidity, if necessary. 

We believe a healthy liquidity position is a crucial element of our ability 
to weather any part of the economic cycle while continuing to execute 
on our plans for proﬁtable growth and increased returns. Our goal is to 
continue to be diligent with our liquidity, maintaining ﬁnancial ﬂexibility 
and allowing for prudent capital spending.

As of December 31, 2016, we had unrestricted cash and cash equivalents 
of $433 million and short-term investments of $538 million. We believe 
our current level of unrestricted cash, cash equivalents and short-term 
investments of approximately 15% of trailing twelve months revenue, 
combined with our approximately $600 million in available lines of credit 
and portfolio of unencumbered assets, provides us with a strong liquidity 
position and the potential for higher returns on cash deployment. We 
believe we have taken several important actions during 2016 in solidifying 
our strong balance sheet and overall liquidity position. 

Our highlights for 2016 included:

 (cid:116) Reduced our overall debt balance by $443 million, including our ﬁnal 
scheduled principal payment of $185 million associated with our 2004 
EETC certiﬁcates and $86 million in convertible debt principal into 
shares of our common stock.

 (cid:116) Increased the number of unencumbered aircraft from 61 as of 
December 31, 2015, to 97 as of December 31, 2016. This was 
principally accomplished by paying cash for the purchase of 10 Airbus 
A321 aircraft, buying out the leases on nine of our aircraft and the 
ﬁnal scheduled payment of our 2004 EETC.

 (cid:116) As a result of these 2016 highlights, our adjusted debt to capitalization 

ratio improved from 46% in 2015 to 35% in 2016.

Analysis of Cash Flows

We had cash and cash equivalents of $433 million as of December 31, 
2016. This compares to $318 million and $341 million as of December 31, 
2015 and 2014, respectively. We held both short and long term 
investments in 2016, 2015 and 2014. Our short-term investments 
totaled $538 million as of December 31, 2016 compared to $558 million 
and $367 million as of December 31, 2015 and 2014, respectively. Our 
long-term investments totaled $90 million as of December 31, 2016 
compared to $49 million and $60 million as of December 31, 2015 
and 2014, respectively. 

Operating Activities

Cash ﬂows provided by operating activities totaled approximately 
$1.6 billion in each of 2016 and 2015 and $912 million in 2014. There 
was a $34 million increase in cash ﬂows from operating activities in 
2016 compared to 2015. During 2016, we saw a 8.9% increase in 
capacity and a 26.9% decrease in the price of fuel which both helped 
to improve operating cash ﬂows. The $686 million increase in cash 
ﬂows from operations in 2015 compared to 2014 was primarily a result 
of a 9.5% increase in capacity, a 0.8% increase in average fares and 
a decrease of 35.6% in fuel prices. As of December 31, 2016, our 
unrestricted cash, cash equivalents and short-term investments as a 
percentage of trailing twelve months revenue was approximately 15%. 
We rely primarily on cash ﬂows from operations to provide working 
capital for current and future operations.

30

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

Investing Activities 

During 2016, capital expenditures related to our purchase of ﬂight 
equipment included $161 million for ﬂight equipment deposits, 
$588 million for the purchase of 10 new Airbus A321 aircraft and the 
buyout of nine aircraft leases, $18 million for spare part purchases, 
and $96 million for ﬂight equipment work-in-progress. Other property 
and equipment capital expenditures also included ground equipment 
purchases and facilities improvements for $148 million. Investing activities 
also included the net purchase of $23 million in investment securities. 

During 2015, capital expenditures related to our purchase of ﬂight 
equipment included $104 million for ﬂight equipment deposits, $450 million 
for the purchase of 12 new Airbus A321 aircraft and $110 million for 
the buyout of six aircraft leases, $120 million for spare part purchases, 
and $29 million for ﬂight equipment work-in-progress. Other property 
and equipment capital expenditures also included ground equipment 
purchases and facilities improvements for $128 million. Investing activities 
also included the net purchase of $187 million in investment securities.

During 2014, capital expenditures related to our purchase of ﬂight 
equipment included $127 million for ﬂight equipment deposits, $298 million 
for the purchase of seven new Airbus A321 aircraft, $33 million for spare 
part purchases, $79 million for ﬂight equipment work-in-progress, and 
$1 million relating to other activities. Capital expenditures also included 
the purchase of the Slots at Reagan National for $75 million, other 
property and equipment including ground equipment purchases and 
facilities improvements for $224 million and LiveTV in-ﬂight entertainment 
equipment inventory for $20 million. Investing activities also included the 
proceeds from the sale of LiveTV for $393 million and the net proceeds 
of $81 million from the sale of investment securities.

We currently anticipate 2017 capital expenditures to be between 
$1.2 billion and $1.4 billion, including approximately $1,050 million and 
$1.2 billion for aircraft and predelivery deposits. The remaining capital 
expenditures of approximately $150 million to $200 million relate to 
non-aircraft projects such as our initiative to reduce our structural cost 
with the goal of saving $250 to $300 million by 2020.

Financing Activities

Financing activities during 2016 consisted of the scheduled repayment 
of $368 million relating to debt and capital lease obligations, as a 
result, 17 aircraft became unencumbered. In addition, we acquired 
$134 million in treasury shares of which $120 million related to our 
accelerated share repurchase in the fourth quarter of 2016. During 
the period, we realized $45 million in proceeds from the issuance of 
stock related to employee share-based compensation. During 2016, 
$86 million of Series B 6.75% convertible debentures were converted 
by holders, as a result, we issued approximately 17.6 million shares 
of our common stock.

Financing activities during 2015 consisted of the scheduled repayment 
of $196 million relating to debt and capital lease obligations. We prepaid 
$100 million of outstanding principal relating to 10 Airbus A320 aircraft. As 
a result, four aircraft became unencumbered and six have lower principal 
balances. We also prepaid the outstanding balance of $32 million on a 
special facility revenue bond for JFK that was issued by the New York 
City Industrial Development Agency in December 2006. In addition, we 
acquired $241 million in treasury shares of which $150 million related 
to our accelerated share repurchase in June 2015. During the period, 
we realized $84 million in proceeds from the issuance of stock related 
to employee share-based compensation. During 2015, $68 million of 
Series B 5.5% convertible debentures were converted by holders, as a 
result, we issued approximately 15 million shares of our common stock.

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financing activities during 2014 consisted of the scheduled repayment of 
$394 million relating to debt and capital lease obligations and $308 million 
of debt prepayment. We issued $342 million in ﬁxed rate equipment notes 
secured by 18 aircraft, acquired $82 million in treasury shares, including 
$73 million related to our share buyback program and $9 million in shares 
withheld for tax purposes upon vesting of RSUs. We repaid $14 million in 
principal related to our construction obligation for T5. We issued $41 million 
in common stock mainly due to stock options being exercised as our 
stock price continued to increase in 2014.

In the future we may issue, in one or more offerings, debt securities, pass-
through certiﬁcates, common stock, preferred stock and/or other securities.

In November 2015, we ﬁled an automatic shelf registration statement 
with the SEC. Under this shelf registration statement, we, or one or more 
selling security holders, have the capacity to offer and sell from time to 
time common stock, preferred stock, debt securities, depositary shares, 
warrants, stock purchase contracts, stock purchase units, subscription 
rights, and pass-through certiﬁcates. The net proceeds of any securities 
we sell under this registration statement may be used for general corporate 
purposes, including among other possible uses, the acquisition of aircraft 
and construction of facilities on or near airports, the repayment or repurchase 
of short-term or long-term debt or lease obligations and other capital 
expenditures. We may also use the proceeds for temporary investments 
until we need them for general corporate purposes. We will not receive any 
of the proceeds from the sale of securities by any selling security holders 
who may be named in a prospectus supplement. Through to December 31, 
2016, we had not issued any securities under this registration statement. 
We may utilize this universal shelf registration statement in the future to 
raise capital to fund the continued development of our products and 
services, the commercialization of our products and services or for other 
general corporate purposes.

None of our lenders or lessors are afﬁliated with us.

Capital Resources

We have been able to generate sufﬁcient funds from operations to meet 
our working capital requirements and we have historically ﬁnanced our 
aircraft through either secured debt or lease ﬁnancing. As of December 31, 
2016, we operated a ﬂeet of 227 aircraft which included 27 Airbus A321 
aircraft and 70 Airbus A320 aircraft that were unencumbered. Of our 
remaining aircraft, 47 were under operating leases, six were ﬁnanced under 
capital leases and 77 were ﬁnanced by private and public secured debt. 
Additionally we have 32 unencumbered spare engines. Approximately 
33% of our property and equipment is pledged as security under various 
loan arrangements. 

Dependent on market conditions, we anticipate using a mix of cash 
and debt ﬁnancing for the 15 Airbus A321 aircraft scheduled for delivery 
in 2017. To the extent we cannot secure ﬁnancing on terms we deem 
attractive, we may be required to pay in cash, further modify our aircraft 
acquisition plans or incur higher than anticipated ﬁnancing costs. Although 
we believe debt and/or lease ﬁnancing should be available to us if needed, 
we cannot give assurance we will be able to secure ﬁnancing on terms 
attractive to us, if at all. 

Working Capital

We had a working capital deﬁcit of $656 million as of December 31, 2016 
compared to a deﬁcit of $902 million as of December 31, 2015 and a 
deﬁcit of $736 million as of December 31, 2014. Working capital deﬁcits 
can be customary in the airline industry since air trafﬁc liability is classiﬁed 
as a current liability. Our working capital deﬁcit decreased $246 million 
in 2016 mainly due to several factors including a decrease in current 

debt maturities primarily related to our ﬁnal maturity of our 2004 EETC of 
$185 million, and holders voluntary conversion of our 6.75% Convertible 
Debentures due 2039 (Series B) resulting in the issuance of approximately 
17.6 million shares of our common stock.

In 2012, we entered into a revolving line of credit with Morgan Stanley 
for up to $100 million which was subsequently increased to $200 million 
in December 2012. This line of credit is secured by a portion of our 
investment securities held by Morgan Stanley and the borrowing amount 
may vary accordingly. This line of credit bears interest at a ﬂoating rate 
of interest based upon the London Interbank Offered Rate, or LIBOR, 
plus a margin. We did not borrow on this facility in 2016 or 2015 and 
the line was undrawn as of December 31, 2016. In November 2014, we 
increased our Credit and Guaranty Agreement with Citibank, N.A. as the 
administrative agent to $400 million. Borrowing under the Credit Facility 
bears interest at a variable rate equal to LIBOR, plus a margin. The Credit 
Facility is scheduled to terminate in 2018. The Credit Facility is secured 
by Slots at JFK, LaGuardia, Reagan National and certain other assets. 
The Credit Facility includes covenants that require us to maintain certain 
minimum balances in unrestricted cash, cash equivalents, and unused 
commitments available under all revolving credit facilities. In addition, the 
covenants restrict our ability to incur additional indebtedness, issue preferred 
stock or pay dividends. During 2016 and 2015, we did not borrow on this 
facility and the line was undrawn as of December 31, 2016.

We expect to meet our obligations as they become due through available 
cash, investment securities and internally generated funds, supplemented 
as necessary by ﬁnancing activities, as they may be available to us. We 
expect to generate positive working capital through our operations. 
However, we cannot predict what the effect on our business might be from 
the extremely competitive environment we are operating in or from events 
beyond our control, such as volatile fuel prices, economic conditions, 
weather-related disruptions, the spread of infectious diseases, the impact 
of airline bankruptcies, restructurings or consolidations, U.S. military actions 
or acts of terrorism. We believe there is sufﬁcient liquidity available to us 
to meet our cash requirements for at least the next 12 months.

Debt and Capital Leases

Our scheduled debt maturities peaked in 2016. As part of our efforts to 
effectively manage our balance sheet and improve ROIC, we expect to 
continue to actively manage our debt balances. Our approach to debt 
management includes managing the mix of ﬁxed vs. ﬂoating rate debt, 
annual maturities of debt and the weighted average cost of debt. We 
intend to continue to opportunistically pre-purchase outstanding debt when 
market conditions and terms are favorable as well as when excess liquidity 
is available.Additionally, our unencumbered assets, including 97 aircraft 
and 32 engines, allow some ﬂexibility in managing our cost of debt and 
capital requirements. The proceeds from the sale of LiveTV in 2014 were 
allocated to debt reduction and share buybacks which are ROIC accretive. 

In March 2014, we completed a private placement EETC offering of 
$226 million in pass-through certiﬁcates that was secured by 14 of our 
unencumbered Airbus A320 aircraft. This funding coincided with the 
ﬁnal scheduled principal payments of $188 million associated with our 
March 2004 EETC Class G-2 certiﬁcates, which resulted in 13 Airbus 
A320 aircraft becoming unencumbered. In June 2014, we used some of 
the proceeds from the sale of LiveTV and prepaid $299 million of ﬂoating 
rate outstanding principal secured by 14 Airbus A320 aircraft which are 
now unencumbered.

During 2014, we entered into two Airbus A321 aircraft capital leases for 
approximately $76 million. These capital leases are included in our total 
debt and capital lease obligations and the aircraft are included in property 
and equipment.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

31

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Contractual Obligations

Our noncancelable contractual obligations at December 31, 2016 include:

2017

Total

(in billions)
Long-term debt and  
capital lease obligations(1)
Lease commitments
Flight equipment obligations
Other obligations(2)
TOTAL
(1) 
(2)  Amounts include noncancelable commitments for the purchase of goods and services.

0.2
0.2
0.9
0.6
1.9
$
Includes actual interest and estimated interest for floating-rate debt based on December 31, 2016 rates.

1.7
1.3
8.1
3.8
14.9

0.3
0.2
1.1
0.7
2.3

$

$

$

$

$

Payments due in

2018

2019

2020

2021

Thereafter

$

$

0.3
0.1
1.3
0.7
2.4

$

$

0.2
0.1
1.6
0.5
2.4

$

$

0.2
0.1
1.4
0.2
1.9

$

$

0.5
0.6
1.8
1.1
4.0

The interest rates are ﬁxed for $1.2 billion of our debt and capital lease 
obligations, with the remaining $0.2 billion having ﬂoating interest rates. 
The ﬂoating interest rates adjust either quarterly or semi-annually based 
on LIBOR. The weighted average maturity of all of our debt was six years 
as of December 31, 2016. 

As of December 31, 2016, we were in compliance with all of our 
covenants in relation to our debt and lease agreements and 33% of 
our owned property and equipment were pledged as security under 
various loan agreements.

As of December 31, 2016, we had operating lease obligations for 47 aircraft 
with lease terms that expire between 2018 and 2028. None of these leases 
have a variable-rate rent payments which adjust semi-annually based 
on LIBOR. Our aircraft lease agreements contain termination provisions 
which include standard maintenance and return conditions. Our policy is 
to record these lease return conditions when they are probable and the 
costs can be estimated. We also lease airport terminal space and other 
airport facilities in each of our markets, as well as ofﬁce space and other 
equipment. We have approximately $31 million of restricted assets pledged 
under standby letters of credit related to certain of our leases which will 
expire at the end of the related leases. As of December 31, 2016, the 
average age of our operating ﬂeet was 8.9 years.

Our ﬁrm aircraft order as of December 31, 2016 is as follows:

Year
2017
2018
2019
2020
2021
2022
2023
2024
TOTAL

Airbus 
A320neo
—
—
—
6
16
3
—
—
25

Airbus 
A321ceo
15
8
3
—
—
—
—
—
26

Airbus 
A321neo
—
3
18
12
4
17
6
—
60

Embraer  
190
—
—
—
10
7
7
—
—
24

Total
15
11
21
28
27
27
6
—
135

Committed expenditures for our ﬁrm aircraft and spare engines include 
estimated amounts for contractual price escalations and predelivery 
deposits. We expect to meet our predelivery deposit requirements for 
our aircraft by paying cash or by using short-term borrowing facilities 
for deposits generally required six to 24 months prior to delivery. Any 
predelivery deposits paid by the issuance of notes are fully repaid at the 
time of delivery of the related aircraft.

Our Terminal at JFK, T5, is governed by a lease agreement we entered 
into with the PANYNJ in 2005. We are responsible for making various 
payments under the lease. This includes ground rents for the terminal 
site which began at the time of the lease execution in 2005 and facility 
rents commenced in October 2008 upon our occupancy of T5. The 
facility rents are based on the number of passengers enplaned out of 
the terminal, subject to annual minimums. The PANYNJ reimbursed us 
for construction costs of this project in accordance with the terms of the 
lease, except for approximately $76 million in leasehold improvements 
provided by us. In 2013, we amended this lease to include additional 
ground space for our international arrivals facility, T5i, which we opened in 

November 2014. For ﬁnancial reporting purposes, the T5 project is being 
accounted for as a ﬁnancing obligation, with the constructed asset and 
related liability being reﬂected on our consolidated balance sheets. The 
T5i project was accounted for at cost. Minimum ground and facility rents 
at JFK totaling $299 million are included in the commitments table above 
as lease commitments and ﬁnancing obligations.

We enter into individual employment agreements with each of our non-
unionized FAA-licensed Crewmembers, inspectors and air trafﬁc controllers. 
Each employment agreement is for a term of ﬁve years and automatically 
renews for an additional ﬁve-year term unless the Crewmember is terminated 
for cause or the Crewmember elects not to renew it. Pursuant to these 
agreements, these Crewmembers can only be terminated for cause. In 
the event of a downturn in our business requiring a reduction in ﬂying 
and related work hours, we are obligated to pay these Crewmembers a 
guaranteed level of income and to continue their beneﬁts. As we are not 
currently obligated to pay this guaranteed income and beneﬁts, no amounts 
related to these guarantees are included in the contractual obligations 
table above. Our pilots voted to be represented by ALPA during 2014.

32

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Off-Balance Sheet Arrangements

None of our operating lease obligations are reﬂected on our consolidated 
balance sheets. Although some of our aircraft lease arrangements are 
with variable interest entities, as deﬁned by the Consolidations topic 
of the Codiﬁcation, none of them require consolidation in our ﬁnancial 
statements. The decision to ﬁnance these aircraft through operating leases 
rather than through debt was based on an analysis of the cash ﬂows and 
tax consequences of each ﬁnancing alternative and a consideration of 
liquidity implications. We are responsible for all maintenance, insurance and 
other costs associated with operating these aircraft. However, we are not 
obligated to provide any residual value or other guarantees to our lessors.

We have determined that we hold a variable interest in, but are not the 
primary beneﬁciary of, certain pass-through trusts. The beneﬁciaries of 

these pass-through trusts are the purchasers of equipment notes issued 
by us to ﬁnance the acquisition of aircraft. Each trust maintains a liquidity 
facility whereby a third party agrees to make payments sufﬁcient to pay 
up to 18 months of interest on the applicable certiﬁcates if a payment 
default occurs.

We have also made certain guarantees and indemnities to other unrelated 
parties that are not reﬂected on our consolidated balance sheets, which 
we believe will not have a signiﬁcant impact on our results of operations, 
ﬁnancial condition or cash ﬂows. We have no other off-balance sheet 
arrangements. See Notes 2, 3 and 11 to our consolidated ﬁnancial 
statements for a more detailed discussion of our variable interests and 
other contingencies, including guarantees and indemnities.

Critical Accounting Policies and Estimates

The preparation of our consolidated ﬁnancial statements in conformity 
with U.S. GAAP requires management to adopt accounting policies as 
well as make estimates and judgments to develop amounts reported 
in our ﬁnancial statements and accompanying notes. We maintain a 
thorough process to review the application of our accounting policies 
and to evaluate the appropriateness of the estimates that are required to 
prepare our ﬁnancial statements. We believe our estimates and judgments 
are reasonable; however, actual results and the timing of recognition of 
such amounts could differ from those estimates. In addition, estimates 
routinely require adjustment based on changing circumstances and the 
receipt of new or better information.

Critical accounting policies and estimates are deﬁned as those that are 
reﬂective of signiﬁcant judgments and uncertainties that could potentially 
result in materially different results under different assumptions and 
conditions. The policies and estimates discussed below have been reviewed 
with our independent registered public accounting ﬁrm and with the Audit 
Committee of our Board of Directors. For a discussion of these and other 
accounting policies, see Note 1 to our consolidated ﬁnancial statements.

Passenger revenue

Passenger ticket sales are initially deferred in air trafﬁc liability. Revenue is 
recognized when transportation is provided or when a ticket or customer 
credit expires. Air trafﬁc liability also includes customer credits issued and 
unused tickets whose travel date has passed. Credit for unused tickets 
and customer credits can each be applied towards another ticket within 
12 months of the original scheduled service or 12 months from the issuance 
of the customer credit. We also defer in the air trafﬁc liability account an 
estimate for customer credits issued in conjunction with the JetBlue Airways 
Customer Bill of Rights that we expect to be ultimately redeemed. These 
estimates are based on historical experience and are periodically evaluated, 
and adjusted if necessary, based on actual credit usage.

Frequent ﬂyer accounting 

We utilize a number of estimates in accounting for our TrueBlue® customer 
loyalty program, or TrueBlue®. We record a liability for the estimated 
incremental cost of outstanding points earned from JetBlue purchases that 
we expect to be redeemed. This liability was $30 million and $24 million 
as of December 31, 2016 and 2015, respectively. The estimated cost 
includes incremental fuel, insurance, passenger food and supplies, in-
ﬂight entertainment and reservation costs. We adjust this liability, which 
is included in air trafﬁc liability, based on points earned and redeemed, 
points that will ultimately go unused, or breakage, changes in the estimated 
incremental costs associated with providing travel and changes in the 
TrueBlue® program. Customers earn points based on the value paid for 
a trip rather than the length of the trip and never expire. In addition, there 
is no longer an automatic generation of a travel award once minimum 

award levels are reached, but instead the points are maintained in the 
account until used by the member. Customers can pool points between 
small groups of people, branded as Family Pooling™. We believe Family 
Pooling™ did not have a material impact on the annual breakage calculation. 
Periodically we evaluate our assumptions for appropriateness, including 
comparison of the cost estimates to actual costs incurred as well as the 
expiration and redemption assumptions to actual experience. Changes in 
the minimum award levels or in the lives of the awards would also require 
us to reevaluate the liability, potentially resulting in a signiﬁcant impact in 
the year of change as well as in future years.

TrueBlue® points can also be sold to participating companies, including 
credit card and car rental companies. These sales are accounted for as 
multiple-element arrangements.

Upon the re-launch of the TrueBlue® program in November 2009, we 
extended our co-branded credit card and membership rewards participation 
agreements. In connection with these extensions, we received a one-time 
payment of $37 million, which we deferred and recognized as other revenue 
over the original term of the agreement through 2015.

We identiﬁed two elements for our co-branded credit card partnership with 
American Express® which ended in 2015, with one element representing 
the fair value of the travel that will ultimately be provided when the points 
are redeemed and the other consisting of marketing related activities we 
conduct with the participating company. The fair value of the transportation 
portion of these point sales is deferred and recognized as passenger 
revenue when transportation is provided. The marketing portion, which 
is the excess of the total sales proceeds over the estimated fair value of 
the transportation to be provided, is recognized in other revenue when 
the points are sold.

In 2015, we announced a co-branded credit card partnership with 
Barclaycard®, which commenced in March 2016. The agreement is a 
multiple-element arrangement subject to ASU, 2009-13, Multiple Deliverable 
Revenue Arrangements. ASU 2009-13 requires the allocation of the overall 
consideration received to each deliverable using the estimated selling 
price. We identiﬁed the following deliverables: air transportation; use of 
the JetBlue brand name and access to our frequent ﬂyer customer lists; 
advertising; and other airline beneﬁts. In determining the estimated selling 
price, JetBlue considered multiple inputs, methods and assumptions, 
including: discounted cash ﬂows; estimated equivalent ticket value, net 
of fulﬁllment discount; points expected to be awarded and redeemed; 
estimated annual spending by cardholder; estimated annual royalty for 
use of JetBlue’s frequent ﬂyer customer lists; and estimated utilization of 
other airline beneﬁts. The overall consideration received is allocated to 
each deliverable based on their relative selling prices. The air transportation 
element will be deferred and recognized as passenger revenue when the 
points are utilized. The other elements will generally be recognized as 
other revenue when earned.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

33

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

TrueBlue® points sold to participating companies which are not redeemed 
are recognized as revenue when management determines the probability of 
redemption is remote. Deferred revenue was $211 million and $181 million 
at December 31, 2016 and 2015, respectively. 

Accounting for long-lived assets

In accounting for long-lived assets we make estimates about the expected 
useful lives, projected residual values and the potential for impairment. In 
estimating useful lives and residual values of our aircraft, we have relied 
upon actual industry experience with the same or similar aircraft types and 
our anticipated utilization of the aircraft. Changing market prices of new 
and used aircraft, government regulations and changes in our maintenance 
program or operations could result in changes to these estimates.

Our long-lived assets are evaluated for impairment at least annually or when 
events and circumstances indicate the assets may be impaired. Indicators 
include operating or cash ﬂow losses, signiﬁcant decreases in market 
value or changes in technology. As our assets are all relatively new and 
we continue to have positive operating cash ﬂows, we have not identiﬁed 
any signiﬁcant impairment related to our long-lived assets at this time.

