Dear fellow owners:
We recently celebrated our 22nd birthday, all made possible by our extraordinary 22,000+ crewmembers. Despite
all of the challenges of 2021, they continued to deliver the best service and product in the industry while advancing
our strongly rooted mission to Inspire Humanity. What started as an airline 22 years ago has evolved into a travel
company, supported by the ever-growing success of our JetBlue Travel Products and JetBlue Tech Ventures
subsidiaries.
I am extremely proud of our great team of crewmembers. They have laid the foundation over the past few years for
JetBlue to continue disrupting the industry well into our third decade, and create an even better travel company
for all of our stakeholders – our customers, crewmembers, owners, and communities.
Some of the key highlights of our work in 2021 include:
■ We executed the fastest and largest operational ramp-up in the industry to serve pent-up travel demand and
help our customers reconnect with the world and each other, generating revenue close to 2019 levels over the
summer, outperforming the nine largest U.S. airlines.
■ We made great strides towards repairing our balance sheet, having paid down approximately $1.9 billion dollars
of debt. We ended 2021 with an adjusted debt to capitalization ratio of 53%, among the strongest in the industry.
■ We brought much needed competition and customer choice to the Northeast through our Northeast Alliance
(NEA) with American Airlines.
■ We disrupted the transatlantic market with the launch of our service to London with our award-winning product
and service.
■ We extended our co-branded credit card partnership with meaningfully enhanced economics.
■ We rolled out our next iteration of Fare Options, delivering more value to our customers.
■ Our JetBlue Travel Products (JTP) subsidiary continued to roll out a suite of new products, contributing
meaningfully to our bottom line.
■ We saw some of our JetBlue Tech Ventures (JTV) portfolio companies go public or announce plans to go public.
■ We accelerated our transition to Sustainable Aviation Fuel with the largest deal in the New York area for supply,
worth over $1 billion dollars.
■ We formed the Aviation Climate Taskforce with nine other airlines and the Boston Consulting Group, focusing
on the development of technologies to decarbonize aviation.
■ We reached our first contract with TWU for our inflight crewmembers.
■ We also doubled down on our investments in our crewmembers – our greatest asset – by expanding our
development programs, offering candidates a path towards a career as a pilot, mechanic, or support center
crewmember.
Charting a Course Towards Sustained Profitability
While the Omicron wave dealt a temporary setback to demand at the start of this year, we view 2022 as the
continuation of a meaningful recovery. We have already seen an incredible recovery in demand through the
quarter and recently hit a daily sales record. This is an encouraging trend that points to a robust spring and peak
summer travel season and positions us well to recapture the recent increase in fuel prices.
We are building back a stronger and more competitive JetBlue that will drive our success for many years to
come. 2022 is an exciting year as many of our initiatives come to fruition and we capitalize on opportunities
that wouldn’t have existed otherwise – none of which would be possible without the passion and hard work of
our crewmembers.
I am confident that this year will prove to be transformational for JetBlue’s structural profitability, as we look to
restore our earnings power and create value for our stakeholders. Our teams are working diligently to execute
on our unique and meaningful commercial initiatives, maintain a competitive cost structure, and manage a
balanced approach to capital allocation.
Unlocking Value for All Stakeholders Through our Network Strategy
At JetBlue’s core, our high-value geography underpins our success. Building relevance in our focus cities –
Boston, Fort Lauderdale, Los Angeles, New York, Orlando and San Juan – is critical to our network strategy as
we continue to deliver value for our customers.
In 2021, we embarked on an ambitious plan to create a viable third competitor in New York and Boston through our
Northeast Alliance with American Airlines. This alliance was conceived to provide customer benefits by unlocking
growth in the region, and we are well on our way to delivering on this promise. Last year, JetBlue and American
collectively grew more quickly than the two large legacy network competitors across New York and Boston.
Since the launch of the NEA, we announced the largest expansion of our network in the past 15 years with nine
new JetBlue BlueCities and 32 new routes. This would not be possible without this alliance. Together, we’ve
added over 50 new routes, including 19 international flights.
We have reached $100 million dollars in gross codeshare revenue generated by the NEA in its early stages, an
important milestone. Looking ahead, our primary focus for 2022 will be on executing the growth opportunities
enabled by the NEA as we provide more options to both our leisure and business customers. Over three-quarters of
JetBlue’s growth in 2022 is planned to be deployed in the Northeast. With a greatly enhanced network, reciprocal
elite loyalty benefits, and accelerated growth that all have yet to be fully rolled out, we are bringing sorely needed
competition and growth with low fares in the region.
Our network is also benefitting from our recent launch of service to London from New York, a milestone
accomplishment that was years in the making. We look forward to bringing JetBlue’s low fares and award-winning
service to even more customers across the Atlantic as we expand service to London from Boston later this year.
Differentiating our Product and Service
In addition to the NEA, we have been solidly executing on key strategic and commercial initiatives to grow our
revenue base. Since refreshing our Fare Options offering in mid-2021, we saw customer behavior and buy-up
activity driving a meaningful revenue benefit, validating our view that we offer the best product, in every category
we serve, all at low fares.
On the loyalty front, we renewed our co-branded credit card agreement with Barclays and Mastercard, which
is driving enhanced value for all stakeholders. In addition to the material growth in our co-brand portfolio, we
rolled out reciprocal benefits for JetBlue and American customers, including elite benefits. We also announced
new Mosaic benefits for 2022, including an all-new Mosaic+ tier that includes Mint upgrades. We are in the early
innings of evolving our TrueBlue program to expand benefits and add value to our TrueBlue point currency.
2021 was also a banner year for our JetBlue Travel Products (JTP) subsidiary, with record revenue performance,
including 50% growth in commissions revenue vs 2019 and $45M in operating income contribution. We saw
growth in all of our main offerings across the JTP portfolio, setting us on a path to achieve our target of $100
million dollars in run-rate operating income contribution in 2022.
Improving Unit Cost Performance
Our business model is structured around maintaining low costs and offering low fares. We faced significant
cost headwinds in 2021 as a result of the pandemic. Low industry traffic volumes drove significant airport rate
increases; inflationary pressures have surfaced across the industry; and the deferral of maintenance events
due to idle aircraft now necessitates a ‘catch up’ period. We are committed to controlling our costs and have
implemented a comprehensive plan to drive a more competitive cost structure. Our teams are working purposefully
in executing our plan to position JetBlue for long-term value creation.
Taking a Balanced Approach to Capital Allocation to Repair our Balance Sheet While Investing in Margin-Accretive Growth
We maintained a strong liquidity balance throughout 2021, ending the year with unrestricted cash and short-term
investments of $2.8 billion dollars, or 35 percent of 2019 revenue. During the year, we paid down approximately
$1.9 billion dollars of debt. Our adjusted debt to cap ratio ended the year at 53 percent, and our balance sheet
continues to be among the strongest in the industry.
Concurrently, as part of our balanced approach to capital allocation, we took delivery of 15 next-generation
aircraft that are foundational to our path to generating long-term earnings growth. In 2022, we’ll welcome 12
new state-of-the-art, fuel-efficient aircraft into our fleet. Earlier this year, we also amended our agreement
with Airbus to exercise 30 A220 options and accelerate the retirement of our E190 fleet. The A220’s strong
economics and operational performance are key to JetBlue’s long-term cost performance, while also enabling
more sustainable flying, greater flexibility to support our network strategy, and the introduction of its all-new
onboard experience to more customers. We’re thrilled to be accelerating our fleet modernization plans to deliver
stronger cost performance and generate enhanced earnings power.
Leading the Industry with our ESG Strategy
We are leading the industry in mitigating risks to ensure the long-term sustainability of our business. We are
wholly committed to serving our communities, adding more diversity to our industry’s talent pipeline, and
increasing sustainability in our operation.
We are paving a path to achieving net zero carbon emissions by 2040. In 2021, we signed substantial deals to
purchase sustainable aviation fuel – or SAF – across our airports, accelerating our path towards our target of
transitioning 10% of our fuel usage to SAF by 2030. We also formed the Aviation Climate Taskforce with nine
other airlines and the Boston Consulting Group, which is focused on the development of emerging technologies
to decarbonize aviation. Earlier this year, we launched our Sustainable Travel Partners program, enabling our
corporate customers to play a direct role in the sustainability of their business travel by purchasing SAF credits.
We’re also investing in our crewmembers – our greatest asset – by expanding development opportunities and
growing our talent pipeline. Representation in our Gateway programs far exceeds the industry average, and we’re
excited to further grow these programs and deliver on our commitments to our crewmembers.
We Expect 2022 to be a Transformational Year
Looking ahead, JetBlue is poised for an exciting new chapter as we emerge from the COVID-19 pandemic. 2022
is set to be a pivotal year for our future success, as many of our investments come to fruition and as we restore
our earnings power. Years of hard work and planning will come together this year across many of our airports
with beautiful new terminals coming online, giving us the infrastructure we need to provide our customers with
a great airport experience while we grow. With the best crewmembers in the industry, I am confident that 2022
will prove to be a transformational year for JetBlue’s structural profitability. We are solidly executing on our
unique strategic and commercial initiatives, keeping a razor-sharp focus on controlling costs, and maintaining
our balanced approach to capital allocation.
Thanks to our 22,000+ crewmembers for their outstanding service despite the tremendous difficulties of 2021.
Of course, thanks also to our owners for your continued support.
Most sincerely,
Robin Hayes
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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, 2021
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
(Address of principal executive offices)
87-0617894
(I.R.S. Employer Identification No.)
11101
(Zip Code)
(718) 286-7900
(Registrant's telephone number, including area code:)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.01 par value
JBLU
The NASDAQ Stock Market LLC
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
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 every Interactive Data File required to be
submitted 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 such files).
■ whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an 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
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 has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued its audit report.
■ whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
The aggregate market value of the registrant's common stock held by non-affiliates of the registrant as of June 30, 2021 was
approximately $5.3 billion (based on the last reported sale price on the NASDAQ Global Select Market on that date). The number
of shares outstanding of the registrant's common stock as of January 31, 2022 was 320,191,156 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Designated portions of the Registrant's Proxy Statement for its 2022 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
Item 1. Business
Overview
JetBlue Experience
Operations and Cost Structure
Human Capital Management
Regulation
Where You Can Find Other Information
Item 1A. Risk Factors
Risks Related to the COVID-19 Pandemic
Risks Related to JetBlue
Risks Associated with the Airline Industry
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
PART II
Item 5.
Market for Registrant’s Common Equity;
Related Stockholder Matters and Issuer
Purchases of Equity Securities
Item 6.
[Reserved]
Item 7.
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Overview
Results of Operations
Consolidated Balance Sheet Analysis
Liquidity and Capital Resources
Contractual Obligations
Off-Balance Sheet Arrangements
Climate Change
Critical Accounting Policies and Estimates
Regulation G Reconciliation of Non-GAAP Financial
Measures
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Item 7A. Quantitative and Qualitative Disclosures
About Market Risk
Item 8. Financial Statements and Supplementary Data
Reports of Independent Registered Public
Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive
Income (Loss)
Consolidated Statements of Cash Flows
Consolidated Statements of Stockholders’ Equity
Notes to Consolidated Financial Statements
Item 9.
Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C.
Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections
PART III
Item 10.
Directors, Executive Officers and Corporate
Governance
Item 11. Executive Compensation
Item 12.
Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters
Item 13.
Certain Relationships and Related Transactions,
and Director Independence
Item 14. Principal Accounting Fees and Services
PART IV
Item 15. Exhibits and Financial Statement Schedules
Item 16. Form 10-K Summary
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
www.jetblue.com
Forward-Looking Information
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. These statements are intended to qualify for the “safe
harbor” from liability established by the Private Securities
Litigation Reform Act of 1995. 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, the coronavirus (“COVID-19”) pandemic
including new and existing variants, and the outbreak of any other
disease or similar public health threat that affects travel demand
or behavior; restrictions on our business related to the financing
we accepted under various federal government support programs
such as the Coronavirus Aid, Relief, and Economic Security Act,
the Consolidated Appropriations Act, and the American Rescue
Plan Act; our significant fixed obligations and substantial
indebtedness; risk associated with execution of our strategic
operating plans in the near-term and long-term; the recording of
a material impairment loss of tangible or intangible assets; our
extremely competitive industry; volatility in financial and credit
markets which could affect our ability to obtain debt and/or lease
financing or to raise funds through debt or equity issuances;
volatility in fuel prices, maintenance costs and interest rates; our
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, including for aircraft, aircraft engines
and parts and vulnerability to delays by those 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; the outcome of
the lawsuit filed by the Department of Justice and certain state
Attorneys General against us related to our Northeast Alliance
entered into with American Airlines, 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, including new or increased
tariffs; 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; 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 the COVID-19 Pandemic”, “Risks Related
to JetBlue”, and “Risks Associated with the Airline Industry.” In
light of these risks and uncertainties, the forward-looking events
discussed in this Report might not occur. Our forward-looking
statements speak only as of the date of this Report. Other than
as required by law, we undertake no obligation to update or
revise forward-looking statements, whether as a result of new
information, future events, or otherwise.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
3
PART I
ITEM 1
BUSINESS
Overview
General
JetBlue Airways Corporation, or JetBlue, is New York's Hometown
Airline®. As of December 31, 2021, JetBlue served over 100
destinations across the United States, the Caribbean and Latin
America, and between New York and London.
JetBlue was incorporated in Delaware in August 1998 and
commenced service on February 11, 2000. 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 22,000+
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 continued growth. We are focused
on delivering solid results for our stockholders, our customers,
and our crewmembers.
As used in this Report, the terms “JetBlue,” the “Company,” “we,”
“us,” “our” and similar terms refer to JetBlue Airways Corporation
and its subsidiaries, unless the context indicates otherwise. Our
principal executive offices are located at 27-01 Queens Plaza
North, Long Island City, New York 11101 and our telephone number
is (718) 286-7900.
Our Industry and Competition
The U.S. airline industry is extremely competitive and 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, such as the
coronavirus ("COVID-19") pandemic, and associated stay at
home orders, vaccination mandates, masking requirements
and travel restrictions, the impact of airline restructurings or
consolidations, and 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
customer demand. The industry's principal competitive factors
include fares, brand and customer service, route networks, flight
schedules, aircraft types, safety records, codeshare and interline
relationships, inflight entertainment and connectivity systems,
and frequent flyer programs.
The COVID-19 Pandemic
The unprecedented COVID-19 pandemic continues to have a
material adverse impact on our operating revenues and financial
position. We began seeing signs of demand recovery in February
2021 which continued to progress throughout the year. Although the
spread of the Delta and Omicron variants temporarily decelerated
the demand for travel in 2021, we believe customer confidence
will continue to grow, resulting in sustained demand improvement
going forward. We expect the recovery of domestic demand to
outpace the recovery of international demand in most regions.
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.
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.
4
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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 one of five branded fares: Blue
Basic, Blue, Blue Plus, Blue Extra, and Mint®, our premium service.
Each fare includes different offerings such as priority boarding,
advance seat selections, free checked bags, reduced change fees,
and additional TrueBlue® points, with all fares including our core
offering of free inflight 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.
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
Extra or Mint® fares 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 self-service layout in select BlueCities redesigned the
way our customers travel through the airport lobby. Our user-
friendly kiosks are the first point of contact for each customer
traveling through the airport lobby and allow for contact-less
service. While all customers are encouraged to use the kiosks,
our 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. 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. For customers who prefer a more traditional experience,
our Help Desk offers full-service check-in. 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 to direct them to their next step
in the travel experience.
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
routes have the option to purchase Mint®, our premium service.
In February 2021, we unveiled a reimagined version of our Mint®
experience. The new service includes a completely refreshed
cabin design featuring private suites with a sliding door for every
Mint® customer. Each Mint® aircraft also include two Mint® Studio
suites which offers the most space in a premium experience from
any U.S. airline based on personal square footage per passenger
seat. We debuted this new premium service with a 16-seat
individual suite layout on select flights between New York and
Los Angeles in June 2021. In August 2021, we began transatlantic
PART I | ITEM 1 BUSINESS
flights to London that include the new Mint® experience with 24
individual suites.
Our inflight entertainment system onboard our Airbus A321
aircraft, Airbus A220 aircraft, and certain restyled Airbus A320
aircraft includes 100+ channels of DIRECTV®, 100+ channels of
SiriusXM Radio® and premium movie channel offerings from
JetBlue Features. Customers on our Airbus A320 and Embraer
E190 aircraft have access to 36 channels of free DIRECTV®, 100+
channels of free SiriusXM Radio® and premium movie channel
offerings from JetBlue Features. Our entire fleet is equipped
with Fly-Fi®, a broadband product that allows gate-to-gate Wi-Fi
at every seat. 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.
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.
Because of our network strength in leisure destinations, we also
sell vacation packages through our wholly owned subsidiary,
JBTP, LLC, or JetBlue Travel Products, 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.
We work to provide a superior air travel experience, including
communicating openly and honestly with customers about delays
and service disruptions. We have a Customer Bill of Rights which
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.
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
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,
Los Angeles, and San Juan, Puerto Rico. All six of our focus cities
are in regions with a diverse mix of traffic.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
5
PART I | ITEM 1 BUSINESS
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. As we
navigate through the COVID-19 pandemic, we will continue to be
nimble, react to changes in our customers' behaviors, and deploy
capacity in areas of our network that creates the most value.
Largely enabled by the Northeast Alliance (the "NEA") with
American Airlines Group Inc. ("American"), we announced nine
new BlueCities and 32 new routes in 2021. As of December 31,
2021, our network served 107 BlueCities in 31 states, the District
of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin
Islands, 24 countries in the Caribbean and Latin America, and
England, our first country in Europe.
