Jetblue Airways

Dear Fellow Shareholders:

JetBlue delivered solid full year results in 2017, and we made significant progress toward our goal of “superior 
margins,” which we define as achieving margins consistent with our low-cost peers. Thanks to the dedicated 
efforts of our outstanding 21,000-plus crewmembers, we demonstrated our ability to manage through the 
unprecedented challenges of two historic hurricanes and severe air traffic control delays, mitigating the impact 
and supporting our customers, crewmembers, and communities.

In 2017 we generated revenues of over $7.0 billion, up 5.8% year over year, and our pre-tax margin was 13.1%, 
surpassing the industry average for the second consecutive year. We now have one of the strongest balance 
sheets in the U.S. airline industry, evidenced by two ratings upgrades during 2017. In 2017 we repaid debt of 
$194 million and returned 6% of our average market capitalization to shareholders via share repurchases. Our 
strong balance sheet, the result of our disciplined financial management, provides the foundation to prudently 
invest for disciplined growth. 

Last year was a challenging year for all airlines stocks. A number of factors, including competitive pricing, and fuel 
and non-fuel costs, pressured industry margins and share prices. We are confident in the actions we are taking to 
address these challenges and further strengthen JetBlue, and we see the potential for tremendous value creation. 
Execution of our plan is enabling us to expand our margins and pursue a balanced capital allocation strategy, 
which ultimately will translate into value for all our stakeholders: customers and crewmembers and owners. 

Our North Star: Superior Margins 

Our first and most important commitment is to drive superior margins to create shareholder value. Since our 
2014 Investor Day we have actively and successfully executed a plan that produces revenue premiums to our 
low-cost competitors. During 2017 we made significant strides to meet our margin commitments by reducing 
our unit costs through our Structural Cost Program. This balanced emphasis on revenue and costs is essential to 
preserve the competitive advantages in the marketplace that will enable us to create value for our shareholders 
and keep customers coming back.

Last year we achieved $90 million of the $250-300 million expected in 2020 run rate savings. We successfully 
renegotiated engine maintenance and commercial agreements with business partners, lowering our cost 
base for years to come. We also invested in cutting-edge technology, ranging from tech ops planning tools, 
to customer service initiatives that make our crewmembers more efficient and productive. These tools and 
initiatives will empower our crewmembers to focus on delivering outstanding hospitality, a key differentiator of 
our value proposition. By the second half of 2018 we expect to see our non-fuel unit costs decrease for the 
first time in many years. 

To support our margin goals, we are also optimizing and modernizing our fleet. We kicked off our cabin restyling 
program for our A320s, which will increase their capacity by approximately 8%, in a capital-efficient manner. We also 
made great progress in our E190 fleet review to address incumbent maintenance costs, taking into consideration 
the advantages of a smaller aircraft to penetrate new markets. Our total fleet at year end comprised 130 A320s, 60 
E190s and 53 A321s, optimizing our efficiency and bringing an outstanding product and service to our customers. 

Building on Our Unique Network Advantage

Our point-to-point business model, our superior product, and the dedication of our amazing crewmembers 
differentiates us from our competitors, and builds the customer relevance in our focus cities that equips us to 
produce superior margins. Having six focus cities—including our three major markets of New York, Boston 
and Fort Lauderdale—also provides us with diversification that mitigates operational and competitive risks. 

Last year, we continued our disciplined growth to support our margin commitments. During the past five years, 
approximately 97% of our growth has been targeted to our six focus cities, and 92% has been in New York, 
Boston and Fort Lauderdale. We continue to see ample opportunities for profitable growth in Boston and Fort 
Lauderdale, where we are working towards 200 and 140 daily departures, respectively. We continue to add 
seats, frequencies and destinations to increase relevance to ‘visiting friends and relatives’ or ‘VFR’ customers, 
leisure and business customers.

Our franchise is built around thoughtfully executing and delivering the JetBlue experience to customers in our 
focus cities. Our growth in our co-branded credit card portfolio and in our ancillary revenues exceeding our 
expectations are all manifestations of customer relevance in our focus cities. Our capital investments, including 
our comprehensive fleet review, commercial plans and investments in technology, are all targeted at strengthening 
our relevance in our network.

Creating Value for our Customers and Shareholders

Our high-value geography allows us to offer a superior product at a good value to our customers. In 2017 our 
ancillary revenue performance exceeded our expectations, as we reached a per customer annual growth rate 
of 8%. Our ancillary portfolio today comprises Fare Options, our Even More products and our co-branded 
JetBlue Card. We see immense opportunities to leverage the power of our brand by enabling our customers to 
buy high-margin, non-air travel products from us rather than third parties. This year we created JetBlue Travel 
Products to drive the next leg of high margin ancillary revenue growth, which includes our JetBlue Vacations 
brand, with a limited investment. This separate organization will develop and exploit the untapped potential of 
the non-air and ancillary travel ribbon. 

We have a number of exciting projects underway that will add to our current value proposition, improve the 
customer experience and support our efforts to continue to increase margins. One of them is a multi-year 
digital transformation effort, including self-service tools that integrate technology in all aspects of travel and 
improve the customer experience as we reduce costs. We have revamped our booking platform, focusing on 
driving customers to www.jetblue.com. This effort will allow us to better merchandise our ancillary offerings, 
drive structural efficiencies and lower our distribution costs. 

And of course, last year we continued to expand our Mint cabin in our markets, showcasing the outstanding 
service delivered by our inflight crewmembers. We’ve had phenomenal success with Mint, which drove revenue 
and margin expansion in our transcontinental flying as we converted routes and added new aircraft. By year-
end we had 32 A321s in Mint configuration, more than surpassing our forecast when we originally envisioned 
this award-winning product. Our Mint aircraft complements our fleet in All-Core configuration, which is also 
highly-margin accretive and allows us to offer competitive fares in mature markets. 

Managing Operational Challenges

Operating in a high-value geography comes with the reality of complex air space and volatile weather. Despite 
the challenging operating environment last year, we continued to deliver great service, and are proud of our 
key contribution to the recovery efforts in Puerto Rico and the Caribbean. 

To mitigate the reality of delays and air traffic congestion in the Northeast, since last summer we have made 
schedule adjustments and operational investments, aiming to improve on-time performance and protect our 
margins in peak travel periods. We are working actively with the FAA and continue to be a strong supporter of 
air traffic control reform as a long-term solution to infrastructure and staffing challenges. 

In the Caribbean we have built relevance around a solid leisure and VFR franchise. Last year hurricanes Irma 
and Maria brought hardships to our crewmembers and customers and added complexities to our operation. 
We successfully demonstrated our ability to manage through the hurricanes and quickly adjust our business 
by redeploying leisure flying in our network. Our 100x35JetBlue initiative was key to help our crewmembers 
and the broader island community rebound and rebuild stronger than before.

Delivering Value into 2018

We could not be more excited about our future. We are better positioned than ever to provide a differentiated 
product to our customers. The focus and energy of our crewmembers to rise to any challenge and execute our 
initiatives will continue to expand customer and shareholder value over the coming years. 

The combined impact of our revenue and cost initiatives will become increasingly apparent as we proceed 
through this year. We have put in place the key building blocks for value creation and 2018 will be a year of 
important progress as we continue to drive our plan. 

On behalf of our 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, 2017

 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

(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

•• if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

•• if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
•• 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.
•• 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).

•• 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.

•• whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging 
growth company. See the definitions of “large accelerated filer,” “accelerated filer’’, “smaller reporting company,” and “emerging growth 
company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 
(Do not check if a smaller  
reporting company)

Smaller reporting company 

Emerging growth company 

•• If an emerging growth company, indicate by check mark if the registrant has elected not to use the 
extended transition period for complying with any new or revised financial accounting standards provided 
pursuant to Section 13(a) of the Exchange Act. 

•• 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, 2017 was approximately 
$7.5 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, 2018 was 321,859,269 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Designated portions of the Registrant’s Proxy Statement for its 2018 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
2017 Operational Highlights  ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������6
JetBlue Experience����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������7
Operations and Cost Structure ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������9
Culture �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������12
Regulation ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������13
Where You Can Find Other Information ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������15
ITEM 1A.  Risk Factors ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������15
Risks Related to JetBlue ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������15
Risks Associated with the Airline Industry ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������19
ITEM 1B.  Unresolved Staff Comments  �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������20
Properties �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������20
ITEM 2. 
Legal Proceedings �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������21
ITEM 3. 
ITEM 4.  Mine Safety Disclosures ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������21

PART II. 

22

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

and Issuer Purchases of Equity Securities ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������22
Selected Financial Data �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������24
ITEM 6. 
ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations ����������26
Overview �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������26
Results of Operations ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������27
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 ���������������������������������������������������������������������������������������������������������������������������������������������������������36
ITEM 8. 
Report of Independent Registered Public Accounting Firm�������������������������������������������������������������������������������������������������������������������������36
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 - 2017 Annual Report   
ITEM 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ���������59
ITEM 9A.  Controls and Procedures �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������59
ITEM 9B.  Other Information ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������59

PART III. 

60

ITEM 10.  Directors, Executive Officers and Corporate Governance ����������������������������������������������������������������������������������������������������������������������60
ITEM 11.  Executive Compensation�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������61
ITEM 12.  Security Ownership of Certain Beneficial Owners and Management  

and Related Stockholder Matters ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������61
ITEM 13.  Certain Relationships and Related Transactions, and Director Independence �������������������������������������������������61
ITEM 14.  Principal Accounting Fees and Services ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������61

PART IV. 

62

ITEM 15.  Exhibits and Financial Statement Schedules ������������������������������������������������������������������������������������������������������������������������������������������������������������������62
ITEM 16.  Form 10-K Summary ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������62

03

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportThis page intentionally left blank.

  

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; 
our significant fixed obligations and substantial indebtedness; volatility in 
fuel prices, maintenance costs and interest rates; our reliance on high daily 
aircraft utilization; our ability to implement our growth strategy; our ability 
to attract and retain qualified personnel and maintain our culture as we 
grow; our reliance on a limited number of suppliers; 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 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.

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05

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report   
PART I

ITEM 1.  Business

Overview

General

JetBlue Airways Corporation, or JetBlue, is New York’s Hometown Airline™. 
In 2017, JetBlue carried over 40 million Customers with an average of 
1,000 daily flights and served 101 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 2017, we were 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 21,000 
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 delivering 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.

2017 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 2017. Our 2017 operational highlights include:

•• Product enhancements – Throughout 2017 we continued to invest in 
industry-leading products which we believe will continue to differentiate 
our offerings from the other airlines. 

•– During 2017, we continued to expand MintTM service, our premium 
product which includes 16 fully lie-flat seats, four of which are in 
suites with a privacy door, a first in the U.S. domestic market, by 
adding flights from John F. Kennedy International Airport, or JFK, 
to Las Vegas and San Diego, along with Boston to San Diego. We 
continually enhance our onboard MintTM experience through new 
offerings to our MintTM Customers such as new products like locally 
curated artisanal ice creams based in some of our MintTM BlueCities 
and a new exclusive chocolate bar from Raaka. During 2018, we 
expect to further expand our MintTM service with flights from JFK and 
Boston to Seattle.

06

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 
fuel costs, 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 restructured 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.

•– During 2017, we enhanced our free Fly-Fi™ in-flight internet service, 
available on our entire fleet, to set our experience apart from other 
airlines by becoming the first in the U.S. to offer gate-to-gate internet 
connectivity on every aircraft. Gate-to-gate Fly-Fi™ eliminates the 
need to wait until reaching cruising altitude to get connected. Instead, 
Customers can email, surf, stream, tweet and shop from the moment 
they board until they reach the arrival gate.

•• Fleet – In conjunction with our intention to expand our Mint™ experience, 
we amended our purchase agreement with Airbus in April 2017 which 
changed the timing of certain of our Airbus A321ceo and Airbus A321neo 
deliveries. Specifically, we deferred eight A321neo deliveries from 2019 
to 2023 and five from 2020 to 2024. We also moved up the delivery of 
three A321ceo Aircraft from 2019 to 2018, while deferring three A321neo 
deliveries to 2019. We retain flexibility to make further changes in our 
order book. We have the option to take certain A321neo deliveries with 
the long range configuration, the A321-LR.

During 2017, we took delivery of 16 Airbus A321 aircraft, 15 of which 
were equipped with our Mint™ cabin layout. 

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1 Business

During the second half of 2016, we introduced Airbus’ new innovative 
galley and lavatory module on our single cabin layout Airbus A321 with 
200 seats. We believe our cabin restyling program across our Airbus 
fleet will improve 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. Our reconfigured Airbus A320 
aircraft will have 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. The industry has experienced 
design failures with the space efficient lavatory module that we have 
installed on certain of our A321 aircraft and were planning to install on 
A320 aircraft. During the fourth quarter of 2017, we made significant 
progress in addressing certain quality issues with our business partners. 
As a result, our first Airbus A320 entered modifications for prototyping 
during the first quarter of 2018, coinciding with a scheduled heavy 
maintenance check for operational efficiency. We believe this multi-year 
restyling program will allow us to increase capacity in a capital-efficient 
and customer-focused way.