Intangible assets

Our intangible assets consist of acquired take-off and landing Slots at certain 
domestic airports. Slots are rights to take-off or land at a speciﬁc airport 
during a speciﬁc time period during the day and are a means by which airport 
capacity and congestion can be managed. The Federal government controls 
Slots at four domestic airports under the High Density rule, including Reagan 
National Airport in Washington D.C. and LaGuardia and JFK Airports in 
New York City. In accounting for our Slot-related intangible assets we make 
estimates about their expected useful lives. Slots at High Density Airports 
are indeﬁnite lived intangible assets. Slots at other airports will continue to 
be amortized on a straight-line basis over their expected useful lives of up 
to 15 years. Changes in our operations, government regulations or demand 
for air travel at these airports could result in changes to these estimates.

We evaluate our intangible assets for impairment at least annually or when 
events and circumstances indicate they may be impaired. Indicators 
include operating or cash ﬂow losses as well as signiﬁcant decreases in 
market value.

Lease accounting 

We operate airport facilities, ofﬁce buildings and aircraft under operating 
leases with minimum lease payments. We recognize the costs associated 
with these agreements as rent expense on a straight-line basis over 

the expected lease term. Within the provisions of certain leases there 
are minimum escalations in payments over the base lease term. There 
are also periodic adjustments of lease rates, landing fees, and other 
charges applicable under such agreements, as well as renewal periods. 
The effects of the escalations and other adjustments have been reﬂected 
in rent expense on a straight-line basis over the lease term. This includes 
renewal periods when it is deemed to be reasonably assured at the 
inception of the lease that we would incur an economic penalty for not 
renewing. The amortization period for leasehold improvements is the term 
used in calculating straight-line rent expense or their estimated economic 
life, whichever is shorter.

Derivative instruments used for aircraft fuel 

We utilize ﬁnancial derivative instruments to manage the risk of changing 
aircraft fuel prices. We do not purchase or hold any derivative instrument 
for trading purposes. As of December 31, 2016, we had $22 million of 
hedge assets related to the net fair value of these derivative instruments; 
the majority of which are not traded on a public exchange. Fair values 
are determined using commodity prices provided to us by independent 
third parties. When possible, we designate these instruments as cash 
ﬂow hedges for accounting purposes, as deﬁned by the Derivatives and 
Hedging topic of the Codiﬁcation which permits the deferral of the effective 
portions of gains or losses until contract settlement.

The Derivatives and Hedging topic is a complex accounting standard. It 
requires us to develop and maintain a signiﬁcant amount of documentation 
related to:

(1) our fuel hedging program and fuel management approach,

(2) statistical analysis supporting a highly correlated relationship between 
the underlying commodity in the derivative ﬁnancial instrument and the 
risk being hedged, i.e. aircraft fuel, on both a historical and prospective 
basis, and

(3) cash ﬂow designation for each hedging transaction executed, to be 
developed concurrently with the hedging transaction.

This documentation requires us to estimate forward aircraft fuel prices 
since there is no reliable forward market for aircraft fuel. These prices are 
developed through the observation of similar commodity futures prices, 
such as crude oil and/or heating oil, and adjusted based on variations 
to those like commodities. Historically, our hedges have settled within 
24 months; therefore, the deferred gains and losses have been recognized 
into earnings over a relatively short period of time.

Regulation G Reconciliations of Non-GAAP Financial Measures

We sometimes use non-GAAP measures that are derived from the 
consolidated ﬁnancial statements, but that are not presented in accordance 
with generally accepted accounting principles in the U.S., or U.S. GAAP. We 
believe these non-GAAP measures provide a meaningful comparison of our 
results to others in the airline industry and our prior year results. Investors 

should consider these non-GAAP ﬁnancial measures in addition to, and 
not as a substitute for, our ﬁnancial performance measures prepared in 
accordance with U.S. GAAP. Further, our non-GAAP information may be 
different from the non-GAAP information provided by other companies.

Operating Expenses per Available Seat Mile, excluding fuel and proﬁt sharing

Operating expenses per available seat mile, or CASM, is a common 
metric used in the airline industry. Our CASM for 2016 through 2012 are 
summarized in the table below. We exclude aircraft fuel, proﬁt sharing, and 
related taxes from operating expenses to determine CASM ex-fuel and 
proﬁt sharing. We believe that CASM ex-fuel and proﬁt sharing provides 
investors the ability to measure ﬁnancial performance excluding items 
beyond our control, such as (i) fuel costs, which are subject to many 

economic and political factors beyond our control, and (ii) proﬁt sharing, 
which is sensitive to volatility in earnings. We believe this measure is 
more indicative of our ability to manage costs and is more comparable 
to measures reported by other major airlines. We are unable to reconcile 
such projected CASM ex-fuel and proﬁt sharing as the nature or amount 
of excluded items are only estimated at this time.

34

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Reconciliation of Operating expense per ASM, excluding fuel and proﬁt sharing

(in millions; per ASM data in cents; 
percentages based on unrounded 
numbers)
Total operating expenses
Less: Aircraft fuel and related taxes
Operating expenses, excluding fuel and 
related taxes
Less: Proﬁt sharing and related taxes
Operating expense, excluding fuel, 
proﬁt sharing and related taxes

Return on Invested Capital

2016

2015

2014

2013

2012

$ per ASM

$ per ASM

$ per ASM

$ per ASM

$ 5,320
1,074

9.92 $ 5,200
1,348
2.00

10.56 $ 5,302
1,912

2.74

11.78 $ 5,013
1,899

4.25

11.71 $ 4,606
1,806

4.43

$ per ASM
11.49
4.50

4,246
176

7.92
0.33

3,852
151

7.82
0.31

3,390
25

7.53
0.05

3,114
12

7.28
0.03

2,800
3

6.99
0.01

$ 4,070

7.59 $ 3,701

7.51 $ 3,365

7.48 $ 3,102

7.25 $ 2,797

6.98

Return on invested capital, or ROIC, is an important ﬁnancial metric which we believe provides meaningful information as to how well we generate returns 
relative to the capital invested in our business. During 2016, our ROIC improved to 14.3%, primarily due to the reduction in fuel prices. We are committed 
to taking appropriate actions which will allow us to produce returns greater than our cost of capital while adding capacity and continuing to grow. 

We believe this non-GAAP measure provides a meaningful comparison of our results to the airline industry and our prior year results. Investors should 
consider this non-GAAP ﬁnancial measure in addition to, and not as a substitute for, our ﬁnancial performance measures prepared in accordance with GAAP.

Reconciliation of Return on Invested Capital (Non-GAAP)

Twelve Months Ended December 31,

(in millions, except as otherwise noted)
Numerator
Operating Income

Add: Interest income (expense) and other
Add: Interest component of capitalized aircraft rent(1)

Subtotal

Less: Income tax expense impact

Operating Income After Tax, Adjusted

Denominator
Average Stockholders’ equity
Average total debt
Capitalized aircraft rent(1)
Invested Capital

Return on Invested Capital
(1)  Capitalized Aircraft Rent

Aircraft rent, as reported

Capitalized aircraft rent (7 * aircraft rent)(2)

2016

$ 1,312
7
58
1,377
520
857

$

$ 3,611
1,606
771
$ 5,988

14.3%

$

110

771

2015

1,216
1
64
1,281
491
790

2,869
2,038
853
5,760

13.7%

122

853

$

$

$

$

$

(2) 

Interest component of capitalized aircraft rent (Imputed interest at 7.5%)
In determining the Invested Capital component of ROIC we include a non-GAAP adjustment for aircraft operating leases, as operating lease obligations are not reﬂected on our balance 
sheets but do represent a signiﬁcant ﬁnancing obligation. In making the adjustment we used a multiple of seven times our aircraft rent as this is the multiple which is routinely used within 
the airline community to represent the ﬁnancing component of aircraft operating lease obligations.

64

58

Free Cash Flow (Non-GAAP)

The table below reconciles cash provided by operations determined in accordance with U.S. GAAP to Free Cash Flow, a non-GAAP measure. 
Management believes that Free Cash Flow is a relevant metric in measuring our ﬁnancial strength and is useful in assessing our ability to fund future 
capital commitments and other obligations. Investors should consider this non-GAAP ﬁnancial measure in addition to, and not as a substitute for, our 
ﬁnancial measures prepared in accordance with U.S. GAAP.

Reconciliation of Free Cash Flow (Non-GAAP)

Year Ended December 31,

2012
(in millions)
Net cash provided by operating activities
698
(542)
Less: Capital expenditures(1)
(283)
Less: Predelivery deposits for ﬂight equipment
(127)
Free Cash Flow
(1)  The capital expenditures in 2014 included two capital leases for approximately $76 million which were classified as a non-cash financing activity in the consolidated statements of cash 

2016
1,632
(850)
(161)
621

2015
1,598
(837)
(104)
657

2013
758
(615)
(22)
121

2014
912
(806)
(127)

(21) $

$

$

$

$

$

$

$

$

$

flows.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

35

PART II  
ITEM 7A Quantitative and Qualitative Disclosures About Market Risk

ITEM 7A. Quantitative and Qualitative Disclosures 

About Market Risk

The risk inherent in our market risk sensitive instruments and positions is 
the potential loss arising from adverse changes to the price of fuel and 
interest rates as discussed below. The sensitivity analyses presented do 
not consider the effects such adverse changes may have on the overall 
economic activity, nor do they consider additional actions we may take 
to mitigate our exposure to such changes. Variable-rate leases are not 
considered market sensitive ﬁnancial instruments and, therefore, are not 
included in the interest rate sensitivity analysis below. Actual results may 
differ. See Notes 1, 2 and 13 to our consolidated ﬁnancial statements for 
accounting policies and additional information.

Aircraft fuel

Our results of operations are affected by changes in the price and availability 
of aircraft fuel. Market risk is estimated as a hypothetical 10% increase in 
the December 31, 2016 cost per gallon of fuel. Based on projected 2017 
fuel consumption, such an increase would result in an increase to aircraft 
fuel expense of approximately $133 million in 2017. This is compared 
to an estimated $120 million for 2016 measured as of December 31, 
2015. As of December 31, 2016 we had hedged approximately 10% of 
our projected 2017 fuel requirements. All hedge contracts existing as of 
December 31, 2016 settle by December 31, 2017. 

The financial derivative instrument agreements we have with our 
counterparties may require us to fund all, or a portion of, outstanding 

loss positions related to these contracts prior to their scheduled maturities. 
The amount of collateral posted, if any, is periodically adjusted based on 
the fair value of the hedge contracts.

Interest

Our earnings are affected by changes in interest rates due to the impact 
those changes have on interest expense from variable-rate debt instruments 
and on interest income generated from our cash and investment balances. 
The interest rate is ﬁxed for $1.2 billion of our debt and capital lease 
obligations, with the remaining $173 million having ﬂoating interest rates. 
If interest rates were on average 100 basis points higher in 2017 than they 
were during 2016, our interest expense would increase by approximately 
$2 million. This is determined by considering the impact of the hypothetical 
change in interest rates on our variable rate debt.

If interest rates were an average 10% lower in 2017 than they were 
during 2016, our interest income from cash and investment balances 
would remain relatively constant. These amounts are determined by 
considering the impact of the hypothetical interest rates on our cash and 
cash equivalents and short term investment securities balances as of 
December 31, 2016 and 2015.

36

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 8 Financial Statements and Supplementary Data

ITEM 8.  Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of 
JetBlue Airways Corporation

We have audited the accompanying consolidated balance sheets of JetBlue 
Airways Corporation as of December 31, 2016 and 2015, and the related 
consolidated statements of operations, comprehensive income, cash ﬂows 
and stockholders’ equity for each of the three years in the period ended 
December 31, 2016. These ﬁnancial statements are the responsibility of the 
Company’s management. Our responsibility is to express an opinion on these 
ﬁnancial statements based on our audits.

We conducted our audits in accordance with the standards of the Public 
Company Accounting Oversight Board (United States). Those standards 
require that we plan and perform the audit to obtain reasonable assurance 
about whether the ﬁnancial statements are free of material misstatement. 
An audit includes examining, on a test basis, evidence supporting the 
amounts and disclosures in the ﬁnancial statements. An audit also includes 
assessing the accounting principles used and signiﬁcant estimates made 
by management, as well as evaluating the overall ﬁnancial statement 
presentation. We believe that our audits provide a reasonable basis for 
our opinion.

In our opinion, the ﬁnancial statements referred to above present fairly, in 
all material respects, the consolidated ﬁnancial position of JetBlue Airways 
Corporation at December 31, 2016 and 2015, and the consolidated 
results of its operations and its cash ﬂows for each of the three years in 
the period ended December 31, 2016, in conformity with U.S. generally 
accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company 
Accounting Oversight Board (United States), JetBlue Airways Corporation’s 
internal control over ﬁnancial reporting as of December 31, 2016, based on 
criteria established in Internal Control-Integrated Framework issued by the 
Committee of Sponsoring Organizations of the Treadway Commission (2013 
framework) and our report dated February 17, 2017 expressed an unqualiﬁed 
opinion thereon.

/s/ Ernst & Young LLP

New York, New York

February 17, 2017

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of 
JetBlue Airways Corporation

We have audited JetBlue Airways Corporation’s internal control over ﬁnancial 
reporting as of December 31, 2016, based on criteria established in Internal 
Control-Integrated Framework issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (2013 framework) (the COSO 
criteria). JetBlue Airways Corporation’s management is responsible for 
maintaining effective internal control over ﬁnancial reporting, and for its 
assessment of the effectiveness of internal control over ﬁnancial reporting 
included in the accompanying Management’s Report on Internal Control 
Over Financial Reporting. Our responsibility is to express an opinion on 
the company’s internal control over ﬁnancial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public 
Company Accounting Oversight Board (United States). Those standards 
require that we plan and perform the audit to obtain reasonable assurance 
about whether effective internal control over ﬁnancial reporting was 
maintained in all material respects. Our audit included obtaining an 
understanding of internal control over ﬁnancial reporting, assessing the 
risk that a material weakness exists, testing and evaluating the design 
and operating effectiveness of internal control based on the assessed 
risk, and performing such other procedures as we considered necessary 
in the circumstances. We believe that our audit provides a reasonable 
basis for our opinion.

A company’s internal control over ﬁnancial reporting is a process designed to 
provide reasonable assurance regarding the reliability of ﬁnancial reporting and 
the preparation of ﬁnancial statements for external purposes in accordance 
with generally accepted accounting principles. A company’s internal control 
over ﬁnancial reporting includes those policies and procedures that (1) pertain 
to the maintenance of records that, in reasonable detail, accurately and 

fairly reﬂect the transactions and dispositions of the assets of the company; 
(2) provide reasonable assurance that transactions are recorded as necessary 
to permit preparation of ﬁnancial statements in accordance with generally 
accepted accounting principles, and that receipts and expenditures of 
the company are being made only in accordance with authorizations of 
management and directors of the company; and (3) provide reasonable 
assurance regarding prevention or timely detection of unauthorized acquisition, 
use, or disposition of the company’s assets that could have a material effect 
on the ﬁnancial statements.

Because of its inherent limitations, internal control over ﬁnancial reporting 
may not prevent or detect misstatements. Also, projections of any evaluation 
of effectiveness to future periods are subject to the risk that controls may 
become inadequate because of changes in conditions, or that the degree 
of compliance with the policies or procedures may deteriorate.

In our opinion, JetBlue Airways Corporation maintained, in all material 
respects, effective internal control over ﬁnancial reporting as of December 31, 
2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public 
Company Accounting Oversight Board (United States), the consolidated 
balance sheets of JetBlue Airways Corporation as of December 31, 
2016 and 2015, and the related consolidated statements of operations, 
comprehensive income, cash ﬂows and stockholders’ equity for each 
of the three years in the period ended December 31, 2016 of JetBlue 
Airways Corporation and our report dated February 17, 2017 expressed 
an unqualiﬁed opinion thereon.

/s/ Ernst & Young LLP

New York, New York

February 17, 2017

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

37

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated Balance Sheets

(in millions, except per share data)
ASSETS
CURRENT ASSETS

Cash and cash equivalents
Investment securities
Receivables, less allowance (2016-$5; 2015-$6)
Inventories, less allowance (2016-$12; 2015-$10)
Prepaid expenses and other
Deferred income taxes
Total current assets

PROPERTY AND EQUIPMENT

Flight equipment
Predelivery deposits for ﬂight equipment

Total ﬂight equipment and predelivery deposits, gross

Less accumulated depreciation

Total ﬂight equipment and predelivery deposits, net

Other property and equipment
Less accumulated depreciation

Total other property and equipment, net

Assets constructed for others
Less accumulated depreciation

Total assets constructed for others, net
Total property and equipment, net

OTHER ASSETS

Investment securities
Restricted cash
Other

Total other assets

TOTAL ASSETS

December 31,

2016

2015

$

$

433
538
172
47
213
164
1,567

7,868
223
8,091
1,823
6,268
972
345
627
561
185
376
7,271

90
62
497
649
9,487

$

318
558
136
44
172
145
1,373

7,079
171
7,250
1,573
5,677
868
293
575
561
161
400
6,652

49
63
507
619
$ 8,644

See accompanying notes to consolidated ﬁnancial statements.

38

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated Balance Sheets

(in millions, except per share data)
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES

Accounts payable
Air trafﬁc liability
Accrued salaries, wages and beneﬁts
Other accrued liabilities
Current maturities of long-term debt and capital leases

Total current liabilities

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
CONSTRUCTION OBLIGATION
DEFERRED TAXES AND OTHER LIABILITIES

Deferred income taxes
Other

Total deferred taxes and other liabilities

COMMITMENTS AND CONTINGENCIES (Notes 10 & 11)
STOCKHOLDERS’ EQUITY

Preferred stock, $0.01 par value; 25 shares authorized, none issued
Common stock, $0.01 par value; 900 shares authorized, 414 and 392 shares issued and 337 
and 322 shares outstanding at 2016 and 2015, respectively
Treasury stock, at cost; 77 and 70 shares at 2016 and 2015, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

December 31,
2016

2015

$

242
1,120
342
330
189
2,223
1,195
457

1,509
90
1,599

$

205
1,053
302
267
448
2,275
1,379
472

1,218
90
1,308

—

—

4
(500)
2,050
2,446
13
4,013
$ 9,487

4
(366)
1,896
1,679
(3)
3,210
$ 8,644

See accompanying notes to consolidated ﬁnancial statements.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

39

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated Statements of Operations

(in millions, except per share amounts)
OPERATING REVENUES

Passenger
Other

Total operating revenues

OPERATING EXPENSES

Aircraft fuel and related taxes
Salaries, wages and beneﬁts
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance, materials and repairs
Other operating expenses
Total operating expenses

OPERATING INCOME
OTHER INCOME (EXPENSE)

Interest expense
Capitalized interest
Interest income and other
Gain on sale of subsidiary

Total other income (expense)
INCOME BEFORE INCOME TAXES
Income tax expense
NET INCOME

EARNINGS PER COMMON SHARE

Basic
Diluted

Years Ended December 31,

2016

6,013
619
6,632

1,074
1,698
357
393
110
259
563
866
5,320
1,312

(111)
8
7
—
(96)
1,216
457
759

2.32
2.22

$

$

$
$

2015

5,893
523
6,416

1,348
1,540
342
345
122
264
490
749
5,200
1,216

(128)
8
1
—
(119)
1,097
420
677

2.15
1.98

$

$

$
$

2014

5,343
474
5,817

1,912
1,294
321
320
124
231
418
682
5,302
515

(148)
14
1
241
108
623
222
401

1.36
1.19

$

$

$
$

See accompanying notes to consolidated ﬁnancial statements.

40

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated Statements of Comprehensive Income

(in millions)

NET INCOME
Changes in fair value of derivative instruments, net of reclassiﬁcations into earnings  
(net of $8, $38, and $(40) of taxes in 2016, 2015 and 2014, respectively)

Total other comprehensive income (loss)

COMPREHENSIVE INCOME

Years Ended December 31,

2016
759

16
16
775

$

$

2015
677

60
60
737

$

$

2014
401

(63)
(63)
338

$

$

See accompanying notes to consolidated ﬁnancial statements.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

41

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated Statements of Cash Flows

(in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Years Ended December 31,

2016

2015

2014

$

759

$

677

$

401

Deferred income taxes
Depreciation
Amortization
Stock-based compensation
Gain on sale of subsidiary
Collateral returned (paid) for derivative instruments
Changes in certain operating assets and liabilities:

(Increase) decrease in receivables
Decrease (increase) in inventories, prepaid and other
Increase in air trafﬁc liability
Increase in accounts payable and other accrued liabilities

Other, net

Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures
Predelivery deposits for ﬂight equipment
Proceeds from sale of subsidiary
Purchase of held-to-maturity investments
Proceeds from the maturities of held-to-maturity investments
Purchase of available-for-sale securities
Proceeds from the sale of available-for-sale securities
Other, net

Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from:

Issuance of common stock
Issuance of long-term debt

Repayment of:

Long-term debt and capital lease obligations

Acquisition of treasury stock
Other, net

Net cash used in ﬁnancing activities
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

270
337
56
23
—
—

(21)
1
67
157
(17)
1,632

(850)
(161)
—
(276)
333
(597)
517
(11)
(1,045)

45
—

(368)
(134)
(15)
(472)
115
318
433

$

377
288
57
20
—
52

11
(5)
80
64
(23)
1,598

(837)
(104)
—
(370)
313
(372)
242
(6)
(1,134)

84
—

(328)
(241)
(2)
(487)
(23)
341
318

$

212
263
62
20
(241)
(49)

1
3
148
68
24
912

(730)
(127)
393
(361)
379
(335)
398
4
(379)

41
342

(702)
(82)
(16)
(417)
116
225
341

$

See accompanying notes to consolidated ﬁnancial statements.

42

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated Statements of Stockholders’ Equity

Additional 
Paid-In  
Capital

Retained 
Earnings

Accumulated 
Other  
Comprehensive  
Income (Loss)

(in millions)
Balance at December 31, 2013
Net income
Changes in comprehensive loss
Vesting of restricted stock units
Exercise of stock options
Stock compensation expense
Stock issued under Crewmember 
stock purchase plan
Shares repurchased under 2012 
share repurchase plan
Convertible debt redemption
Other
Balance at December 31, 2014
Net income
Changes in comprehensive income
Vesting of restricted stock units
Exercise of stock options
Stock compensation expense
Stock issued under Crewmember 
stock purchase plan
Shares repurchased under 2012 
share repurchase plan
Convertible debt redemption
Other
Balance at December 31, 2015
Cumulative Effect for the adoption 
of ASU 2016-09
Net income
Changes in comprehensive income
Vesting of restricted stock units
Exercise of stock options
Stock compensation expense
Stock issued under Crewmember 
stock purchase plan
Shares repurchased under 2016 
share repurchase plan
Convertible debt redemption
Balance at December 31, 2016

Common 
Shares
347
—
—
3
2
—

Common 
Stock
$

3
—
—
—
—
—

2

—
15
—
369
—
—
2
5
—

1

—
15
—
392

—
—
—
1
1
—

2

—
18
414

—

—
1
—
4
—
—
—
—
—

—

—
—
—
4

—
—
—
—
—
—

—

—
—
4

$

$

$

Treasury 
Shares

51
—
—
1
—
—

—

7
—
—
59
—
—
1
—
—

—

10
—
—
70

—
—
—
1
—
—

—

6
—
77

Treasury 
Stock
$

(43)
—
—
(9)
—
—

$ 1,573
—
—
—
22
20

—

19

(73)
—
—
$ (125)
—
—
(14)
—
—

—
76
1
$ 1,711
—
—
—
59
20

$

601
401
—
—
—
—

—

—
—
—
$ 1,002
677
—
—
—
—

—

25

—

(227)
—
—
$ (366)

—
67
14
$ 1,896

—
—
—
$ 1,679

—
—
—
(14)
—
—

—

—
—
—
—
10
23

35

8
759
—
—
—
—

—

(120)
—
$ (500)

—
86
$ 2,050

—
—
$ 2,446

$ —
—
(63)
—
—
—

Total
$ 2,134
401
(63)
(9)
22
20

—

19

—
—
—
$ (63)
—
60
—
—
—

—

—
—
—
(3)

—
—
16
—
—
—

—

—
—
13

$

$

(73)
77
1
$ 2,529
677
60
(14)
59
20

25

(227)
67
14
$ 3,210

8
759
16
(14)
10
23

35

(120)
86
$ 4,013

See accompanying notes to consolidated ﬁnancial statements.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

43

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Notes to Consolidated Financial Statements

JetBlue Airways Corporation, or JetBlue, is New York’s Hometown Airline™. 
We believe our differentiated product and service offerings combined with 
our competitive cost advantage enables us to effectively compete in the 
high-value geography we serve. As of December 31,2016, we served 100 
destinations in 29 states, the District of Columbia, the Commonwealth of 

Puerto Rico, the U.S. Virgin Islands, and 21 countries in the Caribbean and 
Latin America. In December 2015, JetBlue created a new wholly-owned 
subsidiary, JetBlue Technology Ventures, LLC, or JTV. JTV will invest in 
or partner with emerging companies in the development of innovative 
products and services within the travel, hospitality and lifestyle industries.