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:
Capacity Distribution
Transcontinental
Caribbean & Latin America(1)
Florida
East
Central
West
Transatlantic(2)
TOTAL
2021
31.0 %
36.8
24.9
3.2
3.0
0.7
0.4
2020
31.7%
31.4
27.4
4.5
4.0
1.0
—
2019
32.0%
31.2
25.2
6.0
4.0
1.6
—
100.0 %
100.0 %
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
(2)
distribution table above, we have included these locations in the Caribbean and Latin America region.
In August 2021, we launched our inaugural transatlantic service from John F. Kennedy International Airport ("JFK") in New York to London Heathrow Airport. We further
expanded our presence in the transatlantic market with service from JFK to London Gatwick Airport, which began in September 2021. We expect to begin service to
London from Boston Logan International Airport in summer 2022.
In 2022, we expect to resume our plans to increase our presence in our focus cities and diversify our network as we continue to recover
from the pandemic. On February 19, 2022, we began service to Puerto Vallarta, Mexico. We have also previously announced service to
the following new destinations:
Destination
Kansas City, Missouri
Milwaukee, Wisconsin
Vancouver, Canada
Asheville, North Carolina
Service Expected to Commence
March 27, 2022
March 27, 2022
June 9, 2022
June 16, 2022
Airline Commercial Partnerships
NORTHEAST ALLIANCE
Airlines frequently participate in commercial partnerships with
other carriers in order to increase customer convenience by
providing interline-connectivity, codeshare, complementary
flight schedules, frequent flyer program reciprocity, and other
joint marketing activities. As of December 31, 2021, we had 47
airline commercial partnerships. Our commercial partnerships
typically begin as an interline agreement allowing a customer to
book a single itinerary with tickets on multiple airlines. On their
day of travel, they enjoy a simplified airport experience with single
check-in and bag drop.
In July 2020, we announced our intention to enter into a strategic
relationship with American Airlines Group Inc. ("American"). Once
fully implemented, this arrangement, known as the Northeast
Alliance (the "NEA"), includes an alliance agreement with
reciprocal code sharing on domestic and international routes
to, from or connecting through New York (John F. Kennedy
International Airport (JFK), LaGuardia Airport, and Newark Liberty
International Airport) and Boston, excluding JetBlue's European
transatlantic flying. We believe this partnership creates more
capacity, seamless connectivity for travelers in the northeast, and
offers more choices for customers across the networks of both
6
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
airlines. In addition, we believe this relationship will accelerate
our recovery as the travel industry adapts to new trends and
requirements as a result of the COVID-19 pandemic. Pursuant
to federal law, American and JetBlue submitted this proposed
alliance arrangement to the Department of Transportation (DOT)
for review. After American, JetBlue and the DOT agreed to a series
of commitments, the DOT terminated its review of the proposed
alliance. The commitments include growth commitments to
ensure capacity expansion, slot divestitures at JFK and at Reagan
National Airport near Washington, D.C. and antitrust compliance
measures. Beyond this agreement with the DOT, American and
JetBlue will also limit their coordination on certain city pair
markets within the scope of the alliance.
Implementation of the NEA began in February 2021. Since then,
JetBlue and American have collectively grown across New
York and Boston, offering customers more options for travel
and returning crewmembers back to the operations faster.
We are investing in a seamless customer experience and have
also introduced loyalty benefits that will give both JetBlue and
American customers the opportunity to earn and redeem on both
airlines.
On September 21, 2021, the United States Department of Justice
("DOJ"), along with the Attorneys General of six states and the
District of Columbia filed a lawsuit against JetBlue and American
concerning the previously implemented NEA. The lawsuit asserts
and seeks an adjudication that the NEA violates U.S. antitrust
laws, and that we and American should be permanently enjoined
from continuing, and restrained from further implementing, the
NEA.
Also on September 21, 2021, the DOT published a Clarification
Notice relating to the agreement that had been reached
between the DOT, JetBlue, and American in January 2021, at the
conclusion of the DOT’s review of the NEA ("DOT Agreement").
The DOT Clarification Notice stated, among other things, that the
DOT Agreement remains in force during the pendency of the DOJ
action against the NEA and, while the DOT retains independent
statutory authority to prohibit unfair methods of competition
in air transportation, the DOT intends to defer to DOJ to
resolve the antitrust concerns that the DOJ has identified with
respect to the NEA. The DOT simultaneously published a Notice
Staying Proceeding in relation to a complaint by Spirit Airlines,
Inc. regarding the NEA, pending resolution of the DOJ action
described above.
We believe the lawsuit is without merit and, along with American,
intends to defend itself vigorously. In November 2021, JetBlue
and American filed a motion to dismiss the DOJ's lawsuit against
the NEA. Motion practice has concluded and the parties await a
decision, while the lawsuit proceeds concurrently.
In 2022, we expect to continue to seek additional strategic
opportunities through new commercial partners as well as assess
ways to deepen existing airline partnerships, including the NEA.
We plan to do this by expanding codeshare 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.
PART I | ITEM 1 BUSINESS
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, promote brand awareness, and complement 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, Even More® Space and Speed, and other ancillary
services.
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 a 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 which helps
us offer lower fares to customers.
Customer Loyalty Program
TrueBlue® is our customer loyalty program designed to reward
and recognize loyal customers. Members earn points based
upon, among other methods, the amount paid for JetBlue flights
and services from certain commercial partners. Our points do
not expire, the program has no black-out dates, points can be
redeemed for any open seat, 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 (1) fly a minimum of 30 times with
JetBlue and acquire at least 12,000 base flight points within a
calendar year, (2) accumulate 15,000 base flight points within a
calendar year, or (3) in certain circumstances, qualify through a
minimum credit card spend of $50,000 in a calendar year.
We made several updates to our TrueBlue® program in response
to the COVID-19 pandemic. These include extending the status of
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
7
PART I | ITEM 1 BUSINESS
all current Mosaic® customers through 2021 and also reducing the
qualification requirements for customers trying to earn Mosaic®
status by 50% in 2021. Under the updated program, customers
can now enjoy Mosaic® benefits by either (1) flying a minimum of 15
times with JetBlue and acquiring at least 6,000 base flight points
within a calendar year or (2) accumulating 7,500 base flight points
within a calendar year. In certain circumstances, customers may
also qualify for Mosaic® status through a minimum credit card
spend of $30,000 in a calendar year plus at least 4,000 base
points during the calendar year. These reduced qualification
requirements were effective through the end of 2021.
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 co-branded credit cards in the United States
are issued in partnership with Barclaycard® on the MasterCard®
network. We also have co-branded loyalty credit cards issued
by Banco Popular de 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 various agreements with other loyalty partners, including
financial institutions, hotels, and car rental companies, that allow
their customers to earn TrueBlue® points through participation
in our partners’ programs. We intend to continue to develop the
footprint of our co-branded credit cards and pursue other loyalty
partnerships in the future.
Operations and Cost Structure
Historically, our cost structure has allowed us to price fares lower
than many of our competitors and was a principal reason for our
profitable growth prior to the onset of the COVID-19 pandemic
in 2020. Our cost advantage relative to some of our competitors
was 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. We will remain nimble and continue to execute on our
cost plan in the face of changing customer behaviors, and staffing
related cost pressures, as we continue to navigate through the
COVID-19 pandemic.
Route Structure
JetBlue's 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 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 typical 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. Generally speaking, 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.
8
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
Our flying in 2021 and 2020 did not follow typical historical
patterns and was instead shaped by our responses to the
changes in travel behavior triggered by the COVID-19 pandemic
and associated government travel and other restrictions in the
U.S. and international destinations we serve.
■ New York metropolitan area - We are New York's Hometown
Airline®. Approximately one-half of our flights originate from
or are destined for the New York metropolitan area. JFK is New
York's largest airport, and we are the second largest airline
at JFK as measured by domestic seats. Our 2021 operations
accounted for 37% of seats offered on domestic routes from
JFK. At the end of 2021, we served 87 nonstop destinations
from JFK. We also serve New Jersey's Newark Liberty
International Airport, or Newark, New York City's LaGuardia
Airport, or LaGuardia, New York's Stewart International Airport,
or Newburgh, and New York's Westchester County Airport,
or White Plains. In 2022, through the NEA with American,
we expect to offer nearly 300 daily departures at JFK, with
JetBlue operating approximately 200 flights. At LaGuardia, we
anticipate increasing our service to over 50 daily departures,
which would triple pre-pandemic levels.
■ Boston - We are the largest carrier at Boston's Logan
International Airport, or Boston, measured by domestic
seats. At the end of 2021, we flew to 69 nonstop destinations
from Boston and our operations accounted for 29% of all
seats offered in Boston. We anticipate flying up to 150 daily
departures in 2022 from Boston. We further expect to begin
services between Boston and London in the summer of 2022.
Together with American, the NEA will offer more than 200 daily
departures at Boston, serving 46 of the top 50 U.S. mainland
markets from Boston.
■ Caribbean and Latin America - At the end of 2021, we had
37 BlueCities in the Caribbean and Latin America. San Juan,
Puerto Rico is our only focus city outside of the Continental U.S.
We are a leading carrier in Puerto Rico serving three airports
and 20 nonstop destinations. We are also the largest airline in
the Dominican Republic, serving four airports and 17 nonstop
destinations.
PART I | ITEM 1 BUSINESS
■ Fort Lauderdale-Hollywood - We are a leading carrier at
Fort Lauderdale-Hollywood International Airport, or Fort
Lauderdale-Hollywood, with approximately 20% of all seats
offered in 2021. We served 55 nonstop destinations from Fort
Lauderdale-Hollywood at the end of 2021.
■ Orlando - We are the leading carrier measured by seats at
Orlando International Airport, or Orlando. At the end of 2021,
we served 28 nonstop destinations from Orlando and our
operations accounted for 10% of all seats offered in Orlando
in 2021.
■ Los Angeles area - We are the seventh largest carrier in the Los
Angeles area measured by seats, operating from Los Angeles
International Airport, or LAX, Burbank's Bob Hope Airport, or
Burbank, and Ontario International Airport, or Ontario. In July
2020, we announced our plans to make LAX a focus city and
our primary base of operations on the west coast. To enable
this shift, we relocated our operations from Long Beach Airport
along with our crew and maintenance bases in October 2020.
At the end of 2021, we served 24 nonstop destinations from
LAX and our operations accounted for 6% of all seats offered
in 2021.
Fleet Structure
We currently operate five types of aircraft: Airbus A220, Airbus
A320, Airbus A321, Airbus A321neo, and Embraer E190. As of
December 31, 2021, our fleet had an average age of 11.6 years.
Our Airbus A220 aircraft have 140 seats in a single cabin layout.
We placed our first Airbus A220 aircraft into service in April 2021
and had eight of these aircraft in our fleet at December 31, 2021.
Our Airbus A320 aircraft in the classic configuration have 150
seats. Those A320 aircraft which have gone through our cabin
restyling program have 162 seats. Our multi-year restyling program
allows us to increase capacity in a capital-efficient and customer-
focused way. As of December 31, 2021, we had 113 restyled Airbus
A320 aircraft in service. We expect the cabin restyling program
to be completed in the first quarter of 2022.
Our Airbus A321 aircraft in a single cabin layout have 200 seats and
those with our Mint® offering have 159 seats. Our Airbus A321neo
aircraft have 200 seats and those with our Mint® offering have 160
seats. The long range version of our A321neo aircraft with Mint®
offering have 138 seats while our Embraer E190 aircraft have 100
seats.
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.
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. We temporarily parked a portion
of our fleet throughout 2020 due to the reduction in demand
expectations and lower capacity driven by the COVID-19 pandemic.
In 2021, we began returning these aircraft back into service as
demand for air travel started to rebound signaling the beginnings
of a recovery. All parked aircraft were returned to service by the
end of November 2021.
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 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 time and materials agreements for the
repair, overhaul, modification, and logistics of our Airbus aircraft
engines. We also have maintenance agreements for our Embraer
E190, Airbus A220, and Airbus A321neo 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.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
9
PART I | ITEM 1 BUSINESS
Aircraft Fuel
Aircraft fuel continues to be one of our largest expenses. Its
price has been extremely volatile due to global economic and
geopolitical factors which we can neither control nor accurately
predict. Our 2021 fuel consumption increased by 68.9% compared
to 2020 due to lower capacity in 2020 as demand for travel
declined significantly as result of the COVID-19 pandemic. We
use third parties 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
2021
696
1,436
2.06
23.5%
$
$
2020
412
631
1.53
$
$
2019
885
1,847
2.09
$
$
13.5 %
25.3 %
(1) Total cost and average price per gallon each include related fuel taxes as well as effective fuel hedging gains and losses.
We attempt to protect ourselves against the volatility of fuel
prices by entering into a variety of derivative instruments. These
include call spread options, call options, swaps, caps, collars, and
basis swaps with underlyings of jet fuel, crude and heating oil. We
did not have any derivatives outstanding at December 31, 2021
and 2020.
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.
In response to the travel restrictions, decreased demand, and
other effects the COVID-19 pandemic has had on the Company's
business, we secured over $4 billion in net proceeds through
various debt and equity financing activities in 2020 to provide
additional liquidity which allowed us to navigate through the
pandemic in the short-term.
In 2021, as we began to recover from the pandemic, we made
significant efforts in deleveraging the Company and strengthening
our balance sheet. We reduced our total debt balance by
$0.9 billion from $4.9 billion at December 31, 2020 to $4.0 billion
at December 31, 2021. The net book value of our assets pledged as
security under various financing arrangements also decreased by
$1.2 billion from $6.9 billion at December 31, 2020, to $5.7 billion
at December 31, 2021.
As a result of our actions, the outlook for our credit ratings
improved to "Positive" at each of the three major credit rating
agencies in 2021.
We will continue to evaluate our financing needs as we continue
to navigate through the pandemic and related recovery.
JetBlue Technology Ventures
JetBlue Technology Ventures, LLC, or JTV, is a wholly owned
subsidiary of JetBlue. JTV invests in and partners with early
stage startups with goals of improving the travel, hospitality,
and transportation industries. The investment focus of JTV is
as follows:
■ Seamless Customer Journey: Solutions that brighten the
journey and enable a seamless travel experience throughout
every part of the customer's trip.
■ Reimagining the Accommodation Experience: Evolutions in
hospitality, including alternative accommodations, and the
underlying products and services that power the industry.
■ Next-Generation Aviation Operations and Enterprise Tech:
Innovations that enhance safety, improve operations, and drive
enterprise-wide efficiencies.
■ Innovation in Loyalty, Distribution, and Revenue: Technologies
that personalize and diversify commerce, simplify payments,
and improve revenue opportunities.
■ Sustainable Travel: Advanced methods of measuring and
reducing emissions, improved environmental protections,
and game-changing transportation powered by alternative
propulsion systems.
JetBlue Travel Products
In 2018, we launched JBTP, LLC, or JetBlue Travel Products,
which includes our JetBlue Vacations® brand for hotel or cruise
packages, and other non-air travel products such as travel
insurance, car rental, lodging and activities. With its Inspiration
Center headquartered in Fort Lauderdale, we believe JetBlue
Travel Products will play an important role in delivering our vision
of inspiring humanity, extending our reach further across the
travel ribbon to offer customers an even more seamless travel
experience.
In March 2021, we introduced Paisly by JetBlue ("Paisly"), a
new travel website that leverages smart technology to provide
individually tailored offers, such as hotel stays and car rentals,
to our customers based on their itinerary. Paisly was designed to
complement our JetBlue Vacations® brand. We believe it will add
breadth to our product offerings, learn more about customers'
preferences, and contribute to future earnings growth.
10
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART I | ITEM 1 BUSINESS
TWA Flight Center Hotel
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. As part of the
plan, a 75-year lease agreement was entered into between the
PANYNJ and the Flight Center Hotel, LLC, a partnership of MCR
Development, LLC and JetBlue. The TWA Flight Center Hotel
opened for business in 2019. As of December 31, 2021, we have
an approximate 10% ownership interest in the hotel.
Human Capital Management
Our People and Culture
We believe our success depends on our crewmembers delivering
the JetBlue Experience in the sky and on the ground. One of our
competitive strengths is a service oriented 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.
We first introduce our culture 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, various leadership training programs, and
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. Known as JetBlue Gateways, we offer a suite
of industry-leading career development programs that provides
an opportunity for both crewmembers and external applicants to
pursue a path to becoming a pilot or maintenance technician at
JetBlue. There are seven distinct education and training paths
offered:
■ Gateway University: Open to crewmembers and external
applicants, students at Aviation Accreditation Board
International accredited partner colleges and universities can
become first officers via a prescribed, time-building pathway.
■ Gateway Select: Open to crewmembers and external applicants,
candidates with little or no flying experience can become pilots
after a rigorous training and time-building program.
■ Gateway Direct - Flight Operations: Open to crewmembers only,
participants can depart on a prescribed college education,
training, and time-building pathway with a partner school and
airline to becoming a pilot.
■ Gateway Flex - Flight Operations: Open to crewmembers only,
participants looking for flexibility in becoming a pilot can
choose their own location for training and time-building within
a defined framework.
■ Gateway Direct - Technical Operations: Open to crewmembers
only, participants enroll in a defined training and experience-
building pathway to becoming an aircraft maintenance
technician.
■ Gateway Flex - Technical Operations: Open to crewmembers
only, participants can depart their current position and pursue
a flexible path to becoming an aircraft maintenance technician
within a defined framework.
■ Gateway Family: Open to families of crewmembers only,
participants can become pilots through a defined education,
training, and time-building path.
We believe a direct relationship between crewmembers and
our leadership is in the best interests of our crewmembers,
our customers, and our stockholders. Except for our pilots and
inflight crewmembers, our other frontline crewmembers do not
have third-party representation. In 2014, JetBlue pilots elected
to be represented by the Air Line Pilots Association, or ALPA.