We are continuing to evaluate our E190 fleet as part of our fleet-wide 
review, and are making progress exploring our future fleet options with 
aircraft and engine manufacturers. Our options range from maintaining 
our current fleet of E190s to replacing it with alternative aircraft types. 
The commercial aircraft landscape has recently changed, requiring us 
to spend more time assessing our options. We examine all fleet and 
capital decisions through the lens of aiming to achieve superior margins 
and drive Shareholder value.

•• Network – We continued to expand and grow in our high-value geography. 
In 2017, we expanded our network with one new BlueCity, bringing our 
total as of the end of December 2017 to 101 BlueCities, and added 
several connect-the-dot routes. 

We began service in March from Boston to Atlanta, our 101st BlueCity. 
Atlanta became the 63rd nonstop destination from Boston. The addition 
of nonstop Atlanta service, which was the most requested destination 
by our Boston Customers, is part of our plan to reach 200 daily flights 
in the coming years. Customers in both cities benefit from convenient, 
five times daily service between Boston and Atlanta. In December 2017, 
we moved our LaGuardia operation from the airport’s Central Terminal B 
to our new home at the historic Marine Air Terminal. We’re New York’s 
Hometown Airline™ and we believe moving into the Marine Air Terminal 

further exemplifies JetBlue’s leadership in our largest focus city. The move 
to the Marine Air Terminal will also enhance the Customer experience 
at LaGuardia by allowing Customers to avoid the congestion and traffic 
associated with the Central Terminal – a particularly significant benefit for 
Customers traveling on our popular LaGuardia-Boston route.

In May 2018, we plan to begin three daily roundtrip services from Boston 
to Minneapolis, making Minneapolis our 102nd BlueCity, and the 65th 
nonstop destination from Boston.

•• Customer Service – JetBlue and our Crewmembers were recognized 

in 2017 for industry leading customer service.

JetBlue received the top score on the American Customer Satisfaction 
Index (ACSI) among airlines. Our score of 82 was the highest for any 
domestic airline. Additionally, Airline Ratings awarded us 7 out of 7 stars 
for safety, and 5 out of 5 stars for our product offerings.

•• Our Crewmembers – During 2017, our Crewmembers recognized 
JetBlue as one of America’s “Best Employers” by Forbes. JetBlue ranked 
#12 through a survey that asked individuals how likely they would be 
to recommend their employer to someone else. We are proud that for 
a sixth year we have 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.”

Effective January 1, 2017, profit sharing eligible Crewmembers received 
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. Under the modified profit sharing plan, non-management 
Crewmembers are 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 on amounts 
above an 18% pre-tax margin.

We believe the recent U.S. tax reform changes will be positive for our 
company, and provide JetBlue with the opportunity to pass on the benefit 
to our Crewmembers, Customers and Shareholders. With tax reform in 
mind, we announced a $1,000 bonus for every Crewmember employed 
as of December 31, 2017.

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 
an itinerary to arrival at the 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.

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 different 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.

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 with 
a reason 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.

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 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 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. Customers can 
purchase tickets under our Fare Options pricing model, at one of three 

Our self-service initiative in select BlueCities 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 airport lobby. While all Customers are encouraged to 

07

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1 Business

use the kiosks, our new lobby layout allows them to choose the check-in 
experience they prefer. Customers who choose to use our kiosk receive 
a virtually queue-less experience. 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 in the travel ribbon.

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. Our entire fleet is equipped 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. Customers also 
have access to 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. In 2017, we became the first in the U.S. 
to offer gate-to-gate internet connectivity on every aircraft. Gate-to-gate 
Fly-Fi™ eliminates the need to wait until reaching cruising altitude to get 
connected. Instead, Customers can email, surf, stream, tweet and shop 
from the moment they board until they reach the arrival gate.

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 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. As part 
of our cabin restyling program we expect to increase the seat density on 
our Airbus A320 fleet. Our reconfiguring of our Airbus A320 aircraft will 
result in 162 seats. Regarding our cabin restyling program, the industry 
has experienced design failures with the space efficient lavatories that we 
have installed on certain of our A321s, and are planning to install on the 
A320s. During the fourth quarter of 2017, we made significant progress in 
addressing certain quality issues with our business partners. As a result, 
our first Airbus A320 entered modifications for prototyping during the first 

quarter of 2018, coinciding with a scheduled heavy maintenance check for 
operational efficiency. We believe this multi-year restyling program will allow 
us to increase capacity in a capital-efficient and customer-focused way.

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. 
In 2018, we created a standalone wholly-owned subsidiary, JetBlue Travel 
Products, LLC that will absorb the JetBlue® Vacations business.

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 2017, we completed 97.3% 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 2017, over 92% of our Customers flew on nonstop 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 2017.

As of December 31, 2017, our network served 101 BlueCities in 30 states, 
the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin 
Islands, and 21 countries in the Caribbean and Latin America. 

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:

2015
Capacity Distribution
29.2%
Florida
28.5
Transcontinental
30.2
Caribbean & Latin America(1)
5.7
East
3.8
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 

2017
30.1%
28.6
28.3
6.4
3.8
2.8
100.0%

2016
29.1%
28.8
30.1
5.4
4.1
2.5
100.0%

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

08

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1 Business

During the past decade we invested in our network, which had been 
dominated by the New York metropolitan 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. We believe 
our increased focus on Boston and Fort Lauderdale-Hollywood makes 
our ASMs more balanced and the overall network is stronger.

In 2018, we anticipate further expanding our network and have previously 
announced service to the following new destination:

Destination
Minneapolis, MN

Service Scheduled to Commence
May 3, 2018

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, 2017, 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 2017, we entered into one new 
code-sharing agreement. Code-sharing is a practice by which one airline 
places its name and flight number on flights operated by another airline. 
In 2018, we expect to continue to seek additional strategic opportunities 
through new commercial partners as well as assess ways to deepen 
existing 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. We believe 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.

Operations and Cost Structure

Our participation in global distribution systems, or GDS, supports our 
profitable growth, particularly in the business market. We find business 
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 2 million TrueBlue® one-way redemption awards were 
flown during 2017, representing approximately 5% 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. 
Our current co-branded credit card partnership with Barclaycard® on 
the MasterCard® network exceeded expectations for conversion rates 
and has exceeded our expectations for 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. In 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. 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.

09

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1 Business

During 2016 we introduced an initiative to reduce our structural cost with 
the goal of saving $250 to $300 million by 2020. The program aims to 
cover all cost categories 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. In 2017, we made significant 
progress in the initial stages of achieving this target and have already secured 
approximately $90 million of the goal. In order to minimize distribution 
costs, we have been proactively reducing the number of online travel 
agencies that sell our tickets. This is the first phase of a broader strategy 
to drive our most price-sensitive Customers towards direct distribution, 
our lowest cost and best merchandise channel.

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 nonstop 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.

•• New York metropolitan area – We are New York’s Hometown AirlineTM. 
The majority of our flights originate in the New York metropolitan area, 
the nation’s largest travel market. JFK is New York’s largest airport, and 
we are the second largest airline at JFK as measured by domestic seats. 
Our 2017 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 the Airbus A321 aircraft, as well as continuing 
to optimize routes based upon load factor and costs. We operate from 
Terminal 5, or T5, which includes an international arrivals facility within 
our current T5 footprint. We believe T5 enables 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. In December, we moved our operation at 
LaGuardia from the Central Terminal to the historic Marine Air Terminal, 
also known as Terminal A bringing our Customers greater convenience 
and an improved ground experience while the Central Terminal undergoes 
reconstruction. We also added year-round Mint™ service from New York 
to Las Vegas and San Diego this year.

•• Boston – We are the largest carrier in terms of flights and capacity at 
Boston’s Logan International Airport. By the end of 2017 we flew to 
63 nonstop destinations from Boston and our operations accounted for 
more than 27% of all seats offered in Boston. 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 August 2017, 

10

we announced nonstop service will be offered to Syracuse, NY, in January 
2018. In October 2017, we announced nonstop service to be offered 
to Minneapolis in the second quarter of 2018. 

With the success of our existing Mint™ routes, we announced additional 
Boston Mint™ service to San Francisco, which began in the third quarter 
of 2017, to San Diego, which began in the fourth quarter of 2017, and 
seasonal Mint™ service to St. Maarten, which began in the fourth 
quarter of 2017.

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. We lease 23 gates, and 
completed installation of self-service kiosks in Boston in early 2017.

•• Caribbean and Latin America – At the end of 2017 we had 38 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 
nonstop destinations than any other carrier. We are also the largest airline 
in the Dominican Republic, serving five airports. While the Caribbean and 
Latin American region is a growing part of our network, operating in this 
region can present challenges, including working with less developed 
airport infrastructure, political instability and vulnerability to corruption. 
The second half of 2017 brought extraordinary weather conditions due 
to several strong hurricanes. We believe full recovery in Puerto Rico in 
the wake of Hurricane Maria will take many months. As the largest airline 
in the Commonwealth, we are working closely with the authorities and 
the community to support short-term needs and help in the long-term 
recovery. In September 2017, we launched a companywide initiative, 
100x35JetBlue, including daily relief flights, transportation of essential 
items and fund raising initiatives. We plan to continue our efforts and 
commitment to providing support during 2018. 

•• Fort Lauderdale-Hollywood – We are the largest carrier at Fort 
Lauderdale-Hollywood International Airport, or Fort Lauderdale-Hollywood, 
with approximately 25% of all seats offered in 2017. We expect Fort 
Lauderdale-Hollywood to continue to be our fastest growing focus 
city. 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, we believe Fort Lauderdale-Hollywood 
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 2017, we launched our Mint™ 
service from Fort Lauderdale to Los Angeles and San Francisco, and we 
launched nonstop service to Salt Lake City. The new route continues to 
grow our presence in Fort Lauderdale where we’re the largest airline. Salt 
Lake City will become the 56th nonstop destination from Fort Lauderdale. 
We expect to add new service to Atlanta in March of 2018.

•• Orlando – We are the third largest carrier in terms of capacity at Orlando 
International Airport, or Orlando, with 13% of all seats offered in 2017. 
Orlando is JetBlue’s fourth largest focus city with 30 nonstop 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. 

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1 Business

•• 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 80% 
of all seats offered in 2017 operated by JetBlue. We 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, in 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 service, Mint™, from 
LAX, which continued to grow during 2017. We currently offer up to eleven 
daily round trips between JFK and LAX and up to four daily round trips 
between Boston and LAX. While international service is not possible at 
Long Beach due to Federal regulations, we remain committed to Long 
Beach and to growing across California. We are now operating more 
flights than we ever have in our 15-year history at Long Beach and 
we continue to grow our LAX operation with the expansion of Mint™. 
Elsewhere in the region, we serve Burbank and are now on the waiting 
list for slots at John Wayne Airport in Orange County.

Fleet Structure

We currently operate Airbus A321, Airbus A320 and Embraer E190 aircraft 
types. In 2017, our fleet had an average age of 9.2 years and operated an 
average of 11.7 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.

Our comprehensive fleet review continues as we explore all options. 
Regarding our cabin restyling program, the industry experienced design 
failures with the space efficient lavatories that we have installed on our 
A321s, and are planning to install on the A320s. During the fourth quarter 
of 2017, we made significant progress in addressing certain quality issues 
with our business partners. As a result, our first Airbus A320 entered 
modifications for prototyping during the first quarter of 2018, coinciding 
with a scheduled heavy maintenance check for operational efficiency. We 
believe this multi-year restyling program will allow us to increase capacity 
in a capital-efficient and customer-focused way.

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. As part of NextGen, our aircraft will also be 
outfitted with the following:

•• Satellite-based Communications: We are putting satellite-based voice 
and data communications (SATCOM) on our Airbus fleet. Every aircraft 
will be assigned a unique phone number, similar to a cell network. This 
will give us positive contact with aircraft anywhere in the world.

•• Data Comm: Data Comm makes departures more efficient by dramatically 
speeding up the process of aircraft pilots obtaining clearance from air 
traffic controllers. With Data Comm, controllers can simply push clearance 
details to the aircraft and dispatcher, which the pilot can confirm and 
automatically input into the flight computer with the push of a button. 
We recently received approval to equip our entire Airbus fleet with Data 
Comm. Data Comm is currently installed on 35 of our Airbus A321 
aircraft and will be equipped on all future deliveries.

In addition, we also plan to upgrade our entire fleet to the latest version of 
the Traffic Collision & Avoidance System (TCAS), a critical safety system 
that reduces the chance of a mid-air collision.

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, or 
“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 complete 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 an 
agreement with Lufthansa Technik AG for the repair, overhaul, modification 
and logistics of our Airbus aircraft engines and certain Airbus components. 
We also have a maintenance agreement with GE Engine Services, LLC 
for our Embraer E190 aircraft engines. 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 facilities.

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.