NOTE 1 

Summary of Signiﬁcant Accounting Policies

Basis of Presentation

Restricted Cash

JetBlue provides air transportation services across the United States, 
the Caribbean and Latin America. Our consolidated ﬁnancial statements 
have been prepared in accordance with accounting principles generally 
accepted in the U.S., or U.S. GAAP, and include the accounts of JetBlue 
and our subsidiaries. All majority-owned subsidiaries are consolidated 
on a line by line basis, with all intercompany transactions and balances 
being eliminated. In June 2014, LiveTV, LLC (and LTV Global, Inc, and 
LiveTV International, Inc., subsidiaries of LiveTV, LLC) were sold to Thales 
Holding Corporation, or Thales, and ceased to be subsidiaries of JetBlue. 
In September 2014, LiveTV Satellite Communications, LLC was sold to 
Thales and ceased to be a subsidiary of JetBlue. Following the closure of 
these sales, the transferred LiveTV operations were no longer presented 
in our consolidated ﬁnancial statements. Refer to Note 16 for more details 
on the sale. Air transportation services accounted for substantially all of 
the Company’s operations in 2016, 2015 and 2014. Accordingly, segment 
information is not provided for LiveTV operations before the sale.

Use of Estimates

The preparation of our consolidated ﬁnancial statements and accompanying 
notes in conformity with U.S. GAAP require us to make certain estimates 
and assumptions. Actual results could differ from those estimates.

Fair Value

The Fair Value Measurements and Disclosures topic of the Financial 
Accounting Standards Board’s, or FASB, Accounting Standards 
Codiﬁcation™, or Codiﬁcation, establishes a framework for measuring fair 
value and requires enhanced disclosures about fair value measurements. 
This topic clariﬁes that fair value is an exit price, representing the amount 
that would be received to sell an asset or paid to transfer a liability in an 
orderly transaction between market participants. The topic also requires 
disclosure about how fair value is determined for assets and liabilities and 
establishes a hierarchy for which these assets and liabilities must be grouped, 
based on signiﬁcant levels of inputs. Refer to Note 13 for more information.

Cash and Cash Equivalents

Our cash and cash equivalents include short-term, highly liquid investments 
which are readily convertible into cash. These investments include money 
market securities and commercial papers with maturities of three months 
or less when purchased.

Restricted cash primarily consists of security deposits, funds held in escrow 
for estimated workers’ compensation obligations and performance bonds 
for aircraft and facility leases.

Accounts and Other Receivables

Accounts and other receivables are carried at cost. They primarily consist 
of amounts due from credit card companies associated with sales of 
tickets for future travel. We estimate an allowance for doubtful accounts 
based on known troubled accounts, if any, and historical experience of 
losses incurred.

Investment Securities

Investment securities consist of available-for-sale investment securities 
and held-to-maturity investment securities. When sold, we use a speciﬁc 
identiﬁcation method to determine the cost of the securities.

Available-for-sale investment securities

Our available-for-sale investment securities include highly liquid investments 
such as certiﬁcates of deposits with maturities between three and twelve 
months which are stated at fair value.

Held-to-maturity investment securities

Our held-to-maturity investments consist of investment-grade interest 
bearing instruments, primarily treasury notes and bills, which are stated 
at amortized cost. We do not intend to sell these investment securities 
and the contractual maturities are not greater than 24 months. Those with 
maturities less than twelve months are included in short-term investments 
on our consolidated balance sheets. Those with remaining maturities in 
excess of twelve months are included in long-term investments on our 
consolidated balance sheets. We did not record any material gains or 
losses on these securities during the years ended December 31, 2016, 
2015 or 2014. The estimated fair value of these investments approximated 
their carrying value as of December 31, 2016 and 2015.

44

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

The carrying values of investment securities consisted of the following at December 31, 2016 and 2015 (in millions):

PART II  
ITEM 8 Financial Statements and Supplementary Data

Available-for-sale securities

Time deposits
Treasury bills
Commercial paper
Total available-for-sale securities

Held-to-maturity securities

Treasury notes
Corporate bonds
Total held-to-maturity securities

TOTAL INVESTMENT SECURITIES

Derivative Instruments

Derivative instruments, including fuel hedge contracts, fuel basis swap 
agreements and interest rate swap agreements are stated at fair value, net 
of any collateral postings. Derivative instruments are included in other current 
assets and other current liabilities in our consolidated balance sheets. Refer 
to Note 12 for more information.

Inventories

Inventories consist of expendable aircraft spare parts and supplies that are 
stated at average cost as well as aircraft fuel that is accounted for on a 

2016

2015

$

$

160
115
60
335

283
10
293
628

$ 125
75
55
255

30
322
352
$ 607

ﬁrst-in, ﬁrst-out basis. These items are expensed when used or consumed. 
An allowance for obsolescence on aircraft spare parts is provided over the 
remaining useful life of the related aircraft ﬂeet.

Property and Equipment

We record our property and equipment at cost and depreciate these assets 
on a straight-line basis over their estimated useful lives to their estimated 
residual values. We capitalize additions, modiﬁcations enhancing the operating 
performance of our assets and the interest related to predelivery deposits used 
to acquire new aircraft and the construction of our facilities.

Estimated useful lives and residual values for our property and equipment are as follows:

Property and Equipment Type
Aircraft
In-ﬂight entertainment systems
Aircraft parts
Flight equipment leasehold improvements
Ground property and equipment
Leasehold improvements—other
Buildings on leased land

Estimated Useful Life
25 years
5-10 years
Fleet life
Lower of lease term or economic life
2-10 years
Lower of lease term or economic life
Lease term

Residual Value
20%
0%
10%
0%
0%
0%
0%

Property under capital leases is initially recorded at an amount equal to the 
present value of future minimum lease payments which is computed on 
the basis of our incremental borrowing rate or, when known, the interest 
rate implicit in the lease. Amortization of property under capital leases is 
on a straight-line basis over the expected useful life and is included in 
depreciation and amortization expense.

We record impairment losses on long-lived assets used in operations when 
events and circumstances indicate the assets may be impaired and the 
undiscounted future cash ﬂows estimated to be generated by the assets 
are less than the assets’ net book value. If impairment occurs, the loss is 
measured by comparing the fair value of the asset to its carrying amount. 
Impairment losses are recorded in depreciation and amortization expense.

Software

We capitalize certain costs related to the acquisition and development 
of computer software. We amortize these costs using the straight-line 
method over the estimated useful life of the software, which is generally 
between ﬁve and ten years. The net book value of computer software, 
which is included in other assets on our consolidated balance sheets, was 
$97 million and $93 million as of December 31, 2016 and 2015, respectively. 
Amortization expense related to computer software was $32 million, 
$34 million and $39 million for the years ended December 31, 2016, 
2015 and 2014, respectively. The higher amortization expense during 
2014 and 2015 was mainly due to accelerated amortization expense as 
a result of a change in the expected useful lives of certain software. As of 
December 31, 2016, amortization expense related to computer software 

is expected to be approximately $33 million in 2017, $28 million in 2018, 
$21 million in 2019, $6 million in 2020, and $3 million in 2021.

Intangible Assets

Our intangible assets consist primarily of acquired take-off and landing slots, 
or Slots, at certain domestic airports. Slots are the rights to take-off or land at 
a speciﬁc airport during a speciﬁc time period of the day and are a means by 
which airport capacity and congestion can be managed. We account for Slots 
at High Density Airports, including Reagan National Airport in Washington, 
D.C., LaGuardia Airport, and JFK Airport, both in New York City as indeﬁnite 
life intangible assets which results in no amortization expense. Slots at other 
airports are amortized on a straight-line basis over their expected useful lives 
of up to 15 years. We evaluate our intangible assets for impairment at least 
annually or when events and circumstances indicate they may be impaired. 
Indicators include operating or cash ﬂow losses as well as signiﬁcant decreases 
in market value. As of December 31, 2016 and 2015, our intangible assets for 
Slots at High Density Airports with indeﬁnite lives was $139 million.

Passenger Revenue

Passenger revenue is recognized when the transportation is provided or after 
the ticket or passenger credit issued upon payment of a change fee expires. 
It is recognized net of the taxes that we are required to collect from our 
Customers, including federal transportation taxes, security taxes and airport 
facility charges. Tickets sold but not yet recognized as revenue and unexpired 
credits are included in air trafﬁc liability on the consolidated balance sheets.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

45

PART II  
ITEM 8 Financial Statements and Supplementary Data

Loyalty Program

We account for our customer loyalty program, TrueBlue®, by recording a 
liability for the estimated incremental cost of outstanding points earned from 
JetBlue purchases that we expect to be redeemed. The estimated cost 
includes incremental fuel, insurance, passenger food and supplies, in-ﬂight 
entertainment and reservation costs. We adjust this liability, which is included 
in air trafﬁc liability, based on points earned and redeemed, points that will 
ultimately go unused, or breakage, changes in the estimated incremental 
costs associated with providing travel and changes in the TrueBlue® program. 
This liability was $30 million and $24 million as of December 31, 2016 
and 2015, respectively. We estimate breakage based on historical point 
redemptions. In June 2013, we amended the program so points earned 
by members never expire. Customers earn points based on the value paid 
for a trip rather than the length of the trip, and Customers can pool points 
between small groups of people, branded as Family Pooling™. We believe 
Family Pooling™ has not had a material impact on the breakage calculation.

TrueBlue® points can also be sold to participating companies, including 
credit card and car rental companies. These sales are accounted for as 
multiple-element arrangements.

Upon the re-launch of the TrueBlue® program in November 2009, we 
extended our co-branded credit card and membership rewards participation 
agreements. In connection with these extensions, we received a one-time 
payment of $37 million, which we deferred and recognized as Other revenue 
over the original term of the agreement through 2015.

We identiﬁed two elements for our co-branded credit card partnership with 
American Express® which ended in 2015, with one element representing 
the fair value of the travel that will ultimately be provided when the points are 
redeemed and the other consisting of marketing related activities that we 
conduct with the participating company. The fair value of the transportation 
portion of these point sales is deferred and recognized as passenger revenue 
when transportation is provided. The marketing portion, which is the excess 
of the total sales proceeds over the estimated fair value of the transportation 
to be provided, is recognized in other revenue when the points are sold.

In 2015, we announced a co-branded credit card partnership 
with Barclaycard®, which commenced in March 2016. The agreement 
is a multiple-element arrangement subject to Accounting Standards 
Update, or ASU, 2009-13, Multiple Deliverable Revenue Arrangements. 
ASU 2009-13 requires the allocation of the overall consideration received 
to each deliverable using the estimated selling price. We identiﬁed the 
following deliverables: air transportation; use of the JetBlue brand name and 
access to our frequent ﬂyer customer lists; advertising; and other airline 
beneﬁts. In determining the estimated selling price, JetBlue considered 
multiple inputs, methods and assumptions, including: discounted cash 
ﬂows; estimated equivalent ticket value, net of fulﬁllment discount; points 
expected to be awarded and redeemed; estimated annual spending by 
cardholder; estimated annual royalty for use of JetBlue’s frequent ﬂyer 
customer lists; and estimated utilization of other airline beneﬁts. The 
overall consideration received is allocated to each deliverable based on 
their relative selling prices. The air transportation element is deferred and 
recognized as passenger revenue when the points are utilized. The other 
elements are recognized as other revenue when earned.

TrueBlue® points sold to participating companies which are not redeemed 
are recognized as revenue when management determines the probability of 
redemption is remote. Deferred revenue was $211 million and $181 million 
at December 31, 2016 and 2015, respectively.

Airframe and Engine Maintenance and Repair

Regular airframe maintenance for owned and leased ﬂight equipment is 
charged to expense as incurred unless covered by a third-party long-term 
ﬂight hour service agreement. We have separate service agreements in 
place covering scheduled and unscheduled repairs of certain airframe line 
replacement unit components as well as the engines in our ﬂeet. These 
agreements, whose original terms generally range from 10 to 15 years, 

46

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

require monthly payments at rates based either on the number of cycles 
each aircraft was operated during each month or the number of ﬂight 
hours each engine was operated during each month, subject to annual 
escalations. These power by the hour agreements transfer certain risks, 
including cost risks, to the third-party service providers. They generally 
ﬁx the amount we pay per ﬂight hour or number of cycles in exchange for 
maintenance and repairs under a predeﬁned maintenance program, which 
are representative of the time and materials that would be consumed. 
These costs are expensed as the related ﬂight hours or cycles are incurred.

Advertising Costs

Advertising costs, which are included in sales and marketing, are expensed 
as incurred. Advertising expense was $65 million in 2016, $69 million in 
2015 and $64 million in 2014.

Share-Based Compensation

We record compensation expense for share-based awards based on the 
grant date fair value of those awards. Share-based compensation expense 
includes an estimate for pre-vesting forfeitures and is recognized over the 
requisite service periods of the awards on a straight-line basis.

Income Taxes

We account for income taxes utilizing the liability method. Deferred income 
taxes are recognized for the tax consequences of temporary differences 
between the tax and ﬁnancial statement reporting bases of assets and 
liabilities. A valuation allowance for deferred tax assets is provided unless 
realizability is judged by us to be more likely than not. Our policy is to 
recognize interest and penalties accrued on any unrecognized tax beneﬁts 
as a component of income tax expense.

New Accounting Standards

New accounting rules and disclosure requirements can impact our ﬁnancial 
results and the comparability of our ﬁnancial statements. The authoritative 
literature which has recently been issued and that we believe will impact 
our consolidated ﬁnancial statements is described below. There are also 
several new proposals under development. If and when enacted, these 
proposals may have a signiﬁcant impact on our ﬁnancial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with 
Customers topic of the Codiﬁcation, which supersedes existing revenue 
recognition guidance. Under the new standard, a company will recognize 
revenue when it transfers goods or services to customers in an amount that 
reﬂects the consideration to which the company expects to be entitled to 
in exchange for those goods or services. The standard allows for either full 
retrospective or modiﬁed retrospective adoption. In July 2015, the FASB 
voted to defer the effective date of ASU 2014-09 by one year to interim and 
annual reporting periods beginning after December 15, 2017 and permitted 
early adoption of the standard, but not prior to December 15, 2016.

While we are evaluating the full impact of the new standard on our 
consolidated ﬁnancial statements, we have determined that it will impact 
our loyalty program accounting. JetBlue will no longer be allowed to 
use the incremental cost method when recording the ﬁnancial impact 
of TrueBlue® points earned on qualifying JetBlue purchases. We will be 
required to re-value our liability with a relative fair value approach, which 
is anticipated to signiﬁcantly increase the related liability. In addition the 
standard will likely result in a change in the timing and classiﬁcation of our 
revenue recognition for certain ancillary fees directly related to passenger 
revenue tickets, as these services are not longer likely to be considered 
distinct performance obligations. Fees associated with these services are 
likely to be recognized as of the date of travel, not when assessed to the 
customer, and classiﬁed as passenger revenue.

PART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue currently anticipates adopting the new standard effective January 1, 
2018 using the full retrospective method, however, this decision is not ﬁnal 
and is subject to the completion of our analysis of the standard. We will 
continue our evaluation of ASU 2014-09 through the date of adoption.

In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance 
Sheet Classiﬁcation of Deferred Taxes topic of the Codiﬁcation. This standard 
requires all deferred tax assets and liabilities to be classiﬁed as non-current 
on the balance sheet instead of separating deferred taxes into current and 
non-current amounts. In addition, valuation allowance allocations between 
current and non-current deferred tax assets are no longer required because 
those allowances also will be classiﬁed as non-current. This standard is 
effective for public companies for annual periods beginning after December 
15, 2016. Our current deferred tax asset and non-current deferred tax liability 
as of December 31, 2016 were $164 million and $1.5 billion, respectively.

During the ﬁrst quarter of 2016, we adopted ASU 2015-03, Interest - 
Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs topic 
of the FASB Codiﬁcation, or Codiﬁcation. ASU 2015-03 provides a simpliﬁed 
presentation of debt issuance costs and requires that debt issuance costs 
related to a recognized debt liability be presented on the balance sheet as 
a direct deduction from the carrying amount of that debt liability, consistent 
with debt discounts. Upon adoption, ASU 2015-03 requires retrospective 
application to all prior periods presented in the ﬁnancial statements. Our 
consolidated balance sheet as of December 31, 2015 reﬂects retrospective 
application and includes our unamortized debt issuance costs of $16 million 
within long-term debt and capital lease obligations. Prior to adoption this 
amount was included within other long-term assets.

Also during the ﬁrst quarter of 2016, we adopted ASU 2015-05, Intangibles - 
Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer’s 
Accounting for Fees Paid in a Cloud Computing Arrangement topic of the 
Codiﬁcation, which provides guidance to clarify customers’ accounting for 
fees paid in a cloud computing arrangement. Customers’ cloud computing 
arrangements which include a software license should account for the software 
license consistent with the acquisition of other software licenses. If a cloud 
computing arrangement does not include a software license, the customer 
should account for the arrangement as a service contract. We adopted 
ASU 2015-05 prospectively and the amendments did not have a signiﬁcant 
impact on our consolidated ﬁnancial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). 
Under ASU 2016-02, a lessee will recognize liabilities for lease payments 
and right-of-use assets representing its right to use the underlying asset 
for the lease term. While we are still evaluating the full impact of adopting 
the amendments on our consolidated ﬁnancial statements and disclosures, 
we have determined that the most signiﬁcant impact will be our accounting 
for leased aircraft and other leasing agreements, requiring the presentation 
of those leases with durations of greater than twelve months on the 
balance sheet. The amendments are effective for ﬁscal years beginning 
after December 15, 2018 and includes interim periods within those ﬁscal 
years. Early adoption is permitted, and companies are required to use a 
modiﬁed retrospective approach at the earliest period presented.

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee 
Share-Based Payment Accounting. The amendments apply to several aspects 
of accounting for stock-based compensation including the recognition of 
excess tax beneﬁts and deﬁciencies and their related presentation in the 
statement of cash ﬂows as well as accounting for forfeitures. We early 
adopted, as permitted, this standard during the fourth quarter of 2016. 
The adoption of this standard resulted in the recognition of $8 million of 
previously unrecognized excess tax beneﬁts in deferred tax assets and an 
increase to retained earnings on our consolidated balance sheet as of the 
beginning of the current year, and the recognition of $8 million of excess 
tax beneﬁts to the income tax provision for the year ended December 31, 
2016. Excess tax beneﬁts for share-based payments are now included in 
net operating cash ﬂows rather than net ﬁnancing cash ﬂows. The changes 
have been applied prospectively in accordance with the ASU and prior 
periods have not been adjusted.

In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows 
(Topic 230), Restricted Cash. The amendments clariﬁed how entities should 
present restricted cash and restricted cash equivalents in the statement of 
cash ﬂows. ASU 2016-18 requires entities to show the changes in the total of 
cash, cash equivalents, restricted cash and restricted cash equivalents in the 
statement of cash ﬂows. As a result, entities will no longer present transfers 
between cash and cash equivalents and restricted cash and restricted cash 
equivalents in the statement of cash ﬂows. The amendments are effective 
for ﬁscal years beginning after December 15, 2017 and includes interim 
periods within those years. Early adoption is permitted.

NOTE 2 

Long-term Debt, Short-term Borrowings and Capital Lease Obligations

Long-term debt and capital lease obligations and the related weighted average interest rate at December 31, 2016 and 2015 consisted of the following (in millions):

Secured Debt
Floating rate equipment notes, due through 2025(1)
Floating rate enhanced equipment notes(2)

Class G-1, due 2016
Class G-2, due 2016

Fixed rate enhanced equipment notes, due through 2023(3)
Fixed rate equipment notes, due through 2026
Fixed rate specialty bonds, due through 2036(4)
Unsecured Debt
6.75% convertible debentures due in 2039(5)
Capital Leases(6)
Total debt and capital lease obligations

Less: Current maturities
Less: Debt acquisition cost(7)

2016

2015

$

173

—
—
189
850
43

—
140
1,395
(189)
(11)
$ 1,195 

4.2%

—%
—%
4.5%
5.5%
4.9%

4.3%

$

193

16
185
201
964
43

86
155
1,843
(448)
(16)
$ 1,379 

3.7%

4.4%
1.0%
4.5%
5.5%
4.9%

4.1%

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
(1) 
(2) 

Interest rates adjust quarterly or semi-annually based on LIBOR, plus a margin.
In March and November 2004, we completed public offerings for $431 million and $498 million, respectively, of pass-through certificates, or EETC. These offerings were set up in order 
to finance the purchase of 28 new Airbus A320 aircraft delivered through 2005. Separate trusts were established for each class of these certificates. In March 2014, we paid the final 
scheduled principal payment of $188 million associated with our March 2004 EETC Class G-2 certificates. In November 2016, we paid the final scheduled principal payment of $185 million 
associated with our November 2004 EETC Class G-2 certificates.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

47

 
 
   
 
   
   
 
 
PART II  
ITEM 8 Financial Statements and Supplementary Data

(3) 

(4) 

(5) 

In March 2014, we completed a private placement of $226 million in pass-through certificates, Series 2013-1. The certificates were issued by a pass-through trust and are not obligations 
of JetBlue. The proceeds from the issuance of the pass-through certificates were used to purchase equipment notes issued by JetBlue and secured by 14 of our previously unencumbered 
aircraft. Principal and interest are payable semi-annually, starting in September 2014.
In November 2005, the Greater Orlando Aviation Authority, or GOAA, issued special purpose airport facilities revenue bonds to JetBlue as reimbursement for certain airport facility construction 
and other costs. In April 2013, GOAA issued $42 million in special purpose airport facility revenue bonds to refund the bonds issued in 2005. The proceeds from the refunded bonds were 
loaned to us and we recorded the issuance of $43 million, net of $1 million premium, as long term debt on our consolidated balance sheets. In December 2006, the New York City Industrial 
Development Agency issued special facility revenue bonds for JFK to us as reimbursement to us for certain airport facility construction and other costs. We recorded the principal amount of 
the bond, net of discounts, as long-term debt on our consolidated balance sheets because we have issued a guarantee of the debt payments on the bond. This fixed rate debt is secured by 
leasehold mortgages of our airport facilities. During June 2015, we prepaid the full $32 million principal outstanding on the JFK special facility revenue bonds.
In June 2009, we completed a public offering for an aggregate principal amount of $115 million of 6.75% Series A convertible debentures due 2039, or the Series A 6.75% Debentures. We 
simultaneously completed a public offering for an aggregate principal amount of $86 million of 6.75% Series B convertible debentures due 2039, or the Series B 6.75% Debentures. These are 
collectively known as the 6.75% Debentures. The 6.75% Debentures are general obligations and rank equal in right of payment with all of our existing and future senior unsecured debt. They 
are effectively junior in right of payment to our existing and future secured debt, including our secured equipment debentures, to the extent of the value of the assets securing such debt, and 
senior in right of payment to any subordinated debt. In addition, the 6.75% Debentures are structurally subordinated to all existing and future liabilities of our subsidiaries. The net proceeds were 
approximately $197 million after deducting underwriting fees and other transaction related expenses. Interest on the 6.75% Debentures is payable semi-annually on April 15 and October 15.
In 2016, holders voluntarily converted $86 million in principal amount into shares of our common stock, as a result we issued approximately 17.6 million shares.

(6)  As of December 31, 2016 and 2015, four capital leased Airbus A320 aircraft and two capital leased Airbus A321 aircraft were included in property and equipment at a cost of $253 million 
with accumulated amortization of $56 million and $48 million, respectively. The future minimum lease payments under these non-cancelable leases are $23 million in 2017, $23 million 
in 2018, $23 million in 2019, $35 million in 2020, $39 million in 2021 and $24 million in the years thereafter. Included in the future minimum lease payments is $27 million representing 
interest, resulting in a present value of capital leases of $140 million with a current portion of $16 million and a long-term portion of $124 million.

(7)  Retrospective application to 2015 as required under ASU 2015-03 Interest - Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs. See Note 1 for additional information.

During 2015, we prepaid $100 million of outstanding principal related to 10 Airbus A320 aircraft, as a result, four aircraft became unencumbered and six had 
lower principal balances. 

As of December 31, 2016, we were in compliance with all of our covenants in relation to our debt and lease agreements. Maturities of long-term debt and 
capital leases for the next ﬁve years are as follows (in millions):

Year
2017
2018
2019
2020
2021
Thereafter

$

Maturities
185
193
215
179
164
448

Aircraft, engines, and other equipment and facilities having a net book value of $2.4 billion at December 31, 2016 were pledged as security under various 
ﬁnancing arrangements. Cash payments for interest related to debt and capital lease obligations, net of capitalized interest, aggregated $78 million, $93 million 
and $102 million in 2016, 2015 and 2014, respectively.