The National Mediation Board, or NMB, certified ALPA as the
representative for JetBlue pilots. The parties reached a final
agreement for our first collective bargaining agreement which
was ratified by the pilots in July 2018. The agreement is a four-year
renewable contract effective August 1, 2018. In February 2022,
the parties commenced Section 6 negotiations for a successor
contract, in accordance with the collective bargaining agreement.
In April 2018, JetBlue inflight crewmembers elected to be
represented by the Transport Workers Union of America, or TWU.
The NMB certified the TWU as the representative for JetBlue
inflight crewmembers. The parties reached a final agreement for
the first collective bargaining agreement which was ratified by
our inflight crewmembers in December 2021. The agreement is a
five-year, renewable contract effective December 13, 2021.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
11
PART I | ITEM 1 BUSINESS
As of December 31, 2021, approximately 46 percent of our full-time equivalent crewmembers were represented by unions. The following
table sets forth our crewmember groups and the status of their respective collective bargaining agreements.
Crewmember Group
Representative
Crewmembers(1)
Pilots
Inflight
Air Line Pilots Association (ALPA)
Transport Workers Union (TWU)
3,850
4,833
Amendable Date(2)
August 1, 2022
December 13, 2026
(1) Approximate number of active full-time equivalent crewmembers as of December 31, 2021.
(2) Our relations with our labor organizations are governed by Title II of the Railway Labor Act of 1926, pursuant to which the collective bargaining agreements between us and
these organizations do not expire but instead become amendable as of a certain date if either party wishes to modify the terms of the 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. 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 provide what
we believe to be industry-leading job protection through these
agreements. We believe these agreements provide JetBlue and
crewmembers flexibility and allow us to react to crewmember
needs more efficiently than collective bargaining agreements.
A key feature of the direct relationship with our crewmembers is
our Values Committees which are made up of peer-elected frontline
crewmembers from each of our major work groups, other than
pilots and inflight crewmembers. Values Committees 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. In 2021, we saw upward pressure
on wages within many of the markets we serve and this trend is
expected to continue in 2022.
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, crewmember engagement surveys, and active
leadership participation in new hire orientations. Leadership is
also heavily involved in periodic open forum meetings across our
network, called “pocket sessions” which are often videotaped and
posted on our intranet. By soliciting feedback for ways to improve
our service, teamwork and work environment, our leadership team
works to keep crewmembers engaged and makes our business
decisions transparent.
In 2021, we launched two development programs focused on
creating greater access to select career paths, fostering equity
by removing barriers to entry and increasing representation in
senior leadership roles. One of the programs, known as JetBlue
Emerging Talent, offers a pathway for our frontline operational
crewmembers to transition into corporate services roles which
includes hands-on experience, rotational job placements, and
job placement assistance upon completion of the program. We
welcomed the first cohort of 12 participants rotating through
the organization in 2021. The other program, known as Gateway
College, provides opportunities to crewmembers with aspiration
to pursue careers in flight operations or technical operations.
Gateway College was designed to alleviate some of the known
barriers to entry for these careers such as financing and fears
of leaving a permanent job, while adding certainty and a defined
pathway to the process. We welcomed 25 inflight and technical
operations participants through this program in 2021.
Our average number of full-time equivalent crewmembers for
the year ended December 31, 2021 consisted of 3,744 pilots, 4,381
inflight (whom other airlines may refer to as flight attendants),
3,591 airport operations personnel, 706 technicians (whom other
airlines may refer to as mechanics), 1,103 reservation agents,
and 3,168 management and other personnel. For the year ended
December 31, 2021, we employed an average of 15,452 full-time
and 4,014 part-time crewmembers.
Our average number of full-time equivalent crewmembers
increased by 8.0% compared to 2020, primarily driven by additional
hiring, as we prepare to return our operations to pre-pandemic
levels. As a result of the various voluntary separation and time
off programs implemented in response to the drastic decline in
demand for air travel brought on by the COVID-19 pandemic, our
average number of full-time equivalent crewmembers in 2020
was lower than previous years. When compared to pre-pandemic
levels in 2019, our average full-time equivalent crewmembers
decreased by 9.9%.
All JetBlue crewmembers have the right to an open and
respectful workplace. Our Code of Conduct prohibits all forms
of discrimination, and we promote open communication to
resolve any discrimination concerns. Every JetBlue director-level
crewmember and above is required to participate in unconscious
bias training.
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Crewmember Programs
We are committed to supporting our crewmembers through a
number of programs including:
■ Crewmember Resource Groups (CRGs) - We encourage
crewmembers to celebrate their individuality and build
camaraderie through our various CRGs. CRGs spearhead
programs to embrace and encourage the sharing of different
perspectives, thoughts, and ideas. At the end of 2021, we had
seven CRGs which include:
— Blue Aviasian: Celebrates the history of Asians, Asian
Americans and Pacific Islanders. The group offers immersive
cultural experiences, networking, and career development
events.
— Blue Conexión: Shares the Latino culture and language in the
workplace and community.
— JADE (JetBlue African Diaspora Experience): Explores the
rich cultures of the African diaspora. JADE leads cultural
events during Black History Month and hosts TravelCon, a
day-long event for crewmembers to learn about the diverse
experience of Black travelers, among other events.
— JetPride: Offers professional development opportunities for
LGBTQ+ crewmembers and their allies. During Pride Month,
crewmembers march across the network to celebrate
diversity, equality and acceptance.
— SAJE (South Asian JetBlue Experience): Created in 2021,
SAJE shines a light on the immensely diverse cultures
and communities that make up south Asia. It provides an
opportunity for our crewmembers who identify as South
Asian to connect with one another, and for all crewmembers
to better understand their unique backgrounds, culture, and
experiences.
— Vets in Blue: Provides a forum for crewmembers who
honorably serve or have served in the Armed Forces. Vets
in Blue strengthens JetBlue’s efforts to employ and retain
members of the military through outreach, networking
events, career fairs, and mentoring opportunities. Many
former service members enjoy second careers with JetBlue
in airport operations, corporate security, inflight, flight
operations and more.
— Women in Flight: Provides members with educational
networking opportunities that inspire career and personal
growth. Typically, the group hosts our annual Fly Like a Girl
event, teaching young girls about different career paths in
aviation.
■ 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 a tax-exempt entity.
JCCF was created to assist JetBlue crewmembers and their
immediate family members (IRS Dependents) with short-term
financial support in times of crisis and unexpected emergencies
when other resources are not available. Funds for JCCF grants
come directly from crewmember donations via a tax-deductible
payroll deduction. The assistance process is confidential with
only the fund administrator and coordinator knowing the identity
of the crewmembers in need.
PART I | ITEM 1 BUSINESS
■ 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 an undergraduate degree through self-directed online
college courses facilitated by JetBlue. This reemphasizes our
continuous effort to help provide assistance to our most valued
asset, our people. To build on the program, we introduced the
Master's Pathway program in 2019 which is designed to help
crewmembers who would like to advance their education even
further by pursuing a master's degree. The Master's Pathway
program partners with reputable institutions to provide a
variety of benefits to crewmembers including tuition discounts,
scholarships, and access to specialized support services.
■ Lift Recognition Program - Created 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 leadership team periodically
hosts an event for the crewmembers who receive the highest
number of Lift award recognitions in each quarter of the year.
Community Programs
JetBlue is committed to supporting the communities and
BlueCities we serve through a variety of community programs
including:
■ Corporate Social Responsibility (CSR) - The CSR strategy,
JetBlue For Good, focuses on three areas that our customers
and crewmembers are passionate about: (1) youth and
education, (2) community, and (3) environment.
— Youth and Education: As a pillar of JetBlue For Good, our
youth and education efforts focus on providing children from
underserved areas the resources needed to obtain a quality
education and sustainable careers. We do this through
various initiatives including donating age-appropriate books
to areas where books are scarce outside of school walls. We
also host regular career days that help expose young adults
to the careers available to them upon graduation and beyond.
— Community: We have a longstanding tradition of supporting
dedicated community organizations that make our BlueCities
better. We show our support through partnerships, donations
and more than the 1 million-plus volunteer hours logged by
our crewmembers since 2011.
— Environment: JetBlue’s primary environmental sustainability
priority is reducing and managing carbon emissions from jet
fuel. We are committed to investing in more fuel-efficient
technologies, renewable fuels, electric ground service
equipment, logistics and other measures to reduce our
carbon footprint.
■ JetBlue Foundation - Created in 2013 as a 501(c)(3) non-profit
corporation, the JetBlue Foundation is a JetBlue-sponsored
organization focused on raising awareness for careers in
science, technology, engineering and math (STEM) and aviation.
The JetBlue Foundation focuses on four main areas:
— Partnering with organizations and communities to provide
access to STEM programs for students from traditionally
underserved communities;
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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PART I | ITEM 1 BUSINESS
— Investing in programs geared toward students from diverse
backgrounds to create a lifelong interest in STEM as early as
possible in a student's academic career;
— Creating equal opportunities and increasing access for all
students to spark a passion for STEM; and
— Building a more diverse talent pipeline for the aviation
industry.
Environmental, Social, and Governance
Management
Mitigating risks to ensure the long-term sustainability of our
business is imperative for JetBlue. We remain focused on
continuing to lead in environmental, social, and governance
("ESG") initiatives, through ambitious target setting, clear actions
and strategy, and transparent reporting.
ENVIRONMENTAL
JetBlue is committed to mitigating climate risk and our
environmental vision is to lead the way toward a lower carbon
future of aviation, with an ultimate target of achieving net-zero
carbon emissions by 2040. As one of our key company-wide
strategic priorities, we are pursuing the following six key levers
to decarbonize our business:
(1) Aircraft Efficiency: Our investments in new next generation
aircraft is expected to increase fuel efficiency and reduce
costs. The Airbus A321neo and Airbus A220 aircraft bring
materially lower fuel burn and associated emissions per seat
than the aircraft they are replacing. Since 2019, we have
taken deliveries of 21 Airbus A321neo aircraft and 8 Airbus
A220 aircraft. Going forward, we expect to take delivery of
64 Airbus A321neo aircraft and 92 Airbus A220 aircraft.
(2) Fuel Optimization: We continuously fine-tune our operation to
ensure adherence to fuel savings procedures. We operate a
cross-functional team that reviews, analyzes, and implements
new fuel-savings opportunities across our operation and
multiple workgroups.
(3) Sustainable Aviation Fuel ("SAF"): We are regularly flying
with SAF on our existing aircraft, which reduces lifecycle
emissions by up to 80% per gallon before being blended
with conventional fuel. We view the adoption of SAF as the
most promising means for us to rapidly and directly reduce
emissions in the aviation industry and drive us towards a net-
zero operation. Enabled by our recent agreements with three
SAF producers, we expect to be ahead of schedule to achieve
our goal of converting 10% of our jet fuel usage to SAF by
2030.
(4) Electric Ground Operations: Where feasible, we are
converting our Ground Service Equipment ("GSE") to electric
and maximizing electric ground power and air systems for
our aircraft to minimize our fuel use and emissions on the
ramp. We are committed to converting 40% of our GSE to
electric by 2025, and 50% by 2030. We do not expect this
conversion program to have a material impact on our annual
capital expenditures.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
(5) Technology Partnerships: We are committed to playing an
active role in advancing the future of sustainable aviation
technologies. Through our subsidiary, JetBlue Technology
Ventures, we support and invest in alternative energy
aircraft technologies, such as those developing electric- and
hydrogen-fueled aircraft.
(6) Carbon Offsetting: For unavoidable emissions today, we
purchase high-quality, verified offsets. The costs of these
offsets are included within Aircraft fuel and related taxes on
our consolidated statements of operations.
In 2020, we became the first major U.S. airline to achieve
carbon neutrality for all domestic flights, which was achieved
through carbon offsetting. Our target is to achieve net-zero
carbon emissions by 2040, ten years ahead of the Paris Climate
Agreement. We are committed to continuously driving down in-
sector emissions and our associated usage of carbon offsets as
we approach net-zero.
We view the adoption of SAF as the most promising lever for the
aviation industry to reach its ambitious decarbonization goals.
Throughout 2021, we took regular delivery of SAF from Neste for
flights flying out of San Francisco International Airport. In July
2021, we entered into a relationship with World Energy and World
Fuel Services to fuel flights flying out of Los Angeles International
Airport with SAF. In September 2021, we announced an agreement
with SG Preston which we expect will deliver at least 670 million
gallons of SAF in the Northeast over a 10-year period with a
target start in the fourth quarter of 2023. Enabled by our recent
agreements, we believe we are ahead of pace to achieve our goal
of converting 10% of our jet fuel usage to SAF by 2030.
In October 2021, we, along with JetBlue Technology Ventures,
formed the Aviation Climate Task force with nine other airlines
and the Boston Consulting Group. Together, we plan to invest
in and facilitate the development of emerging technologies to
decarbonize aviation.
SOCIAL
Every day we aim to live our mission of inspiring humanity by
driving inclusion both inside and outside the Company. While we
recognize that there is a lack of diversity in certain areas of the
commercial aviation industry, we are taking steps to address that
challenge.
Our efforts to promote diversity, equity and inclusion ("DEI") are
centered around three key areas: (1) people; (2) sourcing; and (3)
brand.
■ People
— Develop a hiring process that mitigates harmful biases in
order to improve representation of talent at all levels of the
Company.
— Educate and inform on DEI through informal learning and
review of practices and policies.
— Focus on our people, continue to promote and invest in
diverse talent.
PART I | ITEM 1 BUSINESS
— Our goal is to double our racial and ethnic minority
representation at the officer and director level to 25%, and
to increase our female representation at these levels to 40%,
by the end of 2025.
■ Sourcing
We report annually on ESG issues using the Sustainable
Accounting Standards Board and Task Force on Climate-related
Financial Disclosures frameworks. Our Environmental Social
Governance Report can be found on our Investor Relations
website at http://investor.jetblue.com.
— Engage minority and women-owned business enterprises
with a proven commitment to DEI in their lines of business.
Our goal is to grow our spend with businesses owned by
underrepresented groups by 5% annually. In 2021, we engaged
with 158 diverse business partners and spent $37 million with
diverse businesses.
■ Brand
— Ensure inclusivity in our offerings by capturing the diverse
needs across our customer base.
— Partner with values-aligned businesses and organizations
within the communities we serve.
— Evaluate social and market shifts and their impact on our
customers' experience.
GOVERNANCE
We believe that strong corporate governance, informed by direct
engagement with our stakeholders, creates the foundation that
allows us to pursue our mission to inspire humanity. We strive to
conduct our business in ways that are principled, transparent,
and accountable to our stakeholders.
We regularly develop, evaluate, and reshape company policies
and procedures to ensure fairness and alignment to our values.
We take a proactive approach to tracking, operationalization,
and mitigation of risks JetBlue faces. This includes climate risk
scenario planning and internal response protocols in response to
ESG trends. We are dedicated to disclosing accurate data across
a variety of material topics such as governance, executive pay,
company emissions, and workforce diversity.
Our Board of Directors ("Board") has ultimate oversight of
enterprise risks and is informed of these risks quarterly by
the Audit Committee and at least annually by the Governance
and Nominating Committee. In 2019, our Board formed an ESG
Subcommittee to the Governance and Nominating Committee
to ensure the Board is aware of the Company's ESG strategy and
has a comprehensive understanding of ESG matters, which we
continued to operate throughout 2021.
Regulation
Airlines are heavily regulated, with rules and regulations set by
various federal, state and local agencies. We also operate under
specific regulations due to our operations within the high density
airspace of the northeast U.S. Most of our airline operations are
regulated by U.S. governmental agencies including:
DOT
The DOT primarily regulates economic issues affecting air
service including, but not limited to, certification and fitness,
insurance, consumer protection and competitive practices. It
Response to the COVID-19 Pandemic
In response to the COVID-19 pandemic, we continued to prioritize
the safety of our crewmembers while continuing to support the
needs of our operations during this period. Some of the steps we
have taken since the onset of the pandemic include:
■ Introduced "Safety from the Ground Up", an initiative with a
multi-layer approach that encompasses enhanced safety and
cleaning measures on our flights, at our airports, and in our
offices;
■ Instituted temperature checks for all of our customer-facing
and support-center crewmembers;
■ Updated our sick leave policy to provide up to 14 days of paid
sick leave for crewmembers who were diagnosed with COVID-19
or were required to quarantine;
■ Partnered with Northwell Direct to provide a comprehensive
set of COVID-19 services and programs to support our
crewmembers;
■ Implemented a framework for internal contact tracing,
crewmember notification, and a return to work clearance
process for all crewmembers, wherever they may be located;
■ Administered more frequent disinfecting of common surfaces
and areas with high touchpoints in our facilities; and
■ Conducted regular virtual "pocket sessions" to provide
company-wide updates to our crewmembers as we navigate
through the pandemic.
As a result of a federal government vaccine mandate, and by
virtue of JetBlue being a contractor to the federal government,
our crewmembers may be required to be vaccinated against the
SARS-Cov-2 novel coronavirus unless an approved medical or
religious accommodation is granted. As a result, we may face
staffing shortages as we enforce this mandate, which may disrupt
our operations.
has the authority to investigate and institute proceedings to
enforce its economic regulations, including its tarmac delay,
full fare advertising and fair and deceptive practice regulations,
and may assess civil penalties, revoke operating authority and
seek criminal sanctions for various levels and manners of non-
compliance.
FAA
The FAA primarily regulates flight operations, in particular,
matters affecting air safety. This includes but is not limited
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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PART I | ITEM 1 BUSINESS
to airworthiness requirements for aircraft, the licensing of
pilots, mechanics and dispatchers, and the certification of
flight attendants. It requires each airline to obtain an operating
certificate authorizing the airline to operate at specific airports
using specified equipment. Like all U.S. certified carriers,
JetBlue cannot fly to new destinations without the prior
authorization of the FAA. After providing notice and a hearing,
the FAA 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 a requisite level
of oversight and performs frequent in-person spot inspections
of our aircraft, crewmembers and records. The FAA 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 wind shear
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.