2017
792
$ 1,363
1.72
$
22.7%

2016
760
$ 1,074
1.41
$
20.2%

2015
700
$ 1,348
1.93
$
25.9%

11

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1 Business

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 on financing activities to fund much of our growth. Starting in 2007, 
our growth has largely been funded through internally generated cash from 
operations. Since 2014, while we have invested approximately $4.1 billion 
in capital assets, we have also generated approximately $5.6 billion in 
cash from operations, resulting in approximately $1.5 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 2014, we 
have also reduced our total debt balance by nearly $1 billion.

JetBlue Technology Ventures

JetBlue has a new wholly-owned subsidiary, JetBlue Technology Ventures, 
L.L.C., or JTV, that incubates, invests in and partners with early stage 
startups at the intersection of technology, travel and hospitality.

JetBlue Travel Products

In 2018, we launched JBTP, LLC, or JetBlue Travel Products, which includes 
our JetBlue® Vacations brand and we plan to introduce a new booking 
flow on our website to better merchandise our existing travel products.

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 
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. The hotel is scheduled to open in early 2019. 
It will be the first hotel on airport property at JFK since 2009. The only 
other hotels near the airport are budget accommodations a short drive 
away by shuttle bus or taxi.

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. In 2016, we launched Gateway Select, 
a program for prospective pilots to join us for a rigorous, approximately 
four-year 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 

12

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. We believe these agreements provide JetBlue and Crewmembers 
flexibility and allow us to react to Crewmember needs more efficiently than 
collective bargaining agreements.

In December 2017, The Transport Workers Union of America (TWU) filed 
for an election, the next step in its long-running effort to unionize our 
Inflight Crewmembers. We continue to monitor this process as it affects 
our Crewmembers. Our Inflight Crewmembers have an important choice 
to make and our focus remains on keeping our culture and values intact.

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 
interests of our workgroups and help us run our business in a productive 
and efficient manner. 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 a 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 

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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 Crewmembers for the year 
ended December 31, 2017 consisted of 3,211 pilots, 4,251 inflight (whom 
other airlines may refer to as flight attendants), 4,512 airport operations 
personnel, 585 technicians (whom other airlines may refer to as mechanics), 
1,430 reservation agents, and 3,129 management and other personnel. 
For the year ended December 31, 2017, we employed an average of 
14,870 full-time and 5,108 part-time Crewmembers.

Crewmember Programs

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

•• Crewmember Resource Groups (CRGs) – These are groups formed 
by and consisting of Crewmembers 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 2017, we had four CRGs in place: JetPride, Women in Flight, 
Vets in Blue, and BlueConexion. In 2018, we welcome the JetBlue African 
Diaspora Experience (JADE), our fifth CRG.

•• JetBlue Crewmember Crisis Fund (JCCF) – This organization, originally 
formed in 2002, is 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. During 2017 we witnessed several unprecedented weather 
challenges including various hurricanes. JCCF helped provide over  
$2 million in relief to Crewmembers impacted by Hurricanes Harvey, 
Irma and Maria. The assistance process is confidential with only the fund 
administrator and coordinator knowing the identity of the Crewmembers 
in need.

•• 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. In 
November 2017 we celebrated the graduation of 60 of our Crewmembers 
who took the initiative and successfully completed their undergraduate 
college degrees. This reemphasizes our continuous effort to help provide 
assistance to our most valued asset, our people.

•• 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 2017, we saw more than 100,000 Lift awards.

Regulation

PART I  
ITEM 1 Business

Community Programs

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

•• 100x35JetBlue – As the airline with more service than any other carrier in 
Puerto Rico and nearly 500 local Crewmembers, we take our commitment 
to the community very seriously. 100x35JetBlue, an initiative JetBlue 
launched following Hurricane Maria making landfall in the Caribbean, 
we supported our Crewmembers, Customers, and communities to 
meet urgent needs and ongoing rebuilding efforts after the devastating 
impact of Hurricane Maria. JetBlue’s support included helping replenish 
vegetation and the ecosystem, hosting free meal events, donating 
school supplies, partnering with community leaders and influencers to 
raise awareness and funds, and offering advertising space to promote 
Puerto Rican tourism.

•• 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!, which builds, opens and improves playgrounds to 
benefit millions of young children, and Soar with Reading, which works 
to get books into the hands of children who need them most including 
free book vending machines.

•• 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.

•• 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 USO 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 USO 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 USO Center.

•• 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 on the roof of T5. The 
T5 Farm aims to serve as an agricultural and educational resource for 
the community, as well as a mechanism to absorb rainwater and runoff, 
reducing the possibility of flooding in the adjacent areas. Produce from 
the T5 Farm is donated to local food pantries.

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:

tour package including airfare (such as 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.

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 

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 

13

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1 Business

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 September 11 Security Fee which is set by the TSA and 
is passed through to the Customer, is currently $5.60 per enplanement, 
regardless of the number of connecting flights and a round trip fee is 
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, or Slots. 
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 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. We 
started flying to Atlanta in the first half of 2017 and were not granted the 
agreed upon number of gates as originally promised, another common 
issue at certain airports.

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, in late 2017 we 

14

moved from Central Terminal B to the historic Marine Air Terminal A. The 
Marine Air Terminal has a beautiful historic design which we plan to honor 
while adding our own modern touches to create an airport experience in 
line with the award-winning service our Customers receive onboard. We 
expect out makeover of the Terminal to continue into 2018 and to include 
updated and additional concessions post-security, more seating, and 
technology upgrades. The Terminal is scheduled to feature an expanded 
check-in area with self-bag-tagging kiosks and a dedicated TSA Pre-Check 
lane with JetBlue as the main tenant, occupying four gates.

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. In 2017, we entered into an agreement with the 
Long Beach City Prosecutor which requires us to pay a $6,000 fine per 
violation. The payments resulting from curfew violations go to support 
the Long Beach Public Library Foundation. This local ordinance has not 
had, and we believe it will not have, a negative effect on our operations.

We report annually on environmental, social, governance (ESG) issues and 
our response to them uses the Sustainable Accounting Standards Board 
(SASB) framework. The report can be found on our Investor Relations 
website at http://blueir.investproductions.com

In 2017, JetBlue focused our sustainability efforts on three areas: Climate 
Leadership, Sustainable Operations, and Sustainable Tourism. Climate 
Leadership encompasses climate change related risk and greenhouse 
gases associated with the burning of jet fuel, our biggest environmental 
impact and regulatory exposure. Sustainable Operations encompasses 
implementation of operational change and new technologies to reduce 
our cost of natural resources associated with the operations. Sustainable 
Tourism encompasses commercial and environmental research to forecast 
future demand for tourism. more can be found on www.jetblue.com/green/

During 2016, we entered into a partnership to buy renewable jet fuel 
produced from plant derived oils. This marked the largest, long-term, 
commitment globally by any airline for a jet fuel based on fatty acids. Early 
engagement with a renewable jet fuel supply positions JetBlue to reduce 
costs associated with CO2 emissions.

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1A Risk Factors

Concern over climate change, including the impact of global warming, has 
led to significant U.S. and international legislative and regulatory efforts to 
limit GHG emissions, including our aircraft and diesel engine emissions. 
In October 2016, the International Civil Aviation Organization (“ICAO”) 
passed a resolution adopting the Carbon Offsetting and Reduction Scheme 
for International Aviation (“CORSIA”), which is a global, market-based 
emissions offset program to encourage carbon-neutral growth beyond 
2020. CORSIA is scheduled to take effect by 2021. ICAO continues to 
develop details regarding implementation, but we believe compliance with 
CORSIA will increase our operating costs.

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.

Where You Can Find Other Information

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.

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.

15

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1A Risk Factors

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.

As of December 31, 2017, our debt of $1.2 billion accounted for 21% 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, 2017, future minimum payments under 
noncancelable leases and other financing obligations were approximately 
$3.3 billion for 2018 through 2022 and an aggregate of $1.6 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, 2017, we had commitments of approximately  
$7.3 billion to purchase 119 additional aircraft, ten spare engines and 
various aircraft modifications through 2024, including estimated amounts for 
contractual price escalations. We may incur additional debt and other fixed 
obligations as we take delivery of new aircraft or finance unencumbered 
aircraft in our fleet 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:

•• 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;

•• divert substantial cash flow from our operations, execution of our 
commercial initiatives and expansion plans in order to service our fixed 
obligations;

•• require us to incur significantly more interest expense than we currently 
do if rates were to increase, since approximately 15% of our debt has 
floating interest rates; and

•• 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.

16

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 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, but 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 could 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 remain 
ongoing. If we are unable to reach agreement on the terms of a collective 
bargaining agreement, or we experience wide-spread Crewmember 

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1A Risk Factors

dissatisfaction, we could be subject to adverse actions. In December 2017, 
the Transport Workers Union of America (TWU) filed for an election, the 
next step in its long-running effort to unionize our Inflight workgroup. 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 and compliance, 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.

The second half of 2017 had unprecedented weather events, particularly in 
Florida and the Caribbean. Hurricanes Irma and Maria resulted in over 2,500 
canceled flights or 3% of departures. Following large weather events, it is 
common to see lingering demand impact similar to what we experienced 
in New York, following superstorm Sandy in 2012. In the Caribbean, we 
believe the full recovery in Puerto Rico, in the wake of Hurricane Maria, 
will take several more months.

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 

17

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1A Risk Factors

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.

In the current environment, there are numerous and evolving risks to 
cybersecurity and privacy, including criminal hackers, hactivists, state-
sponsored intrusions, industrial espionage, employee malfeasance and 
human or technological error. High-profile security breaches at other 
companies and in government agencies have increased in recent years, 
and security industry experts and government officials have warned about 
the risks of hackers and cyberattacks targeting businesses such as ours. 
Computer hackers and others routinely attempt to breach the security of 
technology products, services and systems, and to fraudulently induce 
employees, customers, or others to disclosure information or unwittingly 
provide access to systems or data. 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. The risk of cyberattacks to our Company 
also includes attempted breaches of contractors, business partners, 
vendors and other third parties. 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. 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.

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.

The Company is subject to increasing legislative, regulator and customer 
focus on privacy issues and data security. 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 

18

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.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. The Company will continue its efforts to meet its privacy and 
data security obligations; however, it is possible that certain new obligations 
may be difficult to meet and could increase the Company’s 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, 
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.

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportOur results of operations fluctuate due to seasonality, weather and 
other factors.

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

PART I  
ITEM 1A Risk 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.

Risks Associated with the Airline Industry

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 2024. 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.

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

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

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 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.

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.

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 

19

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART I  
ITEM 1B Unresolved Staff Comments

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 may be affected by global climate change or by legal, regulatory or 
market responses to such change.

Concern over climate change, including the impact of global warming, has 
led to significant U.S. and international legislative and regulatory efforts to 
limit greenhouse gas (“GHG”) emissions, including our aircraft emissions. 
In October 2016, the ICOA passed a resolution adopting the Carbon 
Offsetting and Reduction Scheme for International Aviation (“CORSIA”), 
which is a global, market-based emissions offset program to encourage 
carbon-neutral grown beyond 2020. CORISA is scheduled to take effect 
by 2021. ICAO continues to develop details regarding implementation, 
but we believe compliance with CORSIA will increase our operating costs.

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, 2017, we operated a fleet consisting of 53 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
114
49
30
193

Capital  
Leased
4
2
—
6

Operating 
Leased
12
2
30
44

Total
130
53
60
243

Average Age  
in Years
12.3
1.9
9.2
9.2

(1)  During 2017, we completed the buyout of three 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, 2017, our aircraft leases had an average remaining term of approximately 6 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. We have 74 owned aircraft 
subject to secured debt financing; 119 of our owned aircraft and 37 owned spare engines are unencumbered.

In July 2016, we 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. 

We amended our purchase agreement with Airbus in April 2017. The amendment changed the timing of several of our Airbus A321ceo and Airbus A321neo 
deliveries. We deferred eight A321neo deliveries from 2019 to 2023 and five from 2020 to 2024. We also moved up the delivery of three A321ceo aircraft from 
2019 to 2018, while deferring three A321neo deliveries to 2019. We retain flexibility to make further changes in our order book. We have the option to take 
certain A321neo deliveries with the long range configuration, the A321-LR.

20

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportAs of December 31, 2017, we had 119 aircraft on order scheduled for delivery through 2024. Our future aircraft delivery schedule is as follows:

PART I  
ITEM 4 Mine Safety Disclosures

Year
2018
2019
2020
2021
2022
2023
2024
TOTAL

Airbus 
A320neo
—
—
6
16
3
—
—
25

Airbus 
A321ceo
10
—
—
—
—
—
—
10

Airbus 
A321neo
—
13
7
4
17
14
5
60

Embraer 
190
—
—
10
7
7
—
—
24

Total
10
13
23
27
27
14
5
119

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:

•• 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. T5i, 
our expansion of T5 that we use as an international arrivals facility opened 
to Customers in November 2014. 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.

•• 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. We further amended our lease in December 2017, 
which allows us to gradually lease up to six additional gates. and related 
support spaces. As of December 31, 2017, we leased 25 gates in Boston. 

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. 

Other
We lease the following hangars and airport support facilities at our focus cities:

•• 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, including a 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.

•• Boston – We have a ground lease agreement which expires in 2022 for 
a building which includes an aircraft maintenance hangar and support 
space. We also have a lease for a facility to accommodate our ground 
support equipment maintenance.