The carrying amounts and estimated fair values of our long-term debt (excluding capital lease obligations and debt issuance costs) at December 31, 2016 and 
2015 were as follows (in millions):

Public Debt
Floating rate enhanced equipment notes

Class G-1, due 2016
Class G-2, due 2016

Fixed rate special facility bonds, due through 2036
6.75% convertible debentures due in 2039
Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023
Floating rate equipment notes, due through 2025
Fixed rate equipment notes, due through 2026
TOTAL

December 31, 2016

December 31, 2015

Carrying 
Value

Estimated 
Fair Value

Carrying 
Value

Estimated 
Fair Value

$

$

—
—
43
—

850
173
189
1,255

$

$

—
—
45
—

915
179
197
1,336

$

16
185
43
86

201
193
964
$ 1,688

$

16
184
45
405

209
195
1,042
$ 2,096

The estimated fair values of our publicly held long-term debt are classiﬁed as 
Level 2 in the fair value hierarchy. The fair values of our EETC transactions 
and our special facility bonds were based on quoted market prices 
in markets with low trading volumes. The fair value of our convertible 
debentures was based upon other observable market inputs since they 
are not actively traded. The fair value of our non-public debt was estimated 
using a discounted cash ﬂow analysis based on our borrowing rates for 
instruments with similar terms and therefore classiﬁed as Level 3 in the fair 
value hierarchy. The fair values of our other ﬁnancial instruments approximate 
their carrying values. Refer to Note 14 for additional information on fair value.

We have ﬁnanced certain aircraft with EETCs as one of the beneﬁts is 
being able to ﬁnance several aircraft at one time, rather than individually. 
The structure of EETC ﬁnancing is that we create pass-through trusts in 
order to issue pass-through certiﬁcates. The proceeds from the issuance 
of these certiﬁcates are then used to purchase equipment notes which 
are issued by us and are secured by our aircraft. These trusts meet the 
deﬁnition of a variable interest entity, or VIE, as deﬁned in the Consolidations 
topic of the Codiﬁcation, and must be considered for consolidation in our 
consolidated ﬁnancial statements. Our assessment of the EETCs considers 
both quantitative and qualitative factors including the purpose for which 

48

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II  
ITEM 8 Financial Statements and Supplementary Data

these trusts were established and the nature of the risks in each. The main 
purpose of the trust structure is to enhance the credit worthiness of our 
debt obligation through certain bankruptcy protection provisions, liquidity 
facilities and lower our total borrowing cost. We concluded that we are 
not the primary beneﬁciary in these trusts due to our involvement in them 

being limited to principal and interest payments on the related notes, the 
trusts were not set up to pass along variability created by credit risk to 
us and the likelihood of our defaulting on the notes. Therefore, we have 
not consolidated these trusts in our consolidated ﬁnancial statements.

Short-term Borrowings

We have several lines of credit which bear interest at a ﬂoating rate based upon LIBOR plus a margin range of between 1.0% and 2.75%. 

Morgan Stanley Line of Credit

We have a revolving line of credit with Morgan Stanley for up to approximately 
$200 million. This line of credit is secured by a portion of our investment 
securities held by Morgan Stanley and the amount available to us under 
this line of credit may vary accordingly. This line of credit bears interest 
at a ﬂoating rate based upon LIBOR, plus a margin. As of and for the 
years ended December 31, 2016 and 2015, we did not have a balance 
outstanding or borrowings under this line of credit.

Citibank Line of Credit

We have a revolving Credit and Guaranty Agreement with Citibank, N.A. 
as the administrative agent for up to approximately $400 million. The 

NOTE 3 

Operating Leases

term of the facility runs through April 2018. Borrowings under the Credit 
and Guaranty Agreement bear interest at a variable rate equal to LIBOR, 
plus a margin. The Credit and Guaranty Agreement is secured by Slots 
at JFK, LaGuardia and Reagan National Airport as well as certain other 
assets. The Credit and Guaranty Agreement includes covenants that 
require us to maintain certain minimum balances in unrestricted cash, cash 
equivalents, and unused commitments available under all revolving credit 
facilities. In addition, the covenants restrict our ability to incur additional 
indebtedness, issue preferred stock or pay dividends. As of and for the 
years ended December 31, 2016 and 2015, we did not have a balance 
outstanding or borrowings under this line of credit.

We lease aircraft, all of our facilities at the airports we serve, ofﬁce space 
and other equipment. These leases have varying terms and conditions, 
with some having early termination clauses which we determine to be the 
lease expiration date. The length of the lease depends upon the type of asset 
being leased, with the latest lease expiring in 2035. Total rental expense for 
all of our operating leases was $294 million in 2016, $298 million in 2015 
and $298 million in 2014. As of December 31, 2016, we have approximately 
$31 million in assets that serve as collateral for letters of credit. These 
letters of credit relate to a certain number of our leases and are included in 
restricted cash.

As of December 31, 2016, 47 of the 227 aircraft in our ﬂeet were leased 
under operating leases, with lease expiration dates ranging from 2018 
to 2028. None of the 47 aircraft operating leases have variable rate rent 
payments based on LIBOR. Leases for 40 of our aircraft can generally be 
renewed at rates based on fair market value at the end of the lease term for 
one or two years. We have purchase options for 42 of our aircraft leases 

at the end of their lease term. These purchase options are at fair market 
value and have a one-time option during the term at ﬁxed amounts that 
were expected to approximate the fair market value at lease inception.

During 2016, we extended the lease on two Airbus A320 aircraft that were 
previously set to expire by 2017. These extensions resulted in an additional 
$7 million of lease commitments through 2020. During 2015, we extended the 
lease on one Airbus A320 aircraft that was previously set to expire in 2016. This 
extension resulted in an additional $9 million of lease commitments through 2020. 
We did not extend any leases on our ﬂeet during 2014. Our policy is to record 
lease return conditions when they are probable and the costs can be estimated.

In the fourth quarter of 2016, we bought out the operating leases on nine 
Airbus A320 aircraft for approximately $164 million. 

In the fourth quarter of 2015, we bought out the operating leases on six Airbus 
A320 aircraft for approximately $110 million.

Future minimum lease payments under noncancelable operating leases, including those described above, with initial or remaining terms in excess of one year 
at December 31, 2016, are as follows (in millions):

2017
2018
2019
2020
2021
Thereafter
TOTAL MINIMUM OPERATING LEASE PAYMENTS

Aircraft
74
$
76
61
59
51
183
504

$

Other
97
90
82
64
57
420
810

$

$

$

Total
171
166
143
123
108
603
$ 1,314

In the past we have entered into sale-leaseback arrangements with a third 
party lender for 40 of our operating aircraft. The sale-leasebacks occurred 
simultaneously with the delivery of the related aircraft to us from their 
manufacturers. Each sale-leaseback transaction was structured with a 
separate trust set up by the third party lender, the assets of which consist 
of the one aircraft initially transferred to it following the sale by us and the 
subsequent lease arrangement with us. Because of their limited capitalization 
and the potential need for additional ﬁnancial support, these trusts are 
VIEs as deﬁned in the Consolidations topic of the Codiﬁcation and must be 
considered for consolidation in our ﬁnancial statements. Our assessment 
of each trust considers both quantitative and qualitative factors, including 
whether we have the power to direct the activities and to what extent we 

participate in the sharing of beneﬁts and losses of the trusts. JetBlue does 
not retain any equity interests in any of these trusts and our obligations to 
them are limited to the ﬁxed rental payments we are required to make to 
them. These were approximately $372 million as of December 31, 2016 
and are reﬂected in the future minimum lease payments in the table above. 
Our only interest in these entities is the purchase options to acquire the 
aircraft as speciﬁed above. Since there are no other arrangements, either 
implicit or explicit, between us and the individual trusts that would result in 
our absorbing additional variability from the trusts, we concluded we are 
not the primary beneﬁciary of these trusts. We account for these leases 
as operating leases, following the appropriate lease guidance as required 
by the Leases topic in the Codiﬁcation.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

49

 
 
 
 
 
 
 
 
 
 
PART II  
ITEM 8 Financial Statements and Supplementary Data

NOTE 4 

JFK Terminal 5

We operate out of T5 at JFK and our occupancy is governed by various 
lease agreements with the PANYNJ. Under the terms of the facility lease 
agreement we were responsible for the construction of the 635,000 square 
foot 26-gate terminal, a parking garage, roadways and an AirTrain Connector, 
all of which are owned by the PANYNJ and collectively referred to as the 
T5 Project. In 2012, we commenced construction on an expansion to 
T5, referred to as T5i, for an international arrivals facility and additional 
gates. The construction of T5i was completed in November 2014, with 
the ﬁrst international ﬂight using the facilities on November 12, 2014. T5i 
includes six international arrival gates comprised of three new gates and 
three converted gates from T5, as well as an international arrivals hall with 
full U.S. Customs and Border Protection services. 

We executed an extension to the original T5 lease in 2013. The lease, as 
amended, now incorporates a total of approximately 19 acres of space for 
our T5 facilities and ends on the 28th anniversary of the date of beneﬁcial 
occupancy of T5i. We have the option to terminate the agreement in 
2033, ﬁve years prior to the end of the original scheduled lease term of 
October 2038. We are responsible for various payments under the leases, 
including ground rents which are reﬂected in the future minimum lease 
payments table in Note 3, and facility rents which are included below. The 
facility rents are based upon the number of passengers enplaned out of 
the terminal, subject to annual minimums. 

We were considered the owner of the T5 Project for ﬁnancial reporting 
purposes only and have been required to reﬂect an asset and liability for 
the T5 Project on our consolidated balance sheets since construction 
commenced in 2005. The cost of the T5 Project and the related liability 
are being accounted for as a ﬁnancing obligation. Our construction of T5i 
is accounted for at cost with no ﬁnancing obligation.

NOTE 5 

Stockholders’ Equity

In September 2012, our Board of Directors authorized a share repurchase 
program for up to 25 million shares of common stock over a 5 year period.

On May 29, 2014, we entered into an accelerated share repurchase 
agreement, or ASR, with JP Morgan, or the 2014 ASR, paying $60 million for 
an initial delivery of approximately 5.1 million shares. The terms of the ASR 
concluded on September 9, 2014 with JP Morgan delivering approximately 
0.4 million additional shares to JetBlue. A total of approximately 5.5 million 
shares was repurchased under the 2014 ASR, with an average price 
paid per share of $10.90. During 2014 in addition to the 2014 ASR, we 
repurchased approximately 1.6 million shares of our common stock for 
approximately $13 million.

On June 16, 2015, we entered into an ASR with Goldman, Sachs & Co., 
or the 2015 ASR, paying $150 million for an initial delivery of approximately 
6.1 million shares. The terms of the ASR concluded on September 15, 2015 
with Goldman, Sachs & Co. delivering approximately 0.7 million additional 
shares to JetBlue. A total of approximately 6.8 million shares was repurchased 
under the 2015 ASR, with an average price paid per share of $22.06.

In September 2015, JetBlue entered into an agreement for the repurchase 
of up to 778,460 shares per day, structured pursuant to Rule 10b5-1 
and 10b-18 under the Securities Exchange Act of 1934 as amended, 
with a maximum of 3 million shares to be repurchased. The repurchases 
commenced on October 30, 2015 and terminated on November 18, 2015 
with 3 million shares repurchased for approximately $77 million. 

On September 10, 2015, our Board of Directors authorized a 
share repurchase program for up to $250 million worth of shares of 
common stock over a three year period beginning on January 1, 2016. 

50

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

Total costs incurred for the elements of the T5 Project were $637 million, 
of which $561 million is classiﬁed as Assets Constructed for Others and 
the remaining $76 million is classiﬁed as leasehold improvements in our 
consolidated balance sheets. Assets Constructed for Others are being 
amortized over the shorter of the 25 year non-cancelable lease term or their 
economic life. We recorded amortization expense of $23 million in 2016, 
2015 and 2014, respectively. Our total expenditures relating to T5i were 
approximately $207 million, all of which were incurred prior to 2016 and are 
classiﬁed as leasehold improvements in our consolidated balance sheets.

The PANYNJ has reimbursed us for the amounts currently included in 
Assets Constructed for Others. These reimbursements and related interest 
are reﬂected as Construction Obligation in our consolidated balance 
sheets. When the facility rents are paid they are treated as a debt service 
on the Construction Obligation, with the portion not relating to interest 
reducing the principal balance. Minimum estimated facility payments 
including escalations associated with the facility lease are estimated to 
be $40 million per year in 2017 through 2021 and $496 million thereafter. 
The portion of these scheduled payments serving to reduce the principal 
balance of the Construction Obligation is $16 million in 2017, $17 million 
in 2018, $18 million in 2019, $19 million in 2020 and $20 million in 2021. 
Payments could exceed these amounts depending on future enplanement 
levels at JFK. Scheduled facility payments representative of interest totaled 
$25 million in 2016, $25 million in 2015 and $26 million in 2014.

We sublease portions of T5 including space for concessionaires, the 
airspace lounge and the TSA facilities. Three of our airline commercial 
partners, Hawaiian Airlines, Aer Lingus and TAP Portugal operate from 
this terminal and sublease facilities from us. Minimum lease payments 
due to us are subject to various escalation amounts through 2024. Future 
minimum lease payments due to us during each of the next ﬁve years 
are estimated to be $14 million in 2017, $14 million in 2018, $7 million in 
2019, $4 million in 2020 and $4 million in 2021.

On December 7, 2016, the Board approved certain changes to our share 
repurchase program, or the 2016 Repurchase Authorization, to increase the 
aggregate authorization in the value of the program, to up to $500 million 
worth of shares, and extended the term of the program through December 
31, 2019. The program includes authorization for repurchases in open 
market transactions pursuant to Rules 10b-18 and/or 10b5-1 of the 
Securities and Exchange Act of 1934, as amended and/or one or more 
accelerated stock repurchase programs through privately-negotiated 
accelerated stock repurchase transactions. 

On November 7, 2016, we entered into an ASR agreement with Goldman, 
Sachs & Co. paying $60 million for an initial delivery of approximately 
2.7 million shares. The terms of the ASR concluded on December 29, 
2016 with Goldman, Sachs & Co. delivering approximately 0.2 million 
additional shares to JetBlue. A total of approximately 2.9 million shares 
was repurchased under this ASR, with an average price paid per share 
of $20.74.

Also on November 7, 2016, we entered into a separate ASR agreement 
with Morgan Stanley & Co. LLC paying $60 million for an initial delivery 
of approximately 2.7 million shares. The terms of the ASR concluded on 
December 30, 2016 with Morgan Stanley & Co. LLC delivering approximately 
0.2 million additional shares to JetBlue. A total of approximately 2.9 million 
shares was repurchased under this ASR, with an average price paid per 
share of $20.93.

The total shares purchased by JetBlue under the 2016 Goldman Sachs ASR 
and 2016 Morgan Stanley ASR, or collectively the 2016 ASRs, the 2015 
ASR, and the 2014 ASR were based on the volume weighted average prices 
of JetBlue’s common stock during the terms of the respective agreements.

PART II  
ITEM 8 Financial Statements and Supplementary Data

As of December 31, 2016, $380 million worth of common shares remain 
available for repurchase under the 2016 Repurchase Authorization.

As of December 31, 2016, we had a total of 30.6 million shares of our 
common stock reserved for issuance. These shares are primarily related 
to our equity incentive plans. Refer to Note 7 for further details on our 
share-based compensation.

As of December 31, 2016, we had a total of 77.5 million shares of treasury 
stock, the majority of which relate to the return of borrowed shares under 
our share lending agreement. 

Morgan Staley terminated our share lending facility in January 2016 and 
returned the shares outstanding to us. Refer to Note 2 for further details 
on the share lending agreement. The treasury stock also includes shares 
that were repurchased under our share repurchase program.

NOTE 6 

Earnings Per Share

The following table shows how we computed basic and diluted earnings per common share for the years ended December 31 (dollars and share data in millions):

Numerator:
Net income
Effect of dilutive securities:

Interest on convertible debt, net of income taxes and proﬁt sharing

Net income applicable to common stockholders after assumed conversions for diluted 
earnings per share
Denominator:
Weighted average shares outstanding for basic earnings per share
Effect of dilutive securities:

Employee stock options and restricted stock units
Convertible debt

Adjusted weighted average shares outstanding and assumed conversions for diluted 
earnings per share
Shares excluded from EPS calculation:
Shares issuable upon exercise of outstanding stock options or vesting of restricted stock 
units as assumed exercise would be antidilutive

2016

2015

$

$

759

2

761

326.5

2.1
13.6

342.2

$

$

677

4

681

315.1

2.8
26.9

344.8

$

$

2014

401

7

408

294.7

2.4
46.2

343.3

—

—

6.9

As of December 31, 2015, a total of approximately 1.4 million shares of 
our common stock, which were lent to Morgan Stanley, our share borrower 
pursuant to the terms of our share lending agreement were issued and 
outstanding for corporate law purposes, but were returned during January 
2016. Holders of the borrowed shares had all the rights of a holder of our 
common stock. However, because the share borrower had to return all 
borrowed shares to us, or identical shares or, in certain circumstances of 
default by the counterparty, the cash value thereof, the borrowed shares 
were not considered outstanding for the purpose of computing and 
reporting basic or diluted earnings per share. 

As discussed in Note 2, during 2016 holders voluntarily converted 
approximately $86 million in principal amount of the 6.75% Series B 
convertible debentures. As a result, we issued 17.6 million shares of our 

common stock. During 2015 holders voluntarily converted approximately 
$68 million in principal amount of the 5.5% Series B convertible debentures. 
As a result, we issued 15.2 million shares of our common stock.

As discussed in Note 5, JetBlue entered into the 2016 ASRs, 2015 ASR, 
2014 ASR and purchased approximately 5.8 million, 5.5 million, and 
6.8 million shares, respectively, for $120 million, $60 million and $150 million, 
respectively. The number of shares repurchased are based on the volume 
weighted average prices of JetBlue’s common stock during the term of 
the ASR agreements.

As discussed in Note 5, JetBlue repurchased three million shares pursuant 
to Rule 10b5-1 and 10b-18 under the Securities Exchange Act of 1934 
as amended, during the fourth quarter of 2015.

NOTE 7 

Share-Based Compensation

We have various equity incentive plans under which we have granted 
stock awards to our eligible Crewmembers and members of our Board of 
Directors. These include the JetBlue Airways Corporation Restated and 
Amended 2002 Stock Incentive Plan, or 2002 Plan, which was replaced 
by the JetBlue Airways Corporation 2011 Incentive Compensation Plan, 
or 2011 Plan. We additionally have a Crewmember Stock Purchase Plan, 
or CSPP, that is available to all eligible Crewmembers. Both the 2011 Plan 
and CSPP were amended in 2015 by shareholders at our annual meeting.

Unrecognized stock-based compensation expense, which was approximately 
$17.3 million as of December 31, 2016, related to a total of 2.2 million 
unvested restricted stock units, or RSUs, performance stock units, or 
PSUs, and deferred stock units, or DSUs, under our 2011 Plan. We expect 
to recognize this stock-based compensation expense over a weighted 
average period of approximately one year.

The total stock-based compensation expense for the years ended December 31, 
2016, 2015 and 2014 was $23 million, $20 million, and $20 million, respectively.

2011 Incentive Compensation Plan

At our Annual Shareholders Meeting held on May 26, 2011, our shareholders 
approved the JetBlue Airways Corporation 2011 Incentive Compensation 
Plan. This replaced the Restated and Amended 2002 Stock Incentive 
Plan, or 2002 Plan, which was set to expire at the end of 2011. Upon 
inception, the 2011 Plan had 15.0 million shares of our common stock 
reserved for issuance. The 2011 Plan, by its terms, will terminate no later 
than May 2021. RSUs vest in annual installments over three years which 
can be accelerated upon the occurrence of a change in control. Under 
this plan, we grant RSUs to certain Crewmembers and members of our 
Board of Directors. Our policy is to grant RSUs based on the market price 
of the underlying common stock on the date of grant. Under this plan we 
grant DSUs, to members of our Board of Directors and PSUs, to certain 
members of our executive leadership team.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

51

PART II  
ITEM 8 Financial Statements and Supplementary Data

The 2011 Plan was amended and restated effective January 1, 2014, 
to include the deﬁnition of retirement eligibility. Once a Crewmember 
meets the deﬁnition they will continue to vest their shares as if they 
remained employed by JetBlue, regardless of their actual employment 
status with the Company. In accordance with the Compensation-Stock 
Compensation topic of the Codiﬁcation, the grant’s explicit service 
condition is non-substantive and the grant has effectively vested at the 
time retirement eligibility is met.

Restricted Stock Units

At our Annual Shareholders Meeting held on May 21, 2015, our shareholders 
approved amendments to the 2011 Plan increasing the number of shares 
of Company common stock that remain available for issuance under the 
plan by 7.5 million.

The following is a summary of RSU activity under the 2011 Plan for the year ended December 31, 2016 (in millions except per share data):

Nonvested at beginning of year
Granted
Vested
Forfeited
NONVESTED AT END OF YEAR

The total intrinsic value, determined as of the date of vesting, for all RSUs 
that vested and converted to shares of common stock during the year 
ended December 31, 2016, 2015 and 2014 was $30 million, $33 million 
and $23 million, respectively. The weighted average grant-date fair value 
of share awards during the years ended December 31, 2016, 2015 and 
2014 was $22.95, $17.09, and $8.62, respectively.

The vesting period for DSUs under the 2011 Plan is either one or three 
years of service. Once vested, shares are issued six months and one 
day following a Director’s departure from our Board of Directors. During 
the years ended December 31, 2016, 2015 and 2014, we granted a 
nominal amount of DSUs, almost all of which remain outstanding at 
December 31, 2016. In 2016, 2015 and 2014, we granted a nominal 
amount of PSUs to members of our executive leadership team which 
are based upon certain performance criteria. 

Shares

Weighted Average 
Grant Date Fair Value

2.5
0.7
(1.4)
—
1.8

$ 10.94
22.95
9.34
—
$ 16.77

Amended and Restated 2002 Stock  
Incentive Plan

The 2002 Plan included stock options issued during 1999 through 2001 
under a previous plan as well as all options issued from 2002 through 
adoption of the 2011 Plan. It provided for incentive and non-qualiﬁed stock 
options and RSUs to be granted to certain Crewmembers and members 
of our Board of Directors. Additionally, it provided for DSUs to be granted 
to members of our Board of Directors. The 2002 Plan became effective 
following our initial public offering in April 2002. We began issuing RSUs 
in 2007 and DSUs in 2008. Prior to 2011, the DSUs vested immediately 
upon being granted. The RSUs vested in annual installments over three 
years which could be accelerated upon the occurrence of a change in 
control as deﬁned in the 2002 Plan. Our policy to grant RSUs was based 
on the market price of the underlying common stock on the date of grant. 
No additional grants were made from this plan after the adoption of the 
2011 Plan. Since December 31, 2014, there were no RSUs outstanding 
under the 2002 Plan.

Stock Options

All options issued under the 2002 Plan expire ten years from the date of grant, with the last options vesting in 2012. Our policy is to grant options with 
an exercise price equal to the market price of the underlying common stock on the date of grant. 

The following is a summary of stock option activity for the year ended December 31, 2016 (in millions except per share data):

Outstanding at beginning of year
Exercised
Forfeited
Expired
OUTSTANDING AT END OF YEAR
Vested at end of year

Shares

Weighted Average 
Grant Date Fair Value

1.3
(0.9)
—
—
0.4
0.4

$ 11.40
11.65
—
—
$ 10.90
$ 10.90

The total intrinsic value, determined as of the date of exercise, of options 
exercised during the years ended December 31, 2016, 2015 and 2014 was 
$6 million, $34 million and $5 million, respectively. Total cash received from 
option exercises during the years ended December 31, 2016, 2015 and 
2014 was $10 million, $59 million and $22 million, respectively. We have 
not granted any stock options since 2008 and those previously granted 
became fully expensed in 2012. Following shareholder approval of the 
2011 Plan, we stopped granting new equity awards under the 2002 Plan.

Crewmember Stock Purchase Plan

In May 2011, our shareholders approved the 2011 Crewmember Stock 
Purchase Plan, or the CSPP. At inception, the CSPP had 8.0 million shares 
of our common stock reserved for issuance. The CSPP, by its terms, will 
terminate no later than the last business day of April 2021.

At our Annual Shareholders Meeting held on May 21, 2015, our shareholders 
approved amendments to the CSPP increasing the number of shares of 
Company common stock that remain available for issuance under the 
plan by 15 million.

52

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 8 Financial Statements and Supplementary Data

Should we be acquired by merger or sale of substantially all of our assets or 
sale of more than 50% of our outstanding voting securities, all outstanding 
purchase rights will automatically be exercised immediately prior to the 
effective date of the acquisition at a price equal to 85% of the fair market 
value per share immediately prior to the acquisition.

Taxation

The Compensation-Stock Compensation topic of the Codiﬁcation requires 
deferred taxes be recognized on temporary differences that arise with 
respect to stock-based compensation attributable to nonqualiﬁed stock 
options and awards. However, no tax beneﬁt is recognized for stock-
based compensation attributable to incentive stock options, or ISO, or 
CSPP shares until there is a disqualifying disposition, if any, for income 
tax purposes. A portion of our historical stock-based compensation was 
attributable to ISO and CSPP shares; therefore, our effective tax rate was 
subject to ﬂuctuation.