Transportation Security Administration and
U.S. Customs and Border Protection
The Transportation Security Administration, or 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
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
In addition to the federal regulations with which we must comply,
we are also subject to state and local laws and regulations in the
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. Additionally, we have Slots at other Slot-controlled
airports governed by unique local ordinances not subject to the
High Density Rule, such as Westchester County Airport in White
Plains, NY. Gate access is another common issue at certain
airports.
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, England, Grenada,
Guadeloupe, Guatemala, Guyana, Haiti, Jamaica, Mexico,
Peru, Saint Lucia, St. Maarten, Trinidad and Tobago, and the
Turks and Caicos Islands. We anticipate further expanding our
network to Canada in 2022. 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 FAA as well as the applicable foreign government. During
2021 and 2020, our flight operations to many of these countries
were disrupted by travel restrictions that were implemented in
response to the COVID-19 pandemic.
The airline industry is one of the most heavily taxed in the U.S.,
with taxes and fees accounting for approximately 15% 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,
We believe we are operating in 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.
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Other
ENVIRONMENTAL
We are subject to various federal, state and local laws relating to
the protection of the environment. This includes the regulation
of greenhouse gas ("GHG") emissions, 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 airport 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
San Diego airport are in compliance with the noise curfew limits,
but on occasion when we experience irregular operations, we may
violate these curfews.
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 ground operations 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 intended to promote carbon-
neutral growth beyond 2020. Annual international emissions
reporting is required via CORSIA as of the 2019 reporting year, and
offsetting compliance is scheduled to be implemented through
multiple phases beginning in 2021. In 2020, given the impacts
of COVID-19 which dramatically reduced 2020 emissions, ICAO
agreed that the baseline from which the industry achieves carbon
neutral growth would be from 2019 only, rather than an average of
2019 and 2020 as originally intended. ICAO continues to develop
details regarding implementation, but we expect compliance with
CORSIA will increase our operating costs.
As part of our sustainability and environmental strategy, we
are embracing new technologies and making changes that
will ultimately benefit our crewmembers, customers, and
stockholders. We discuss some of our sustainability initiatives
in “—Environmental, Social Governance – Environmental” above.
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
PART I | ITEM 1 BUSINESS
FOREIGN OWNERSHIP
Under federal law and DOT regulations, JetBlue must be controlled
by U.S. citizens. In this regard, our chief executive officer 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 Federal Communications
Commission, or FCC. To the extent we are subject to FCC
requirements, we take all necessary steps to comply with those
requirements.
Additionally, as a result of our operations to Havana, Cuba, we
are required to comply with regulations promulgated by the U.S.
Department of the Treasury's Office of Foreign Assets Control.
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 various types of insurance 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.
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.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
17
PART I | ITEM 1A RISK FACTORS
ITEM 1A RISK FACTORS
We are subject to various risks that make an investment in our
securities risky. The events and consequences discussed in these
risk factors could, in circumstances we may or may not be able to
accurately predict, recognize, or control, have a material adverse
effect on our business, liquidity, financial condition, and results
of operations. In addition, these risks could cause our actual
results to differ materially from those we express in forward-
looking statements contained in this Annual Report or in other
Company communications. These risk factors do not identify
all risks that we face; our operations could also be affected by
factors, events, or uncertainties that are not presently known to
us or that we currently do not consider to present significant risks
to our operations.
Risks Related to the COVID-19 Pandemic
The global COVID-19 pandemic has had, and
is expected to continue to have, a material
adverse impact on the travel industry generally
and, as a result, on our business and results of
operations, and these impacts may persist for
an extended period of time or become more
pronounced over time.
The global spread and impact of the COVID-19 pandemic is
complex, unpredictable, and continuously evolving and has
resulted in significant disruption and additional risks to our
business; the travel and hospitality industries; and the global
economy. The COVID-19 pandemic has led governments and
other authorities around the world to impose measures intended
to control its spread, including restrictions on large gatherings
of people, travel bans, border closings and restrictions, business
closures, quarantines, shelter-in-place orders, and social
distancing and masking measures and vaccination mandates.
As a result, the COVID-19 pandemic, including existing and new
variants, and its consequences have significantly reduced global
passenger air travel and have had a material detrimental impact
on global commercial activity across the travel and hospitality
industries, all of which has had, and is expected to continue to
have, a material adverse impact on our business, operations, and
financial results.
The extent, duration, and magnitude of the COVID-19 pandemic's
effects will depend on various factors, all of which are highly
uncertain, difficult to predict and not controlled by us, including,
but not limited to, the impact of the pandemic on global and
regional economies, travel, and economic activity, as well as
actions taken by governments, businesses, and individuals in
response to the pandemic, including vaccination rates in the
markets where we operate, and any additional resurgence of
COVID-19 and the development of new variants. These factors
include the impact of the COVID-19 pandemic on unemployment
rates and consumer discretionary spending; governmental or
regulatory orders that impact our business and our industry,
including mandates that require all passengers and our
crewmembers to be vaccinated; the demand for air travel; levels
of consumer confidence; COVID-19-based health and safety
protocols; the ability to effectively and widely manufacture and
distribute vaccines and broad acceptance of the vaccine by the
general population; and the pace of recovery when the pandemic
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
subsides. Moreover, even after shelter-in-place orders and travel
bans and advisories are lifted, and vaccines are more widely
distributed and available and vaccination rates increase, demand
for air travel may remain depressed for a significant length of
time, and we cannot predict if and when demand will return to pre-
COVID-19 levels. In addition, we cannot predict whether business
travel for in-person meetings will decrease over the long-term
due to technological advancements in, and consumer acceptance
and adaptation to, virtual meetings and/or changes in customer
preferences.
The COVID-19 pandemic has subjected our business, operations,
and financial condition to a number of significant risks:
DEMAND, CAPACITY, REVENUES AND EXPENSES
With the global spread of COVID-19 beginning in March 2020, the
Company began experiencing a significant decline in international
and domestic demand related to COVID-19 during the first quarter
of 2020, and this reduction in demand has continued through the
date of this report and is expected to continue for the foreseeable
future. The decline in demand caused a material deterioration in
our revenues, resulting in a net loss of $182 million and $1.4 billion
for the years ended December 31, 2021 and 2020, respectively.
Additionally, the U.S. Congress has considered legislation that
would mandate all passengers on our domestic flights to be
vaccinated, which could negatively impact demand in certain
of our markets. The continued decline in demand, which is
expected to continue for the foreseeable future, is expected to
have a material adverse impact on our business, operating results,
financial condition, and liquidity.
The COVID-19 pandemic has caused us, and could continue to
cause us, to incur additional expenses. While governments
have and may continue to implement various stimulus and
relief programs, it is uncertain whether and to what extent we
will be eligible to participate in, or successfully access, such
programs, whether conditions or restrictions imposed under
such programs will be acceptable, and whether such programs
will be effective in avoiding or mitigating the financial impacts
of the COVID-19 pandemic. Further, we have incurred additional
costs related to severance payments and may incur additional
expenses related to restructuring activities in future periods.
Even after the COVID-19 pandemic subsides and the associated
restrictions begin to ease, we could experience other short or
longer-term impacts on our costs, including, for example, the
PART I | ITEM 1A RISK FACTORS
need for enhanced health and hygiene standards or certifications,
social distancing requirements or other precautionary measures
in response to the health and safety challenges presented by
the COVID-19 pandemic. These effects could impact our ability
to generate profits even after revenues improve. The Company
has and expects to continue to focus on reducing expenses and
managing liquidity.
OPERATIONS
In response to the significant decline in demand for air travel across
our system, we have taken actions and continue to evaluate spending
to manage operating expenses and optimize our financial resources.
These actions include a temporary reduction in our workforce
across our BlueCities and our support centers in 2020, eliminating
non-essential spending and corporate initiatives, and reducing
costs. We have received, and may continue to receive, demands
or requests from labor unions that represent our colleagues,
whether in the course of our periodic renegotiation of our collective
bargaining agreements or otherwise, for additional compensation,
healthcare benefits, or other terms that could increase costs, and
we could experience labor disputes or disruptions as we continue to
implement our mitigation plans. Additionally, as a result of a federal
government mandate and by virtue of JetBlue being a contractor
to the federal government, our crewmembers who do not receive
an approved medical or religious accommodation may be required
to be vaccinated. As a result, we may face staffing shortages as
we begin to enforce this mandate that may disrupt our operations.
Further, once the effects of the pandemic subside, the recovery
period could be extended and we expect that certain operational
changes, particularly with respect to enhanced health and safety
measures and global care and cleanliness certifications, will be
necessary over the long-term.
Further, certain crewmembers of the Company, its suppliers and
its business partners, such as airport, air traffic personnel, and
those working on certain production lines, have tested positive
for or been suspected of having COVID-19, which has resulted in
facility closures, reduction in available staffing, and disruptions to
the Company’s overall operations as well as that of our suppliers.
The Company’s operations may be further impacted in the event
of additional instances of actual or perceived risk of infection
among crewmembers of the Company, its suppliers or its business
partners, and this impact may have a material and adverse effect
if the Company is unable to maintain a suitably skilled and sized
workforce and address related crewmember matters.
offering for $750 million of 0.50% convertible notes, executed a
number of aircraft sale-leaseback transactions, and temporarily
grounded a portion of its fleet. There is no guarantee that debt
financings will be available in the future to fund our obligations or
will be available on terms consistent with our expectations. We
also expect the ongoing impact of the COVID-19 pandemic on the
financial markets could also adversely affect our ability to raise
equity financing in the future. Changes in the credit ratings of our
debt, including our revolving credit facility and outstanding senior
notes, could have an adverse impact on our interest expense. As
a result of the general economic uncertainty and the impact of
the COVID-19 pandemic, our credit ratings have been downgraded.
If our credit ratings were to be further downgraded, or general
market conditions were to ascribe higher risk to our credit rating
levels, our industry, or our Company, our access to capital and the
cost of debt financing would be negatively impacted.
The Company may also take additional actions to improve its
financial position, including measures to improve liquidity, such as
the issuance of additional unsecured and secured debt securities,
equity securities and equity-linked securities, the sale of assets
and/or the entry into additional bilateral and syndicated secured
and/or unsecured credit facilities. There can be no assurance as to
the timing of any such issuance, which may be in the near term, or
that any such additional financing will be completed on favorable
terms, or at all. Any such actions may be material in nature and
could result in significant additional borrowing. The Company's
reduction in expenditures, measures to improve liquidity or other
strategic actions that the Company may take in the future in
response to COVID-19 may not be effective in offsetting decreased
demand, and the Company will not be permitted to take certain
strategic actions as a result of restrictions under the CARES Act,
the Consolidated Appropriations Act, and the American Rescue
Plan Act, which could result in a material adverse effect on the
Company's business, operating results, liquidity and financial
condition.
GROWTH
The COVID-19 pandemic has negatively impacted, and could
continue to impact, the pace and timing of our growth. As a
result of the COVID-19 pandemic, the Company reduced its
planned capital expenditures and operating expenditures in 2020
(including by postponing projects deemed non-critical to the
Company's operations), suspended share repurchases under its
share repurchase program, and grounded or redeployed aircraft.
FINANCIAL CONDITION AND INDEBTEDNESS
SECURITIES MARKETS VOLATILITY
As we manage through the effects of the pandemic, our level of
indebtedness has increased and may continue to increase. To
enhance our liquidity profile and cash position in response to the
COVID-19 pandemic, the Company suspended share repurchases
under its share repurchase program, executed two new term loan
agreements and immediately drew down on these facilities for
the full amount available, borrowed on its existing $550 million
revolving credit facility, completed the public placements of
equipment notes in an aggregate principal amount of $923 million,
completed a public offering of 42 million shares of our common
stock for net proceeds of $583 million, completed a private
The global stock markets have experienced, and may continue
to experience, significant volatility as a result of the COVID-19
pandemic, and the price of our common stock has been volatile
since the onset of the pandemic. The COVID-19 pandemic
and the significant uncertainties it has caused for the global
economy and travel industry in particular, business activity, and
business confidence have had, and are likely to continue to have,
a significant effect on the market price of securities generally,
including our securities. In addition, certain government
restrictions limit our ability to engage in share repurchase activity.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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PART I | ITEM 1A RISK FACTORS
The impacts of the COVID-19 pandemic on our business,
operations and financial condition are continuously evolving, and
the continuation of the pandemic, any additional resurgence, of
COVID-19 or variants could precipitate or aggravate the other risk
factors included in this annual report, which in turn could further
materially adversely affect our business, financial condition,
liquidity, results of operations, and profitability, including in ways
that are not currently known to us or that we do not currently
consider to present significant risks.
COVID-19 has materially disrupted our
strategic operating plans in the near-term,
and there are risks to our business, operating
results, liquidity and financial condition
associated with executing our strategic
operating plans in the long-term.
COVID-19 has materially disrupted our strategic operating plans,
and there are risks to our business, operating results and financial
condition associated with executing our long-term strategic
operating plans. In recent years, we have announced several
strategic operating plans, including several revenue-generating
initiatives and plans to optimize revenue, such as our plans to
add capacity, including international expansion and new or
increased service to mid-size airports, initiatives and plans to
optimize and control our costs and opportunities to enhance our
segmentation and improve the customer experience at all points
in air travel. In July 2020, we announced a strategic partnership
with American Airlines Group Inc. (“AAL”), designed to optimize
the Company and AAL’s network through certain flights operated
by us and AAL to and from John F. Kennedy International Airport,
LaGuardia Airport, Newark Liberty International Airport and
Boston Logan International Airport. In developing our strategic
operating plans, we make certain assumptions, including, but
not limited to, those related to customer demand, competition,
market consolidation, the availability of aircraft and the global
economy. Actual economic, market and other conditions have
been and may continue to be different from our assumptions.
The COVID-19 pandemic has materially disrupted the execution
of our strategic operating plans, including plans to add capacity
in 2020 and 2021. If we do not successfully execute or adjust our
strategic operating plans in the long-term, or if actual results
continue to vary significantly from our prior assumptions or
vary significantly from our future assumptions, our business,
operating results and financial condition could be materially and
adversely impacted.
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 over the 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. For example, in February 2022, Frontier Airlines and
Spirit Airlines announced an intention to merge. If the proposed
merger meets regulatory and stockholder approval, the combined
airline is expected to be a larger competitor to JetBlue, which may
affect our competitiveness. 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 or new
entrants, our business could be materially adversely affected.
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
2027. 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.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
Operational Risks
Our business is highly dependent on the
availability of fuel and fuel is subject to price
volatility.
Our results of operations are heavily impacted by the price and
availability of fuel. Fuel costs comprise a substantial portion of
our total operating expenses. Historically, fuel costs have been
subject to wide price fluctuations based on geopolitical factors
as well as supply and demand. The availability of fuel is not only
dependent on crude oil but also on refining capacity. When even
a small amount of the domestic or global oil refining capacity
becomes unavailable, supply shortages can result for extended
periods of time. The availability of fuel is also affected by demand
for home heating oil, gasoline and other petroleum products, as
well as crude oil reserves, dependence on foreign imports of
crude oil and potential hostilities in oil producing areas of the
world. Because of the effects of these factors on the price and
availability of fuel, the cost and future availability of fuel cannot
be predicted with any degree of certainty.
Our aircraft fuel purchase agreements do not protect us against
price increases or guarantee the availability of fuel. Additionally,
some of our competitors may have more leverage than we do in
obtaining fuel. We have and may continue to enter into a variety
of option contracts and swap agreements for crude oil, heating
oil, and jet fuel to partially protect against significant increases
in fuel prices. However, such contracts and agreements do not
completely protect us against price volatility, are limited in volume
and duration in the respective contract, and can be less effective
during volatile market conditions and may carry counterparty
risk. Under the fuel hedge contracts we may enter from time to
time, counterparties to those contracts may require us to fund
the margin associated with any loss position on the contracts.
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.
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 on JetBlue's existing fleet types 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 continue
to implement various fleet modifications over the next several
years to ensure our aircraft's continued efficiency, modernization,
PART I | ITEM 1A RISK FACTORS
brand consistency and safety. Our plans to continue to restyle
our Airbus A320 aircraft with new cabins, for example, require
significant modification time. These fleet modifications 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.
Because we derive a portion of our revenues
from operations outside the United States,
the risks of doing business internationally, or
in a particular country or region, could lower
our revenues, increase our costs, reduce our
profits, or disrupt our business.
We currently operate in 107 airports in 26 countries around the
world. Our available seat miles that take off or land outside the
United States represented approximately 36% of our revenues
for the year ended December 31, 2021. Over the long term, we
expect our international operations may account for an increasing
portion of our total revenues and available seat miles.
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
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
21
PART I | ITEM 1A RISK FACTORS
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.
As a result, we are subject to the risks of doing business outside
the United States, including:
■ the costs of complying with laws, regulations, and policies
(including taxation policies) of foreign governments relating
to investments and operations, the costs or desirability of
complying with local practices and customs, and the impact of
various anti-corruption and other laws affecting the activities
of U.S. companies abroad;
■ evolving local data residency requirements that require data to
be stored only in and, in some cases, also to be accessed only
from within, a certain jurisdiction;
■ U.S. taxation of income earned abroad;
■ import and export licensing requirements and regulations,
as well as unforeseen changes in regulatory requirements,
including imposition of tariffs or embargoes, export regulations,
controls, and other trade restrictions;
■ political and economic instability;
■ fluctuations in GDP, 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;
■ health and safety protocols, including global care and
cleanliness certifications, at the airports in which we operate;
■ the complexity of managing an organization doing business in
many jurisdictions;
■ uncertainties as to local laws and enforcement of contract and
intellectual property rights and occasional requirements for
onerous contract clauses; and
■ rapid changes in government, economic, and political policies;
political or civil unrest; acts of terrorism; or the threat of
international boycotts or U.S. anti-boycott legislation.