•• Orlando – We have a ground lease agreement for a hanger which 
expires in 2035. 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 Crewmembers, as well as 
support training for our technical operations and airport Crewmembers. 
This facility is equipped with seven full flight simulators, ten 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.

21

JETBLUE AIRWAYS CORPORATION - 2017 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.

2017 Quarter Ended
March 31
June 30
September 30
December 31
2016 Quarter Ended
March 31
June 30
September 30
December 31

High

Low

$ 22.78
23.36
23.75
22.58

$ 23.37
21.33
18.71
22.79

$ 18.86
20.51
18.25
18.51

$ 19.34
15.15
15.76
16.93

As of January 31, 2018, there were approximately 433 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 JetBlue 
common stock. This authorization replaced our prior 2012 authorization. On 
December 7, 2016, the Board approved changes to our share repurchase 
program to increase the aggregate authorization to $500 million worth of 
JetBlue common stock, and extended the term of the program through 
December 31, 2019. The 2015 authorization was completed during the 
three months ended September 30, 2017 and no shares were repurchased 
during the three months ended December 2017.

On December 8, 2017, the Board of Directors approved a two year 
share repurchase authorization starting on January 1, 2018, of up to 
$750 million worth of JetBlue common stock. The authorization can be 
executed through 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 privately-negotiated accelerated stock 
repurchase transactions. We may adjust or change our share repurchase 
practices based on market conditions and other alternatives.

22

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 5 Market for Registrant’s Common Equity; Related Stockholder Matters and Issuer Purchases of Equity Securities

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, 2013 to December 31, 2017. 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 $

280

240

200

160

120

80

12/31/13

12/31/14

12/31/15

12/31/16

12/31/17

JetBlue Airways Corporation

S&P 500 Stock Index

NYSE Arca Airline Index

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

$

12/31/2013
100
100
100

$

12/31/2014
186
111
149

$

12/31/2015
265
111
125

$

12/31/2016
263
121
159

$

12/31/2017
262
145
167

23

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 6 Selected Financial Data

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.

(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 (benefit)(2)
NET INCOME
Earnings per common share:

Basic
Diluted(2)

2017

2016

2015

2014

2013

$ 7,015

$

6,632

$

6,416

$

5,817

$

5,441

1,363
1,887
397
446
100
267
622
933
6,015
1,000
(79)
921
(226)
$ 1,147

$
$

3.49
3.47

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

2.32
2.22

$

$
$

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

2.15
1.98

$

$
$

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

1.36
1.19

$

$
$

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

0.59
0.52

$

$
$

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) 
(2)  Our 2017 results include a $570 million tax benefit, or $1.72 of diluted earnings per share, from the remeasurement of our deferred taxes to reflect the impact of the enactment of the Tax 

14.3%
13.1%
6.23x
$ 1,398
(975)
(553)

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%.

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

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

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

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

$

$

$

$

Cuts and Jobs Act of 2017.

24

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 6 Selected Financial Data

(in millions)
Balance Sheet Data:
Cash and cash equivalents
Investment securities
Total assets(1)
Total long-term debt and capital leases
Common stockholders’ equity

$

2017

303
392
9,781
1,199
4,834

2017

$

2016

433
628
9,323
1,384
4,013

2016

$

2015

318
607
8,499
1,827
3,210

2015

$

2014

341
427
7,643
2,211
2,529

2014

$

2013

225
516
7,203
2,558
2,134

2013

30,463
35,836
42,824

40,038
47,240
56,007

35,101
41,711
49,258

32,078
37,813
44,994

38,263
45,619
53,620

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(2)
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(3)
(1)  Retrospective application to all prior periods as required under ASU 2015-17 Income Taxes, Balance Sheet Classification of Deferred Taxes. See Note 1 to the Consolidated Financial 

83.7%
11.9
$ 163.19
13.87
11.61
12.71
11.71
7.28
282,133
1,090
185.2
3.14
604
12,447

85.1%
12.0
$ 157.14
13.18
11.21
12.37
9.92
7.92
337,302
1,093
218.9
1.41
760
15,696

84.0%
11.8
$ 166.57
14.13
11.88
12.93
11.78
7.53
294,800
1,088
196.2
2.99
639
13,280

84.7%
11.9
$ 167.89
14.13
11.96
13.03
10.56
7.82
316,505
1,092
207.9
1.93
700
14,537

84.3%
11.7
$ 157.07
13.31
11.23
12.53
10.74
8.30
353,681
1,072
233.5
1.72
792
17,118

$

$

$

$

$

Statements for additional information.

(2)  Refer to our “Regulation G Reconciliation” section for more information on this non-GAAP measure.
(3)  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, 

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

Glossary of Airline terminology

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

 • Aircraft utilization – The average number of block hours operated per 

day per aircraft for the total fleet of aircraft.

 • Available seat miles – The number of seats available for passengers 

multiplied by the number of miles the seats are flown.

 • Average fare – The average one-way fare paid per flight segment by 

a revenue passenger.

 • 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.

 • Average stage length – The average number of miles flown per flight.

 • Load factor – The percentage of aircraft seating capacity actually utilized, 
calculated by dividing revenue passenger miles by available seat miles.

 • Operating expense per available seat mile – Operating expenses 

divided by available seat miles.

 • Operating expense per available seat mile, excluding fuel – Operating 
expenses, less aircraft fuel and other non-airline expenses, divided by 
available seat miles.

 • Operating revenue per available seat mile – Operating revenues 

divided by available seat miles.

 • Passenger revenue per available seat mile – Passenger revenue 

divided by available seat miles.

 • Revenue passengers – The total number of paying passengers flown 

on all flight segments.

 • Revenue passenger miles – The number of miles flown by revenue 

passengers.

 • Yield per passenger mile – The average amount one passenger pays 

to fly one mile.

25

JETBLUE AIRWAYS CORPORATION - 2017 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 2017, we experienced the persistent competitiveness of the airline industry. Even with these external factors, 2017 was one of the most profitable 
years in our history. We generated operating revenue growth of almost 5.8% year-over-year. We remain committed to striving to deliver a safe and 
reliable JetBlue Experience for our Customers and 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.

2017 Highlights

 • We generated over $7.0 billion in operating revenue, an increase of 
$383 million compared to 2016 due primarily to a 4.6% increase in 
revenue passengers.

 • Our earnings per diluted share were $3.47, including a benefit from tax 

reform of $570 million or $1.72.

 • We generated $1.4 billion in cash from operations. The significant 
amount of cash we generated provided the opportunity to pay cash for 
all 2017 aircraft deliveries, buy out three aircraft leases, reduce existing 
debt balances and execute share repurchases.

 • Operating expenses per available seat mile increased 8.2% to 10.74 
cents, primarily driven by an increase in aircraft fuel expenses. Excluding 
fuel and related taxes, as well as operating expenses related to our non-
airline operations, our cost per available seat mile increased 4.8% in 
2017. Effective January 1, 2017, non-management profit sharing eligible 
Crewmembers received 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. 

Company Initiatives

Balance Sheet

We ended the year with unrestricted cash, cash equivalents and short-term 
investments of $693 million and undrawn lines of credit of approximately 
$625 million. In June 2017, Moody’s Investor Service upgraded our debt 
rating to Ba1 from Ba3 with a stable outlook reflecting the strength of our 
financial position. In November 2017, Standard & Poor’s Rating Services 
upgraded our debt rating to BB from BB- with a stable outlook. At 
December 31, 2017, unrestricted cash, cash equivalents and short-term 
investments was approximately 10% of trailing twelve months revenue. We 
reduced our overall debt and capital lease obligations by $185 million. As 
a result, three aircraft became unencumbered. We increased the number 
of unencumbered aircraft in 2017 bringing total unencumbered aircraft 
to 119 and spare engines to 37 as of December 31, 2017. During 2017, 
we acquired approximately 18.7 million shares of our common stock for 
approximately $380 million under our share repurchase program.

Aircraft and Airport Infrastructure Investments

During 2017, we took delivery of 16 Airbus A321 aircraft, all of which were 
purchased with cash.

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. At December 31, 2017 twenty-five kiosks 
and thirty check-in counters were 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, mirroring 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 nine BlueCities in 2017: Boston, 
Newark, Atlanta, Long Beach, Los Angeles, Buffalo, Jacksonville, Orlando 
and La Guardia. These kiosks helped streamline the airport experience 
for our Customers and we plan to continue the improvements to other 
BlueCities in 2018.

Network

As part of our ongoing network initiatives and route optimization efforts, 
we continued to make schedule and frequency adjustments throughout 
2017. During 2017, we added Atlanta to our growing network. Due to the 
unprecedented weather in Puerto Rico and throughout the Caribbean, 
we temporarily redeployed inbound leisure flying to other destinations. 
We expect to return to a full operation by the end of 2018. We will also 
continue to watch booking trends closely and expect to adjust our plans 
as needed. We also added new routes between existing BlueCities. 

Outlook for 2018 

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. 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 plan to 
continue to strengthening the balance sheet.

We will adopt the requirements of ASU 2014-09, Revenue from Contracts 
with Customers topic of the Codification, as of January 1, 2018 utilizing the 
full retrospective method of transition. Please see Note 1 on the specific 
changes related to revenue recognition.

The Tax Cuts and Jobs Act of 2017, or The Act, was enacted on December 22, 
2017. The Act made significant changes to the Federal tax code, including 
a reduction in the Federal corporate statutory rate from 35% to 21%. 
The Act also made changes to the Federal taxation of foreign earnings, 
to the timing of recognition of certain revenue and expenses, and the 
deductibility of certain business expenses. During 2018, the Company will 
continue to gain a more thorough understanding of The Act and additional 
regulatory guidance that may be issued. As a result of The Act, we expect 
the reduction in the corporate tax rate will result in an effective annual tax 
rate for JetBlue between 24% to 26%. However, the actual tax rate could 
differ due to a number of factors.

For the full year 2018, we estimate our operating capacity will increase by 
approximately 6.5% to 8.5% over 2017 with the addition of 10 Airbus A321 
aircraft to our operating fleet. We are expecting our cost per available seat 
mile, excluding fuel and related taxes, and operating expenses related to 
other non-airline expenses, for 2018 to increase by between approximately 
(1.0)% to 1.0% over the level in 2017.

26

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Year 2017 compared to Year 2016

Overview

We reported net income of $1.1 billion, operating income of $1.0 billion 
and operating margin of 14.3% for the year ended December 31, 2017. 
This compares to net income of $759 million, operating income of  
$1,312 million and operating margin of 19.8% for the year ended 
December 31, 2016. Diluted earnings per share were $3.47 for 2017 
compared to $2.22 for the same period in 2016. This included a benefit 
from tax reform of $570 million or $1.72 per share. 

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

Approximately 75% 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 third quarter of 2017, we 
saw unprecedented weather challenges for JetBlue and the entire airline 
industry, with two large hurricanes impacting our network. We estimate 
that, due to the severe hurricane season, revenue was negatively impacted 
by approximately $110 million for the full year 2017. Revenue per available 
seat mile (RASM) was negatively impacted by approximately 0.3 points for 
the full year by the hurricanes. Operating income was negatively impacted 
by approximately $82 million.

$

$

2017
6,288
727
7,015

157.07
13.31
11.23
12.53
1,072
40,038
47,240
56,007

$

2016
6,013
619
6,632

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

84.3%

85.1%

Year-over-Year Change
%
4.6
17.3
5.8

$
275
108
383

(0.08)
0.13
0.02
0.16
(21)
1,775
1,621
2,387

—
1.0
0.1
1.3
(1.9)
4.6
3.6
4.5
(0.8) pts

Passenger revenue accounted for 89.6% of our total operating revenue 
for the year ended December 31, 2017. In addition to 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 28.7% of our passenger revenues 
in 2017. 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 2017, the increase in Passenger revenue was mainly attributable to a 
4.6% increase in revenue passengers. Our largest ancillary product remains 
the EvenMore™ Space seats, generating approximately $246 million in 
revenue, an increase of over 3% compared to 2016. 

The primary component of Other revenue is 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, onboard product sales, ground handling fees of other airlines 
and rental income.

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

2017
1,363
1,887
397
446
100
267
622
933
6,015

$

$

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

$

$

Year-over-Year Change
$
$ 289
189
40
53
(10)
8
59
67
$ 695

%
26.9
11.1
11.1
13.7
(9.0)
2.9
10.5
7.6
13.1

per ASM

2016 % Change
21.5
2.00
6.4
3.17
6.3
0.67
0.73
8.9
(12.9)
0.21
(1.5)
0.48
5.8
1.04
3.0
1.62
8.2
9.92

2017
2.43
3.37
0.71
0.80
0.18
0.48
1.11
1.66
10.74

27

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Aircraft Fuel and Related Taxes

Maintenance, Materials and Repairs

Aircraft fuel and related taxes represented 23% of our total operating 
expenses in 2017 compared to 20% in 2016. The average fuel price 
increased 21.8% in 2017 to $1.72 per gallon. This was coupled with 
an increase in our fuel consumption of approximately 32 million gallons. 
Additional fuel consumption was mainly due to our increase in capacity. 
Based on our expected fuel volume for 2018, a 10% per gallon increase 
in the cost of aircraft fuel would increase our annual fuel expense by 
approximately $170 million. 