The CSPP has a series of six month offering periods, with a new offering 
period beginning on the ﬁrst business day of May and November each 
year. Crewmembers can only join an offering period on the start date. 
Crewmembers may contribute up to 10% of their pay towards the purchase 
of common stock via payroll deductions. Purchase dates occur on the 
last business day of April and October each year.

Until April 2013, our CSPP was considered non-compensatory as the 
purchase price discount was 5% based upon the stock price on the date of 
purchase. The plan was amended and restated in May 2013 with the CSPP 
purchase price discount increasing to 15% based upon the stock price 
on the date of purchase. In accordance with the Compensation-Stock 
Compensation topic of the Codiﬁcation, the CSPP no longer meets the  
non-compensatory deﬁnition as the terms of the plan are more favorable 
than those to all holders of the common stock. For all offering periods 
starting after May 1, 2013, the compensation cost relating to the discount 
is recognized over the offering period. The total expense recognized relating 
to the CSPP for the years ended December 31, 2016, 2015 and 2014 was 
approximately $6 million, $5 million and $3 million, respectively. Under this plan, 
Crewmembers purchased 2.2 million, 1.3 million, and 2.3 million new shares 
for the years ended December 31, 2016, 2015 and 2014, respectively, at 
weighted average prices of $15.88, $19.25, and $8.04 per share, respectively. 

NOTE 8 

Income Taxes

The provision for income taxes consisted of the following for the years ended December 31 (in millions):

Deferred:
Federal
State

Deferred income tax expense
Current:
Federal
State
Foreign

Current income tax expense
TOTAL INCOME TAX EXPENSE

2016

$ 245
25
270

129
26
32
187
$ 457

2015

2014

$ 351
26
377

20
16
7
43
$ 420

$ 192
20
212

2
6
2
10
$ 222

As discussed in Note 1, we early adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting during the fourth quarter of 
2016. The adoption of this standard resulted in the recognition of $8 million of previously unrecognized excess tax beneﬁts in deferred tax assets and 
an increase to retained earnings on our consolidated balance sheet as of the beginning of the current year, and the recognition of $8 million of excess 
tax beneﬁts to the income tax provision for the year ended December 31, 2016. 

The effective tax rate on income before income taxes differed from the federal income tax statutory rate for the years ended December 31 for the 
following reasons (in millions):

Income tax expense at statutory rate
Increase resulting from:

State income tax, net of federal beneﬁt
Valuation Allowance, federal and state
Other, net

TOTAL INCOME TAX EXPENSE

2016
425

34
—
(2)
457

$

$

2015
$ 384

28
—
8
$ 420

2014
$ 218

18
(19)
5
$ 222

Cash payments for income taxes were $173 million in 2016, $42 million in 2015 and $8 million in 2014. 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

53

PART II  
ITEM 8 Financial Statements and Supplementary Data

The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions):

Deferred tax assets:

Deferred revenue/gains
Employee beneﬁts
Terminal 5 lease
Rent expense
Other
Deferred tax assets, net

Deferred tax liabilities:

Accelerated depreciation
Deferred tax liabilities

NET DEFERRED TAX LIABILITY

2016

2015

$

121
41
38
34
8
242

(1,596)
(1,596)
$ (1,354)

$

$

104
39
36
33
49
261

(1,334)
(1,334)
(1,073 )

In evaluating the realizability of the deferred tax assets, we assess whether it is more likely than not that some portion, or all, of the deferred tax assets, 
will be realized. We consider, among other things, the generation of future taxable income (including reversals of deferred tax liabilities) during the periods 
in which the related temporary differences will become deductible. We have concluded that no valuation allowance is required as of December 31, 2016.

A reconciliation of the beginning and ending amount of unrecognized tax beneﬁts is as follow (in millions):

Unrecognized tax beneﬁts at January 1,

Increases for tax positions taken during a prior period
Increases for tax positions taken during the period
Decreases for tax positions taken during a prior period
Decreases for settlement with tax authorities during the period

UNRECOGNIZED TAX BENEFITS DECEMBER 31,

2016
21
10
5
(4)
(6)
26

$

$

2015
16
—
6
(1)
—
21

$

$

2014
11
2
4
(1)
—
16

$

$

Interest and penalties accrued on unrecognized tax beneﬁts were not signiﬁcant. If recognized, $19 million of the unrecognized tax beneﬁts as of 
December 31, 2016 would impact our effective tax rate. We do not expect any signiﬁcant change in the amount of the unrecognized tax beneﬁts within 
the next twelve months. As a result of net operating losses and statute of limitations in our major tax jurisdictions, years 2003 through 2015 remain 
subject to examination by the relevant tax authorities.

NOTE 9 

Employee Retirement Plan

We sponsor a retirement savings 401(k) deﬁned contribution plan, or 
the Plan, covering all of our Crewmembers where we match 100% of 
our Crewmember contributions up to 5% of their eligible wages. The 
contributions vest over ﬁve years and are measured from a Crewmember’s 
hire date. Participants are immediately vested in their voluntary contributions.

Another component of the Plan is a Company discretionary contribution 
of 5% of eligible non-management Crewmember compensation, which 
we refer to as Retirement Plus. Retirement Plus contributions vest over 
three years and are measured from a Crewmember’s hire date. 

For years of service prior to 2017, our non-management Crewmembers are 
also eligible to receive proﬁt sharing, calculated as 15% of adjusted pre-tax 
income before proﬁt sharing and special items with the result reduced by 
Retirement Plus contributions. Eligible non-management Crewmembers may 

elect to have their proﬁt sharing contributed directly to the Plan. Beginning 
with 2017 adjusted pre-tax income, non-management Crewmembers will 
be eligible to receive proﬁt sharing, calculated as 10% of adjusted pre-tax 
income before proﬁt sharing and special items up to a pre-tax margin of 
18% with the result reduced by Retirement Plus contributions. If JetBlue’s 
resulting pre-tax margin exceeds 18%, non-management Crewmembers 
will receive 20% proﬁt sharing above an 18% pre-tax margin. 

Certain Federal Aviation Administration, or FAA-licensed Crewmembers, 
receive an additional contribution of 3% of eligible compensation, which 
we refer to as Retirement Advantage. Total 401(k) company match, 
Retirement Plus, proﬁt sharing and Retirement Advantage expensed in for 
the years ended December 31, 2016, 2015 and 2014 were $290 million, 
$256 million and $119 million, respectively. 

NOTE 10  Commitments

Flight Equipment Commitments

As of December 31, 2016, our ﬁrm aircraft orders consisted of 26 Airbus 
A321 aircraft, 25 Airbus A320 new engine option (neo) aircraft, 60 Airbus 
A321neo aircraft, 24 Embraer E190 aircraft and 10 spare engines scheduled 
for delivery through 2023. Committed expenditures for these aircraft and 
related ﬂight equipment, including estimated amounts for contractual price 
escalations and predelivery deposits, will be approximately $1.12 billion 
in 2017, $891 million in 2018, $1.3 billion in 2019, $1.6 billion in 2020, 

$1.4 billion in 2021 and $1.8 billion thereafter. We are scheduled to receive 
15 new Airbus A321 aircraft in 2017. Dependent on market conditions, 
we anticipate paying cash for some portion of our 15 Airbus A321 aircraft 
scheduled for delivery in 2017. 

In conjunction with our intention to expand our Mint experience, we 
amended our purchase agreement with Airbus during July 2016 to add 30 
incremental Airbus A321 aircraft with scheduled deliveries between 2017 
and 2023. We expect 15 of the incremental 30 Airbus A321 aircraft to be 
delivered with the current engine option beginning 2017. Our amendment 

54

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

includes ﬂexibility to take deliveries in our Mint or all-core conﬁguration. 
We anticipate the remaining 15 aircraft to be Airbus A321neo, scheduled 
to be delivered beginning in 2020. Starting in June 2019, we would have 
the option to take any or all A321neo deliveries with the Long Range 
conﬁguration, the A321-LR.

In November 2014, we amended our purchase agreement with Airbus 
by deferring 13 Airbus A321 aircraft orders and eight Airbus A320 aircraft 
orders from 2016-2020 to 2020-2023. Of these deferrals, 10 Airbus A321 
aircraft orders were converted to Airbus A321neo orders and ﬁve Airbus 
A320neo aircraft orders were converted to Airbus A321neo aircraft orders. 
We additionally converted three Airbus A320 aircraft orders in 2016 to 
Airbus A321 aircraft orders. In October 2013, we amended our purchase 
agreements with both Embraer and Airbus. We deferred 24 Embraer E190 
aircraft from 2014-2018 to 2020-2022. We converted eight existing Airbus 
A320 orders to Airbus A321 orders and ten Airbus A320neo orders to 
Airbus A321neo orders. We incrementally ordered 15 Airbus A321 aircraft 
for delivery between 2015 and 2017 and 20 Airbus A321neo aircraft for 
delivery between 2018 and 2020. 

Other Commitments

We utilize several credit card processors to process our ticket sales. Our 
agreements with these processors do not contain covenants, but do 
generally allow the processor to withhold cash reserves to protect the 
processor from potential liability for tickets purchased, but not yet used for 
travel. While we currently do not have any collateral requirements related 
to our credit card processors, we may be required to issue collateral to 
our credit card processors, or other key business partners, in the future.

NOTE 11  Contingencies

We self-insure a portion of our losses from claims related to workers’ 
compensation, environmental issues, property damage, medical insurance 
for Crewmembers and general liability. Losses are accrued based on an 
estimate of the ultimate aggregate liability for claims incurred, using standard 
industry practices and our actual experience.

We are a party to many routine contracts under which we indemnify third 
parties for various risks. These indemnities consist of the following:

All of our bank loans, including our aircraft and engine mortgages, contain 
standard provisions present in loans of this type. These provisions obligate 
us to reimburse the bank for any increased costs associated with continuing 
to hold the loan on our books which arise as a result of broadly deﬁned 
regulatory changes, including changes in reserve requirements and bank 
capital requirements. These indemnities would have the practical effect of 
increasing the interest rate on our debt if they were to be triggered. In all 
cases, we have the right to repay the loan and avoid the increased costs. 
The term of these indemnities matches the length of the related loan up 
to 15 years.

Under both aircraft leases with foreign lessors and aircraft and engine 
mortgages with foreign lenders, we have agreed to customary indemnities 
concerning withholding tax law changes. Under these contracts we are 
responsible, should withholding taxes be imposed, for paying such amount 
of additional rent or interest as is necessary to ensure that the lessor or 
lender still receives, after taxes, the rent stipulated in the lease or the interest 
stipulated under the loan. The term of these indemnities matches the length 
of the related lease up to 17 years.

We have various leases with respect to real property as well as various 
agreements among airlines relating to fuel consortia or fuel farms at airports. 
Under these contracts we have agreed to standard language indemnifying 
the lessor against environmental liabilities associated with the real property 
or operations described under the agreement, even if we are not the party 
responsible for the initial event that caused the environmental damage. 

PART II  
ITEM 8 Financial Statements and Supplementary Data

As of December 31, 2016, we had approximately $25 million pledged 
related to our workers compensation insurance policies and other business 
partner agreements, which will expire according to the terms of the related 
policies or agreements. 

As part of the sale of LiveTV, refer to Note 16, a $3 million liability relating to 
Airfone was assigned to JetBlue under the purchase agreement. Separately, 
prior to the sale of LiveTV, JetBlue had an agreement with ViaSat Inc. 
through 2020 relating to in-ﬂight broadband connectivity technology on 
our aircraft. That agreement stipulated a $20 million minimum commitment 
for the connectivity service and a $25 million minimum commitment for the 
related hardware and software purchases. As part of the sale of LiveTV, 
these commitments to ViaSat Inc. were assigned to LiveTV and JetBlue 
entered into two new service agreements with LiveTV pursuant to which 
LiveTV will provide in-ﬂight entertainment and connectivity services to 
JetBlue for a minimum of seven years.

Except for our pilots, our Crewmembers do not have third-party 
representation. In April 2014, JetBlue pilots elected to be solely represented 
by ALPA. The NMB certiﬁed ALPA as the representative body for JetBlue 
pilots and we are working with ALPA to reach our ﬁrst collective bargaining 
agreement. We enter into individual employment agreements with each of 
our non-unionized FAA-licensed Crewmembers which include dispatchers, 
technicians and inspectors as well as air trafﬁc controllers. Each employment 
agreement is for a term of ﬁve years and automatically renews for an 
additional ﬁve years unless either the Crewmember or we elect not to 
renew it by giving at least 90 days notice before the end of the relevant 
term. Pursuant to these agreements, these Crewmembers can only be 
terminated for cause. In the event of a downturn in our business that 
would require a reduction in work hours, we are obligated to pay these 
Crewmembers a guaranteed level of income and to continue their beneﬁts 
if they do not obtain other aviation employment. 

In the case of fuel consortia at airports, these indemnities are generally 
joint and several among the participating airlines. We have purchased a 
standalone environmental liability insurance policy to help mitigate this 
exposure. Our existing aviation hull and liability policy includes some limited 
environmental coverage when a cleanup is part of an associated single 
identiﬁable covered loss.

Under certain contracts, we indemnify speciﬁed parties against legal liability 
arising out of actions by other parties. The terms of these contracts range 
up to 25 years. Generally, we have liability insurance protecting ourselves 
for the obligations we have undertaken relative to these indemnities.

Upon the sale of LiveTV to Thales in June 2014, refer to Note 16 for more 
information, we transferred certain contingencies to Thales. These included 
product warranties and LiveTV indemnities against any claims which may 
have been brought against its customers. These indemnities related to 
allegations of patent, trademark, copyright or license infringement as a 
result of the use of the LiveTV system.

Under a certain number of our operating lease agreements we are required 
to restore certain property or equipment to its original form upon expiration 
of the related agreement. We have recorded the estimated fair value of these 
retirement obligations of approximately $5 million as of December 31, 2016. 
This liability may increase over time.

We are unable to estimate the potential amount of future payments under 
the foregoing indemnities and agreements.

Legal Matters

Occasionally we are involved in various claims, lawsuits, regulatory examinations, 
investigations and other legal matters arising, for the most part, in the ordinary 
course of business. The outcome of litigation and other legal matters is always 
uncertain. The Company believes it has valid defenses to the legal matters 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

55

PART II  
ITEM 8 Financial Statements and Supplementary Data

currently pending against it, is defending itself vigorously and has recorded 
accruals determined in accordance with U.S. GAAP, where appropriate. 
In making a determination regarding accruals, using available information, 
we evaluate the likelihood of an unfavorable outcome in legal or regulatory 
proceedings to which we are a party to and record a loss contingency when 
it is probable a liability has been incurred and the amount of the loss can be 
reasonably estimated. These subjective determinations are based on the 
status of such legal or regulatory proceedings, the merits of our defenses 
and consultation with legal counsel. Actual outcomes of these legal and 
regulatory proceedings may materially differ from our current estimates. It is 

possible that resolution of one or more of the legal matters currently pending 
or threatened could result in losses material to our consolidated results of 
operations, liquidity or ﬁnancial condition.

To date, none of these types of litigation matters, most of which are typically 
covered by insurance, has had a material impact on our operations or ﬁnancial 
condition. We have insured and continue to insure against most of these 
types of claims. A judgment on any claim not covered by, or in excess of, our 
insurance coverage could materially adversely affect our ﬁnancial condition 
or results of operations.

NOTE 12  Financial Derivative Instruments and Risk Management

As part of our risk management techniques, we periodically purchase over 
the counter energy derivative instruments and enter into ﬁxed forward price 
agreements, or FFPs, to manage our exposure to the effect of changes in the 
price of aircraft fuel. Prices for the underlying commodities have historically 
been highly correlated to aircraft fuel, making derivatives of them effective at 
providing short-term protection against volatility in average fuel prices. We also 
periodically enter into jet fuel basis swaps for the differential between heating 
oil and jet fuel to further limit the variability in fuel prices at various locations.

To manage the variability of the cash ﬂows associated with our variable rate 
debt, we have also entered into interest rate swaps. We do not hold or issue 
any derivative ﬁnancial instruments for trading purposes.

Aircraft fuel derivatives

than recognizing the gains and losses on these instruments into earnings 
during each period they are outstanding. The effective portion of realized 
aircraft fuel hedging derivative gains and losses is recognized in aircraft 
fuel expense in the period the underlying fuel is consumed.

Ineffectiveness can occur in certain circumstances, when the change in the 
total fair value of the derivative instrument differs from the change in the 
value of our expected future cash outlays for the purchase of aircraft fuel 
and is recognized immediately in interest income and other. Likewise, if a 
hedge does not qualify for hedge accounting, the periodic changes in its 
fair value are recognized in the period of the change in interest income and 
other. When aircraft fuel is consumed and the related derivative contract 
settles, any gain or loss previously recorded in other comprehensive income 
is recognized in aircraft fuel expense. All cash ﬂows related to our fuel 
hedging derivatives are classiﬁed as operating cash ﬂows.

We attempt to obtain cash ﬂow hedge accounting treatment for each 
aircraft fuel derivative that we enter into. This treatment is provided for 
under the Derivatives and Hedging topic of the Codiﬁcation. It allows 
for gains and losses on the effective portion of qualifying hedges to be 
deferred until the underlying planned jet fuel consumption occurs, rather 

Our current approach to fuel hedging is to enter into hedges on a 
discretionary basis without a speciﬁc target of hedge percentage needs. 
We view our hedge portfolio as a form of insurance to help mitigate the 
impact of price volatility and protect us against severe spikes in oil prices, 
when possible.

The following table illustrates the approximate hedged percentages of our projected fuel usage by quarter as of December 31, 2016, related to our 
outstanding fuel hedging contracts that were designated as cash ﬂow hedges for accounting purposes.

First Quarter 2017
Second Quarter 2017
Third Quarter 2017
Fourth Quarter 2017

Interest rate swaps

The ﬁnal interest payment relating to our interest rate swaps took place 
in August 2016. As such, as of December 31, 2016, we did not have 
any notional debt outstanding related to these swaps. These interest rate 
hedges effectively swapped ﬂoating rate debt for ﬁxed rate debt. They took 
advantage of lower borrowing rates in existence at the time of the hedge 
transaction as compared to the date our original debt instruments were 
executed. The notional amount decreased over time to match scheduled 
repayments of the related debt. 

Jet fuel swap 
agreements
10%
10%
10%
10%

Jet fuel collar 
agreements
—%
—%
—%
—%

Heating oil collar 
agreements
—%
—%
—%
—%

Total
10%
10%
10%
10%

All of our interest rate swap contracts qualiﬁed as cash ﬂow hedges in 
accordance with the Derivatives and Hedging topic of the Codiﬁcation. 
Since all of the critical terms of our swap agreements matched the debt to 
which they pertain, there was no ineffectiveness relating to these interest 
rate swaps for the years ended December 31, 2016, 2015 or 2014, and all 
related unrealized losses were deferred in accumulated other comprehensive 
income. We recognized a $1 million gain in interest expense for the year 
ended December 31, 2016. We recognized approximately $1 million in 
additional interest expense as the related interest payments were made 
during the years ended December 31, 2015 and 2014.

The table below reﬂects quantitative information related to our derivative instruments and where these amounts are recorded in our ﬁnancial statements 
(dollar amounts in millions).

Fuel derivatives
Asset fair value recorded in prepaid expense and other(1)
Liability fair value recorded in other accrued liabilities(1)
Longest remaining term (months)
Hedged volume (barrels, in thousands)
Estimated amount of existing (gains) losses expected to be reclassiﬁed into earnings in the next 12 months

As of December 31,

2016

$

22
—
12
1,920
(22)

$

2015

—
5
12
900
4

56

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 8 Financial Statements and Supplementary Data

2016

2015

2014

Fuel derivatives
Hedge effectiveness (gains) losses recognized in aircraft fuel expense
(Gains) losses on derivatives not qualifying for hedge accounting recognized in other expense
Hedge (gains) losses on derivatives recognized in comprehensive income
Percentage of actual consumption economically hedged
(1)  Gross asset or liability of each contract prior to consideration of offsetting positions with each counterparty and prior to impact of collateral paid.

$

(9)
—
(34)
12%

$ 126
1
29
17%

$

30
(2)
134

20%

Any outstanding derivative instrument exposes us to credit loss in connection 
with our fuel contracts in the event of nonperformance by the counterparties 
to the agreements, but we do not expect any of our counterparties will 
fail to meet their obligations. The amount of such credit exposure is 
generally the fair value of our outstanding contracts for which we are in a 
liability position. To manage credit risks we select counterparties based on 
credit assessments, limit our overall exposure to any single counterparty 
and monitor the market position with each counterparty. Some of our 
agreements require cash deposits from either counterparty if market risk 
exposure exceeds a speciﬁed threshold amount.

The impact of offsetting derivative instruments is depicted below (in millions):

We have master netting arrangements with our counterparties allowing 
us the right of offset to mitigate credit risk in derivative transactions. The 
ﬁnancial derivative instrument agreements we have with our counterparties 
may require us to fund all, or a portion of, outstanding loss positions 
related to these contracts prior to their scheduled maturities. The amount 
of collateral posted, if any, is periodically adjusted based on the fair value 
of the hedge contracts. Our policy is to offset the liabilities represented 
by these contracts with any cash collateral paid to the counterparties.

Fuel derivatives
As of December 31, 2016
As of December 31, 2015

NOTE 13  Fair Value

Gross Amount of 
Recognized

Assets

Liabilities

Gross Amount of 
Cash Collateral
Offset

Net Amount Presented 
on Balance Sheet

Assets

Liabilities

$
$

22
$
— $

—
5

$
$

—
—

$
$

22
$
— $

—
5

Under the Fair Value Measurements and Disclosures topic of the Codiﬁcation, 
disclosures are required about how fair value is determined for assets and 
liabilities and a hierarchy for which these assets and liabilities must be grouped 
is established, based on signiﬁcant levels of inputs as follows:

 (cid:116) Level 1 quoted prices in active markets for identical assets or liabilities;

 (cid:116) Level 2 quoted prices in active markets for similar assets and liabilities 

and inputs that are observable for the asset or liability; or

 (cid:116) Level 3 unobservable inputs for the asset or liability, such as discounted 

cash ﬂow models or valuations.

The determination of where assets and liabilities fall within this hierarchy 
is based upon the lowest level of input that is signiﬁcant to the fair value 
measurement.

The following is a listing of our assets and liabilities required to be measured at fair value on a recurring basis and where they are classiﬁed within the 
fair value hierarchy (in millions):

Cash equivalents
Available-for-sale investment securities
Aircraft fuel derivatives

Cash equivalents
Available-for-sale investment securities
Aircraft fuel derivatives

Level 1
$ 313
115
—

Level 1
$ 147
75
$ —

As of December 31, 2016

Level 2
—
$
220
22

Level 3
$ —
—
—

As of December 31, 2015

Level 2
—
$
180
(5)

$

Level 3
$ —
—
$ —

$

Total
313
335
22

Total
$ 147
255
(5)

$

The carrying values of all other ﬁnancial instruments approximated 
their fair values at December 31, 2016 and 2015. Refer to Note 2 for 
fair value information related to our outstanding debt obligations as of 
December 31, 2016 and 2015.

tradable. These securities are valued using inputs observable in active 
markets for identical securities and are therefore classiﬁed as Level 1 
within our fair value hierarchy.

Cash equivalents

Our cash equivalents include money market securities and commercial 
paper which are readily convertible into cash, have maturities of 90 days 
or less when purchased and are considered to be highly liquid and easily 

Available-for-sale investment securities

Included in our available-for-sale investment securities are time deposits, 
commercial paper and treasury bills. The fair values of these instruments 
are based on observable inputs in non-active markets, which are therefore 
classiﬁed as Level 2 in the hierarchy. We did not record any material gains or 
losses on these securities during the year ended December 31, 2016 or 2015. 

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

57

PART II  
ITEM 8 Financial Statements and Supplementary Data

Aircraft fuel derivatives

Our aircraft fuel derivatives include swaps, caps, collars, and basis swaps 
which are not traded on public exchanges. Their fair values are determined 
using a market approach based on inputs that are readily available from 

public markets for commodities and energy trading activities; therefore, 
they are classiﬁed as Level 2 inputs. The data inputs are combined into 
quantitative models and processes to generate forward curves and 
volatilities related to the speciﬁc terms of the underlying hedge contracts.

NOTE 14  Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in fair value of our aircraft fuel derivatives and interest rate swap agreements, which qualify for hedge 
accounting. A rollforward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the years ended December 31, 
2016, 2015 and 2014 is as follows (in millions):

Balance of accumulated income (losses), at December 31, 2013
Reclassiﬁcations into earnings (net of $12 of taxes)
Change in fair value (net of $(52) of taxes)
Balance of accumulated losses, at December 31, 2014
Reclassiﬁcations into earnings (net of $49 of taxes)
Change in fair value (net of $(11) of taxes)
Balance of accumulated losses, at December 31,2015
Reclassiﬁcations into earnings (net of $(4) of taxes)
Change in fair value (net of $12 of taxes)
Balance of accumulated income, at December 31, 2016
(1)  Reclassified to aircraft fuel expense

(2)  Reclassified to interest expense

NOTE 15  Geographic Information

Aircraft Fuel 
Derivatives(1)

Interest Rate 
Swaps(2)

1
18
(82)
(63)
77
(18)
(4)
(5)
22
13

$

(1)
1
—
—
1
—
1
(1)
—
—

$

Total
—
19
(82)
(63)
78
(18)
(3)
(6)
22
13

$

Under the Segment Reporting topic of the Codiﬁcation, disclosures are 
required for operating segments that are regularly reviewed by chief operating 
decision makers. Air transportation services accounted for substantially 
all the Company’s operations in 2016, 2015 and 2014.