While these factors and the impact of these factors are difficult
to predict, any one or more of them could lower our revenues,
affect our operations, increase our costs, reduce our profits, or
disrupt our business. For example, in 2021 and 2020, our financial
results were materially adversely affected by the global COVID-19
pandemic. The occurrence of any of these events in markets
served by us and the resulting instability may adversely affect
our business.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
Our comparatively 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 and reputation.
We maintain a comparatively 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 and reputational harm.
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 historically 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, including COVID-19, negative
public perception of New York City, acts of terrorism, or significant
price or tax increases linked to increases in airport access costs and
fees imposed on passengers.
Extended interruptions or disruptions in service
at one or more of our focus cities could have a
material adverse impact on our operations.
Our business is heavily dependent on our operations in the New
York Metropolitan area, particularly at JFK, and at our other focus
cities in Boston, Orlando, Fort Lauderdale, the Los Angeles basin,
and San Juan, Puerto Rico. Each of these operations includes
flights that gather and distribute traffic to other major cities. A
significant interruption or disruption in service at one or more
of our focus cities could have a serious impact on our business,
financial condition and results of operations.
We may be impacted by increases in airport
expenses relating to infrastructure and
facilities.
In order to operate within our current markets as well as continue
to grow in new markets, we must be able to obtain adequate
infrastructure and facilities within the airports we serve. This
includes gates, check-in facilities, operations facilities, and
landing slots, where applicable. The costs associated with these
airports are often negotiated on a short-term basis with the
airport authority and we could be subject to increases in costs on
a regular basis with or without our approval. There is a possibility
that airport authorities, suffering from revenue shortfalls due to
the pandemic, may attempt to recover those shortfalls by passing
along the costs or increasing rents or fees to airline tenants. 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 results of operations fluctuate due to
seasonality, weather, and other factors.
We expect our quarterly operating results to fluctuate due to
seasonality including high vacation and leisure demand generally
occurring on our Florida routes between October and April
and on our western routes during the summer. Actions of our
competitors and the impact of COVID-19 and travel restrictions
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. In addition, the effects of the COVID-19
pandemic has and may continue to disrupt traditional seasonality
in our industry and geographies due to quarantines, rising case
counts and changes in governmental travel related regulation.
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 five types of aircraft and engines for all
of our flights makes us vulnerable to significant problems associated
with the Pratt & Whitney Geared Turbofan Engines, or PW1133G-JM
engine, on our A321neo fleet, 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, the Pratt
PART I | ITEM 1A RISK FACTORS
& Whitney Geared Turbofan Engines, or PW1524G-3, engine on our
A220 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 Thales Avionics, Inc., or Thales. An integral
component of the Fly-Fi® system is the antenna, which is supplied
to us by Thales. If Thales 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.
Tariffs imposed on commercial aircraft and
related parts imported from outside the United
States, or tariffs that may be escalated over
time, may have a material adverse effect on
our fleet, business, financial condition and
results of operations.
Certain of the products and services that we purchase, including
aircraft and related parts, are sourced from suppliers located
outside the United States, and the imposition of new tariffs,
or any increase in existing tariffs, by the U.S. government on
the importation of such products or services could materially
increase the amounts we pay for them.
On October 2, 2019, the World Trade Organization ruled that the
United States could impose up to $7.5 billion in retaliatory tariffs
in response to European Union subsidies to Airbus. On October 18,
2019, the United States imposed these tariffs on certain imports
from the European Union, including an ad valorem duty of 10%
on commercial aircraft and related parts. On February 14, 2020,
the United States announced it would increase the tariff to
15% with an effective date of March 18, 2020. As of January 12,
2021, the tariff also applies to certain aircraft parts imported
from specific countries into the United States for consumption.
These tariffs apply to aircraft and other parts that we are already
contractually obligated to purchase. In March 2021, the U.S. Trade
Representative announced a four-month suspension of the tariff
that was followed by an announcement in June 2021 that the
suspension will be extended for five years.
The imposition of these or any other tariffs could substantially
increase the cost of, among other things, new aircraft and
parts, which in turn could have a material adverse effect on our
fleet, business, financial condition and results of operations.
We may also seek to postpone or cancel delivery of certain
aircraft currently scheduled for delivery, and we may choose
not to purchase in the future as many aircraft as we intended.
In addition, should additional or different retaliatory tariffs be
imposed, our business could be harmed. Any such action could
have a material adverse effect on the size of our fleet, business,
financial condition and results of operations.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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PART I | ITEM 1A RISK FACTORS
Our Northeast Alliance with American Airlines
is Subject to Challenge.
In July 2020, we announced a strategic partnership with
American Airlines Group Inc., designed to optimize our and
American Airlines’ networks through certain flights operated
by us and American Airlines to and from John F. Kennedy
International Airport, LaGuardia Airport, Newark Liberty
International Airport and Boston Logan International Airport,
which we refer to as the Northeast Alliance. On September 21,
2021, the United States Department of Justice, along with the
Attorneys General of each of the States of Arizona, California, and
Florida, the Commonwealths of Massachusetts, Pennsylvania
and Virginia, and the District of Columbia, filed a lawsuit in the
United States District Court for the District of Massachusetts
against us and American Airlines concerning the Northeast
Alliance. The lawsuit asserts and seeks an adjudication that the
Northeast Alliance violates Section 1 of the Sherman Act, and
that we and American Airlines should be permanently enjoined
from continuing and restrained from further implementing the
Northeast Alliance.
We and American Airlines established the Northeast Alliance to
unlock capacity growth and customer benefits neither of us could
achieve independently and to better compete in the northeast
market. We believe the lawsuit is without merit, we, along with
American Airlines, intend to defend this matter vigorously. If we
are unsuccessful, the failure to achieve the intended benefits
of the Northeast Alliance could have an adverse impact on
our business, financial condition and results of operations.
Additionally, we are incurring costs associated with implementing
operational and marketing elements of the Northeast Alliance,
which would not be recoverable if we were required to unwind all
or a portion of the Northeast Alliance.
Data and Information Security Related Risks
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,
hacktivists, 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 routinely attempt to breach our networks.
When the Company learns of security incidents, we investigate
the incident, which includes making reports to law enforcement,
as appropriate.
We also are aware that hackers may attempt to fraudulently
induce crewmembers, customers, or others to disclose
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 and our 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.
While the Company makes significant efforts to ensure the
security of its computer network, we cannot provide any
assurances that our efforts will defend against all cyberattacks.
Any compromises to our security or computer network 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.
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PART I | ITEM 1A RISK FACTORS
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.
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, cyberattacks, 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.
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 cyberattacks or cyber intrusions over the
Internet, malware, computer viruses, and the like), discovery of
new vulnerabilities or attempts to exploit existing vulnerabilities
in our systems, other data thefts, physical system or network
break-ins or inappropriate access, or other developments will not
compromise or breach the technology protecting the networks
that access and store sensitive information. The risk of a security
breach or disruption, particularly through cyberattack 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 business 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. We will continue our efforts to meet
the privacy and data security obligations; however, it is possible
that certain new obligations may be difficult to meet and could
increase our costs.
A significant data security breach or our failure to comply with
applicable U.S. or foreign data security regulations or other
data security standards may expose us to litigation, claims for
contract breach, fines, sanctions or other penalties, which could
disrupt our operations, harm our reputation, and materially and
adversely affect our business, results of operations, and financial
condition. The costs to remediate breaches and similar system
compromises that do occur could be material. In addition, as cyber
criminals become more frequent, intense, and sophisticated,
the costs of proactive defensive measures may increase. Failure
Human Capital Related Risks
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. In addition,
we have had crewmembers take opt out packages to reduce our
costs and we may continue to lose crewmembers due to the
impact of COVID-19 on aviation and we may lose crewleaders
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
25
PART I | ITEM 1A RISK FACTORS
as a result of restrictions imposed under the CARES Act, the
Consolidated Appropriations Act, and the American Rescue
Plan Act. If we are unable to hire, train, and retain qualified
crewmembers representing diverse backgrounds, experiences,
and skill sets, our business could be harmed and we may be
unable to implement our growth plans. In addition, our business
may be harmed if we lose too many individuals with institutional
knowledge.
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 experience turnover, 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.
Reputational Risks
Our reputation and financial results could be
harmed in the event of an accident or incident
involving our aircraft.
An accident or incident involving one of our aircraft could involve
significant potential claims of injured passengers or others in
addition to repair or replacement of a damaged aircraft and its
consequential temporary or permanent loss from service. We
are required by the DOT to carry liability insurance. Although
we believe we currently maintain liability insurance in amounts
and of the type generally consistent with industry practice, the
amount of such coverage may not be adequate and we may be
forced to bear substantial losses from an accident or incident.
Substantial claims resulting from an accident or incident in
excess of our related insurance coverage would harm our
business and financial results. Moreover, any aircraft accident
or incident, even if fully insured, could cause a public perception
we are less safe or reliable than other airlines which would harm
our business.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
We may be subject to unionization, work
stoppages, slowdowns or increased labor
costs and the unionization of the Company’s
pilots and inflight crewmembers 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.
In 2014, our pilots voted to be represented by the Airlines Pilot
Association, or ALPA and our first collective bargaining agreement
was ratified by the pilots and became effective on August 1, 2018.
In April 2018, JetBlue inflight crewmembers elected to be solely
represented by the Transport Workers Union of America, or
TWU. The NMB certified the TWU as the representative body for
JetBlue inflight crewmembers. In November 2020, our inflight
crewmembers voted to decline the ratification of a tentative
collective bargaining agreement between JetBlue and TWU.
We reached a final agreement for the first collective bargaining
agreement which was ratified by our inflight crewmembers in
December 2021.
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. Increasingly the perception our customers
and other stakeholders have about how we address the risks
and opportunities we face related to DEI and climate change
engagement, our role in the communities in which we operate
and our relationship with our crewmembers will have an impact
on our reputation. 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.
PART I | ITEM 1A RISK FACTORS
Financing and Financial Risks
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, 2021, our debt of $4.0 billion accounted for 51%
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
hangars, other facilities and office space. As of December 31,
2021, future minimum payments under non-cancelable leases
and other financing obligations were approximately $2.9 billion
for 2022 through 2026 and an aggregate of $1.1 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 have been included in
the future minimum payment totals above.
As of December 31, 2021, we had commitments of approximately
$7.5 billion to purchase 126 additional aircraft and related flight
equipment through 2027, including estimated amounts for
contractual price escalations and pre-delivery deposits. 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 more interest expense than we currently do
if rates were to increase, since approximately 3% 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.
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 that 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 meet 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,
including COVID-19, 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 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.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
27
PART I | ITEM 1A RISK FACTORS
We are subject to certain restrictions on our
business as a result of our participation in
governmental programs under the CARES Act,
the Consolidated Appropriations Act, and the
American Rescue Plan Act (collectively the
"Acts").
January 15, 2021, March 5, 2021 and April 29, 2021. The loans
have a 10-year term and bear interest on the principal amount
outstanding at an annual rate of 1.00% until January 15, 2026, and
the applicable SOFR plus 2.00% thereafter until January 15, 2031.
In consideration for the Payroll Support 2 Payments, we issued
warrants to purchase approximately 1.0 million shares of our
common stock to Treasury at an exercise price of $14.43 per share.
CARES ACT – PAYROLL SUPPORT PROGRAM
Under the CARES Act, assistance was made available to the
aviation industry in the form of direct payroll support (the "Payroll
Support Program") and secured loans (the "Loan Program") from
the United States Department of the Treasury ("Treasury").
On April 23, 2020, we entered into a Payroll Support Program
Agreement (the "PSP Agreement") under the CARES Act with
Treasury governing our participation in the Payroll Support
Program. Under the Payroll Support Program, Treasury provided
us with a total of approximately $963 million (the "Payroll Support
Payments") consisting of $704 million in grants and $259 million
in unsecured term loans. The loans have a 10-year term and bear
interest on the principal amount outstanding at an annual rate of
1.00% until April 23, 2025, and the applicable Secured Overnight
Financing Rate ("SOFR") plus 2.00% thereafter until April 23, 2030.
The principal amount may be repaid at any time prior to maturity
at par. As part of the agreement, JetBlue issued to Treasury
warrants to acquire more than 2.7 million shares of our common
stock under the program at an exercise price of $9.50 per share.
CARES ACT – SECURED LOAN PROGRAM
Under the CARES Act Loan Program, JetBlue had the ability to
borrow up to a total of approximately $1.9 billion from Treasury.
We entered into a loan and guarantee agreement (the "Loan
Agreement") with Treasury and made an initial drawing of
$115 million under the Loan Agreement on September 29, 2020.
In connection with this initial drawing, we entered into a warrant
agreement with Treasury, pursuant to which we issued to
Treasury warrants to purchase approximately 1.2 million shares
of our common stock at an exercise price of $9.50 per share.
On September 15, 2021, the Company repaid the full amount
of outstanding borrowings under the Loan Agreement, which,
together with accrued interest and fees, totaled approximately
$118 million. As of December 31, 2021, we did not have a balance
outstanding and all obligations under the Loan Agreement,
including all pledges of collateral, were terminated in full.
CONSOLIDATED APPROPRIATIONS ACT – PAYROLL SUPPORT
PROGRAM 2
On January 15, 2021, we entered into a Payroll Support Program
Extension Agreement with Treasury governing our participation
in the federal Payroll Support Program for passenger air carriers
under the United States Consolidated Appropriations Act, 2021
(the “Payroll Support Program 2"). Treasury provided us with a total
of approximately $580 million (the "Payroll Support 2 Payments")
under the program, consisting of $436 million in grants and
$144 million in unsecured term loans, with funding received on
28
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
AMERICAN RESCUE PLAN ACT – PAYROLL SUPPORT
PROGRAM 3
On May 6, 2021, we entered into a Payroll Support 3 Agreement
with Treasury governing our participation in the federal payroll
support program for passenger air carriers under Section 7301
of the American Rescue Plan Act of 2021 (the "Payroll Support
Program 3"). Treasury provided us with a total of approximately
$541 million (the "Payroll Support 3 Payments") under the program,
consisting of $409 million in grants and $132 million in unsecured
term loans. The loans have a 10-year term and bear interest on
the principal amount outstanding at an annual rate of 1.00% until
May 6, 2026, and the applicable SOFR plus 2.00% thereafter until
May 6, 2031. In consideration for the Payroll Support 3 Payments, we
issued warrants to purchase approximately 0.7 million shares of our
common stock to Treasury at an exercise price of $19.90 per share.
The warrants associated with each of the support programs
described above will expire 5 years after issuance and will be
exercisable either through net cash settlement or net share
settlement, at our option, in whole or in part at any time.
In accordance with any grants and/or loans received under the
Acts, we are required to comply with the relevant provisions of
the Acts which, among other things, includes the following: the
requirement to use the Payroll Support Payments, the Payroll
Support 2 Payments, and the Payroll Support 3 Payments
exclusively for the continuation of payment of crewmember
wages, salaries and benefits; the requirement that certain levels
of commercial air service be maintained until March 1, 2022; the
prohibitions on share repurchases and the payment of common
stock dividends; and restrictions on the payment of certain
executive compensation vary depending on the type of support
received.
The substance and duration of restrictions to which we are
subject under the grants and/or loans under the Acts, including,
but not limited to, those outlined above, will materially affect the
Company's operations, and the Company may not be successful in
managing these impacts. Further, these restrictions could limit our
ability to take actions that we otherwise might have determined
to be in the best interest of our Company and our shareholders.
In particular, limitations on executive compensation, which
currently, depending on the form of aid, could extend through
April 1, 2023, may impact the Company's ability to attract and
retain senior management or attract other key employees during
this critical time. We cannot predict whether the assistance under
any of these programs will be adequate to support our business
for the duration of the COVID-19 pandemic or whether additional
assistance will be required or available in the future.
We have a significant amount of indebtedness
from fixed obligations and may seek material
amounts of additional financial liquidity in
the short-term, and insufficient liquidity may
have a material adverse effect on our financial
condition and business.
We have a significant amount of indebtedness from fixed
obligations, including aircraft lease and debt financings, leases
of airport property, secured loan facilities and other facilities, and
other material cash obligations. In addition, we have substantial
non-cancelable commitments for capital expenditures, including
for the acquisition of new aircraft and related spare engines.
In addition, in response to the travel restrictions, decreased
demand and other effects the COVID-19 pandemic has had and
is expected to have on our business, we may continue to seek
material amounts of additional financial liquidity in the short-term,
which may include the issuance of additional unsecured or
secured debt securities, equity securities and equity-linked
securities, the sale of assets, the entry into sale-leaseback
transactions, as well as additional bilateral and syndicated
secured and/or unsecured credit facilities, among other items.
If our credit ratings were to be further downgraded, or general
market conditions were to ascribe higher risk to our rating levels,
the airline industry, or our business, our access to capital and the
cost of any debt financing would be negatively affected. There can
be no assurance as to the timing of any such issuance, which may
be in the near term, or that any such additional financing will be
completed on favorable terms, or at all.
Although our cash flows from operations and available capital,
including the proceeds from financing transactions, have been
sufficient to meet our obligations and commitments to date, our
liquidity has been, and may in the future be, negatively affected
by the risk factors described herein. If our liquidity is materially
diminished, we might not be able to timely pay our leases and
debts or comply with certain operating and financial covenants
under our financing and credit card processing agreements or with
other material provisions of its contractual obligations. Moreover,
as a result of our recent financing activities in response to the
COVID-19 pandemic, the number of financings and the aggregate
amount of indebtedness with respect to which such covenants
and provisions apply has increased, thereby subjecting us to
more substantial risk of cross-default and cross-acceleration
in the event of breach, and additional operating and financial
covenants could become binding on us as we continue to seek
additional liquidity. In addition, we have agreements with financial
institutions that process customer credit card transactions for
the sale of air travel and other services. Under certain of our
credit card processing agreements, the financial institutions in
certain circumstances have the right to require that we maintain
a reserve equal to a portion of advance ticket sales that have been
processed by that financial institution, but for which we have not
yet provided the air transportation. Such financial institutions
may require cash or other collateral reserves to be established or
withholding of payments related to receivables to be collected,
including if we do not maintain certain minimum levels of
unrestricted cash, cash equivalents and short-term investments.