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 2017 was 9.2 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 14.6 additional total operating aircraft 
in 2017 compared to 2016.

In 2017, we recorded fuel hedge gains of $15 million compared to  
$9 million in fuel hedge gains in 2016 which were recorded in Aircraft fuel 
and related taxes. We did not have any fuel hedging contracts outstanding 
as of December 31, 2017.

 In 2017, Maintenance, materials and repairs increased by $59 million, or 
10.5% compared to 2016, primarily driven by increased flight hours on 
our engine flight-hour based maintenance repair agreements and by the 
number of airframe heavy maintenance repairs.

Salaries, Wages and Benefits

Other Operating Expenses

Salaries, wages and benefits represent approximately 31% of our total 
operating expenses in 2017 compared to 32% in 2016. The increase 
in salaries, wages and benefits was primarily driven by an increase in 
our Crewmember headcount and an 8% raise for profit sharing eligible 
Crewmembers effective January 1, 2017 and a modified profit sharing plan. 

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, 
onboard supplies, shop and office supplies, bad debts, communication 
costs and taxes other than payroll and fuel taxes.

Our profit sharing is calculated as 10% of adjusted pre-tax income, 
reduced by Retirement Plus contributions and special items. Profit sharing 
decreased by $133 million in 2017 compared to 2016, primarily driven 
by our change in policy. During 2017, the average number of full-time 
equivalent Crewmembers increased by 9% and the average tenure of 
our Crewmembers was 6.6 years. 

Retirement Plus contributions, which equate to 5% of all of our eligible 
Crewmembers wages, increased by $13 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 
$3 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 2018. 

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 
75% of our operations center. Other rents primarily consist of rent for 
airports in our 101 BlueCities. Landing fees and other rents increased 
$40 million, or 11.1%, in 2017 primarily due to our increased departures.

Depreciation and Amortization

Depreciation and amortization primarily include depreciation for our owned 
and capital leased aircraft, engines, and in-flight entertainment systems. 
Depreciation and amortization increased $53 million, or 13.7%, primarily 
driven by a 6.7% increase in the average number of aircraft operating in 
2017 compared to the same period in 2016.

In 2017, Other operating expenses increased by $67 million, or 7.6%, 
compared to 2016, primarily due to an increase in airport services and 
passenger onboard supplies resulting from an increased number of 
passengers flown.

Income Taxes

Our effective tax rate was a benefit of 24.5% in 2017, compared to our 
effective tax rate of 37.6% in 2016. Our effective tax rate decreased 
primarily due to a one-time benefit of $570 million from the remeasurement 
of our deferred taxes to reflect the enactment of the Tax Cuts and Jobs 
Act of 2017.

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.

28

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

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
0.4 pts

Passenger revenue accounted for over 90.7% of our total operating 
revenues for the year ended December 31, 2016. In addition to 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 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 2016, the increase in Passenger revenue was mainly attributable to a 
9.0% increase in revenue passengers and a 6.4% decrease in average 
fare. Our largest ancillary product was EvenMore™ Space, 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, onboard 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 our Fare Options pricing structure 
compared to half a year during 2015. 

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

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

$

$

$
(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

2016
2.00
3.17
0.67
0.73
0.21
0.48
1.04
1.62
9.92

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

Aircraft Fuel and Related Taxes

Salaries, Wages and Benefits

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.

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 represented 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 Crewmember headcount. 

Our profit sharing was 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. 

29

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

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. 

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 centered in 2016. Other rents primarily consisted 
of rent for airports in our 100 BlueCities. Landing fees and other rents 
increased $15 million, or 4.3%, in 2016 primarily due to increased departures.

Depreciation and Amortization

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.

compared to our competitors. 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, 
onboard 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. 

Maintenance, Materials and Repairs

Income Taxes

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 was relatively young 

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. 

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, 2017, we had 119 unencumbered aircraft and 37 
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, 2017, we had unrestricted cash and cash equivalents 
of $303 million and short-term investments of $390 million. We believe 
our current level of unrestricted cash, cash equivalents and short-term 
investments of approximately 10% of trailing twelve months revenue, 
combined with our approximately $625 million in available lines of credit 
and portfolio of unencumbered assets, provides a strong liquidity position 
and the potential for higher returns on cash deployment. We believe we 
have taken several important steps during 2017 in solidifying our strong 
balance sheet and overall liquidity position. 

Our highlights for 2017 included:

 • Increased the number of unencumbered aircraft from 97 as of 
December 31, 2016, to 119 as of December 31, 2017. This was 
principally accomplished by paying cash for the purchase of 16 Airbus 
A321 aircraft, buying out the leases on three of our aircraft. Three of 
our Airbus A320 aircraft became unencumbered in 2017 as a result of 
regularly scheduled debt payments.

 • Our adjusted debt to capitalization ratio improved from 35% in 2016 

to 28% in 2017.

Analysis of Cash Flows

We had cash and cash equivalents of $303 million as of December 31, 
2017. This compares to $433 million and $318 million as of December 31, 

30

2016 and 2015, respectively. We held both short and long term investments 
in 2017, 2016 and 2015. Our short-term investments totaled $390 million 
as of December 31, 2017 compared to $538 million and $558 million as 
of December 31, 2016 and 2015, respectively. Our long-term investments 
totaled $2 million as of December 31, 2017 compared to $90 million and 
$49 million as of December 31, 2016 and 2015, respectively. 

Operating Activities

Cash flows provided by operating activities totaled approximately  
$1.4 billion in 2017 and $1.6 billion in each of 2016 and 2015. There was 
a $234 million decrease in cash flows from operating activities in 2017 
compared to 2016 which was primarily driven by a 21.8% increase in the 
price of fuel, partially offset by a 4.5% increase in capacity during 2017. The 
$34 million increase in cash flows from operations in 2016 compared to 
2015 was primarily a result of a 8.9% increase in capacity and a decrease 
of 26.9% in the price of fuel which both helped to improve operating cash 
flows. As of December 31, 2017, our unrestricted cash, cash equivalents 
and short-term investments as a percentage of trailing twelve months 
revenue was approximately 10%. We rely primarily on cash flows from 
operations to provide working capital for current and future operations.

Investing Activities  

During 2017, capital expenditures related to our purchase of flight equipment 
included $128 million for flight equipment deposits, $759 million for the 
purchase of 16 new Airbus A321 aircraft and the buyout of three aircraft 
leases, $61 million for spare part purchases, and $156 million for flight 
equipment work-in-progress. Other property and equipment capital 
expenditures also included ground equipment purchases and facilities 
improvements for $98 million. Investing activities also included the net 
purchase of $236 million in investment securities. 

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.

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

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, $110 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.

We currently anticipate 2018 capital expenditures to be between  
$900 million and $1.1 billion, including approximately $750 million and 
$900 million 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 2017 consisted of the scheduled repayment 
of $194 million relating to debt and capital lease obligations, as a 
result, three aircraft became unencumbered. In addition, we acquired  
$390 million in treasury shares of which $380 million related to our 
accelerated share repurchases during 2017. During this period, we realized 
$47 million in proceeds from the issuance of stock related to employee 
share-based compensation. 

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 this 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 this period, we 
realized $84 million in proceeds from the issuance of stock related to 
employee share-based compensation. During 2015, $68 million of our 
Series B 5.5% convertible debentures were converted by holders, as a 
result, we issued approximately 15 million shares of our common stock.

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, 
2017, we had not issued any securities under this registration statement. 
We may utilize this universal shelf registration statement, or a replacement 
filed with the SEC, 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 paid cash 
or financed our aircraft through either secured debt or lease financing. 
As of December 31, 2017, we operated a fleet of 243 aircraft which 
included 43 Airbus A321 aircraft and 76 Airbus A320 aircraft that were 
unencumbered. Of our remaining aircraft, 44 were under operating leases, 
six were financed under capital leases and 80 were financed by private 
and public secured debt. Additionally we have 37 unencumbered spare 
engines. Approximately 29% 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 10 Airbus A321 aircraft scheduled for delivery 
in 2018. 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 $1.2 billion as of December 31, 2017 
compared to a deficit of $656 million as of December 31, 2016 and a deficit 
of $902 million as of December 31, 2015. Working capital deficits can be 
customary in the airline industry since air traffic liability is classified as a 
current liability. Our working capital deficit increased $379 million in 2017 
primarily due to using cash and short-term investments on hand to cover 
the difference of our cash from operations and our capital expenditures 
and share repurchases. 

 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 based upon 
the London Interbank Offered Rate, or LIBOR, plus a margin. We did not 
borrow on this facility in 2017 or 2016 and the line was undrawn as of 
December 31, 2017.

In April 2017, we increased our Credit and Guaranty Agreement with 
Citibank, N.A. as the administrative agent to $425 million. The term of 
the Amended and Restated Facility runs through April 6, 2021. Borrowing 
under the Amended and Restated Facility bears interest at a variable rate 
equal to LIBOR, plus a margin. The Amended and Restated Facility is 
secured by Slots at JFK, LaGuardia, Reagan National and certain other 
assets. The Amended and Restated 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 2017 and 
2016, we did not borrow on this facility and the line was undrawn as of 
December 31, 2017.

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.

31

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations

Debt and Capital Leases

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 119 aircraft and 37 engines, allow some flexibility in 
managing our cost of debt and capital requirements. 

Contractual Obligations

Our noncancelable contractual obligations at December 31, 2017 include:

2018

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.

0.3
0.2
1.0
0.3
1.8
$
Includes actual interest and estimated interest for floating-rate debt based on December 31, 2017 rates.

1.4
1.2
7.3
2.3
12.2

0.2
0.2
0.8
0.5
1.7

$

$

$

$

$

Payments due in

2019

2020

2021

2022

Thereafter

$

$

0.2
0.1
1.4
0.3
2.0

$

$

0.2
0.1
1.5
0.2
2.0

$

$

0.2
0.1
1.5
0.2
2.0

$

$

0.3
0.5
1.1
0.8
2.7

The interest rates are fixed for $1.1 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, 2017. 

As of December 31, 2017, we were in compliance with all of our covenants 
in relation to our debt and lease agreements and 29% of our owned property 
and equipment were pledged as security under various loan agreements.

As of December 31, 2017, we had operating lease obligations for 44 aircraft 
with lease terms that expire between 2018 and 2028. None of these leases  

Our firm aircraft order as of December 31, 2017 is as follows:

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 $30 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, 2017, the 
average age of our operating fleet was 9.2 years.

Year
2018
2019
2020
2021
2022
2023
2024
TOTAL

Airbus 
A320neo
—
—
6
16
3
—
—
25

Airbus 
A321ceo
10
—
—
—
—
—
—
10

Airbus 
A321neo
—
13
7
4
17
14
5
60

Embraer  
190
—
—
10
7
7
—
—
24

Total
10
13
23
27
27
14
5
119

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 - 2017 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 significant 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 $37 million and $30 million 
as of December 31, 2017 and 2016, 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 PoolingTM. 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 with American Express®. Under this arrangement, which 
ended in 2015, we identified two elements, 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.

33

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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 $263 million and $211 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 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 three 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. 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

Operating expenses per available seat mile, or CASM, is a common 
metric used in the airline industry.  Our CASM for 2017 through 2013 are 
summarized in the table below. We exclude aircraft fuel and related taxes, 
and operating expenses related to other non-airline expenses, such as 
JetBlue Technology Ventures, from operating expenses to determine CASM 
ex-fuel. We believe that CASM ex-fuel provides investors with the ability to 
measure financial performance excluding items beyond our control, such 
as fuel costs which are subject to many economic and political factors 
beyond our control, or not related to the generation of an available seat 
mile, such as operating expense related to other non-airline expenses. 
We believe this non-GAAP measure is more indicative of our ability to 
manage airline costs and is more comparable to measures reported by 
other major airlines. 

34

JETBLUE AIRWAYS CORPORATION - 2017 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

2017

2016

2015

2014

2013

$ per ASM

$ per ASM

$ per ASM

$ per ASM

$ 6,015

10.74 $ 5,320

9.92 $ 5,200

10.56 $ 5,302

11.78 $ 5,013

$ per ASM
11.71

1,363
4
$ 4,648

1,074
2.43
0.01
1
8.30 $ 4,245

2.00
—

1,348
—
7.92 $ 3,852

2.74
—

1,912
—
7.82 $ 3,390

4.25
—

1,899
—
7.53 $ 3,114

4.43
—
7.28

(in millions; per ASM data in cents)
Total operating expenses
Less:
Aircraft fuel and related taxes
Other non-airline expenses
Operating expenses, excluding fuel

Return on Invested Capital

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 2017, our ROIC was 10.3% from 14.3% in 2016, primarily due to 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)

2017

$ 1,000
6
53
1,059
395
664

$

$ 4,424
1,291
702
$ 6,417

10.3%

$

100

702

2016

1,312
7
58
1,377
520
857

3,611
1,606
771
5,988

14.3%

110

771

$

$

$

$

$

(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.