Operating revenues are allocated to geographic regions, as deﬁned 
by the DOT, based upon the origination and destination of each ﬂight 
segment. We currently serve 33 locations in the Caribbean and Latin 

American region, or Latin America as deﬁned by the DOT. However, our 
management includes our three destinations in Puerto Rico and two 
destinations in the U.S. Virgin Islands in our Caribbean and Latin America 
allocation of revenues. Therefore, we have reﬂected these locations within 
the Caribbean and Latin America region in the table below. Operating 
revenues by geographic regions for the years ended December 31 are 
summarized below (in millions):

Domestic
Caribbean & Latin America
TOTAL

2016
4,751
1,881
6,632

$

$

2015
$ 4,521
1,895
$ 6,416

2014
$ 4,093
1,724
$ 5,817

Our tangible assets primarily consist of our ﬂeet of aircraft, which is deployed system wide, with no individual aircraft dedicated to any speciﬁc route or 
region; therefore our assets do not require any allocation to a geographic area.

NOTE 16  LiveTV

LiveTV, LLC, formerly a wholly owned subsidiary of JetBlue, provides in-ﬂight 
entertainment and connectivity solutions for various commercial airlines including 
JetBlue. On June 10, 2014, JetBlue entered into an amended and restated 
purchase agreement with Thales Holding Corporation, or Thales, replacing 
the original purchase agreement between the parties dated as of March 13, 
2014. Under the terms of the amended and restated purchase agreement, 
JetBlue sold LiveTV to Thales for $399 million, subject to purchase adjustments 
based upon the amount of cash, indebtedness, and working capital of LiveTV 
at the closing date of the transaction relative to a target amount. Excluded 
from this sale was LiveTV Satellite Communications, LLC, which was retained 
by JetBlue pending receipt of the necessary regulatory approvals for the sale. 
On September 25, 2014, JetBlue received all necessary regulatory approvals 
and sold LiveTV Satellite Communications, LLC, to Thales for approximately 
$1 million in cash. 

The total cash proceeds of $393 million reﬂect the agreed upon purchase 
price, net of purchase agreement adjustments including post-closing purchase 
price adjustments, which were ﬁnalized during the third quarter of 2014. 
The sale resulted in a pre-tax gain of approximately $241 million and is net of 
approximately $19 million in transaction costs. The gain on the sale has been 
reported as a separate line item in the consolidated statement of operations 
for the year ended December 31, 2014.

The tax expense recorded in connection with this transaction totaled 
$72 million, net of a $19 million tax beneﬁt related to the utilization of a 
capital loss carryforward. The capital gain generated from the sale of 
LiveTV resulted in the release of a valuation allowance related to the capital 
loss deferred tax asset. This resulted in an after tax gain on the sale of 
approximately $169 million. 

58

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART II  
ITEM 8 Financial Statements and Supplementary Data

Following the closure of the sales on June 10, 2014, and on September 25, 
2014, the applicable LiveTV operations are no longer being consolidated 
as a subsidiary in JetBlue’s consolidated ﬁnancial statements. The effect of 
this reporting structure change is not material to the consolidated ﬁnancial 
statements presented. LiveTV third party revenues in 2014 up to the date of 
sale were $30 million.

Deferred proﬁt on hardware sales and advance deposits for future hardware 
sales were included in other accrued liabilities and other long term liabilities 
on our consolidated balance sheets depending on whether we expected to 

recognize it in the next 12 months or beyond. No deferred proﬁt is recognized 
in our consolidated balance sheets as of December 31, 2016 or 2015. There is 
no net book value of equipment installed for other airlines in our consolidated 
balance sheets as of December 31, 2016 or 2015.

JetBlue expects to continue to be a signiﬁcant customer of LiveTV. Concurrent 
with the LiveTV sale, the parties have entered into two agreements, each with 
seven year terms pursuant to which LiveTV continues to provide JetBlue 
with in-ﬂight entertainment and onboard connectivity products and services.

NOTE 17  Quarterly Financial Data (Unaudited)

Quarterly results of operations for the years ended December 31, 2016 and 2015 are summarized below (in millions, except per share amounts):

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

2016
Operating revenues
Operating income
Net income(1)
Basic earnings per share(1)
Diluted earnings per share(1)
2015
$ 1,594
Operating revenues
330
Operating income
190
Net income
0.60
Basic earnings per share
Diluted earnings per share
0.56
(1)   As discussed in Note 1, we early adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting during the fourth quarter of 2016. The adoption of this standard 
resulted in the recognition of $8 million of excess tax benefits to the income tax provision for the year ended December 31, 2016. Net Income, basic and diluted earnings per share data 
above are presented as if the ASU was adopted at the beginning of the year. 

$ 1,616
349
207
0.64
0.61

$ 1,523
253
137
0.44
0.40

$ 1,641
296
172
0.51
0.50

$ 1,643
313
181
0.56
0.53

$ 1,612
282
152
0.48
0.44

$ 1,732
354
199
0.61
0.58

$ 1,687
351
198
0.63
0.58

$
$

$
$

$
$

$
$

$
$

$
$

$
$

$
$

The sum of the quarterly earnings per share amounts does not equal the annual amount reported since per share amounts are computed independently 
for each quarter and for the full year based on respective weighted-average common shares outstanding and other dilutive potential common shares.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

59

PART II  
ITEM 9 Changes and Disagreements with Accountants on Accounting and Financial Disclosure

ITEM 9.  Changes and Disagreements with 

Accountants on Accounting and Financial 
Disclosure

None.

ITEM 9A. Controls and Procedures

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as deﬁned in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure 
that information required to be disclosed by us in reports that we ﬁle under the Exchange Act is recorded, processed, summarized and reported 
within the time periods speciﬁed in the SEC’s rules and forms and that such information required to be disclosed by us in reports that we ﬁle under the 
Exchange Act is accumulated and communicated to our management, including our Chief Executive Ofﬁcer, or CEO, and our Chief Financial Ofﬁcer, 
or CFO, to allow timely decisions regarding required disclosure. Management, with the participation of our CEO and CFO, performed an evaluation of 
the effectiveness of our disclosure controls and procedures as of December 31, 2016. Based on that evaluation, our CEO and CFO concluded that our 
disclosure controls and procedures were effective as of December 31, 2016.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over ﬁnancial reporting (as deﬁned in Rule 13a-15(f) or 
Rule 15d-15(f) under the Exchange Act). Under the supervision and with the participation of our management, including our CEO and CFO, we conducted 
an evaluation of the effectiveness of our internal control over ﬁnancial reporting based on the framework in Internal Control—Integrated Framework 
issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on that evaluation, our management 
concluded that our internal control over ﬁnancial reporting was effective as of December 31, 2016 to provide reasonable assurance regarding the 
reliability of ﬁnancial reporting and the preparation of consolidated ﬁnancial statements for external reporting purposes in accordance with U.S. GAAP.

Ernst & Young LLP, the independent registered public accounting ﬁrm that audited our Consolidated Financial Statements included in this Annual Report 
on Form 10-K, audited the effectiveness of our internal control over ﬁnancial reporting as of December 31, 2016. Ernst & Young LLP has issued their 
report which is included elsewhere herein.

Changes in Internal Control Over Financial Reporting

During the quarter ended December 31, 2016, there were no changes in our internal control over ﬁnancial reporting (as deﬁned in Rule 13a-15(f) and 
Rule 15d-15(f) under the Exchange Act) identiﬁed in connection with the evaluation of our controls performed during the quarter ended December 31, 
2016 that have materially affected, or are reasonably likely to materially affect, our internal control over ﬁnancial reporting.

ITEM 9B. Other Information

None.

60

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART III  

PART III

ITEM 10.  Directors, Executive Ofﬁcers and Corporate 

Governance

Code of Ethics

We adopted a Code of Ethics within the meaning of Item 406(b) of SEC 
Regulation S-K. This Code of Ethics applies to our principal executive 
ofﬁcer, principal ﬁnancial ofﬁcer and principal accounting ofﬁcer. This Code 
of Ethics is publicly available on our website at http://investor.jetblue.com. 

If we make substantive amendments to this Code of Ethics or grant any 
waiver, including any implicit waiver, we will disclose the nature of such 
amendment or waiver on our website or in a report on Form 8-K within 
four days of such amendment or waiver.

Executive Ofﬁcers of the Registrant

Certain information concerning JetBlue’s executive ofﬁcers as of the date 
of this report follows. There are no family relationships between any of 
our executive ofﬁcers.

Robin Hayes, age 50, is our Chief Executive Ofﬁce and President. He 
was promoted to President on January 1, 2014 and Chief Executive 
Ofﬁcer on February 16, 2015. He joined JetBlue after nineteen years at 
British Airways. In his last role at British Airways, Mr. Hayes served as 
Executive Vice President for The Americas and before that he served in a 
number of operational and commercial positions in the UK and Germany.

James Leddy, age 53, is our interim Chief Financial Ofﬁcer, he was 
appointed to the position effective November 1, 2016. Mr. Leddy joined 
us in November 2012 as Senior Vice President Treasurer. He was 
previously Senior Vice President of Treasury and Cash Management at 
NBC Universal from 2008 to 2012.

Mark D. Powers, age 63, served as our Chief Financial Ofﬁcer from April 
2012 to October 31, 2016. Mr. Powers joined us in July 2006 as Treasurer 
and Vice President, Corporate Finance. He was promoted to Senior Vice 
President, Treasurer in 2007. Prior to joining JetBlue, Mr. Powers was 
an independent advisor to several aviation-related companies and has 
held a number of positions in both the ﬁnance and legal departments of 
Continental Airlines, Northwest Airlines and General Electric’s jet engine 
unit. Mr. Powers retired as our Chief Financial Ofﬁcer on November 1, 2016 
but will remain with us as a Senior Advisor through November 1, 2017.

James Hnat, age 46, is our Executive Vice President Corporate Affairs, 
General Counsel and Secretary and has served in this capacity since 
April 2007. Previously, he served as our Senior Vice President, General 
Counsel and Assistant Secretary from March 2006, as General Counsel 

and Assistant Secretary from February 2003 to March 2006 and as 
Associate General Counsel from June 2001 to January 2003. Prior to 
joining JetBlue, Mr. Hnat worked as an attorney at Milbank, Tweed, Hadley 
& McCloy LLP, where he specialized in aircraft ﬁnance transactions and at 
Condon & Forsyth LLP where he specialized in airline defense litigation. 
Mr. Hnat is a member of the bar of New York and Massachusetts.

Marty St. George, age 53, is our Executive Vice President Commercial and 
Planning, a position he has held since February 2015 and is responsible 
for airline and network planning, marketing, sales and revenue. Prior to 
this appointment, Mr. St. George served as our Senior Vice President - 
Commercial. Mr. St. George joined JetBlue in July 2006 and has held 
several roles including Senior Vice President - Marketing and Commercial 
Strategy and Vice President - Planning. Prior to JetBlue, Mr. St. George held 
marketing and network planning roles at United Airlines and US Airways.

Alexander Chatkewitz, age 52, is our Vice President and Chief Accounting 
Ofﬁcer, a position he has held since December 2014. Prior to joining 
JetBlue, Mr. Chatkewitz worked at Philip Morris International, where he 
served as Vice President & Controller - Financial Reporting & Accounting 
Research since 2008. Prior to Phillip Morris, he served for a decade as 
Altria Group’s Vice President Assistant Controller - Financial Reporting & 
Consolidations. Mr. Chatkewitz also held positions at Marsh & McLennan 
Companies as well as the audit practice of Deloitte & Touche.

The other information required by this Item will be included in and is 
incorporated herein by reference from our deﬁnitive proxy statement 
for our 2017 Annual Meeting of Stockholders to be ﬁled with the SEC 
pursuant to Regulation 14A within 120 days after the end of our 2016 
ﬁscal year, or our 2017 Proxy Statement.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

61

PART III  
ITEM 11  Executive Compensation

ITEM 11.  Executive Compensation

The information required by this Item will be included in and is incorporated herein by reference from our 2017 Proxy Statement.

ITEM 12.  Security Ownership of Certain Beneﬁcial 

Owners and Management and Related 
Stockholder Matters

The table below provides information relating to our equity compensation plans, including individual compensation arrangements, under which our common 
stock is authorized for issuance as of December 31, 2016, as adjusted for stock splits:

Plan Category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
TOTAL

Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
2,929,042
—
2,929,042

Weighted-average
exercise price of
outstanding
options, warrants
and rights
$

14.75
—
14.75

$

Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities 
reﬂected in ﬁrst column)
27,685,169
—
27,685,169

Refer to Note 7 to our consolidated ﬁnancial statements for further information regarding the material features of the above plans.

Other information required by this Item will be included in and is incorporated herein by reference from our Proxy Statement.

ITEM 13.  Certain Relationships and Related 

Transactions, and Director Independence

The information required by this Item will be included in and is incorporated herein by reference from our 2017 Proxy Statement.

ITEM 14.  Principal Accounting Fees and Services

The information required by this Item will be included in and is incorporated herein by reference from our 2017 Proxy Statement.

62

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  

PART IV

ITEM 15.  Exhibits, Financial Statement Schedules

1.

2.

3.

Financial statements:
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets — December 31, 2016 and December 31, 2015
Consolidated Statements of Operations — For the years ended December 31, 2016, 2015 and 2014
Consolidated Statements of Comprehensive Income — For the years ended December 31, 2016, 2015 and 2014
Consolidated Statements of Cash Flows — For the years ended December 31, 2016, 2015 and 2014
Consolidated Statements of Stockholders’ Equity — For the years ended December 31, 2016, 2015 and 2014
Notes to Consolidated Financial Statements
Financial Statement Schedules:
Report of Independent Registered Public Accounting Firm on Financial Statement Schedule
Schedule II — Valuation of Qualifying Accounts and Reserves
Quarterly Financial Data
All other schedules have been omitted because they are inapplicable, not required, or the information is included elsewhere in the 
consolidated ﬁnancial statements or notes thereto.
Exhibits: See accompanying Exhibit Index included after the signature page of this Report for a list of the exhibits ﬁled or furnished 
with or incorporated by reference in this Report.

S-1
S-2
S-3

ITEM 16.  Form 10-K Summary

Omitted.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

63

PART IV  
ITEM 16 Form 10-K Summary

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on 
its behalf by the undersigned, thereunto duly authorized.

Date: 
February 17, 2017

By:

JETBLUE AIRWAYS CORPORATION
(Registrant)
/S/ ALEXANDER CHATKEWITZ
Vice President, Controller, and Chief Accounting Ofﬁcer 
(Principal Accounting Ofﬁcer)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose 
signature appears below constitutes and appoints James G. Hnat 
his or her attorney-in-fact with power of substitution for him or her 
in any and all capacities, to sign any amendments, supplements or 
other documents relating to this Annual Report on Form 10-K which 
he or she deems necessary or appropriate, and to ﬁle the same, with 
exhibits thereto, and other documents in connection therewith, with the 
Securities and Exchange Commission, hereby ratifying and conﬁrming 

all that such attorney-in-fact or their substitute may do or cause to be 
done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, 
this Report has been signed below by the following persons on behalf 
of the registrant and in the capacities and on the dates indicated (and, 
as indicated with an asterisk, representing at least a majority of the 
members of the Board of Directors).

Signature
/S/ ROBIN HAYES
Robin Hayes

/S/ JAMES LEDDY
James Leddy

Capacity
Chief Executive Ofﬁcer and Director
(Principal Executive Ofﬁcer)

Date
February 17, 2017

Chief Financial Ofﬁcer (Principal Financial Ofﬁcer)

February 17, 2017

/S/ ALEXANDER CHATKEWITZ
Alexander Chatkewitz

Vice President, Controller, and Chief Accounting Ofﬁcer  
(Principal Accounting Ofﬁcer)

/S/ JENS BISCHOF
Jens Bischof *

/S/ PETER BONEPARTH
Peter Boneparth *

/S/ DAVID CHECKETTS
David Checketts *

/S/ STEPHAN GEMKOW
Stephan Gemkow *

/S/ ELLEN JEWETT
Ellen Jewett *

/S/ STANLEY MCCHRYSTAL
Stanley McChrystal *

/S/ JOEL PETERSON
Joel Peterson *

/S/ FRANK SICA
Frank Sica *

/S/ THOMAS WINKELMANN
Thomas Winkelmann *

Director

Director

Director

Director

Director

Director

Director

Director

Director

February 17, 2017

February 17, 2017

February 17, 2017

February 17, 2017

February 17, 2017

February 17, 2017

February 17, 2017

February 17, 2017

February 17, 2017

February 17, 2017

64

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  
ITEM 16 Form 10-K Summary

EXHIBIT INDEX

2.1

2.1(a)

2.1(b)

3.1

3.2

3.3

4.1

4.2

4.2(a)

4.2(b)

4.2(c)

4.2(d)

4.4

4.5

4.5(a)

4.7

4.7(a)

4.7(b)

4.7(c)

4.7(d)

4.7(e)

4.7(f)

4.7(g)

4.7(h)

Membership Interest Purchase Agreement among Harris Corporation and Thales Avionics In-Flight Systems, LLC and In-Flight Liquidating, 
LLC and Glenn S. Latta and Jeffrey A. Frisco and Andreas de Greef and JetBlue Airways Corporation, dated as of September 9, 2002 relating 
to the interests in LiveTV, LLC—incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K dated September 27, 2002  
(File No. 000-49728).

Purchase agreement between JetBlue Airways Corporation and Thales Avionics, Inc., dated as of March 13, 2014—incorporated by reference to 
Exhibit 2.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.

Amended and Restated Purchase Agreement between JetBlue Airways Corporation and Thales Holding Corporation, dated June 10, 2014—
incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2014.

Amended and Restated Certiﬁcate of Incorporation of JetBlue Airways Corporation—incorporated by reference to Exhibit 3.1 to our Current 
Report on Form 8-K dated May 20, 2016 (File No. 000-49728).

Amended and Restated Bylaws of JetBlue Airways Corporation—incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K 
dated March 30, 2016.

Certiﬁcate of Designation of Series A Participating Preferred Stock dated April 1, 2002—incorporated by reference to Exhibit 3.2 to our Current 
Report on Form 8-K dated July 10, 2003 (File No. 000-49728).

Specimen Stock Certiﬁcate—incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1, as amended 
(File No. 333-82576).

Amended and Restated Registration Rights Agreement, dated as of August 10, 2000, by and among JetBlue Airways Corporation and 
the Stockholders named therein—incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-1, as amended 
(File No. 333-82576).

Amendment No. 1, dated as of June 30, 2003, to Amended and Restated Registration Rights Agreement, dated as of August 10, 2000, by and 
among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to Exhibit 4.2 to the Registration Statement 
on Form S-3, ﬁled on July 3, 2003, as amended on July 10, 2003 (File No. 333-106781).

Amendment No. 2, dated as of October 6, 2003, to Amended and Restated Registration Rights Agreement, dated as of August 10, 2000, by and 
among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to Exhibit 4.9 to the Registration Statement 
on Form S-3, ﬁled on October 7, 2003 (File No. 333-109546).

Amendment No. 3, dated as of October 4, 2004, to Amended and Restated Registration Rights Agreement, dated as of August 10, 2000, by 
and among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to Exhibit 4.1 to our Current Report 
on Form 8-K/A dated October 4, 2004 (File No. 000-49728).

Amendment No. 4, dated as of June 22, 2006, to Amended and Restated Registration Rights Agreement, dated as of August 10, 2000, by 
and among JetBlue Airways Corporation and the Stockholders named therein—incorporated by reference to Exhibit 4.19 to our Registration 
Statement on Form S-3 ARS, ﬁled on June 30, 2006 (File No. 333-135545).

Summary of Rights to Purchase Series A Participating Preferred Stock—incorporated by reference to Exhibit 4.4 to the Registration Statement 
on Form S-1, as amended (File No. 333-82576).

Stockholder Rights Agreement—incorporated by reference to Exhibit 4.3 to our Annual Report on Form 10-K for the year ended December 31, 
2002 (File No. 000-49728).

Amendment to the Stockholder Rights Agreement, dated as of January 17, 2008, by and between JetBlue Airways Corporation and 
Computershare Trust Company, N.A.—incorporated by reference to Exhibit 4.5(a) to our Current Report on Form 8-K dated January 23, 2008 
(File No. 000-49728).

Form of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Certiﬁcate Series 2004-1G-1-O—incorporated by reference to 
Exhibit 4.1 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Form of Three-Month LIBOR plus 0.420% JetBlue Airways Pass Through Certiﬁcate Series 2004-1G-2-O—incorporated by reference to 
Exhibit 4.2 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Form of Three-Month LIBOR plus 4.250% JetBlue Airways Pass Through Certiﬁcate Series 2004-1C-O—incorporated by reference to Exhibit 4.3 
to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Pass Through Trust Agreement, dated as of March 24, 2004, between JetBlue Airways Corporation and Wilmington Trust Company, as 
Pass Through Trustee, made with respect to the formation of JetBlue Airways Pass Through Trust, Series 2004-1G-1-O and the issuance of 
Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-1G-1-O, Pass Through Certiﬁcates—incorporated by 
reference to Exhibit 4.4 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728) (1).

Revolving Credit Agreement (2004-1G-1), dated as of March 24, 2004, between Wilmington Trust Company, as Subordination Agent, as agent 
and trustee for the JetBlue Airways 2004-1G-1 Pass Through Trust, as Borrower, and Landesbank Hessen-Thüringen Girozentrale, as Primary 
Liquidity Provider—incorporated by reference to Exhibit 4.5 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Revolving Credit Agreement (2004-1G-2), dated as of March 24, 2004, between Wilmington Trust Company, as Subordination Agent, as agent 
and trustee for the JetBlue Airways 2004-1G-2 Pass Through Trust, as Borrower, and Landesbank Hessen-Thüringen Girozentrale, as Primary 
Liquidity Provider—incorporated by reference to Exhibit 4.6 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Revolving Credit Agreement (2004-1C), dated as of March 24, 2004, between Wilmington Trust Company, as Subordination Agent, as agent and 
trustee for the JetBlue Airways 2004-1C Pass Through Trust, as Borrower, and Landesbank Hessen-Thüringen Girozentrale, as Primary Liquidity 
Provider—incorporated by reference to Exhibit 4.7 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Deposit Agreement (Class G-1), dated as of March 24, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank 
AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.8 to our Current Report on Form 8-K dated March 24, 2004 
(File No. 000-49728).

Deposit Agreement (Class G-2), dated as of March 24, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank 
AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.9 to our Current Report on Form 8-K dated March 24, 2004 
(File No. 000-49728).

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

65

PART IV  
ITEM 16 Form 10-K Summary

4.7(i)

4.7(j)

4.7(k)

4.7(l)

4.7(m)

4.7(n)

4.7(o)

4.7(p)

4.7(q)

4.7(r)

4.7(s)

4.7(t)

4.7(u)

4.7(v)

4.7(w)

4.7(x)

4.7(y)

4.7(z)

4.7(aa)

4.7(ab)

Deposit Agreement (Class C), dated as of March 24, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank 
AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K dated March 24, 2004 
(File No. 000-49728).

Escrow and Paying Agent Agreement (Class G-1), dated as of March 24, 2004, among Wilmington Trust Company, as Escrow Agent, Morgan 
Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Credit Lyonnais Securities 
(USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through 
Trust 2004-1G-1-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by reference to Exhibit 4.11 to our 
Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Escrow and Paying Agent Agreement (Class G-2), dated as of March 24, 2004, among Wilmington Trust Company, as Escrow Agent, Morgan 
Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Credit Lyonnais Securities 
(USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through 
Trust 2004-1G-2-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by reference to Exhibit 4.12 to our 
Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Escrow and Paying Agent Agreement (Class C), dated as of March 24, 2004, among Wilmington Trust Company, as Escrow Agent, Morgan 
Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc. and Credit Lyonnais Securities 
(USA) Inc., as Underwriters, Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through 
Trust 2004-1C-O, as Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by reference to Exhibit 4.13 to our 
Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services Inc., as Above Cap Liquidity Facility Provider, 
and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-1G-1-O—incorporated by 
reference to Exhibit 4.14 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728) (2).