PART I | ITEM 1A RISK FACTORS
In light of the affect COVID-19 is having on demand and, in turn,
capacity, we have seen an increase in demand from consumers for
refunds on their tickets, and we anticipate this will continue to be
the case for the foreseeable future. Refunds lower our liquidity and
put us at risk of triggering liquidity covenants in these processing
agreements and, in doing so, could force us to post cash collateral
with the credit card companies for advance ticket sales. We also
maintain certain insurance- and surety-related agreements under
which counterparties may require collateral. See "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".
Our substantial level of indebtedness, particularly following the
additional liquidity transactions completed and contemplated in
response to the impacts of COVID-19, and non-investment grade
credit rating, as well as market conditions and the availability of
assets as collateral for loans or other indebtedness, together with
the effect the COVID-19 pandemic has had on the global economy
generally and the air transportation industry specifically, may
make it difficult for the Company to raise additional capital if
needed to meet its liquidity needs on acceptable terms, or at all.
See "Part II - Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" of this report for
additional information regarding the Company's liquidity as of
December 31, 2021.
We may never realize the full value of our
intangible assets or our long-lived assets
causing us to record impairments that may
negatively affect our financial condition and
operating results.
In accordance with applicable accounting standards, we
are required to test its indefinite-lived intangible assets for
impairment on an annual basis, or more frequently where there
is an indication of impairment. In addition, we are required to
test certain of its other assets for impairment where there is any
indication that an asset may be impaired.
We may be required to recognize losses in the future due to, among
other factors, extreme fuel price volatility, tight credit markets,
government regulatory changes, decline in the fair values of certain
tangible or intangible assets, such as aircraft, route authorities,
airport slots and frequent flyer database, unfavorable trends in
historical or forecasted results of operations and cash flows and
an uncertain economic environment, as well as other uncertainties.
For example, during the year ended December 31, 2020, we
recorded impairment charges of $273 million associated with our
E190 fleet due to COVID-19. We can provide no assurance that a
material impairment loss of tangible or intangible assets will not
occur in a future period, and the risk of future material impairments
has been significantly heightened as result of the effects of the
COVID-19 pandemic on our flight schedules and business. The value
of our aircraft could also be impacted in future periods by changes
in supply and demand for these aircraft. Such changes in supply and
demand for certain aircraft types could result from the grounding
of aircraft. A further impairment loss could have a material adverse
effect on our financial condition and operating results.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
29
PART I | ITEM 1A RISK FACTORS
Risks Associated with the Airline Industry
We could be adversely affected by an outbreak
of a disease or an environmental disaster that
significantly affects travel behavior.
We may be affected by global climate change
or by legal, regulatory or market responses to
such change.
Any outbreak of another disease or variants of COVID-19, which
affect travel behavior, travel demand, or travel restrictions, or a
similar public health threat, or fear of such an event could have
a material adverse impact on airlines. In addition, outbreaks of
disease could result in quarantines of our personnel, business
partners and their suppliers, 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, operating
results, liquidity and financial condition.
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 we don't expect 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 that the costs of complying
with environmental regulations in the future will not have such
an effect.
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, but not limited to, the DOT, FAA, CBP, and
the TSA. If the federal government were to continue experiencing
issues in reaching budgetary consensus in the future resulting
in mandatory furloughs and/or other budget constraints, or if a
government shutdown were to continue for an extended period of
time, 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.
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 ground operations emissions. In October 2016, the
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. Annual international
emissions reporting is required via CORSIA as of the 2019
reporting year, and offsetting compliance is scheduled to be
implemented through multiple phases beginning in 2021. In 2020,
given the impacts of COVID-19, which dramatically reduced 2020
emissions, ICAO agreed that the baseline from which the industry
achieves carbon neutral growth would be from 2019 only, rather
than an average of 2019 and 2020 as originally intended. ICAO
continues to develop details regarding implementation, but we
expect compliance with CORSIA will increase our operating costs.
In addition, climate change-related litigation and investigations
have increased in recent years and any claims or investigations
against us could be costly to defend and our business could be
adversely affected by the outcome.
Changes in government regulations imposing
additional requirements and restrictions on
our operations could increase our operating
costs and result in service delays and
disruptions.
Airlines are subject to extensive regulatory and legal
requirements, both domestically and internationally, involving
significant compliance costs. In the last several years, Congress
has passed laws, and the agencies of the federal government,
including, but not limited to, the DOT, FAA, CBP, and the TSA
have issued regulations relating to the operation of airlines
that have required significant expenditures. We expect to
continue to incur expenses in connection with complying with
government regulations. Additional laws including executive
orders, regulations, taxes, and airport rates and charges have
been proposed from time to time that could significantly increase
the cost of airline operations or reduce the demand for air travel.
If adopted or materially amended, these measures could have
the effect of raising ticket prices affecting the perception of the
airline industry, reducing air travel demand and/or revenue, and
increasing costs. We cannot assure you these and other laws
including executive orders, regulations, or taxes enacted in the
future will not harm our business.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART I | ITEM 1B UNRESOLVED STAFF COMMENTS
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.
A future act of terrorism, the threat of such
acts or escalation of U.S. military involvement
overseas could adversely affect our industry.
Acts of terrorism, the threat of such acts or escalation of U.S.
military involvement overseas could have an adverse effect on the
airline industry. In the event of an act of terrorism, whether or not
successful, the airline industry would likely experience increased
security requirements and significantly reduced demand. We
cannot assure you these actions, or consequences resulting from
these actions, will not harm our business or the industry.
The airline industry is particularly sensitive to
changes in economic conditions.
Fundamental and permanent changes in the domestic airline
industry have occurred over time 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.
The recent implementation of 5G wireless
technology near the airports to which we
operate could have an adverse effect on our
continued safe operations.
In the United States, two major telecom providers activated 5G
services across 46 markets on January 19, 2022 using frequencies
in a radio spectrum called the C-band. These 5G frequencies
may interfere with radio altimeters on our aircraft. Moreover, we
expect other telecom providers to activate 5G services in the
future. Because the 5G deployment involves a new combination
of power levels, frequencies, proximity to flight operations, and
other factors, we are closely monitoring any restrictions placed
on our aircraft by the FAA. These safety restrictions could affect
our flight schedules and operations, which could have a material
adverse impact on our business and operational reliability. The
FAA is working with the Federal Communications Commission,
the two major telecom providers, and airlines across the United
States to reduce effects of this disruption. However, we cannot
assure you that the effect of the 5G deployment will not cause
undue disruptions to our operation.
ITEM 1B UNRESOLVED STAFF COMMENTS
None.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
31
PART I | ITEM 2 PROPERTIES
ITEM 2
PROPERTIES
Aircraft
As of December 31, 2021, we operated a fleet consisting of eight Airbus A220 aircraft, 130 Airbus A320 aircraft, 63 Airbus A321 aircraft,
21 Airbus A321neo aircraft, and 60 Embraer E190 aircraft as summarized below:
Aircraft
Airbus A220
Airbus A320
Airbus A321
Airbus A321neo
Embraer E190
Seating Capacity
Owned(4)
Operating Leased
140
162 / 150(1)
200 / 159(2)
200 / 160 / 138(3)
100
8
98
63
21
30
220
—
32
—
—
30
62
Total
8
130
63
21
60
282
Average Age in
Years
0.5
16.3
5.5
1.4
13.2
11.6
(1) Our Airbus A320 with a restyled cabin configuration has a seating capacity of 162 seats. Our Airbus A320 with a classic cabin configuration has a seating capacity of
150 seats.
(2) Our Airbus A321 with a single cabin layout has a seating capacity of 200 seats. Our Airbus A321 with Mint® premium service has a seating capacity of 159 seats.
(3) Our Airbus A321neo with a single cabin layout has a seating capacity of 200 seats. Our Airbus A321neo with Mint® premium service has a seating capacity of 160 seats.
The long range version of our A321neo with Mint® premium service has a seating capacity of 138 seats.
(4) Total owned aircraft include aircraft associated with sale-leaseback transactions that did not qualify as sales for accounting purposes.
As of December 31, 2021, our aircraft leases had an average
remaining term of approximately 3.3 years, with expiration dates
between 2023 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.
As of December 31, 2021, options for 50 additional A220-300
aircraft deliveries remain available to us and we retain the
flexibility to convert certain aircraft to the A220-100 model.
Both members of the A220 family share commonality in more
than 99 percent of their replaceable parts and utilize the same
family of engines.
As of December 31, 2021, we had 126 aircraft on order and scheduled for delivery through 2027. Our future aircraft delivery schedule
is as follows:
Year
2022
2023
2024
2025
2026
2027
TOTAL
Airbus A321neo
Airbus A220
Contractual Order Book
3
11
13
11
12
14
64
9
18
22
12
1
—
62
Total
12
29
35
23
13
14
126
In February 2022, we exercised our option to purchase 30 additional Airbus A220-300 aircraft under our existing agreement with
Airbus Canada Limited Partnership. The 30 additional A220-300 aircraft are expected to be delivered from 2022 to 2026. Options for 20
additional A220-300 aircraft remain available to us. The 30 additional aircraft are not included in the aircraft delivery schedule above.
32
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART I | ITEM 4 MINE SAFETY DISCLOSURES
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 and catering 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 leases for facilities
to accommodate our ground support equipment maintenance
and catering operations.
■ Orlando - We have a ground lease agreement for a hangar 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 inflight
crewmembers, as well as support training for our technical
operations and airport crewmembers. This facility is equipped
with nine full flight simulators, nine flight training devices, three
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. Reaffirming our
commitment to New York, in February 2022, we executed a new
lease for our primarily corporate offices that will extend our stay
in the present Long Island City location until 2039.
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.
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 is provided
below:
■ 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. We also executed a supplement to this lease
agreement for the T6 property, our original base of operations
at JFK.
■ 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. The agreement
included extension language which provided for 20 successive
one-year automatic renewals after the initial five year term.
With the continued growth of our operations in Boston, we
have periodically amended our lease to add additional gates
and support spaces, most recently in 2017 to have the rights
to six additional gates. As of December 31, 2021, we leased
27 gates in Boston. Our lease with Massport is scheduled to
expire in April 2030.
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.
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.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
33
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. As of January 31, 2022, there were
approximately 392 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
and any restrictions under the Acts, or other legislation. 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
Our share repurchase programs include authorization for
repurchases in open market transactions pursuant to Rules
10b-18 and/or 10b5-1 of the Exchange Act, and/or one or more
privately-negotiated accelerated stock repurchase transactions.
The timing, price, and volume of any repurchases will be based on
market conditions and other relevant factors.
December 31, 2021 represents the return of shares to satisfy tax
payments associated with crewmember stock compensation that
vested during the period.
In consideration for the Payroll Support Payments and payments
received under the CARES Act Loan Program, during the year
ended December 31, 2020, we issued warrants to purchase
approximately 3.9 million shares of our common stock to the
Treasury at an exercise price of $9.50 per share.
In consideration for the Payroll Support 2 Payments, during the
year ended December 31, 2021, we issued warrants to purchase
approximately 1.0 million shares of our common stock to the
Treasury at an exercise price of $14.43 per share.
In consideration for the Payroll Support 3 Payments, during the
year ended December 31, 2021, we issued warrants to purchase
approximately 0.7 million shares of our common stock to the
Treasury at an exercise price of $19.90 per share.
See Note 3 to our consolidated financial statements for further
details.
On December 8, 2017, the Board of Directors approved a two year
share repurchase program, or the 2017 Authorization, of up to
$750 million worth of common stock beginning on January 1, 2018.
The 2017 Authorization was completed in 2019.
On September 19, 2019, the Board of Directors approved a
share repurchase program, or the 2019 Authorization, of up to
$800 million worth of common stock beginning on October 1, 2019
and ending no later than December 31, 2021.
We suspended our share repurchase program as of March 31,
2020. In accordance with restrictions under the Acts, we
are prohibited from making any share repurchases through
September 30, 2022. The acquisition of treasury stock reflected
on our consolidated statement of cash flows for the year ended
34
JETBLUE AIRWAYS CORPORATION | 2021 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, as amended.
The following line graph compares the cumulative total stockholder return on our common stock with the cumulative total return of
the S&P 500 Stock Index and the NYSE Arca Airline Index from December 31, 2017 to December 31, 2021. 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.
$
200
150
100
50
178
70
64
2017
2018
2019
2020
2021
● JetBlue Airways Corporation ● S&P 500 Stock Index
● NYSE Arca Airline Index
JetBlue Airways Corporation
S&P 500 Stock Index
NYSE Arca Airline Index
12/31/2017
12/31/2018
12/31/2019
12/31/2020
12/31/2021
$
100
100
100
$
72
94
78
$
84
121
94
$
65
140
71
$
64
178
70
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
35
PART II | ITEM 6 [RESERVED]
ITEM 6
[RESERVED]
ITEM 7
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Coronavirus (COVID-19) Pandemic
The unprecedented COVID-19 pandemic continues to have a
material adverse impact on our operating revenues and financial
position. We began seeing signs of recovery in February 2021
which continued to progress throughout the year. Although the
spread of the Delta and Omicron variants temporarily decelerated
the demand for travel in 2021, we believe customer confidence
will continue to grow, resulting in sustained demand improvement
going forward. We expect the recovery of domestic demand to
outpace the recovery of international demand in most regions.
2021 Results
Our 2021 and 2020 results were adversely impacted by the
COVID-19 pandemic. As a result, comparisons of our 2021
results to 2020 are not necessarily indicative of future operating
results. In certain cases, we have also included comparisons of
our 2021 results to our 2019 results which are more reflective of
pre-pandemic operations.
For the year end December 31, 2021:
■ System capacity increased by 65.5% year-over-year and
decreased by 15.2% compared to 2019.
■ We generated $6.0 billion in operating revenue, an increase
of $3.1 billion compared to 2020, primarily due to a 110.8%
increase in revenue passengers. When compared to 2019, our
operating revenue decreased by 25.4%, primarily driven by a
decrease in revenue passenger of 29.6%.
■ Operating revenue per available seat mile (RASM) increased by
23.4% to 11.16 cents year-over-year and decreased by 12.0%
compared to 2019.
■ Operating expense increased by 31.0% year-over-year to
$6.1 billion. This compares to a decrease of 16.1% versus 2019.
■ Operating expense per available seat mile (CASM) decreased
by 20.9% to 11.30 cents year-over-year and decreased by 1.1%
compared to 2019.
■ Our 2021 and 2020 results included the effects of special
items. Excluding fuel and related taxes, special items, as well
as operating expenses related to our non-airline businesses,
our 2021 operating expense(1) increased by 27.6% to $5.5 billion,
as compared to 2020. When compared to 2019, our operating
expenses excluding fuel and related taxes, special items, as well
as operating expenses related to our non-airline businesses(1)
increased by 1.6%.
■ Excluding fuel and related taxes, special items, as well as
operating expenses related to our non-airline businesses, our
cost per available seat mile (CASM ex-fuel) (1) decreased by 22.9%
to 10.11 cents year-over-year and increased by 19.8% compared
to 2019.
■ Our operating margin was (1.3)% in 2021, (58.0)% in 2020, and
9.9% in 2019. Excluding special items, our adjusted operating
margin(1) were (15.1)%, (67.5)%, and 10.1% for full year 2021, 2020,
and 2019 respectively.
■ Reported a net loss of $(0.2) billion in 2021 compared to a net
loss of $(1.4) billion in 2020. Reported 2019 net income was
$569 million.
■ Our reported (loss) per share for 2021 and 2020 was $(0.57) and
$(4.88), respectively. Excluding special items, our adjusted
(loss) per share(1) was $(2.51) for 2021, and $(5.65) for 2020.
For 2019, our reported earnings per diluted share was $1.91.
Adjusted earnings per diluted share(1) was $1.90 for 2019.
■ During 2021, we took delivery of eight Airbus A321neo aircraft
and seven Airbus A220 aircraft.
Outlook for 2022
We expect demand trends to remain non-linear through the
course of the COVID-19 pandemic. Although the spread of the
Delta and Omicron variants temporarily set back a full recovery
of travel demand in 2021, we are seeing underlying momentum in
demand and expect sequential improvements in customer demand
throughout the first quarter of 2022 and beyond. We believe we
would have generated higher revenue in the first quarter of 2022
compared to the first quarter of 2019, if not for the impact from
the Omicron variant in late 2021. For full year 2022, we expect
our capacity to increase between 11% to 15% compared to 2019
as we plan to execute growth across our high-value network
enabled by the Northeast Alliance. Over three-quarters of our
planned capacity growth in 2022 is expected to be deployed in
the historically capacity constrained Northeast geography.
(1) Refer to our ‘’Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure.
36
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
As discussed in Note 1 to our consolidated financial statements,
in 2021, a new SEC rule became effective that is intended to
modernize, simplify, and enhance certain disclosures throughout
this “Management’s Discussion and Analysis of Financial Condition
and Results of Operations.” The new rule allows us to omit selected
financial data for the preceding five years and discussions
comparing 2020 and 2019 results, as such disclosures were
included in our Annual Report on Form 10-K for the year ended
December 31, 2020, which is available on the SEC’s website at
www.sec.gov. Please note that although our 2021 and 2020 results
were adversely impacted by the COVID-19 pandemic, the impact of
COVID-19 on our operating results for 2021 and 2020 was different.
As a result, comparisons of our 2021 results to 2020 may not
necessarily be indicative of changes between operating results
for future reporting periods.