53

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,

2013
(in millions)
758
Net cash provided by operating activities
(615)
Less: Capital expenditures(1)
(22)
Less: Predelivery deposits for flight equipment
Free Cash Flow
121
(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 

2017
1,398
(1,074)
(128)
196

2015
1,598
(837)
(104)
657

2016
1,632
(850)
(161)
621

2014
912
(806)
(127)

(21) $

$

$

$

$

$

$

$

$

$

flows.

35

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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, 2017 cost per gallon of fuel. Based on projected 2018 
fuel consumption, such an increase would result in an increase to aircraft 
fuel expense of approximately $170 million in 2018. This is compared to an 
estimated $133 million for 2017 measured as of December 31, 2016. We 
did not have any hedge contracts outstanding as of 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 $1.1 billion of our debt and capital lease 
obligations, with the remaining $153 million having floating interest rates. 
If interest rates were on average 100 basis points higher in 2018 than they 
were during 2017, 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 2018 than they were during 
2017, our interest income from cash and investment balances would 
decrease by approximately $1 million. 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, 2017 and 2016.

ITEM 8.  Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of  
JetBlue Airways Corporation

Basis for Opinion

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of JetBlue 
Airways Corporation (the Company) as of December 31, 2017 and 2016, 
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, 2017, and the related notes (collectively 
referred to as the “financial statements”). In our opinion, the financial 
statements present fairly, in all material respects, the consolidated financial 
position of the Company at December 31, 2017 and 2016, and the 
consolidated results of its operations and its cash flows for each of the 
three years in the period ended December 31, 2017, 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) (PCAOB), the 
Company’s internal control over financial reporting as of December 31, 
2017, 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 16, 2018 
expressed an unqualified opinion thereon.

These financial statements are the responsibility of the Company’s 
management. Our responsibility is to express an opinion on the Company’s 
financial statements based on our audits. We are a public accounting 
firm registered with the PCAOB and are required to be independent with 
respect to the Company in accordance with the U.S. federal securities laws 
and the applicable rules and regulations of the Securities and Exchange 
Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. 
Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of 
material misstatement, whether due to fraud or error. Our audits included 
performing procedures to assess the risks of material misstatement of 
the financial statements, whether due to error or fraud, and performing 
procedures that respond to those risks. Such procedures included examining, 
on a test basis, evidence regarding the amounts and disclosures in the 
financial statements. Our audit also included evaluating the accounting 
principles used and significant estimates made by management, as well as 
evaluating the overall presentation of the financial statements. We believe 
that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2001.

New York, New York

February 16, 2018

36

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of  
JetBlue Airways Corporation

Opinion on Internal Control over Financial 
Reporting

We have audited JetBlue Airways Corporation’s internal control over 
financial reporting as of December 31, 2017, 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). In our opinion, JetBlue Airways Corporation (the 
Company) maintained, in all material respects, effective internal control over 
financial reporting as of December 31, 2017, based on the COSO criteria.

We have also audited, in accordance with the standards of the Public 
Company Accounting Oversight Board (United States) (PCAOB), the 2017 
consolidated financial statements of the Company and our report dated 
February 16, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’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 are a public accounting 
firm registered with the PCAOB and are required to be independent with 
respect to the Company in accordance with U.S. federal securities laws 
and the applicable rules and regulations of the Securities and Exchange 
Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 
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.

Definition and Limitations of Internal Control 
Over Financial Reporting

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.

/s/ Ernst & Young LLP

New York, New York

February 16, 2018

37

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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 (2017-$1; 2016-$5)
Inventories, less allowance (2017-$14; 2016-$12)
Prepaid expenses and other

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,

2017

2016

$

$

303
390
245
55
213
1,206

8,980
204
9,184
2,125
7,059
1,041
405
636
561
207
354
8,049

2
56
468
526
9,781

$

433
538
172
47
213
1,403

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

90
62
497
649
$ 9,323

See accompanying notes to consolidated financial statements.

38

JETBLUE AIRWAYS CORPORATION - 2017 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, 418 and 414 shares issued and 321  
and 337 shares outstanding at 2017 and 2016, respectively
Treasury stock, at cost; 97 and 77 shares at 2017 and 2016, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

December 31,
2017

2016

$

378
1,215
313
293
196
2,395
1,003
441

1,033
75
1,108

$

242
1,120
342
321
189
2,214
1,195
457

1,354
90
1,444

—

—

4
(890)
2,127
3,593
—
4,834
$ 9,781

4
(500)
2,050
2,446
13
4,013
$ 9,323

See accompanying notes to consolidated financial statements.

39

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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

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

EARNINGS PER COMMON SHARE

Basic
Diluted

Years Ended December 31,

2017

6,288
727
7,015

1,363
1,887
397
446
100
267
622
933
6,015
1,000

(95)
10
6
(79)
921
(226)
1,147

3.49
3.47

$

$

$
$

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

$

$

$
$

See accompanying notes to consolidated financial statements.

40

JETBLUE AIRWAYS CORPORATION - 2017 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), $8, and $38 of taxes in 2017, 2016 and 2015, respectively)

Total other comprehensive income (loss)

COMPREHENSIVE INCOME

Years Ended December 31,

2017
1,147

(13)
(13)
1,134

$

$

2016
759

16
16
775

$

$

2015
677

60
60
737

$

$

See accompanying notes to consolidated financial statements.

41

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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,

2017

2016

2015

$

1,147

$

759

$

677

Deferred income taxes
Depreciation
Amortization
Stock-based compensation
Collateral returned 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
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

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

(313)
383
63
29
—

(50)
15
95
53
(24)
1,398

(1,074)
(128)
(207)
244
(245)
444
(9)
(975)

47

(194)
(390)
(16)
(553)
(130)
433
303

$

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

$

See accompanying notes to consolidated financial statements.

42

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

JetBlue Airways Corporation

Consolidated Statements of Stockholders’ Equity

(in millions)
Balance at December 31, 2014
Net income
Other 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
Other 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
Net income
Other comprehensive loss
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
Balance at December 31, 2017

Common 
Shares
369
—
—
2
5
—

Common 
Stock
$

4
—
—
—
—
—

1

—
15
—
392

—
—
—
1
1
—

2

—
18
414
—
—
1
—
—

3

—
418

—

—
—
—
4

—
—
—
—
—
—

—

—
—
4
—
—
—
—
—

—

—
4

$

$

$

Additional 
Paid-In 
Capital

Retained 
Earnings

Accumulated 
Other 
Comprehensive  
Income (Loss)

$ 1,711
—
—
—
59
20

$ 1,002
677
—
—
—
—

$ (63)
—
60
—
—
—

Treasury  
Stock
$ (125)
—
—
(14)
—
—

—

25

—

(227)
—
—
$ (366)

—
67
14
$ 1,896

—
—
—
$ 1,679

—
—
—
(14)
—
—

—

(120)
—
$ (500)
—
—
(10)
—
—

—
—
—
—
10
23

35

—
86
$ 2,050
—
—
—
4
29

8
759
—
—
—
—

—

—
—
$ 2,446
1,147
—
—
—
—

—

44

—

$

$

—

—
—
—
(3)

—
—
16
—
—
—

—

—
—
13
—
(13)
—
—
—

—

Total
$ 2,529
677
60
(14)
59
20

25

(227)
67
14
$ 3,210

8
759
16
(14)
10
23

35

(120)
86
$ 4,013
1,147
(13)
(10)
4
29

44

(380)
$ (890)

—
$ 2,127

—
$ 3,593

—
$ —

(380)
$ 4,834

Treasury 
Shares

59
—
—
1
—
—

—

10
—
—
70

—
—
—
1
—
—

—

6
—
77
—
—
1
—
—

—

19
97

See accompanying notes to consolidated financial statements.

43

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II

ITEM 8.  Financial Statements and 

Supplementary Data

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, 2017, we served 101 
destinations in 30 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

Accounts and Other Receivables

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 with 
all intercompany transactions and balances being eliminated.

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.

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

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

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, 2017, 
2016 or 2015. The estimated fair value of these investments approximated 
their carrying value as of December 31, 2017 and 2016.

44

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportThe carrying values of investment securities consisted of the following at December 31, 2017 and 2016 (in millions):

PART II  
ITEM 8 Financial Statements and Supplementary Data

Available-for-sale securities

Time deposits
Debt Securities
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 

2017

2016

$

$

130
6
—
—
136

220
36
256
392

$ 160
—
115
60
335

283
10
293
$ 628

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.

Amortization expense related to computer software was $41 million,  
$32 million and $34 million for the years ended December 31, 2017, 2016 
and 2015, respectively. As of December 31, 2017, amortization expense 
related to computer software is expected to be approximately $37 million 
in 2018, $28 million in 2019, $11 million in 2020, $7 million in 2021, and 
$4 million in 2022.

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  
$92 million and $97 million as of December 31, 2017 and 2016, respectively. 

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, 2017 and 2016, our intangible assets for 
Slots at High Density Airports with indefinite lives was $139 million.

45

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

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.

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 $37 million and $30 million as of 
December 31, 2017 and 2016, 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 with American Express®. Under this agreement, which ended 
in 2015, we identified two elements, 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 $263 million and  
$211 million at December 31, 2017 and 2016, respectively.

46

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, 
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 $66 million in 2017, $65 million in 
2016 and $69 million in 2015.

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.

During the first quarter of 2017, we adopted Accounting Standards Update, 
or ASU, 2015-17, Income Taxes, Balance Sheet Classification of Deferred 
Taxes topic of the FASB Codification, or 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. Our condensed 
consolidated balance sheet as of December 31, 2016 reflects retrospective 
application. As a result of the adoption, $9 million of deferred tax liabilities 
previously included within other accrued liabilities and $164 million of deferred 
tax assets previously included within current assets have been moved to 
long-term liabilities on our December 31, 2016 balance sheet. 

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 

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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. See Note 3 with respect to our operating leases not currently 
presented 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 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.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with 
Customers, 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.

We have closely assessed the new standard and monitored FASB activity, 
including the interpretations by the FASB Transition Resource Group for 
Revenue Recognition throughout 2017. In the fourth quarter of 2017, we 
substantially completed our assessment of the new standard, and we 
expect to adopt the requirements of ASU 2014-09 as of January 1, 2018 

PART II  
ITEM 8 Financial Statements and Supplementary Data

utilizing the full retrospective method of transition. We will record a cumulative 
adjustment to retained earnings as of January 1, 2016 for the impacts of 
the new accounting standard.

For JetBlue, we believe the most significant impact of the new standard 
relates to the accounting for our TrueBlue® Loyalty Program. The standard 
eliminates the incremental cost method for loyalty program accounting 
which we previously used. We will be required to re-value the liability for 
points earned on qualifying JetBlue purchases using a relative fair value 
approach. The application of a relative fair value approach is expected to 
increase our air traffic liability by approximately $270 million to $300 million, 
net of breakage, as of the beginning of the retrospective reporting period.

In addition, we currently have a liability for outstanding points that were 
earned in conjunction with our previous co-branded credit card agreement 
had been recorded using the residual method. The new standard does not 
permit the usage of the residual method for this contract and instead, the 
transaction price will be allocated to the performance obligations on a relative 
selling price basis. This change is expected to decrease the relative value 
allocated to the transportation performance obligation and will result in a 
decrease of approximately $160 million to $170 million, net of breakage, to 
the liability as of the beginning of the retrospective reporting period.

Under the new standard, passenger revenue from unused tickets and 
passenger credits will be recognized in proportion to flown revenue based 
on estimates of expected expiration or when the likelihood of the Customer 
exercising their remaining rights becomes remote. Currently, recognition of 
passenger revenue was at expiration. This change will increase passenger 
revenue by approximately $20 million to $25 million.

We also expect this standard to result in a change in the timing and 
classification of our revenue recognition for certain ancillary fees directly 
related to passenger tickets. As a result, we expect that these revenues, 
which were approximately $470 million and $425 million, in 2017 and 
2016, respectively, will be reclassified from other revenue under the current 
presentation to passenger revenue after adoption.

The estimated impact of this ASU is expected to be less than one percent 
reduction to Operating revenues for both full year 2017 and 2016, and do 
not expect it to impact any of the Company’s existing debt covenants.

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, 2017 and 2016 consisted of the following (in millions):

Secured Debt
Floating rate equipment notes, due through 2025(1)
Fixed rate enhanced equipment notes, due through 2023(2)
Fixed rate equipment notes, due through 2026
Fixed rate specialty bonds, due through 2036(3)
Capital Leases(4)
Total debt and capital lease obligations

Less: Current maturities
Less: Debt acquisition cost

LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS

2017

2016

$

153
171
716
43
124
1,207
(196)
(8)
$ 1,003 

4.7%
4.5%
5.4%
4.9%
4.5%

$

173
189
850
43
140
1,395
(189)
(11)
$ 1,195 

4.2%
4.5%
5.5%
4.9%
4.3%

(1) 
(2) 

(3) 

Interest rates adjust quarterly or semi-annually based on LIBOR, plus a margin. 
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.