Schedule to the ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services Inc., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-1G-1-O—
incorporated by reference to Exhibit 4.15 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Schedule to the ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services, Inc., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-1G-2-O—
incorporated by reference to Exhibit 4.16 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Schedule to the ISDA Master Agreement, dated as of March 24, 2004, between Morgan Stanley Capital Services, Inc., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-1C-O—
incorporated by reference to Exhibit 4.17 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Class G-1 Above Cap Liquidity Facility Conﬁrmation, dated March 24, 2004, between Morgan Stanley Capital Services Inc., as Above Cap 
Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.18 to our Current 
Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Class G-2 Above Cap Liquidity Facility Conﬁrmation, dated March 24, 2004, between Morgan Stanley Capital Services Inc., as Above Cap 
Liquidity Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.19 to our Current 
Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Class C Above Cap Liquidity Facility Conﬁrmation, dated March 24, 2004, between Morgan Stanley Capital Services Inc., as Above Cap Liquidity 
Facility Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.20 to our Current Report on 
Form 8-K dated March 24, 2004 (File No. 000-49728).

Guarantee, dated March 24, 2004, of Morgan Stanley Capital Services Inc. with respect to the Class G-1 Above Cap Liquidity Facility—
incorporated by reference to Exhibit 4.21 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Guarantee, dated March 24, 2004, of Morgan Stanley Capital Services Inc. with respect to the Class G-2 Above Cap Liquidity Facility—
incorporated by reference to Exhibit 4.22 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Guarantee, dated March 24, 2004, of Morgan Stanley Capital Services Inc. with respect to the Class C Above Cap Liquidity Facility—incorporated 
by reference to Exhibit 4.23 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Insurance and Indemnity Agreement, dated as of March 24, 2004, among MBIA Insurance Corporation, as Policy Provider, JetBlue Airways 
Corporation and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.24 to our Current Report on Form 
8-K dated March 24, 2004 (File No. 000-49728).

MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated March 24, 2004, bearing Policy Number 43567(1) issued to Wilmington 
Trust Company, as Subordination Agent for the Class G-1 Certiﬁcates—incorporated by reference to Exhibit 4.25 to our Current Report on 
Form 8-K dated March 24, 2004 (File No. 000-49728).

MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated March 24, 2004, bearing Policy Number 43567(2) issued to Wilmington 
Trust Company, as Subordination Agent for the Class G-2 Certiﬁcates—incorporated by reference to Exhibit 4.26 to our Current Report on 
Form 8-K dated March 24, 2004 (File No. 000-49728).

Intercreditor Agreement, dated as of March 24, 2004, among Wilmington Trust Company, as Pass Through Trustee, Landesbank Hessen- 
Thüringen Girozentrale, as Primary Liquidity Provider, Morgan Stanley Capital Services, Inc., as Above-Cap Liquidity Provider, MBIA Insurance 
Corporation, as Policy Provider, and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.27 to our 
Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Note Purchase Agreement, dated as of March 24, 2004, among JetBlue Airways Corporation, Wilmington Trust Company, in its separate 
capacities as Pass Through Trustee, as Subordination Agent, as Escrow Agent and as Paying Agent—incorporated by reference to Exhibit 4.28 to 
our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

Form of Trust Indenture and Mortgage between JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, as Mortgagee—
incorporated by reference to Exhibit 4.29 to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728).

66

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  
ITEM 16 Form 10-K Summary

4.7(ac)

Form of Participation Agreement among JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, in its separate capacities as 
Mortgagee, as Pass Through Trustee and as Subordination Agent—incorporated by reference to Exhibit 4.30 to our Current Report on Form 8-K 
dated March 24, 2004 (File No. 000-49728).

4.8

4.8(a)

4.8(b)

4.8(c)

4.8(d)

4.8(e)

4.8(f)

4.8(g)

4.8(h)

4.8(i)

4.8(j)

4.8(k)

4.8(l)

4.8(m)

4.8(n)

4.8(o)

4.8(p)

4.8(q)

4.8(r)

Form of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Certiﬁcate Series 2004-2G-1-O, with attached form of Escrow 
Receipt—incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Form of Three-Month LIBOR plus 0.450% JetBlue Airways Pass Through Certiﬁcate Series 2004-2G-2-O, with attached form of Escrow 
Receipt—incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Form of Three-Month LIBOR plus 3.100% JetBlue Airways Pass Through Certiﬁcate Series 2004-2C-O, with attached form of Escrow Receipt—
incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Pass Through Trust Agreement, dated as of November 15, 2004, between JetBlue Airways Corporation and Wilmington Trust Company, as Pass 
Through Trustee, made with respect to the formation of JetBlue Airways Pass Through Trust, Series 2004-2G-1-O and the issuance of Three-
Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-2G-1-O, Pass Through Certiﬁcates—incorporated by reference to 
Exhibit 4.4 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728) (3).

Revolving Credit Agreement (2004-2G-1), dated as of November 15, 2004, between Wilmington Trust Company, as Subordination Agent, as 
agent and trustee for the JetBlue Airways 2004-2G-1 Pass Through Trust, as Borrower, and Landesbank Baden-Württemberg, as Primary 
Liquidity Provider—incorporated by reference to Exhibit 4.5 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Revolving Credit Agreement (2004-2G-2), dated as of November 15, 2004, between Wilmington Trust Company, as Subordination Agent, as 
agent and trustee for the JetBlue Airways 2004-2G-2 Pass Through Trust, as Borrower, and Landesbank Baden-Württemberg, as Primary 
Liquidity Provider—incorporated by reference to Exhibit 4.6 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Revolving Credit Agreement (2004-2C), dated as of November 15, 2004, between Wilmington Trust Company, as Subordination Agent, as agent 
and trustee for the JetBlue Airways 2004-2C Pass Through Trust, as Borrower, and Landesbank Baden-Württemberg, as Primary Liquidity 
Provider—incorporated by reference to Exhibit 4.7 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Deposit Agreement (Class G-1), dated as of November 15, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank 
AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.8 to our Current Report on Form 8-K dated November 9, 2004 
(File No. 000-49728).

Deposit Agreement (Class G-2), dated as of November 15, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank 
AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.9 to our Current Report on Form 8-K dated November 9, 2004 
(File No. 000-49728).

Deposit Agreement (Class C), dated as of November 15, 2004, between Wilmington Trust Company, as Escrow Agent, and HSH Nordbank 
AG, New York Branch, as Depositary—incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K dated November 9, 2004 
(File No. 000-49728).

Escrow and Paying Agent Agreement (Class G-1), dated as of November 15, 2004, among Wilmington Trust Company, as Escrow Agent, 
Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, Inc., as Underwriters, 
Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through Trust 2004-2G-2-O, as 
Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by reference to Exhibit 4.11 to our Current Report on 
Form 8-K dated November 9, 2004 (File No. 000-49728).

Escrow and Paying Agent Agreement (Class G-2), dated as of November 15, 2004, among Wilmington Trust Company, as Escrow Agent, 
Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, Inc., as Underwriters, 
Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through Trust 2004-2G-2-O, as 
Pass Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by reference to Exhibit 4.12 to our Current Report on 
Form 8-K dated November 9, 2004 (File No. 000-49728).

Escrow and Paying Agent Agreement (Class C), dated as of November 15, 2004, among Wilmington Trust Company, as Escrow Agent, Morgan 
Stanley & Co. Incorporated, Citigroup Global Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities, Inc., as Underwriters, 
Wilmington Trust Company, as Pass Through Trustee for and on behalf of JetBlue Airways Corporation Pass Through Trust 2004-2C-O, as Pass 
Through Trustee, and Wilmington Trust Company, as Paying Agent—incorporated by reference to Exhibit 4.13 to our Current Report on Form 8-K 
dated November 9, 2004 (File No. 000-49728).

ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, and Wilmington 
Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-2G-1-O—incorporated by reference to 
Exhibit 4.14 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728) (4).

Schedule to the ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, and 
Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-2G-1-O—incorporated by 
reference to Exhibit 4.15 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Schedule to the ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, and 
Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-2G-2-O—incorporated by 
reference to Exhibit 4.16 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Schedule to the ISDA Master Agreement, dated as of November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, 
and Wilmington Trust Company, as Subordination Agent for the JetBlue Airways Corporation Pass Through Trust 2004-2C-O—incorporated by 
reference to Exhibit 4.17 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Class G-1 Above Cap Liquidity Facility Conﬁrmation, dated November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, 
and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.18 to our Current Report on Form 8-K dated 
November 9, 2004 (File No. 000-49728).

Class G-2 Above Cap Liquidity Facility Conﬁrmation, dated November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, 
and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.19 to our Current Report on Form 8-K dated 
November 9, 2004 (File No. 000-49728).

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

67

PART IV  
ITEM 16 Form 10-K Summary

4.8(s)

4.8(t)

4.8(u)

4.8(v)

4.8(w)

4.8(x)

4.8(y)

4.8(z)

4.9

4.9(b)

4.9(c)

4.9(d)

4.9(e)

4.9(f)

4.9(g)

4.9(h)

4.9(i)

4.10

4.10(a)

4.11

4.12

4.13

10.3**

10.3(a)**

10.3(b)**

Class C Above Cap Liquidity Facility Conﬁrmation, dated November 15, 2004, between Citibank, N.A., as Above Cap Liquidity Facility Provider, 
and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.20 to our Current Report on Form 8-K dated 
November 9, 2004 (File No. 000-49728).

Insurance and Indemnity Agreement, dated as of November 15, 2004, among MBIA Insurance Corporation, as Policy Provider, JetBlue Airways 
Corporation and Wilmington Trust Company, as Subordination Agent and Trustee—incorporated by reference to Exhibit 4.21 to our Current 
Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated November 15, 2004, bearing Policy Number 45243 issued to Wilmington 
Trust Company, as Subordination Agent for the Class G-1 Certiﬁcates—incorporated by reference to Exhibit 4.22 to our Current Report on 
Form 8-K dated November 9, 2004 (File No. 000-49728).

MBIA Insurance Corporation Financial Guaranty Insurance Policy, dated November 15, 2004, bearing Policy Number 45256 issued to Wilmington 
Trust Company, as Subordination Agent for the Class G-2 Certiﬁcates—incorporated by reference to Exhibit 4.23 to our Current Report on 
Form 8-K dated November 9, 2004 (File No. 000-49728).

Intercreditor Agreement, dated as of November 15, 2004, among Wilmington Trust Company, as Pass Through Trustee, Landesbank Baden-
Württemberg, as Primary Liquidity Provider, Citibank, N.A., as Above-Cap Liquidity Provider, MBIA Insurance Corporation, as Policy Provider, 
and Wilmington Trust Company, as Subordination Agent—incorporated by reference to Exhibit 4.24 to our Current Report on Form 8-K dated 
November 9, 2004 (File No. 000-49728).

Note Purchase Agreement, dated as of November 15, 2004, among JetBlue Airways Corporation, Wilmington Trust Company, in its separate 
capacities as Pass Through Trustee, as Subordination Agent, as Escrow Agent and as Paying Agent—incorporated by reference to Exhibit 4.25 to 
our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Form of Trust Indenture and Mortgage between JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, as Mortgagee—
incorporated by reference to Exhibit 4.26 to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728).

Form of Participation Agreement among JetBlue Airways Corporation, as Owner, and Wilmington Trust Company, in its separate capacities as 
Mortgagee, as Pass Through Trustee and as Subordination Agent—incorporated by reference to Exhibit 4.27 to our Current Report on Form 8-K 
dated November 9, 2004 (File No. 000-49728).

Indenture, dated as of March 16, 2005, between JetBlue Airways Corporation and Wilmington Trust Company, as Trustee, relating to 
the Company’s debt securities—incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated March 10, 2005 
(File No. 000-49728).

Second Supplemental Indenture to the Indenture ﬁled as Exhibit 4.9 to this Report, dated as of June 4, 2008, between JetBlue Airways 
Corporation and Wilmington Trust Company, as Trustee, relating to the Company’s 5.5% Convertible Debentures due 2038—incorporated by 
reference to Exhibit 4.1 to our Current Report on Form 8-K dated June 5, 2008 (File No. 000-49728).

Third Supplemental Indenture to the Indenture ﬁled as Exhibit 4.9 to this Report, dated as of June 4, 2008, between JetBlue Airways Corporation 
and Wilmington Trust Company, as Trustee, relating to the Company’s 5.5% Convertible Debentures due 2038—incorporated by reference to 
Exhibit 4.2 to our Current Report on Form 8-K dated June 5, 2008 (File No. 000-49728).

Form of Global Debenture-5.50% Convertible Debenture due 2038 (Series A) (included as part of Exhibit 4.1)-incorporated by reference to 
Exhibit 4.3 to Current Report on Form 8-K ﬁled on June 5, 2008 (File No. 000-49728).

Form of Global Debenture-5.50% Convertible Debenture due 2038 (Series B) (included as part of Exhibit 4.2)-incorporated by reference to 
Exhibit 4.4 to Current Report on Form 8-K ﬁled on June 5, 2008 (File No. 000-49728).

Fourth Supplemental Indenture dated as of June 9, 2009 between JetBlue Airways Corporation and Wilmington Trust Company, as Trustee-
incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K ﬁled on June 9, 2009 (File No. 000-49728).

Fifth Supplemental Indenture dated as of June 9, 2009 between JetBlue Airways Corporation and Wilmington Trust Company, as Trustee-
incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K ﬁled on June 9, 2009 (File No. 000-49728).

Form of Global Debenture-6.75% Convertible Debenture due 2039 (Series A)-incorporated by reference to Exhibit 4.3 to Current Report on 
Form 8-K ﬁled on June 9, 2009 (File No. 000-49728).

Form of Global Debenture-6.75% Convertible Debenture due 2039 (Series B)-incorporated by reference to Exhibit 4.3 to Current Report on 
Form 8-K ﬁled on June 9, 2009 (File No. 000-49728).

Stock Purchase Agreement, dated as of December 13, 2007, between JetBlue Airways Corporation and Deutsche Lufthansa AG—incorporated 
by reference to Exhibit 4.11 to our Current Report on Form 8-K dated December 13, 2007 (File No. 000-49728).

Amendment No. 1, dated as of January 22, 2008, to the Stock Purchase Agreement, dated as of December 13, 2007, between JetBlue Airways 
Corporation and Deutsche Lufthansa AG—incorporated by reference to Exhibit 4.11(a) to our Current Report on Form 8-K dated January 23, 
2008 (File No. 000-49728).

Registration Rights Agreement, dated as of January 22, 2008, by and between JetBlue Airways Corporation and Deutsche Lufthansa 
AG—incorporated by reference to Exhibit 4.12 to our Current Report on Form 8-K dated January 23, 2008 (File No. 000-49728).

Supplement Agreement, dated as of May 27, 2008, between JetBlue Airways Corporation and Deutsche Lufthansa AG—incorporated by 
reference to Exhibit 4.12 to our Current Report on Form 8-K dated May 28, 2008 (File No. 000-49728).

Registration Rights Agreement, dated as of April 5, 2012, among JetBlue Airways Corporation, Deutsche Lufthansa AG and Lufthansa Malta 
Blues LP—incorporated by reference to Exhibit 4.22 to our Current Report on Form 8-K ﬁled on April 5, 2012.

V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, including Side Letters No. 1 through No. 3 and 
No. 5 through No. 9—incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1, as amended (File No. 333-82576).

Side Letter No. 10 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated April 25,  
2002—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002 (File No. 000-49728).

Side Letter No. 11 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
February 10, 2003—incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K for the year ended December 31, 2002 
(File No. 000-49728).

68

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  
ITEM 16 Form 10-K Summary

10.3(c)**

10.3(d)**

10.3(e)**

10.3(f)**

10.3(g)**

10.3(h)**

10.3(i)**

10.3(j)**

10.3(k)**

10.3(l)**

10.3(m)**

10.3(n)**

10.3(o)**

10.3(p)**

10.3(q)**

10.3(r)**

10.3(s)**

10.3(t)**

10.3(u)**

10.3(v)**

10.3(w)**

10.3(x)**

10.3(y)**

10.3(z)**

10.3(aa)**

10.3(ab)**

10.3(ac)**

10.3(ad)**

Side Letter No. 12 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated March 24,  
2003—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 (File No. 000-49728).

Side Letter No. 13 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated April 23,  
2003—incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K dated June 30, 2003 (File No. 000-49728).

Side Letter No. 14 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
October 3, 2003—incorporated by reference to Exhibit 10.15 to our Annual Report on Form 10-K for the year ended December 31, 2003 
(File No. 000-49728).

Side Letter No. 15 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
November 10, 2003—incorporated by reference to Exhibit 10.16 to our Annual Report on Form 10-K for the year ended December 31, 2003 
(File No. 000-49728).

Side Letter No. 16 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated 
February 20, 2004—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 
(File No. 000-49728).

Side Letter No. 17 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated June 11,  
2004—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2004 (File No. 000-49728).

Side Letter No. 18 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, dated November 19, 
2004—incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K dated November 19, 2004 (File No. 000-49728).

Side Letter No. 19 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, dated July 21,  
2005—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 (File No. 000-49728).

Side Letter No. 20 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, dated July 6,  
2006—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (File No. 000-49728).

Side Letter No. 21 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, dated January 30, 
2007—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 000-49728).

Side Letter No. 22 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, dated March 27, 2007—
incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2007 (File No. 000-49728).

Side Letter No. 23 to V2500 General Terms of Sale between IAE International Aero Engines AG and New Air Corporation, dated 
December 18, 2007—incorporated by reference to Exhibit 10.3(n) to our Annual Report on Form 10-K, as amended, for the year ended 
December 31, 2007 (File No. 000-49728).

Side Letter No. 24 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated April 2, 2008—
incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-49728).

Side Letter No. 25 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated May 27, 2008—
incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (File No. 000-49728).

Side Letter No. 26 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated January 27, 2009—
incorporated by reference to Exhibit 10.3(q) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 (File No. 000-49728).

Side Letter No. 27 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated June 5, 2009–
incorporated by reference to Exhibit 10.3(r) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 (File No. 000-49728).

Side letter No. 28 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated August 31, 2010—
incorporated by reference to Exhibit 10.3(s) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 000-49728).

Side letter No. 29 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated March 14, 2011—
incorporated by reference to Exhibit 10.3(t) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011.

Side letter No. 30 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated August 17, 2011—
incorporated by reference to Exhibit 10.3(u) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011.

Side letter No. 31 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated September 27, 
2011—incorporated by reference to Exhibit 10.3(v) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2011.

Side letter No. 32 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated November 8, 2011—
incorporated by reference to Exhibit 10.3(w) to our Annual Report on Form 10-K for the year ended December 31, 2011.

Side letter No. 33 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated December 1, 2011—
incorporated by reference to Exhibit 10.3(x) to our Annual Report on Form 10-K for the year ended December 31, 2011.

Side letter No. 34 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated February 21, 2012—
incorporated by reference to Exhibit 10.3(y) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

Side letter No. 35 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated March 15, 2012—
incorporated by reference to Exhibit 10.3(z) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012.

Side letter No. 36 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated May 1, 2012—
incorporated by reference to Exhibit 10.3(aa) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

Side letter No. 37 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated November 9, 2012—
incorporated by reference to Exhibit 10.3(ab) to our Annual Report on Form 10-K for the year ended December 31, 2012.

Side letter No. 38 to V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated October 2, 2013—
incorporated by reference to Exhibit 10.3(ac) to our Annual Report on Form 10-K for the year ended December 31, 2014.

Amendment No.1 to the V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated December 15, 
2014—incorporated by reference to Exhibit 10.3(ad) to our Annual Report on Form 10-K for the year ended December 31, 2014.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

69

PART IV  
ITEM 16 Form 10-K Summary

10.3(ae)***

10.4**

10.5**

10.15

10.17**

10.17(a)**

10.17(b)**

10.17(c)**

10.17(d)**

10.17(e)**

10.17(f)**

10.17(g)**

10.17(h)**

10.17(i)**

10.17(j)**

10.17(k)**

10.17(l)**

10.17(m)**

10.17(n)**

10.17(o)**

10.17(p)**

10.17(q)**

10.17(r)**

Amendment No. 2 to the V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated December 4, 
2015—incorporated by reference to Exhibit 10.3(ae) to our Annual Report on Form 10-K for the year ended December 31, 2015.

Amendment and Restated Agreement between JetBlue Airways Corporation and LiveTV, LLC, dated as of December 17, 2001, including 
Amendments No. 1, No. 2 and 3—incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1, as amended 
(File No. 333-82576).

GDL Patent License Agreement between Harris Corporation and LiveTV, LLC, dated as of September 2, 2002—incorporated by reference to 
Exhibit 10.1 to our Quarterly Report on Form 10-Q for quarter ended September 30, 2002 (File No. 000-49728).

Form of Director/Ofﬁcer Indemniﬁcation Agreement—incorporated by reference to Exhibit 10.20 to the Registration Statement on Form S-1, as 
amended (File No. 333-82576) and referenced as Exhibit 10.19 in our Current Report on Form 8-K dated February 12, 2008 (File No. 000-49728).

Embraer-190 Purchase Agreement DCT-025/2003, dated June 9, 2003, between Embraer-Empresa Brasileira de Aeronautica S.A. and JetBlue 
Airways Corporation—incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K dated June 30, 2003 (File No. 000-49728).

Amendment No. 1 to Purchase Agreement DCT-025/2003, dated as of July 8, 2005, between Embraer-Empresa Brasileria de Aeronautica 
S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2005 (File No. 000-49728).

Amendment No. 2 to Purchase Agreement DCT-025/2003, dated as of January 5, 2006, between Embraer-Empresa Brasileria de Aeronautica 
S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.22(b) to our Annual Report on Form 10-K for the year ended 
December 31, 2005 (File No. 000-49728).

Amendment No. 3 to Purchase Agreement DCT-025/2003, dated as of December 4, 2006, between Embraer-Empresa Brasileria de Aeronautica 
S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.21(c) to our Annual Report on Form 10-K for the year ended 
December 31, 2006 (File No. 000-49728).

Amendment No. 4 to Purchase Agreement DCT-025/2003, dated as of October 17, 2007, between Embraer-Empresa Brasileria de Aeronautica 
S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(d) to our Annual Report on Form 10-K for the year ended 
December 31, 2007 (File No. 000-49728).

Amendment No. 5 to Purchase Agreement DCT-025/2003, dated as of July 18, 2008, between Embraer-Empresa Brasileira de Aeronautica 
S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2008 (File No. 000-49728).

Amendment No. 6 to Purchase Agreement DCT-025/2003, dated as of February 17, 2009, between Embraer-Empresa Brasileira de Aeronautica 
S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(f) to our Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2009 (File No. 000-49728).

Amendment No. 7 to Purchase Agreement DCT-025/2003, dated as of December 14, 2009, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(g) to our Annual Report on Form 10-K for the 
year ended December 31, 2009 (File No. 000-49728).

Amendment No. 8 to Purchase Agreement DCT-025/2003, dated as of March 11, 2010, between Embraer-Empresa Brasileira de Aeronautica 
S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(h) to our Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2010 (File No. 000-49728).

Amendment No. 9 to Purchase Agreement DCT-025/2003, dated as of May 24, 2010, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(i) to our Quarterly Report on Form 10-Q for the quarter ended 
June 30, 2010 (File No. 000-49728).

Amendment No. 10 to Purchase Agreement DCT-025/2003, dated as of September 10, 2010, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(j) to our Quarterly Report on Form 10-Q for the 
quarter ended September 30, 2010 (File No. 000-49728).

Amendment No. 11 to Purchase Agreement DCT-025/2003, dated as of October 20, 2011, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(k) to our Annual Report on Form 10-K for the 
year ended December 31, 2011.

Amendment No. 12 to Purchase Agreement DCT-025/2003, dated as of October 25, 2011, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(l) to our Annual Report on Form 10-K for the 
year ended December 31, 2011.

Amendment No. 13 to Purchase Agreement DCT-025/2003, dated as of July 20, 2012, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(m) to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2012.

Amendment No. 14 to Purchase Agreement DCT-025/2003, dated as of December 3, 2012, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(n) to our Annual Report on Form 10-K for the 
year ended December 31, 2012.

Amendment No. 15 to Purchase Agreement DCT-025/2003, dated as of December 19, 2012, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(m) to our Annual Report on Form 10-K for the 
year ended December 31, 2012.

Amendment No. 16 to Purchase Agreement DCT-025/2003, dated as of January 31, 2013 between Embraer S.A. (formerly known as 
Embraer - Empresa Brasileira de Aeronáutica S.A.) and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(p) to our 
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

Amendment 17 to Purchase Agreement DCT-025/2003, dated as of May 14, 2013 between Embraer S.A. (formerly known as  
Embraer—Empresa Brasileira de Aeronáutica S.A.) and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(q) to our 
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

Amendment 18 to Purchase Agreement DCT-025/2003, dated as of June 25, 2013 between Embraer S.A. (formerly known as  
Embraer—Empresa Brasileira de Aeronáutica S.A.) and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(r) to our  
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

70

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  
ITEM 16 Form 10-K Summary

10.17(s)**

10.17(t)**

10.18**

10.18(a)**

10.18(b)**

10.18(c)**

10.18(d)**

10.18(e)**

10.18(f)**

10.18(g)**

10.18(h)**

10.18(i)**

10.18(j)**

10.18(k)**

10.20

10.20(a)

10.21*

10.22*

10.22(a)*

10.30**

10.31*

10.31(a)*

10.31(b)*

Amendment No. 19 to Purchase Agreement DCT-025/2003, dated as of October 1, 2013 between Embraer S.A. (formerly known as Embraer—
Empresa Brasileira de Aeronautica S.A.) and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(s) to our Annual Report on 
Form 10-K for the year ended December 31, 2013.