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
2021 Compared to 2020
OVERVIEW
We reported a net (loss) of $(182) million, an operating (loss) of
$(80) million and operating margin of (1.3)% for the year ended
December 31, 2021. This compares to net (loss) of $(1.4) billion,
operating (loss) of $(1.7) billion, and operating margin of (58.0)%
for the year ended December 31, 2020. Our (loss) per share was
$(0.57) for 2021 compared to $(4.88) for 2020.
Our 2021 and 2020 reported results included the effects of special
items. Adjusting for these one-time items, our adjusted net (loss) (1)
was $(797) million, adjusted operating (loss) (1) was $(913) million, and
our adjusted operating margin (1) was (15.1)% for 2021. This compares
to an adjusted net (loss) (1) of $(1.6) billion, adjusted operating (loss) (1)
of $(2.0) billion, and an adjusted operating margin (1) of (67.5)% for
2020. Excluding one-time items, our adjusted (loss) per share (1) was
$(2.51) for 2021 compared to $(5.65) for 2020.
Year-over-Year Change
$
$
$
2021
5,609
428
6,037
186.39
13.63
10.37
11.16
1,283
30,094
41,152
54,113
$
$
$
2020
2,733
224
2,957
191.42
14.69
8.36
9.04
1,222
14,274
18,598
32,689
$
2,876
204
3,080
(5.03)
(1.06)
2.01
2.12
61
15,820
22,554
21,424
%
105.3
91.4
104.2
(2.6)
(7.2)
24.0
23.4
5.0
110.8
121.3
65.5
76.0%
56.9%
19.1 pts
Passenger revenue accounted for 92.9% of our total operating
revenue for the year ended December 31, 2021. In addition to seat
revenue, passenger revenue includes revenue from our ancillary
product offerings such as Even More® Space. Revenue generated
from international routes, including Puerto Rico, accounted
for 35.6% of our total operating revenues in 2021. Passenger
revenue, including certain ancillary fees directly related to
passenger tickets, is recognized when the transportation is
provided. Passenger revenue from unused tickets and passenger
credits are recognized in proportion to flown revenue based
on estimates of expected expiration or when the likelihood of
the customer exercising his or her remaining rights becomes
remote. 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.
(1) Refer to our ‘’Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
37
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In 2021, the increase in Passenger revenue was primarily driven by
the increase in demand for travel as we were gradually recovering
from the COVID-19 pandemic. We saw a 110.8% increase in
revenue passengers compared to 2020. Fees revenue, which
was our largest source of ancillary revenue in 2021, increased
by $326 million, or 125.0% year-over-year. This was mainly the
result of our customers returning to air travel coupled with
benefits from revenue initiatives such as enhancements to our
Fare Options aimed at providing our customers more choices,
more flexibility, and lower fares.
OPERATING EXPENSES
(in millions; per ASM data in cents; percentages based
on unrounded numbers)
2021
2020
Aircraft fuel and related taxes
$
1,436
$
631
Salaries, wages and benefits
Landing fees and other rents
Depreciation and amortization
Aircraft rent
Sales and marketing
Maintenance, materials and repairs
Other operating expenses
Special items
2,358
2,032
628
540
99
183
626
1,080
(833)
358
535
85
110
441
762
(283)
TOTAL OPERATING EXPENSES
$
6,117
$ 4,671
Other revenue is primarily comprised of the marketing component
of the sales of our TrueBlue® points. It also includes revenue from
the sale of vacation packages, ground handling fees received from
other airlines, and rental income. In 2021, Other revenue increased
by $204 million, or 91.4%, principally driven by a $138 million
increase in marketing revenue associated with our TrueBlue®
program due to higher customer spend along with improved
metrics from our new co-branded credit card agreements.
Year-over-Year Change
per ASM
$
805
326
270
5
14
73
185
318
(550)
1,446
%
127.7
16.1
75.2
0.9
17.2
66.0
42.0
41.8
194.8
31.0
2021
2.65
4.36
1.16
1.00
0.18
0.34
1.15
2.00
(1.54)
11.30
2020 % Change
1.93
6.21
1.10
1.64
0.26
0.34
1.34
2.33
(0.86)
14.29
37.6
(29.9)
5.9
(39.1)
(29.2)
0.3
(14.2)
(14.4)
78.1
(20.9)
AIRCRAFT FUEL AND RELATED TAXES
Aircraft fuel and related taxes represented 23.5% of our total
operating expenses in 2021 compared to 13.5% in 2020. The
average fuel price increased 34.6% in 2021 to $2.06 per gallon. Our
fuel consumption increased by 68.9%, or 284 million gallons, due
to capacity increases as demand for travel grew. We expect our
fuel consumption to be higher in 2022 as we anticipate returning
capacity to pre-pandemic levels.
We recognized fuel hedge losses of $7 million, in 2020. These
losses were recorded in Aircraft fuel and related taxes. We are
unable to predict the potential loss from hedge accounting,
which is determined on a derivative-by-derivative basis, due to
the volatility in the forward markets for these commodities. No
fuel hedge gains or losses were recognized in 2021. There were
no outstanding fuel hedges as of December 31, 2021 and 2020.
SALARIES, WAGES AND BENEFITS
Salaries, wages and benefits increased $326 million, or 16.1%
in 2021, driven primarily by higher total hours worked by our
crewmembers as we align our workforce with the increase in
demand for air travel. Salaries, wages and benefits in 2020 were
lower than usual as a result of various cost saving initiatives
taken in response to the COVID-19 pandemic. Beginning in March
2020, we instituted a company-wide hiring freeze, implemented
salary reductions for our officers, offered voluntary time off
programs to our crewmembers, and reduced work hours for all
other management workgroups. In June 2020, we announced
voluntary separation programs to our crewmembers, with most
departures having occurred in the third quarter of 2020. We
had approximately 22,200 crewmembers as of December 31,
2021 as compared to approximately 20,000 crewmembers at
December 31, 2020. During 2021, the average number of full-time
equivalent crewmembers increased by 8.0% and the average
tenure of our crewmembers was 7.9 years.
LANDING FEES AND OTHER RENTS
Landing fees and other rents include landing fees, which are at
premium rates in the heavily trafficked northeast corridor of the
U.S. through which a large number of our flights operate. Other
rents primarily consist of rent for airports in our BlueCities.
Landing fees and other rents increased $270 million, or 75.2%,
in 2021 driven by increases in departures as well as increases in
rates partially tied to airport shortfalls attributed by a depressed
level of travel demand. Departures increased by 56.8% compared
to 2020. We expect the increase in landing fees and other rents
to continue into 2022 as we anticipate a return of capacity to
pre-pandemic levels partially offset by mitigations in airport rates
tied to the recovery in travel demand. We expect full year 2022
capacity to increase between 11% and 15% compared to 2019.
38
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DEPRECIATION AND AMORTIZATION
Depreciation and amortization primarily include depreciation
for our owned and finance leased aircraft, engines, and inflight
entertainment systems. Depreciation and amortization increased
$5 million, or 0.9%, primarily driven by a 4.1% increase in the
average number of aircraft operating in 2021 compared to the
same period in 2020. We placed 16 aircraft, including our first
Airbus A220 aircraft into service in 2021.
The increase in depreciation expense attributed to our new
aircraft described above was partially offset by lower depreciation
due to the impairment of our Embraer E190 fleet and related spare
parts which reduced the carrying value of the E190 fleet in 2020.
In addition, we also executed a number of aircraft sale-leaseback
transactions towards the second half of 2020, the majority of
which qualified as sales for accounting purposes. As a result of
these sales, we no longer record depreciation expense on the
assets. The costs associated with leasing these assets back from
the purchaser are included in Aircraft Rent on our consolidated
statements of operations.
AIRCRAFT RENT
Aircraft rent increased $14 million, or 17.2%, in 2021. As
discussed above, we executed a number of aircraft sale-
leaseback transactions towards the second half of 2020, the
majority of which qualified as sales for accounting purposes.
The assets associated with these transactions, which qualified
as sales, are recorded within operating lease assets for which
rent expenses are recognized throughout the life of the related
lease terms.
SALES AND MARKETING
Sales and marketing increased $73 million, or 66.0%, in 2021
driven by higher credit card fees and computer reservation
system charges, which are directly related to demand increases
as we begin to recover from the pandemic. Revenue passengers
more than doubled in 2021 to 30.1 million from 14.3 million
in 2020.
MAINTENANCE, MATERIALS AND REPAIRS
Maintenance, materials and repairs are generally expensed when
incurred unless covered by a long-term flight hour services
contract. The average age of our aircraft in 2021 was 11.6 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 10.8 additional total operating aircraft
in 2021 compared to 2020.
In 2021, Maintenance, materials and repairs increased by
$185 million, or 42.0% compared to 2020. The increase was
primarily driven by a higher number of maintenance events as
we brought our parked aircraft back into service. We significantly
reduced our flying in 2020 due to the COVID-19 pandemic and
parked a portion of our fleet throughout the year. We expect the
increase in expenses relating to maintenance, materials, and
repairs to continue into 2022 as we return our capacity to pre-
pandemic levels.
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 2021, other operating expenses increased by $318 million,
or 41.8%, compared to 2020 due to higher levels of operations
in response to the increased demand for air travel. Scheduled
departures increased by 56.8% in 2021.
SPECIAL ITEMS
In 2021, special items included the following:
■ Contra-expense of $830 million, which represents the amount
of federal payroll support grants utilized during the period;
■ Contra-expense of $11 million related to the recognition of
Employee Retention Credits provided by the CARES Act; and
■ One-time costs of $8 million related to the ratification
of the collective bargaining agreement with our inflight
crewmembers.
Special items in 2020 included the following:
■ Contra-expense of $685 million, which represents the
amount of CARES Act payroll support grants utilized during
the period;
■ Contra-expense of $36 million related to the recognition of
Employee Retention Credits provided by the CARES Act;
■ Impairment charges of $273 million on our Embraer E190 fleet;
■ Losses of $106 million related to certain aircraft sale-leaseback
transactions; and
■ One-time costs of $59 million, consisting of severance and
health benefits, in connection with our voluntary separation
programs.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
39
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Consolidated Balance Sheet Analysis
Below is a discussion of the significant changes on our consolidated balance sheet between December 31, 2021 and December 31, 2020.
(in millions)
Selected Balance Sheet Data:
December 31, 2021
December 31, 2020
$ Change
% Change
ASSETS
Investment securities
Receivables, net of allowance of $3 and $2,
at December 31, 2021 and December 31, 2020,
respectively.
Investment securities (non-current)
LIABILITIES
Accounts payable
Air traffic liability
Accrued salaries, wages and benefits
Other accrued liabilities
Total debt and finance lease obligations
Other
$
$
824
$
1,135
(311)
(27.4)
$
207
39
499
1,618
480
359
4,006
552
98
2
365
1,122
409
215
4,863
78
109
37
134
496
71
144
(857)
474
111.7
1,840.9
36.9
44.2
17.5
66.5
(17.6)
603.7
Investment securities
Accrued salaries, wages and benefits
Short-term investment securities decreased by $311 million, or
27.4%, primarily driven by the maturities of our time deposits that
were outstanding at December 31, 2020.
Receivables, net of allowance
Receivables, net of allowance, increased by $109 million, or 111.7%,
as a result of improvements in customer demand which led to an
increase in receivables from our credit card processors.
Investment securities (non-current)
Long-term investment securities increased by $37 million
principally driven by the purchases of corporate bonds in the
fourth quarter of 2021.
Accounts payable
Accounts payable increased by $134 million, or 36.9%, primarily
due to increases in operating expenses and timing of payments.
Customer demand began to recover from the COVD-19 pandemic
in February 2021 and thus our level of operations was significantly
greater at the end of 2021 compared to 2020. We operated over
26,000 flights in December 2021 as compared to approximately
15,000 flights in December 2020.
Air traffic liability
Air traffic liability increased by $496 million, or 44.2%, driven by
improvements in demand as customers begin to gain confidence
to travel and resumed booking travel further in advance. Cash
collected from customers for future travel is recorded on our
balance sheet until the point in time that the customer travels.
40
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
Accrued salaries, wages and benefits increased by $71 million, or
17.5%, as a result of the increase in the number of crewmembers.
We significantly increased our staffing levels in 2021 to align with
greater demand as customers began returning to travel. We had
over 22,000 crewmembers at December 31, 2021 compared to
approximately 20,000 crewmembers at December 31, 2020.
Other accrued liabilities
Other accrued liabilities increased by $144 million, or
66.5%, principally driven by due the timing of passenger tax
remittances to governmental authorities. Passenger taxes are
collected from customers when tickets are sold and remitted
to the authorities at a later date. The increase in passenger tax
liability correlates to the increase in demand for travel as we
began to recover from the COVID-19 pandemic. In addition, the
initial cash payments received from our new co-branded credit
card agreements are deferred and recognized as revenue over
the terms of the related contracts. Deferred amounts are
classified as other accrued liabilities and other liabilities on
our consolidated balance sheet.
Total debt and finance lease obligations
Total debt and finance lease obligations decreased by $857
million, or 17.6%, primarily due to $1.9 billion of debt repayments
made during the year partially offset by the issuance of our 0.50%
Convertible Senior Notes and unsecured term loans received
under various federal payroll support programs. We will continue
to look for opportunities to reduce our overall debt level as our
business continues to recover.
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Other liabilities
Other liabilities increased by $474 million principally due to the initial cash payments received from our new co-branded credit card
agreements in 2021. The initial cash payments received from our new co-branded credit card agreements are deferred and recognized
as revenue over the terms of the related contracts. Deferred amounts are classified as other accrued liabilities and other liabilities on
our consolidated balance sheet.
Liquidity and Capital Resources
The airline business is capital intensive. Our ability to successfully
execute our 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 and investment
securities on-hand. During 2020, we executed a significant
number of financing transactions to ensure that we have adequate
levels of liquidity to navigate through the challenges posed by the
COVID-19 pandemic. As we began to recover in 2021, our focus
shifted to strengthening our balance sheet, lowering our total
cost of debt, and growing our unencumbered asset base. As of
December 31, 2021, our unrestricted cash, cash equivalents, and
short-term investments totaled $2.8 billion. Our adjusted debt to
capitalization ratio(1) at December 31, 2021 was 53%, down from
57% at December 31, 2020.
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, maintain financial flexibility, and be prudent with capital
spending.
Analysis of Cash Flows
We had unrestricted cash and cash equivalents of $2.0 billion
as of December 31, 2021. This compares to $1.9 billion and $959
million as of December 31, 2020 and 2019, respectively. We held
both short and long-term investments in 2021, 2020 and 2019. Our
short-term investments totaled $824 million as of December 31,
2021 compared to $1.1 billion and $369 million as of December 31,
2020 and 2019, respectively.
OPERATING ACTIVITIES
Cash provided by operating activities totaled approximately $1.6
billion in 2021. This compares to cash used in operating activities
of $683 million in 2020 and cash provided by operating activities
of $1.5 billion in 2019. Lower losses, principally driven by higher
operating revenues coupled with federal grants received under
various payroll support programs, and the initial cash payments
associated with our new co-branded credit card agreements all
contributed to the $2.3 billion increase in operating cash flows
in 2021. Cash provided by operating activities decreased by
$2.1 billion in 2020 compared to 2019 principally driven by the
unprecedented decline in demand for air travel caused by the
COVID-19 pandemic.
INVESTING ACTIVITIES
Cash used in investing activities totaled approximately
$704 million, $1.3 billion, and $1.1 billion in 2021, 2020, and 2019,
respectively.
During 2021, capital expenditures related to our purchase of flight
equipment included $637 million for the purchase of eight new
Airbus A321neo aircraft, seven Airbus A220 aircraft, and a number of
spare engines; $88 million for flight equipment deposits, $133 million
for flight equipment work-in-progress; and $44 million for spare
part purchases. Other property and equipment capital expenditures
included ground equipment purchases and facilities improvements
for $93 million. Investing activities in 2021 also included the net
proceeds of $296 million from our investment securities.
During 2020, capital expenditures related to our purchase of flight
equipment included $426 million for the purchase of seven new
Airbus A321neo aircraft, our first A220 Aircraft, and the buyout
of one Airbus A321 aircraft lease; $76 million for flight equipment
deposits; $151 million for flight equipment work-in-progress;
and $15 million for spare part purchases. Other property and
equipment capital expenditures included ground equipment
purchases and facilities improvements for $123 million. Investing
activities in 2020 also included the net purchase of $767 million
in investment securities.
We executed $563 million of aircraft sale-leaseback transactions
in 2020, which provided an additional source of liquidity during the
COVID-19 pandemic. Of these transactions, $209 million qualified
as sales for accounting purposes and the related proceeds are
classified within investing activities. The remaining $354 million
which did not qualify as sales for accounting purposes are treated
as cash from financing activities as noted below.
During 2019, capital expenditures related to our purchase of flight
equipment included $478 million for the purchase of six new
Airbus A321 aircraft and the buyout of one Airbus A320 aircraft
lease; $224 million for flight equipment deposits; $249 million
for flight equipment work-in-progress; and $48 million for
spare part purchases. Other property and equipment capital
expenditures included ground equipment purchases and facilities
improvements for $158 million. Investing activities in 2019 also
included the net purchase of $40 million in investment securities.
We currently anticipate capital expenditures of approximately
$175 million for the first quarter of 2022, and approximately
$1.0 billion for the full year 2022. We plan to restrict non-aircraft
capital expenditures to those that are most critical to our path
to recovery.
(1) Refer to our ‘’Regulation G Reconciliation of Non-GAAP Financial Measures” at the end of this section for more information on this non-GAAP measure.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
41
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCING ACTIVITIES
We made significant progress in strengthening our balance sheet
in 2021 by reducing our total debt balance from $4.9 billion at
December 31, 2020 to $4.0 billion at December 31, 2021.