47

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report 
 
   
 
   
   
 
 
PART II  
ITEM 8 Financial Statements and Supplementary Data

(4)  As of December 31, 2017 and 2016, 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 $64 million and $56 million, respectively. The future minimum lease payments under these non-cancelable leases are $23 million in 2018, $23 million in 
2019, $35 million in 2020, $39 million in 2021, $9 million in 2022 and $14 million in the years thereafter. Included in the future minimum lease payments is $20 million representing interest, 
resulting in a present value of capital leases of $124 million with a current portion of $17 million and a long-term portion of $107 million.

As of December 31, 2017, 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
2018
2019
2020
2021
2022
Thereafter

$

Maturities
194
215
179
164
142
305

Aircraft, engines, and other equipment and facilities having a net book value of $2.3 billion at December 31, 2017 were pledged as security under various 
financing arrangements. Cash payments for interest related to debt and capital lease obligations, net of capitalized interest, aggregated $60 million, $78 million 
and $93 million in 2017, 2016 and 2015, respectively.

The carrying amounts and estimated fair values of our long-term debt at December 31, 2017 and 2016 were as follows (in millions):

Public Debt
Fixed rate special facility bonds, due through 2036
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(1)

December 31, 2017

December 31, 2016

Carrying  
Value

Estimated  
Fair Value

Carrying  
Value

Estimated  
Fair Value

42

169
152
712
1,075

$

46

178
159
771
1,154

$

42

45

188
171
843
$ 1,244

197
179
915
$ 1,336

(1)  Total excludes capital lease obligations of $124 million and $140 million for December 31, 2017 and 2016, respectively.

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 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 13 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 
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 2.0%. 

Citibank Line of Credit

We have a revolving Credit and Guaranty Agreement with Citibank, N.A. 
as the administrative agent for up to approximately $425 million. The term 
of the facility runs through April 2021. 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 John 
F. Kennedy International Airport, LaGuardia Airport and Reagan National 
Airport as well as certain other assets. Slots are rights to take-off or land 
at a specific airport during a specific time period during the day and a 

means by which airport capacity and congestion can be managed. 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, among other things, dispose 
of certain collateral, or merge, consolidate, or sell assets. As of and for the 
years ended December 31, 2017 and 2016, we did not have a balance 
outstanding or borrowings under this line of credit.

48

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART II  
ITEM 8 Financial Statements and Supplementary Data

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, 2017 and 2016, we did not have a balance outstanding 
or borrowings under this line of credit.

NOTE 3 

Operating Leases

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 $315 million in 2017, $294 million in 2016 and $298 million in 2015. As of 
December 31, 2017, we have approximately $30 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, 2017, 44 of the 243 aircraft in our fleet were leased under 
operating leases, with lease expiration dates ranging from 2018 to 2028. None 

of the 44 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.

We bought out the operating leases on three Airbus A320 aircraft for approximately 
$51 million, nine Airbus A320 aircraft for approximately $164 million, and  
six Airbus 320 aircraft for approximately $110 million, during 2017, 2016, and 
2015 respectively.

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, 2017, are as follows (in millions):

2018
2019
2020
2021
2022
Thereafter
TOTAL MINIMUM OPERATING LEASE PAYMENTS

Aircraft
71
$
59
57
51
45
139
422

$

Other
99
91
74
66
62
378
770

$

$

$

Total
170
150
131
117
107
517
$ 1,192

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 $316 million as of December 31, 2017 
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.

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 2014, we completed construction of our an international 
arrivals facility and additional gates, T5i. 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.

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 $22 million, 
$23 million, and $23 million during in 2017, 2016 and 2015, respectively. 

49

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report 
 
 
 
 
 
 
 
 
 
PART II  
ITEM 8 Financial Statements and Supplementary Data

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 2018 through 2022 and $456 million thereafter. The portion 
of these scheduled payments serving to reduce the principal balance of 
the Construction Obligation is $17 million in 2018, $18 million in 2019,  
$19 million in 2020, $20 million in 2021 and $21 million in 2022. Payments 
could exceed these amounts depending on future enplanement levels 
at JFK. Scheduled facility payments representative of interest totaled  
$24 million in 2017, $25 million in 2016 and $25 million in 2015.

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 June 16, 2015, we entered into an accelerated share repurchase 
agreement, or ASR, with Goldman, Sachs & Co., or Goldman Sachs, 
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 delivering approximately 0.7 million additional shares to JetBlue. 
A total of approximately 6.8 million shares was repurchased under this 
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. 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 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 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, or Morgan Stanley, 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 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.

On March 6, 2017, JetBlue entered into an ASR agreement with Barclays 
Bank PLC, or Barclays, paying $100 million for an initial delivery of 
approximately 4.1 million shares. The terms of the ASR concluded on 
April 24, 2017 with Barclays delivering approximately 0.8 million additional 
shares to JetBlue. A total of 4.9 million shares, at an average price of 
$20.23 per share, were repurchased under the agreement. 

On April 27, 2017, JetBlue entered into an ASR agreement with Goldman 
Sachs, paying $150 million for an initial delivery of approximately 5.4 million 
shares. The terms of the ASR concluded on July 24, 2017 with Goldman 
Sachs delivering approximately 1.4 million additional shares to JetBlue. A 
total of 6.8 million shares, at an average price of $21.99 per share, were 
repurchased under the agreement.

On September 11, 2017, JetBlue entered into an ASR agreement with 
Morgan Stanley, paying $130 million for an initial delivery of approximately 
5.4 million shares. The terms of the ASR concluded on September 26, 
2017 with Morgan Stanley delivering approximately 1.5 million additional 
shares to JetBlue. A total of 6.9 million shares, at an average price of 
$18.86 per share, were repurchased under the agreement. The Morgan 
Stanley ASR completed our 2016 Repurchase Authorization.

The total shares purchased by JetBlue under each of the ASRs in 2017, 
2016 and 2015 were based on the volume weighted average prices of 
JetBlue’s common stock during the terms of the respective agreements.

On December 8, 2017, the Board of Directors approved a two year share 
repurchase authorization starting on January 1, 2018, of up to $750 million 
worth of shares. The authorization can be executed through 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 privately-negotiated accelerated stock repurchase transactions. 

As of December 31, 2017, we had a total of 26.6 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, 2017, we had a total of 96.6 million shares of treasury 
stock, the majority of which relate to shares repurchased under our 
share repurchase program and the return of borrowed shares under our 
share lending agreement with Morgan Stanley which was terminated in 
January 2016.

50

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

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

2017

2016

$

1,147

—

$

1,147

$

$

328.7

1.7
—

330.4

759

2

761

326.5

2.1
13.6

342.2

$

$

2015

677

4

681

315.1

2.8
26.9

344.8

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. 

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 ASRs in 2017, 2016 
and 2015 and purchased approximately 18.7 million, 5.8 million, and  
6.8 million shares, respectively, for $380 million, $120 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. JetBlue also repurchased 3 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 
$21.6 million as of December 31, 2017, related to a total of 2.1 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, 2017, 2016 and 2015 was $29 million, $23 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.

51

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II

ITEM 8.  Financial Statements and 

Supplementary Data

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.

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.

Restricted Stock Units

The following is a summary of RSU activity under the 2011 Plan for the year ended December 31, 2017 (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, 2017, 2016 and 2015 was $20 million, $30 million 
and $33 million, respectively. The weighted average grant-date fair value 
of share awards during the years ended December 31, 2017, 2016 and 
2015 was $19.76, $22.95, and $17.09, 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, 2017, 2016 and 2015, we granted a 
nominal amount of DSUs, almost all of which remain outstanding at 
December 31, 2017. In 2017, 2016 and 2015, 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

1.8
0.9
(1.0)
(0.1)
1.6

$ 16.77
19.76
14.04
19.69
$ 20.14

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, 2017 (in millions except per share data):

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

Shares

Weighted Average 
Grant Date Fair Value

0.4
(0.4)
—
—

$ 10.90
10.90
—

—

The total intrinsic value, determined as of the date of exercise, of options 
exercised during the years ended December 31, 2017, 2016 and 2015 
was $4 million, $6 million and $34 million, respectively. Total cash received 
from option exercises during the years ended December 31, 2017, 2016 
and 2015 was $4 million, $10 million and $59 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.

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. The purchase price is the 
stock price on the purchase date, less a 15% discount. 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, 2017, 2016 and 2015 was approximately $8 million, $6 million and  
$5 million, respectively. Under this plan, Crewmembers purchased 2.5 million, 
2.2 million, and 1.3 million new shares for the years ended December 31, 

52

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

2017, 2016 and 2015, respectively, at weighted average prices of $17.46, 
$15.88, and $19.25 per share, respectively. 

Taxation

Under the CSPP, 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.

The Compensation-Stock Compensation topic of the FASB 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.

NOTE 8 

Income Taxes

Our income tax (benefit) expense consisted of the following for the years ended December 31 (in millions):

Deferred:
Federal
State
Foreign

Deferred income tax (benefit) expense
Current:
Federal
State
Foreign

Current income tax expense
TOTAL INCOME TAX (BENEFIT) EXPENSE

2017

$ (361)
25
23
(313)

94
18
(25)
87
$ (226)

2016

$ 245
25
—
270

129
26
32
187
$ 457

2015

$ 351
26
—
377

20
16
7
43
$ 420

The Tax Cuts and Jobs Act, or The Act, was enacted on December 22, 
2017. The Act made significant changes to the Federal tax code, including 
a reduction in the Federal corporate statutory tax rate from 35% to 21%. 
At December 31, 2017, the Company was able to make a reasonable 
estimate of the tax effects of enactment of The Act as written, on the 
existing deferred tax balances. As a result of these estimates, the Company 

recognized a provisional benefit in the amount of $570 million. During 
2018, the Company will continue to refine the calculations as we gain a 
more thorough understanding of the Act, including those related to the 
deductibility of purchased assets, state tax treatment, amounts related to 
Crewmember compensation as well as changes in interpretations of The 
Act and additional regulatory guidance that may be issued. 

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
State income tax, net of federal benefit

Adjustment of net deferred tax liability from enacted tax rate change
Other, net

TOTAL INCOME TAX (BENEFIT) EXPENSE

2017
322
28
(570)
(6)
(226)

$

$

2016
$ 425
34
—
(2)
$ 457

2015
$ 384
28
—
8
$ 420

Cash payments for income taxes were $139 million in 2017, $173 million in 2016 and $42 million in 2015. 

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

Deferred tax assets:

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

Deferred tax liabilities:

Accelerated depreciation
Deferred tax liabilities

NET DEFERRED TAX LIABILITY

2017

2016

95
45
32
23
22
6
223

121
38
41
—
34
8
242

(1,256)
(1,256)
$ (1,033)

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

$

53

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

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.

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,

2017
26
2
6
(3)
—
31

$

$

2016
21
10
5
(4)
(6)
26

$

$

2015
16
—
6
(1)
—
21

$

$

Interest and penalties accrued on unrecognized tax benefits were not significant. If recognized, $15 million of the unrecognized tax benefits as of 
December 31, 2017 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 2004 through 2016 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. 
Crewmembers 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 
were 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. Beginning with 2017,  

non-management Crewmembers are 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%. If JetBlue’s resulting pre-tax 
margin exceeds 18%, non-management Crewmembers will receive 20% 
profit sharing on amounts above an 18% pre-tax margin. The result is 
reduced by Retirement Plus contributions and Crewmembers may elect 
to have their profit sharing contributed directly to the Plan.

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, 2017, 2016 and 2015 were $182 million, 
$290 million and $256 million, respectively. 

NOTE 10  Commitments

Flight Equipment Commitments

Other Commitments

As of December 31, 2017, our firm aircraft orders consisted of 10 Airbus 
A321 current engine option (ceo) 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 2024. Committed 
expenditures for these aircraft and related flight equipment, including 
estimated amounts for contractual price escalations and predelivery 
deposits, will be approximately $0.8 billion in 2018, $1.0 billion in 2019, 
$1.4 billion in 2020, $1.5 billion in 2021, $1.5 billion in 2022 and $1.1 billion 
thereafter. We are scheduled to receive 10 new Airbus A321ceo aircraft 
in 2018, and depending on market conditions, we anticipate paying cash 
for some portion of our 2018 deliveries.

We amended our purchase agreement with Airbus in April 2017 which 
changed the timing of certain of our Airbus A321ceo and Airbus A321neo 
deliveries.

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. Our amendment 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. We have the option to take certain A321neo deliveries 
with the Long Range configuration, the A321-LR.

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.

As of December 31, 2017, we had approximately $24 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. 

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.

54

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report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 obligate 
us to reimburse the bank for any increased costs arising from regulatory 
changes, including changes in reserve requirements and bank capital 
requirements; these obligations are standard terms present in loans of 
this type. These indemnities would increase the interest rate on our debt 
if they were to be triggered. In all cases, we have the option to repay the 
loan and avoid the increased costs. These terms match 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 20 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. 
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.

PART II  
ITEM 8 Financial Statements and Supplementary Data

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.

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 $4 million as of December 31, 
2017. 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 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 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

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 
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.