Amendment No. 20 to Purchase Agreement DCT-025/2003, dated as of October 24, 2013 between Embraer S.A. (formerly known as Embraer - 
Empresa Brasileira de Aeronáutica S.A.) and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.17(t) to our Annual Report on 
Form 10-K for the year ended December 31, 2013.

Letter Agreement DCT-026/2003, dated June 9, 2003, between Embraer-Empresa Brasileira de Aeronautica S.A. and JetBlue Airways 
Corporation—incorporated by reference to Exhibit 10.5 to our Current Report on Form 8-K dated June 30, 2003 (File No. 000-49728).

Amendment No. 1, dated as of July 8, 2005, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2005 (File No. 000-49728).

Amendment No. 2, dated as of January 5, 2006, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.22(b) to our Annual Report on Form 10-K for the year ended 
December 31, 2006 (File No. 000-49728).

Amendment No. 3, dated as of December 4, 2006, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.22( c) to our Annual Report on Form 10-K for the 
year ended December 31, 2006 (File No. 000-49728).

Amendment No. 4, dated as of October 17, 2007, to Letter Agreement DCT-026/2003, between Embraer-Empresa Brasileria de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(d) to our Annual Report on Form 10-K for the year ended 
December 31, 2007 (File No. 000-49728).

Amendment No. 5 to Letter Agreement DCT-026/2003, dated as of March 6, 2008, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2008 (File No. 000-49728).

Amendment No. 6 to Letter Agreement DCT-026/2003, dated as of July 18, 2008, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended 
September 30, 2008 (File No. 000-49728).

Amendment No. 7 to Letter Agreement DCT-026/2003, dated as of February 17, 2009, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(g) to the Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2009 (File No. 000-49728).

Amendment No. 8 to Letter Agreement DCT-026/2003, dated as of December 14, 2009, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(h) to the Annual Report on Form 10-K for the 
year ended December 31, 2009 (File No. 000-49728).

Amendment No. 9 to Letter Agreement DCT-026/2003, dated as of March 11, 2010, between Embraer-Empresa Brasileira de Aeronautica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(i) to the Quarterly Report on Form 10-Q for the quarter ended 
March 31, 2010 (File No. 000-49728).

Amendment No. 10 to Letter Agreement DCT - 026/2003, dated as of November 18, 2010, between Embraer-Empresa Brasileira de 
Aeronautica S.A. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(j) to our Annual Report on Form 10-K for the 
year ended December 31, 2013.

Amendment No. 11 to Letter Agreement DCT-026/2003, dated as of October 24, 2013 between Embraer-Empresa Brasileira de Aeronáutica S.A. 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.18(k) to our Annual Report on Form 10-K for the year ended 
December 31, 2013.

Agreement of Lease (Port Authority Lease No. AYD-350), dated November 22, 2005, between The Port Authority of New York and New Jersey 
and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.30 to our Annual Report on Form 10-K for the year ended 
December 31, 2005 (File No. 000-49728).

Supplement No. 3 to Agreement of Lease, dated July 1, 2012 between The Port Authority of New York and New Jersey and JetBlue Airways 
Corporation—incorporated by reference to Exhibit 10.20(a) to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.

Amended and Restated 2002 Stock Incentive Plan, dated November 7, 2007, and form of award agreement—incorporated by reference to 
Exhibit 10.21 to the Annual Report for Form 10-K for the year ended December 31, 2008 (File No. 000-49728).

JetBlue Airways Corporation Executive Change in Control Severance Plan, dated as of June 28, 2007—incorporated by reference to Exhibit 10.1 
to our Current Report on Form 8-K, dated June 28, 2007 (File No. 000-49728).

JetBlue Airways Corporation Severance Plan, dated May 22, 2014—incorporated by reference to Exhibit 10.3 to our Current Report on 
Form 10-Q for the quarter ended June 30, 2014.

Sublease by and between JetBlue Airways Corporation and Metropolitan Life Insurance Company—incorporated by reference to Exhibit 10.30 to 
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 000-49728).

JetBlue Airways Corporation 2011 Incentive Compensation Plan—incorporated by reference to Exhibit 10.31(a) to our Quarterly Report on 
Form 10-Q for the quarter ended June 30, 2011.

Amended and Restated JetBlue Airways Corporation 2011 Incentive Compensation Plan—incorporated by reference to Exhibit 10.2 to our 
Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

JetBlue Airways Corporation 2011 Incentive Compensation Plan forms of award agreement—incorporated by reference to Exhibit 10.31(b) to our 
Quarterly Report on Form 10-Q for the quarter ended June 30, 2011.

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

71

PART IV  
ITEM 16 Form 10-K Summary

10.31(c)*

10.31(d)*

10.31(e)*

10.31(f)*

10.31(g)*

10.31(h)*

10.33**

10.33(a)**

10.33(b)**

10.33(c)**

10.33(d)**

10.33(e)**

10.33(f)**

10.34**

10.34(a)**

10.35*

10.36

10.36(a)

10.37

10.38**

10.38(a)**

10.39*

10.41*

10.42*

12.1

21.1

23

31.1

JetBlue Airways Corporation 2011 Incentive Compensation Plan form of Performance Share Unit Award Agreement—incorporated by reference to 
Exhibit 10.1 to our Current Report on Form 8-K ﬁled on April 12, 2013.

JetBlue Airways Corporation 2011 Incentive Compensation Plan forms of amended award agreement—incorporated by reference to 
Exhibit 10.31(d) to our Annual Report on Form 10-K for the year ended December 31, 2013.

Form of Performance Share Unit Award Agreement as amended—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q 
for the quarter ended September 30, 2014.

Amended and Restated JetBlue Airways Corporation 2011 Incentive Compensation Plan form of Restricted Stock Unit Award Agreement—
incorporated by reference to Exhibit 10.2(a) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

Amended and Restated JetBlue Airways Corporation 2011 Incentive Compensation Plan form of Deferred Stock Unit Award Agreement—
incorporated by reference to Exhibit 10.2(b) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

Amended and Restated JetBlue Airways Corporation 2011 Incentive Compensation Plan form of Performance Share Unit Agreement (2015)—
incorporated by reference to Exhibit 10.2(c) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

Airbus A320 Family Purchase Agreement, dated October 19, 2011, between Airbus S.A.S. and JetBlue Airways Corporation, including Letter 
Agreements 1-8, each dated as of same date—incorporated by reference to Exhibit 10.33 to our Annual Report on Form 10-K for the year ended 
December 31, 2011.

Letter Agreement 9 to Airbus A320 Family Purchase Agreement, dated December 19, 2012, between Airbus S.A.S. and JetBlue Airways 
Corporation—incorporated by reference to Exhibit 10.33(a) to our Annual Report on Form 10-K for the year ended December 31, 2012.

Amendment No. 1 to Airbus A320 Family Purchase Agreement, dated as of October 25, 2013, between Airbus S.A.S. and JetBlue Airways 
Corporation, including Amended and Restated Letter Agreements 1, 2, 3 and 6, each dated as of the same date—incorporated by reference to 
Exhibit 10.33(b) to our Annual Report on Form 10-K for the year ended December 31, 2013.

Amendment No. 2 to Airbus A320 Family Purchase Agreement, dated as of November 19, 2014, between Airbus S.A.S. and JetBlue Airways 
Corporation, including Amended and Restated Letter Agreements 1 and 3, each dated as of the same date—incorporated by reference to 
Exhibit 10.33(c) to our Annual Report on Form 10-K for the year ended December 31, 2014.

Amendment No. 3 to Airbus A320 Family Purchase Agreement, dated as of July 26, 2016, between Airbus S.A.S. and JetBlue Airways 
Corporation-incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.

Amendment No. 4 to Airbus A320 Family Purchase Agreement, dated as of July 26, 2016, between Airbus S.A.S. and JetBlue Airways 
Corporation, including Amended and Restated Letter Agreements 1, 2, 3 and 6 and Letter Agreement 9, each dated as of the same date-
incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.

Amendment No. 5 to Airbus A320 Family Purchase Agreement, dated as of August 9, 2016, between Airbus S.A.S. and JetBlue Airways 
Corporation-incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.

Letter Agreement dated as of July 23, 2015 between Airbus S.A.S. and JetBlue Airways Corporation—incorporated by reference to Exhibit 10.1 
to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2015.

Letter Agreement dated as of April 11, 2016 between Airbus S.A.S. and JetBlue Airways Corporation-incorporated by reference to Exhibit 10.1 to 
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.

Amended and Restated JetBlue Airways Corporation 2011 Crewmember Stock Purchase Plan—incorporated by reference to Exhibit 10.1 to our 
Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.

Credit and Guarantee Agreement dated as of April 23, 2013 among JetBlue Airways Corporation, as Borrower, The Subsidiaries of the Borrower 
Party Hereto, as Guarantors, The Lenders Party Hereto, and Citibank, N.A., as Administrative Agent—incorporated by reference to Exhibit 10.1 to 
our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

First Amendment to the Credit and Guaranty Agreement, dated as of November 3, 2014, among JetBlue Airways Corporation, as Borrower, 
the subsidiaries of JetBlue party thereto from time to time, as guarantors, the lenders party thereto from time to time and Citibank, N.A., as 
administrative agent—incorporated by reference to Exhibit 10.36(a) to our Annual Report on Form-10-K for the year ended December 31, 2014.

Slot and Gate Security Agreement dated as of April 23, 2013 between JetBlue Airways Corporation, as Grantor, and Citibank, N.A., as 
Administrative Agent—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

Engine Services Agreement between JetBlue Airways Corporation and GE Engine Services, LLC, dated as of May 1, 2013—incorporated by 
reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.

Amendment No. 1 to Engine Services Agreement between JetBlue Airways Corporation and GE Engine Services, LLC, dated as of December 23, 
2014—incorporated by reference to Exhibit 10.38(a) to our Annual Report on Form 10-K for the year ended December 31, 2014.

JetBlue Airways Corporation Retirement Plan, amended and restated effective as of January 1, 2014—incorporated by reference to Exhibit 10.39 
to our Annual Report on Form 10-K for the year ended December 31, 2013.

Employment Agreement, dated February 12, 2015, between JetBlue Airways Corporation and Robin Hayes—incorporated by reference to 
Exhibit 10.41 to our Annual Report on Form 10-K for the year ended December 31, 2014.

Senior Advisor Agreement, dated September 13, 2016, between JetBlue Airways Corporation and Mark D. Powers—incorporated by reference 
into Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2016.

Computation of Ratio of Earnings to Fixed Charges.

List of Subsidiaries.

Consent of Ernst & Young LLP.

Rule 13a-14(a)/15d-14(a) Certiﬁcation of the Chief Executive Ofﬁcer.

72

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  
ITEM 16 Form 10-K Summary

31.2

32

99.2

101.INS

101.SCH

101.DEF

101.CAL

101.LAB

Rule 13a-14(a)/15d-14(a) Certiﬁcation of the Chief Financial Ofﬁcer.

Section 1350 Certiﬁcations, furnished herewith.

Letter of Approval from the City of Long Beach Department of Public Works, dated May 22, 2001, approving City Council Resolution C-27843 
regarding Flight Slot Allocation at Long Beach Municipal Airport—incorporated by reference to Exhibit 99.2 to the Registration Statement on 
Form S-1, as amended (File No. 333-82576).

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Deﬁnition Linkbase Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Labels Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document
Compensatory plans in which the directors and executive officers of JetBlue participate.

101.PRE
* 
**  Pursuant to a Confidential Treatment Request under Rule 24b-2 filed with and approved by the SEC, portions of this exhibit have been omitted.
(1)  Documents substantially identical in all material respects to the document filed as Exhibit 4.4 to our Current Report on Form 8-K dated March 24, 2004 (which exhibit relates to formation 
of JetBlue Airways Pass Through Trust, Series 2004-1G-1-O and the issuance of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-1G-1-O, Pass Through 
Certificates) have been entered into with respect to formation of each of JetBlue Airways Pass Through Trusts, Series 2004-1G-2-O and Series 2004-1C-O and the issuance of each of 
Three-Month LIBOR plus 0.420% JetBlue Airways Pass Through Trust, Series 2004-1G-2-O and Three-Month LIBOR plus 4.250% JetBlue Airways Pass Through Trust, Series 2004-1C-O. 
Pursuant to Instruction 2 of Item 601 of Regulation S-K, Exhibit 99.1, incorporated by reference to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728), sets forth 
the terms by which such substantially identical documents differ from Exhibit 4.7(c).

(2)  Documents substantially identical in all material respects to the document filed as Exhibit 4.14 our Current Report on Form 8-K dated March 24, 2004 (which exhibit relates to an above-cap 
liquidity facility provided on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-1G-1-O) have been entered into with respect to the above-cap liquidity facilities provided 
on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-1G-2-O and the JetBlue Airways Corporation Pass Through Trust 2004-1C-O. Pursuant to Instruction 2 of Item 601 
of Regulation S-K, Exhibit 99.2, incorporated by reference to our Current Report on Form 8-K dated March 24, 2004 (File No. 000-49728), sets forth the terms by which such substantially 
identical documents differ from Exhibit 4.7(m).

(3)  Documents substantially identical in all material respects to the document filed as Exhibit 4.4 to our Current Report on Form 8-K dated November 9, 2004 (which exhibit relates to formation 
of JetBlue Airways Pass Through Trust, Series 2004-2G-1-O and the issuance of Three-Month LIBOR plus 0.375% JetBlue Airways Pass Through Trust, Series 2004-2G-1-O, Pass Through 
Certificates) have been entered into with respect to formation of each of the JetBlue Airways Pass Through Trusts, Series 2004-2G-2-O and Series 2004-2C-O and the issuance of each of 
Three-Month LIBOR plus 0.450% JetBlue Airways Pass Through Trust, Series 2004-2G-2-O and Three-Month LIBOR plus 3.100% JetBlue Airways Pass Through Trust, Series 2004-2C-O. 
Pursuant to Instruction 2 of Item 601 of Regulation S-K, Exhibit 99.1, incorporated by reference to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728), sets 
forth the terms by which such substantially identical documents differ from Exhibit 4.8(c).

(4)  Documents substantially identical in all material respects to the document filed as Exhibit 4.14 to our Current Report on Form 8-K dated November 9, 2004 (which exhibit relates to an 
above-cap liquidity facility provided on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-2G-1-O) have been entered into with respect to the above-cap liquidity facilities 
provided on behalf of the JetBlue Airways Corporation Pass Through Trust 2004-2G-2-O and the JetBlue Airways Corporation Pass Through Trust 2004-2C-O. Pursuant to Instruction 2 of 
Item 601 of Regulation S-K, Exhibit 99.2, incorporated by reference to our Current Report on Form 8-K dated November 9, 2004 (File No. 000-49728), sets forth the terms by which such 
substantially identical documents differ from Exhibit 4.8(m).

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

73

PART IV  
ITEM 16 Form 10-K Summary

Financial Statement Schedule

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of 
JetBlue Airways Corporation

We have audited the consolidated ﬁnancial statements of JetBlue Airways Corporation as of December 31, 2016 and 2015, and for each of the three 
years in the period ended December 31, 2016, and have issued our report thereon dated February 17, 2017 (included elsewhere in this Annual Report 
on Form 10-K). Our audits also included the ﬁnancial statement schedule listed in Item 15(2) of this Annual Report on Form 10-K. This schedule is the 
responsibility of the Company’s management. Our responsibility is to express an opinion on this schedule based on our audits.

In our opinion, the ﬁnancial statement schedule referred to above, when considered in relation to the basic ﬁnancial statements taken as a whole, 
presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

New York, New York

February 17, 2017

74

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  
ITEM 16 Form 10-K Summary

JetBlue Airways Corporation

Schedule II—Valuation and Qualifying Accounts

(in millions)

Year Ended December 31,2016
Allowance for doubtful accounts
Allowance for obsolete inventory parts

TOTAL

Year Ended December 31, 2015
Allowance for doubtful accounts
Allowance for obsolete inventory parts

TOTAL

Year Ended December 31, 2014
Allowance for doubtful accounts
Allowance for obsolete inventory parts
Valuation allowance for deferred tax assets

TOTAL

(1)  Uncollectible accounts written off, net of recoveries.
(2) 
(3)  Attributable to recognition and write-off of deferred tax assets.

Inventory scrapped.

Balance at
beginning of 
period

Additions 
Charged to
Costs and 
Expenses

Deductions

Balance at end 
of period

$ 

$

$ 

$

$

$

$

6
10
16

6
8
14

6
6
20
32

$

$

$

$

—
2
2

4
2
6

3
2
—
5

$

$ 

$

$

1(1)
—(2)
1

4(1)
—(2)
4

3(1)
—(2)
20(3)
23

5
12
17

6
10
16

6
8
—
14

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

75

 
 
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
PART IV  
ITEM 16 Form 10-K Summary

EXHIBIT 12.1  Computation of Ratio of Earnings to Fixed Charges

(in millions, except ratios)
Earnings:

Income before income taxes(a)
Less: Capitalized interest
Add:
Fixed charges
Amortization of capitalized interest

Adjusted earnings
Fixed charges:

2016

2015

2014

2013

2012

Year Ended December 31,

$ 1,216
(8)

$ 1,097
(8)

201
4

232
4

$ 1,413

$ 1,325

107
4
90
201
7.03

$

123
5
104
232
5.71

$

$

$

623
(14)

237
4

850

142
6
89
237
3.59

$

$

$

$

279
(13)

255
3

524

154
8
93
255
2.05

$

$

$

$

209
(8)

270
2

473

167
9
94
270
1.75

Interest expense
Amortization of debt costs
Rent expense representative of interest

$

TOTAL FIXED CHARGES
RATIO OF EARNINGS TO FIXED CHARGES(a)
(a)  Excluding the $241 million gain on the sale of LiveTV in 2014 would result in a ratio of earnings to ﬁxed charges of 2.57.

$

$

$

EXHIBIT 23 

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1)  Registration Statement (Form S-8 No. 333-86444) pertaining to the JetBlue Airways Corporation 2002 Stock Incentive Plan and the JetBlue 

Airways Corporation Crewmember Stock Purchase Plan,

(2)  Registration Statement (Form S-8 No. 333-129238) pertaining to the JetBlue Airways Corporation 2002 Stock Incentive Plan and the JetBlue 

Airways Corporation Crewmember Stock Purchase Plan,

(3)  Registration Statement (Form S-8 No. 333-161565) pertaining to the JetBlue Airways Corporation 2002 Stock Incentive Plan and the JetBlue 

Airways Corporation Crewmember Stock Purchase Plan,

(4)  Registration Statement (Form S-8 No. 333-174947) pertaining to the JetBlue Airways Corporation 2011 Incentive Compensation Plan and the 

JetBlue Airways Corporation 2011 Crewmember Stock Purchase Plan,

(5)  Registration Statement (Form S-3 ASR No. 333-207768) of JetBlue Airways Corporation, and

(6)  Registration Statement (Form S-3 ASR No. 333-202143) of JetBlue Airways Corporation; and

(7)  Registration Statement (Form S-8 No. 333-207242) pertaining to the JetBlue Airways Corporation 2011 Incentive Compensation Plan and the 

JetBlue Airways Corporation 2011 Crewmember Stock Purchase Plan

of our reports dated February 17, 2017, with respect to the consolidated ﬁnancial statements of JetBlue Airways Corporation, the effectiveness of internal 
control over ﬁnancial reporting of JetBlue Airways Corporation and the ﬁnancial statement schedule of JetBlue Airways Corporation listed in Item 15(2) 
included in this Annual Report (Form 10-K) of JetBlue Airways Corporation for the year ended December 31, 2016.

/s/ Ernst & Young LLP

New York, New York

February 17, 2017

76

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART IV  
ITEM 16 Form 10-K Summary

EXHIBIT 31.1  Rule 13a-14(a)/15d-14(a) Certiﬁcation of the Chief Executive Ofﬁcer

I, Robin Hayes, certify that:

1. 

2. 

3. 

4. 

I have reviewed this Annual Report on Form 10-K of JetBlue Airways Corporation; 

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make 
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered 
by this report; 

Based on my knowledge, the ﬁnancial statements, and other ﬁnancial information included in this report, fairly present in all material respects the 
ﬁnancial condition, results of operations and cash ﬂows of the registrant as of, and for, the periods presented in this report; 

The registrant’s other certifying ofﬁcer and I are responsible for establishing and maintaining disclosure controls and procedures (as deﬁned in 
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over ﬁnancial reporting (as deﬁned in Exchange Act Rules 13a-15(f) and 15d-15(f)) 
for the registrant and have: 

a) 

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within 
those entities, particularly during the period in which this report is being prepared;

b)  designed such internal control over ﬁnancial reporting, or caused such internal control over ﬁnancial reporting to be designed under our 
supervision, to provide reasonable assurance regarding the reliability of ﬁnancial reporting and the preparation of ﬁnancial statements for 
external purposes in accordance with generally accepted accounting principles;

c) 

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the 
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over ﬁnancial reporting that occurred during the registrant’s most recent 
ﬁscal quarter (the registrant’s fourth ﬁscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially 
affect, the registrant’s internal control over ﬁnancial reporting; and

5. 

The registrant’s other certifying ofﬁcer and I have disclosed, based on our most recent evaluation of internal control over ﬁnancial reporting, to the 
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a) 

b) 

all signiﬁcant deﬁciencies and material weaknesses in the design or operation of internal control over ﬁnancial reporting which are reasonably 
likely to adversely affect the registrant’s ability to record, process, summarize and report ﬁnancial information; and

any fraud, whether or not material, that involves management or other employees who have a signiﬁcant role in the registrant’s internal control 
over ﬁnancial reporting.

Date: February 17, 2017

By:

/s/ ROBIN HAYES
Chief Executive Ofﬁcer

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

77

PART IV  
ITEM 16 Form 10-K Summary

EXHIBIT 31.2  Rule 13a-14(a)/15d-14(a) Certiﬁcation of the Chief Financial Ofﬁcer

I, James Leddy, certify that:

1. 

2. 

3. 

4. 

I have reviewed this Annual Report on Form 10-K of JetBlue Airways Corporation; 

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make 
the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered 
by this report; 

Based on my knowledge, the ﬁnancial statements, and other ﬁnancial information included in this report, fairly present in all material respects the 
ﬁnancial condition, results of operations and cash ﬂows of the registrant as of, and for, the periods presented in this report; 

The registrant’s other certifying ofﬁcer and I are responsible for establishing and maintaining disclosure controls and procedures (as deﬁned in 
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over ﬁnancial reporting (as deﬁned in Exchange Act Rules 13a-15(f) and 15d-15(f)) 
for the registrant and have: 

a) 

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within 
those entities, particularly during the period in which this report is being prepared;

b)  designed such internal control over ﬁnancial reporting, or caused such internal control over ﬁnancial reporting to be designed under our 
supervision, to provide reasonable assurance regarding the reliability of ﬁnancial reporting and the preparation of ﬁnancial statements for 
external purposes in accordance with generally accepted accounting principles;

c) 

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the 
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  disclosed in this report any change in the registrant’s internal control over ﬁnancial reporting that occurred during the registrant’s most recent 
ﬁscal quarter (the registrant’s fourth ﬁscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially 
affect, the registrant’s internal control over ﬁnancial reporting; and

5. 

The registrant’s other certifying ofﬁcer and I have disclosed, based on our most recent evaluation of internal control over ﬁnancial reporting, to the 
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): 

a) 

b) 

all signiﬁcant deﬁciencies and material weaknesses in the design or operation of internal control over ﬁnancial reporting which are reasonably 
likely to adversely affect the registrant’s ability to record, process, summarize and report ﬁnancial information; and

any fraud, whether or not material, that involves management or other employees who have a signiﬁcant role in the registrant’s internal control 
over ﬁnancial reporting.

Date: February 17, 2017

By:

/s/ JAMES LEDDY
Chief Financial Ofﬁcer

78

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

PART IV  
ITEM 16 Form 10-K Summary

EXHIBIT 32 

Section 1350 Certiﬁcations

In connection with the Annual Report of JetBlue Airways Corporation on Form 10-K for the year ended December 31, 2016, as ﬁled with the Securities 
and Exchange Commission on February 17, 2017 (the “Report”), the undersigned, in the capacities and on the dates indicated below, each hereby 
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report fully complies 
with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and the information contained in the 
Report fairly presents, in all material respects, the ﬁnancial condition and results of operations of JetBlue Airways Corporation. 

Date: February 17, 2017

Date: February 17, 2017

By:

By:

/s/ ROBIN HAYES
Chief Executive Ofﬁcer

/s/ JAMES LEDDY
Chief Financial Ofﬁcer

JETBLUE AIRWAYS CORPORATION - 2016 Annual Report

79

This page intentionally left blank.

SAFETY • CARING • INTEGRITY • PASSION • FUN