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.

We did not have any fuel hedging contracts outstanding as of 
December 31, 2017.

55

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

Interest rate swaps

The final interest payment relating to our interest rate swaps took place 
in August 2016. As such, as of December 31, 2017, 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. 

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 or 2015, and all related 
unrealized losses were deferred in accumulated other comprehensive 
income. We recognized approximately a $1 million gain in interest expense 
for the year ended December 31, 2016 and we recognized approximately 
$1 million in additional interest expense as the related interest payments 
were made during the year ended December 31, 2015.

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)
Longest remaining term (months)
Hedged volume (barrels, in thousands)
Estimated amount of existing (gains) expected to be reclassified into earnings in the next 12 months

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 of each contract prior to consideration of offsetting positions with each counterparty and prior to impact of collateral paid.

As of December 31,

2017

$ —
—
—
—

$

2016

22
12
1,920
(22)

2017

2016

2015

$

(15)
—
6
10%

$

(9)
—
(34)
12%

$ 126
1
29
17%

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, 2017
As of December 31, 2016

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

—
—

$
$

—
—

$
$

— $
$
22

—
—

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:

 • Level 1 quoted prices in active markets for identical assets or liabilities;

 • Level 2 quoted prices in active markets for similar assets and liabilities 

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

 • 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.

56

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

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

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

Level 1
$ 173
—

Level 1
$ 313
115
—

As of December 31, 2017

Level 2
—
$
136

Level 3
$ —
—

As of December 31, 2016

Level 2
—
$
220
22

Level 3
$ —
—
—

$

$

Total
173
136

Total
313
335
22

The carrying values of all other financial instruments approximated their fair values at December 31, 2017 and 2016. Refer to Note 2 for fair value 
information related to our outstanding debt obligations as of December 31, 2017 and 2016.

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 
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.

Available-for-sale investment securities

Included in our available-for-sale investment securities are U.S. treasury 
bills, time deposits, commercial paper and debt securities. 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, 2017 or 2016. 

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. There 
were no aircraft fuel derivatives outstanding as of December 31, 2017.

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, 
2017, 2016 and 2015 is as follows (in millions):

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 income (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
Reclassifications into earnings (net of $(6) of taxes)
Change in fair value (net of $(2) of taxes)
Balance of accumulated income, at December 31, 2017
(1) Reclassified to aircraft fuel expense

(2) Reclassified to interest expense

Aircraft Fuel 
Derivatives(1)

(63)
77
(18)
(4)
(5)
22
13
(9)
(4)
—

$

Interest Rate 
Swaps(2)
—
1
—
1
(1)
—
$ —
—
—
—

Total
(63)
78
(18)
(3)
(6)
22
13
(9)
(4)
—

$

57

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 8 Financial Statements and Supplementary Data

NOTE 15  Geographic Information

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 2017, 2016 and 2015.

Operating revenues are allocated to geographic regions, as defined by the 
Department of Transportation, or 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

2017
5,001
2,014
7,015

$

$

2016
$ 4,751
1,881
$ 6,632

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

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  Quarterly Financial Data (Unaudited)

Quarterly results of operations for the years ended December 31, 2017 and 2016 are summarized below (in millions, except per share amounts):

First Quarter

Second Quarter

Third Quarter

Fourth Quarter

2017
Operating revenues
Operating income
Net income(1)
Basic earnings per share
Diluted earnings per share(1)
2016
Operating revenues
Operating income
Net income
Basic earnings per share
Diluted earnings per share
(1)   During the fourth quarter of 2017, we recorded a one-time tax benefit of $570 million or $1.76 per diluted share related to the enactment of The Tax Cuts and Jobs Act.

$ 1,616
349
207
0.64
0.61

$ 1,604
147
85
0.25
0.25

$ 1,643
313
181
0.56
0.53

$ 1,842
354
211
0.64
0.64

$ 1,732
354
199
0.61
0.58

$ 1,813
310
179
0.55
0.55

$
$

$
$

$
$

$
$

$
$

$
$

$ 1,756
189
672
2.09
2.08

$
$

$ 1,641
296
172
0.51
0.50

$
$

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.

58

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART II  
ITEM 9B Other information

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, 2017. Based on that evaluation, our CEO and CFO concluded that our 
disclosure controls and procedures were effective as of December 31, 2017.

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, 2017 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, 2017. 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, 2017, 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, 
2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. Other Information

None.

59

JETBLUE AIRWAYS CORPORATION - 2017 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 51, is our Chief Executive Officer and President. He 
was promoted to President on January 1, 2014 and Chief Executive Officer 
on February 16, 2015. He joined JetBlue, as its Chief Commercial Officer 
in 2008, 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.

Steve Priest, age 47, is our Chief Financial Officer, a position he has held 
since February 2017. Mr. Priest joined JetBlue in August 2015 as our 
Vice President Structural Programs. Prior to JetBlue, he worked at British 
Airways from 1996 to 2015 where he served as Senior Vice President of 
the carrier’s North Atlantic joint business with American Airlines, Iberia, 
and Finnair, as well as several other leadership roles.

James Hnat, age 47, 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 54, 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 53, 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 
2018 Annual Meeting of Stockholders to be filed with the SEC pursuant 
to Regulation 14A within 120 days after the end of our 2017 fiscal year, 
or our 2018 Proxy Statement.

60

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART III  
ITEM 14 Principal Accounting Fees and Services

ITEM 11.  Executive Compensation

The information required by this Item will be included in and is incorporated herein by reference from our 2018 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, 2017, 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
2,450,000
—
2,450,000

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

18.23
—
18.23

$

Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in first column)
24,105,221
—
24,105,221

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 2018 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 2018 Proxy Statement.

61

JETBLUE AIRWAYS CORPORATION - 2017 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, 2017 and December 31, 2016
Consolidated Statements of Operations — For the years ended December 31, 2017, 2016 and 2015
Consolidated Statements of Comprehensive Income — For the years ended December 31, 2017, 2016 and 2015
Consolidated Statements of Cash Flows — For the years ended December 31, 2017, 2016 and 2015
Consolidated Statements of Stockholders’ Equity — For the years ended December 31, 2017, 2016 and 2015
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.

62

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

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 16, 2018

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/ STEVE PRIEST
Steve Priest

Capacity
Chief Executive Officer and Director
(Principal Executive Officer)

Date
February 16, 2018

Chief Financial Officer (Principal Financial Officer)

February 16, 2018

/S/ ALEXANDER CHATKEWITZ
Alexander Chatkewitz

Vice President, Controller, and Chief Accounting Officer  
(Principal Accounting Officer)

/S/ PETER BONEPARTH
Peter Boneparth *

/S/ DAVID CHECKETTS
David Checketts *

/S/ VIRGINIA GAMBALE
Virginia Gambale *

/S/ STEPHAN GEMKOW
Stephan Gemkow *

/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

February 16, 2018

February 16, 2018

February 16, 2018

February 16, 2018

February 16, 2018

February 16, 2018

February 16, 2018

February 16, 2018

February 16, 2018

63

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

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)

4.9

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**

64

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 January 8, 2018.

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 ASR, 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).

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).

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 4.4 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 (File No. 000-49728).

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).

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

10.3(a)**

10.3(b)**

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)**

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).

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 filed on January 18, 2005 (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 (File No. 000-49728).

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 
(File No. 000-49728).

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  
(File No. 000-49728).

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 (File No. 000-49728).

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 (File No. 000-49728).

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 (File No. 000-49728).

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 (File No. 000-49728).

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 (File No. 000-49728).

65

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

10.3(ab)**

10.3(ac)**

10.3(ad)**

10.3(ae)**

10.3(af)**

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)**

66

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 (File No. 000-49728).

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.

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 No. 3 to the V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation, dated August 15, 
2017—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2017.

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 (File No. 000-49728).

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 (File No. 000-49728).

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 (File No. 000-49728).

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 (File No. 000-49728).

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(o) to our Annual Report on Form 10-K for the year 
ended December 31, 2012 (File No. 000-49728).

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

10.17(p)**

10.17(q)**

10.17(r)**

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*

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.

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 10.1 to our Current Report on Form 8-K 
dated May 22, 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.

67

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

10.31(a)*

10.31(b)*

10.31(c)*

10.31(d)*

10.31(e)*

10.31(f)*

10.31(g)*

10.31(h)*

10.31(i)*

10.31(j)*

10.33**

10.33(a)**

10.33(b)**

10.33(c)**

10.33(d)**

10.33(e)**

10.33(f)**

10.33(g)**

10.33(h)**

10.33(i)***

10.34**

10.34(a)**

10.35*

10.36

10.37

10.37(a)

10.38**

10.38(a)**

10.39*

68

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 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.

JetBlue Airways Corporation 2011 Amendment and Restatement 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.

Form of Performance Share Unit Award Agreement as amended—incorporated by reference to Exhibit 10.1(a) to our Quarterly Report on  
Form 10-Q for the quarter ended March 31, 2017.

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.

Amendment No. 6 to Airbus A320 Family Purchase Agreement, dated as of April 11, 2017, 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 June 30, 2017.

Amendment No. 7 to Airbus A320 Family Purchase Agreement, dated as of April 25, 2017, between Airbus S.A.S. and JetBlue Airways 
Corporation-incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

Amendment No. 8 to Airbus A320 Family Purchase Agreement, dated as of December 19, 2017, between Airbus S.A.S. and JetBlue  
Airways Corporation.

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 June 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.

Amended and Restated Credit and Guaranty Agreement, dated as of April 6, 2017 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 10.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

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.

Security Agreement Ratification, dated as of April 6, 2017 between JetBlue Airways Corporation, as Borrower, 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, 2017.

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, 2013—incorporated by reference to Exhibit 10.39 
to our Annual Report on Form 10-K for the year ended December 31, 2013.

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

10.41*

10.41(a)*

10.42*

10.43

12.1

21.1

23

31.1

31.2

32

99.2

101.INS

101.SCH

101.DEF

101.CAL

101.LAB

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.

Amendment No. 1 to the Employment Agreement, dated February 16, 2017, between JetBlue Airways Corporation and Robin Hayes—
incorporated by reference to Exhibit 10.41(a) to our current report on Form 8-K filed on February 22, 2017.

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.

Agreement and General Release, dated as of February 23, 2017, between JetBlue Airways Corporation and James F. Leddy—incorporated by 
reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.

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.

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.
***  Pursuant to 17 CFR 240.24b-2, confidential information has been omitted and has been provided separately to the Securities and Exchange Commission pursuant to a Confidential 

Treatment Request filed with the Commission.

(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).

69

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

Financial Statement Schedule

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of  
JetBlue Airways Corporation

Opinion on the Financial Statement Schedules

We have audited the consolidated financial statements of JetBlue Airways Corporation (the Company) as of December 31, 2017 and 2016, and for 
each of the three years in the period ended December 31, 2017, and have issued our report thereon dated February 16, 2018 (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. 
In our opinion, the financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all 
material respects the information set forth therein.

Basis for Opinion

This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s schedule based on  
our audits. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

New York, New York

February 16, 2018

70

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportJetBlue Airways Corporation

Schedule II—Valuation and Qualifying Accounts

(in millions)

PART IV  

Year Ended December 31, 2017
Allowance for doubtful accounts
Allowance for obsolete inventory parts

TOTAL

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

(1)  Uncollectible accounts written off, net of recoveries.
(2) 

Inventory scrapped.

Balance at
beginning of 
period

Additions 
Charged to
Costs and 
Expenses

Deductions

Balance at end 
of period

$

$

$

$

$

$

5
12
17

6
10
16

6
8
14

$

$

$

—
2
2

—
2
2

4
2
6

$

$

$

4(1)
—(2)
4

1(1)
—(2)
1

4(1)
—(2)
4

1
14
15

5
12
17

6
10
16

71

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report 
 
 
   
 
   
 
 
 
 
 
 
 
 
 
 
 
PART IV  

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:

Interest expense
Amortization of debt costs
Rent expense representative of interest

2017

2016

2015

2014

2013

Year Ended December 31,

$

921
(10)

175
5

$ 1,216
(8)

$ 1,097
(8)

201
4

232
4

$ 1,091

$ 1,413

$ 1,325

$

$

$

90
4
81
175
6.23

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

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, 

(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 16, 2018, 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, 2017.

/s/ Ernst & Young LLP

New York, New York

February 16, 2018

72

JETBLUE AIRWAYS CORPORATION - 2017 Annual Report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART IV  

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 16, 2018

By:

/s/ ROBIN HAYES
Chief Executive Officer

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JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

EXHIBIT 31.2  Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer

I, Steve Priest, 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 16, 2018

By:

/s/ STEVE PRIEST
Chief Financial Officer

74

JETBLUE AIRWAYS CORPORATION - 2017 Annual ReportPART IV  

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, 2017, as filed with the Securities 
and Exchange Commission on February 16, 2018 (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 16, 2018

Date: February 16, 2018

By:

By:

/s/ ROBIN HAYES
Chief Executive Officer

/s/ STEVE PRIEST
Chief Financial Officer

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SAFETY • CARING • INTEGRITY • PASSION • FUN