Financing activities during the year primarily consisted of debt
repayments of $1.9 billion on our outstanding debt and finance
lease obligations, which included the following payoffs:
■ $722 million on our term loan facility;
■ $550 million on our revolving credit facility; and
■ $115 million on our secured loan balance under the CARES Act
Loan Program.
These principal payments were partially offset by:
■ Net proceeds of $734 million from the issuance of our 0.50%
Convertible Senior Notes due 2026;
■ Net proceeds of $276 million and $14 million from the
issuances of unsecured term loans and warrants, respectively,
in connection with the Payroll Support Program 2 under the
Consolidated Appropriations Act and Payroll Support Program
3 under the American Rescue Plan Act; and
■ $46 million in proceeds from the issuance of common stock
related to our crewmember stock purchase plan.
Also included in financing activities during 2021 were $8 million
used for the acquisition of treasury stock which represents
the return of shares to satisfy tax payments associated with
crewmember stock compensation that vested during the period.
We plan to continue to opportunistically pay down those
obligations with the highest costs as we continue to manage
through the recovery.
Financing activities during 2020 primarily consisted of net
proceeds of $2.2 billion from drawdowns of our credit facilities
and the execution of a number of financing transactions which
included the following:
■ $981 million from our 364-day delayed draw term loan facility
with Morgan Stanley Senior Funding Inc. as administrative
agent;
■ $717 million from our term loan facility with Barclays Bank PLC
as administrative agent; and
■ $550 million from our revolving credit facility with Citibank N.A.
as administrative agent.
Also included in financing activities during 2020 were:
■ Net proceeds of $913 million from the public placements of
equipment notes;
■ Net proceeds of $583 million from the offering of 42 million
shares of our common stock
■ $354 million of aircraft sale-leaseback transactions which did
not qualify as sales for accounting purposes;
■ Net proceeds of $259 million and $19 million from the issuance of
unsecured term loan and warrants, respectively, in connection
with the Payroll Support Program under the CARES Act;
42
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
■ Net proceeds of $105 million and $9 million from the issuance
of secured term loan and warrants, respectively, in connection
with the Loan Program under the CARES Act; and
■ $35 million in proceeds from the issuance of common stock
related to our crewmember stock purchase plan.
These proceeds were partially offset by the payoff of our
364-day delayed draw term loan facility for $1.0 billion, scheduled
maturities of $372 million relating to debt and finance lease
obligations, $12 million of which were associated with scheduled
rent payments on sale-leaseback aircraft that did not qualify as
sales for accounting purposes, and the acquisitions of treasury
shares of $167 million, of which $160 million related to our
accelerated share repurchases, or ASRs. Our share repurchase
program has been suspended since March 31, 2020.
Financing activities during 2019 consisted of the net issuance of
$981 million of debt, $764 million of which related to the offering of
our Enhanced Equipment Trust Certificates, Series 2019-1 (“2019-1
EETC”) in November, partially offset by the scheduled repayment
of $323 million in debt and finance lease obligations. Additionally,
we acquired $542 million in treasury shares of which $535 million
related to ASRs during 2019. During this period, we received
$51 million in proceeds from the issuance of stock related to
employee share-based compensation.
In March 2019, we filed an automatic shelf registration statement
with the SEC. Under this shelf registration statement, we may
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. We may utilize this 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,
to repay indebtedness, or for other general corporate purposes.
The warrants issued by JetBlue to Treasury under the Acts were
made, and any issuances of our underlying common stock are
expected to be made, in reliance on the exemption from the
registration afforded by Section 4(a)(2) of the Securities Act
of 1933, as amended (the “Securities Act”), for transactions not
involving a public offering.
None of our lenders or lessors are affiliated with us.
Capital Resources
Dependent on market conditions, we anticipate using a mix of
cash and debt financing for our expected aircraft deliveries in
2022. 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 assurances we
will be able to secure financing on terms attractive to us, if at all.
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 borrowing amount may vary accordingly. This line of
credit bears interest at a floating rate based upon the London
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Interbank Offered Rate, or LIBOR, plus a margin. We did not borrow
under this facility in 2021 or 2020 and the line was undrawn as of
December 31, 2021.
Working capital deficits can be customary in the airline industry
since a large portion of air traffic liability is classified within
current liability.
We have a revolving Credit and Guaranty Agreement with
Citibank N.A. as the administrative agent, for up to $550 million
(the “Revolving Facility”). The term of the Revolving Facility runs
through August 2023. Borrowings under the Revolving Facility
bear interest at a variable rate equal to LIBOR, plus a margin.
The Revolving Facility is secured by aircraft, simulators, and
certain other assets as permitted thereunder. The Revolving
Facility includes covenants that require us to maintain certain
minimum balances in unrestricted cash, cash equivalents, and
unused commitments available under revolving credit facilities. In
addition, the covenants restrict our ability to, among other things,
dispose of certain collateral, or merge, consolidate, or sell assets.
In response to the unprecedented decline in demand for air travel
caused by the COVID-19 pandemic, we borrowed the full amount of
$550 million under the Revolving Facility on April 22, 2020.
We repaid the full balance of the Revolving Facility in the first
quarter of 2021. As of December 31, 2021, we did not have a balance
outstanding or any borrowings under the Revolving Facility.
Working Capital
We had a working capital deficit of $170 million as of December
31, 2021 compared to a surplus of $671 million as of December 31,
2020. Our working capital decreased by $501 million due to several
factors, including an overall increase in our air traffic liability
resulting from the increase in customer bookings as demand for
air travel began to recover from the COVID-19 pandemic.
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 and
federal government assistance programs, which 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 future developments related to the
COVID-19 pandemic and its impact on the economy and consumer
behavior, the extremely competitive environment in which we
operate, or from events beyond our control, such as volatile fuel
prices, economic conditions, weather-related disruptions, airport
infrastructure challenges, the spread of infectious diseases,
the impact of other airline bankruptcies, restructurings or
consolidations, U.S. military actions, or acts of terrorism. We
believe there is sufficient liquidity available to us to meet our
cash requirements for at least the next 12 months.
Debt and Finance Leases
As part of our efforts to effectively manage our balance sheet,
we expect to continue to actively manage our debt balances.
Our approach to debt management includes managing the mix
of fixed and floating rate debt, annual maturities of debt, and the
weighted average cost of debt. Additionally, our unencumbered
assets allow some flexibility in managing our cost of debt and
capital requirements.
Contractual Obligations
Our contractual obligations at December 31, 2021 include the following (in billions):
Total
2022
2023
2024
2025
2026
Thereafter
Payments due in
Debt and finance lease obligations(1)
$
Operating lease obligations
Flight equipment purchase obligations
Other obligations(2)
TOTAL
$
4.6
1.1
7.5
2.3
$
15.5
$
0.5
0.2
0.9
0.3
1.9
$
$
0.7
0.2
1.6
0.4
2.9
$
$
0.4
0.1
1.8
0.4
2.7
$
$
0.2
0.1
1.3
0.4
2.0
$
$
0.9
0.1
0.9
0.4
2.3
$
$
1.9
0.4
1.0
0.4
3.7
Includes actual interest and estimated interest for floating-rate debt based on December 31, 2021 rates.
(1)
(2) Amounts include non-cancelable commitments for the purchase of goods and services.
The interest rates are fixed for $3.9 billion of our debt and finance
lease obligations, with the remaining $0.1 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 eight years as of December 31, 2021.
As of December 31, 2021, we believe we were in compliance
with the covenants of our debt and lease agreements and
approximately 64% of our owned property and equipment were
pledged as security under various loan agreements.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
43
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As of December 31, 2021, we had operating lease obligations
for 62 aircraft with lease terms that expire between 2023
and 2028. 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
Our firm aircraft order book as of December 31, 2021 was as follows:
airport facilities in each of our markets, as well as office space
and other equipment. We have approximately $32 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, 2021, the average age
of our operating fleet was 11.6 years.
Year
2022
2023
2024
2025
2026
2027
TOTAL
Airbus A321neo
Airbus A220
Total
3
11
13
11
12
14
64
9
18
22
12
1
—
62
12
29
35
23
13
14
126
In February 2022, we exercised our option to purchase 30
additional Airbus A220-300 aircraft under our existing agreement
with Airbus Canada Limited Partnership. The 30 additional A220-
300 aircraft are expected to be delivered from 2022 to 2026.
Options for 20 additional A220-300 aircraft remain available to us.
The 30 additional aircraft are not included in the aircraft delivery
schedule above. With the addition of these 30 Airbus A220
aircraft, our flight equipment purchase obligations are expected
to be $1.0 billion in 2022, $1.7 billion in 2023, $2.0 billion in 2024,
$1.6 billion 2025, $1.3 billion in 2026 and 1.0 billion thereafter.
Committed expenditures for our firm aircraft and spare engines
include estimated amounts for contractual price escalations and
pre-delivery deposits. We expect to meet our pre-delivery 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 pre-delivery 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. Minimum ground
and facility rents at JFK totaling $496 million are included in the
commitments table above as operating lease obligations.
Reaffirming our commitment to New York, in February 2022, we
executed a new lease for our primarily corporate offices that will
extend our stay in the present Long Island City location until 2039.
We expect the new lease will increase our lease commitments by
approximately $3 million in 2024, $6 million in 2025, $7 million in
2026, and $97 million thereafter.
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.
Off-Balance Sheet Arrangements
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.
44
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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 3, 4, and 11 to our consolidated financial statements for
a more detailed discussion of our variable interests and other
contingencies, including guarantees and indemnities.
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Climate 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 and ground operations emissions. Below is
a discussion of the regulations that are relevant to JetBlue and
the efforts we have taken to address climate change.
Legislation, Regulation, and Accords on
Climate Change
CARBON OFFSETTING AND REDUCTION SCHEME FOR
INTERNATIONAL AVIATION
In October 2016, 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.
Annual international emissions reporting is required via CORSIA as
of the 2019 reporting year, and offsetting compliance is scheduled
to be implemented through multiple phases beginning in 2021. In
2020, given the impacts of COVID-19 which dramatically reduced
2020 emissions, ICAO agreed that the baseline from which the
industry achieves carbon neutral growth would be from 2019 only,
rather than an average of 2019 and 2020 as originally intended.
ICAO continues to develop details regarding implementation, but
we expect compliance with CORSIA will increase our operating
costs.
SUSTAINABLE SKIES ACT
In May 2021, the Sustainable Skies Act was introduced in the
United States Congress to amend the Internal Revenue Code of
1986 to provide a tax credit for sustainable aviation fuel (“SAF”).
Under this proposal, SAF that achieve 50% or greater reduction
in lifecycle GHG emissions would be eligible to receive a tax credit
ranging from $1.50 per gallon to $2.00 per gallon.
We are supportive of this proposed legislation and consider this
to be a meaningful development to stimulate the production of
SAF, making it more affordable and widely available. We believe
this to be an important step in helping the U.S. airline industry
reach its goal of achieving net-zero carbon emissions by 2050.
Actions Taken to Address Climate Change
JetBlue is committed to proactively responding to climate
change by taking meaningful steps to decarbonize our business
and mitigating climate risks that may materially impact the
business. As one of our key company-wide strategic priorities,
we are pursuing six key levers to decarbonize our business. We
discuss these levers and other sustainability initiatives in “Item 1.
Business—Environmental, Social Governance – Environmental”
above.
Other Impacts of Climate Change
The number of extreme weather events, such as hurricanes,
typhoons, wildfires, and rainstorms, associated with climate
change is expected to increase. Occurrences of these extreme
weather events may result in flight cancellations, delays, and
diversions, severely impacting our operations and thus adversely
affecting our financial results and conditions.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in
conformity with generally accepted accounting principles in
the United States, or 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
Ticket sales and the fees collected for related ancillary services
are initially deferred in air traffic liability. Air traffic liability
represents tickets sold but not yet flown, credits which can be
used for future travel, and a portion of the liability related to our
TrueBlue® loyalty program. We allocate the transaction price to
each performance obligation identified in a passenger ticket on
a relative standalone basis. Passenger revenue, including certain
ancillary fees directly related to passenger tickets, is recognized
when the transportation is provided. Taxes that we are required
to collect from our customers, including foreign and U.S. federal
transportation taxes, security taxes, and airport facility charges,
are excluded from passenger revenue. Those taxes and fees are
recorded as a liability upon collection and are relieved from the
liability upon remittance to the applicable governmental agency.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
45
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The majority of the tickets we sell are non-refundable.
Non-refundable fares may be canceled prior to the scheduled
departure date for a credit for future travel. Refundable fares
may be canceled at any time prior to the scheduled departure
date. Failure to cancel a refundable fare prior to departure will
result in the cancellation of the original ticket and an issuance
of a credit for future travel. Passenger credits can generally be
used for future travel up to a year from the date of issuance. In
response to the impact of COVID-19 on air travel, we extended the
expiration dates for travel credits issued from February 27, 2020
through June 30, 2020 to a 24-month period. In January 2022, in
response to the surge in COVID-19 cases and flight cancellations
in late 2021, we further extended the expiration dates for travel
credits with an original expiration date between February 1,
2020 through September 29, 2022 to September 30, 2022. All
passenger credits were classified as current air traffic liability
as of December 31, 2021.
Passenger breakage revenue from unused tickets and passenger
credits will be recognized in proportion to flown revenue based
on estimates of expected expiration when the likelihood of the
customer exercising his or her remaining rights becomes remote.
Breakage revenue consists of non-refundable tickets that remain
unused past the departure date, have continued validity, and are
expected to ultimately expire unused, as well as passenger credits
that are not expected to be redeemed prior to expiration. JetBlue
uses estimates based on historical experience of expired tickets
and credits and considers other factors that could impact future
expiration patterns of tickets and credits. Tickets which do not
have continued validity past the departure date are recognized as
revenue after the scheduled departure date has lapsed.
Passenger ticket costs primarily include credit card fees,
commissions paid, and global distribution systems booking fees.
Costs are allocated entirely to the purchased travel services and
are capitalized until recognized when travel services are provided
to the customer.
Loyalty Program
Customers may earn points under our customer loyalty program,
TrueBlue®, based on the fare paid and fare product purchased for a
flight. Customers can also earn points through business partners
such as credit card companies, hotels, car rental companies, and
our participating airline partners.
POINTS EARNED FROM A TICKET PURCHASE
When a TrueBlue® member travels, we recognize a portion of the
fare as revenue and defer in air traffic liabilities the portion that
represents the value of the points net of spoilage, or breakage. We
allocate the transaction price to each performance obligation on
a relative standalone basis. We determine the standalone selling
price of TrueBlue® points issued using the redemption value
approach. To maximize the use of observable inputs, we utilize the
actual ticket value of the tickets purchased with TrueBlue® points.
The liability is relieved and passenger revenue is recognized when
the points are redeemed and the free travel is provided.
POINTS SOLD TO TRUEBLUE® PARTNERS
Our most significant contract to sell TrueBlue® points is
with our co-branded credit card partner. Co-branded credit
card partnerships have the following identified performance
obligations: 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 standalone
selling price, JetBlue considers multiple inputs, methods, and
assumptions, including: discounted cash flows; estimated
redemption value, net of fulfillment discount; points expected
to be awarded and redeemed; estimated annual spending by
cardholders; estimated annual royalty for use of JetBlue’s
frequent flyer customer lists; and estimated utilization of other
airline benefits. Payments are typically due monthly based on
the volume of points sold during the period, and the terms of
our marketing contracts are generally from one to ten years. The
overall consideration received is allocated to each performance
obligation based on its relative standalone selling price. The air
transportation element is deferred and recognized as passenger
revenue when the points are redeemed. The other elements are
recognized as other revenue when the performance obligations
related to those services are satisfied, which is generally the same
period as when consideration is received from the participating
company.
Amounts allocated to the air transportation element which
are initially deferred include a portion that are expected to be
redeemed during the following twelve months (included within
Air traffic liability), and a portion that are not expected to be
redeemed during the following twelve months (included within Air
traffic liability - non-current). We periodically update this analysis
and adjust the split between current and non-current liabilities
as appropriate.
Points earned by TrueBlue® members never expire. TrueBlue®
members can pool points between small groups of people,
branded as Points Pooling™. Breakage is estimated using
historical redemption patterns to determine a breakage rate.
Breakage rates used to estimate breakage revenue are evaluated
annually. Changes to breakage estimates impact revenue
recognition prospectively.
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.
46
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
To determine if impairment exists for our aircraft used in
operations, we group our aircraft by fleet-type (the lowest level for
which there are identifiable cash flows) and then estimate their
future cash flows based on projections of capacity, aircraft age,
maintenance requirements, and other relevant conditions. An
impairment occurs when the sum of the estimated undiscounted
future cash flows are less than the aggregate carrying value
of the fleet. The impairment loss recognized is the amount by
which the fleet’s carrying value exceeds its estimated fair value.
We estimate aircraft fair value using third party valuations which
consider the effects of the current market environment, age of
the assets, and marketability.
Given the substantial reduction in our active aircraft and
diminished projections of future cash flows experienced in 2020
as a result of the COVID-19 pandemic, we evaluated and recorded
impairment charges of flight equipment and other property and
equipment related to our Embraer E190 fleet for the year ended
December 31, 2020. No impairment charges were recorded for
the year ended December 31, 2021.
Refer to Note 17 to our consolidated financial statements for
further details of our impairment charges.
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. 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 Reconciliation of Non-GAAP Financial Measures
We sometimes use non-GAAP financial measures in this report.
Non-GAAP financial measures are financial measures that
are derived from the consolidated financial statements, but
that are not presented in accordance with generally accepted
accounting principles in the United States, or GAAP. We believe
these non-GAAP financial 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
GAAP. Further, our non-GAAP information may be different from
the non-GAAP information provided by other companies. The
information below provides an explanation of each non-GAAP
financial measure and shows a reconciliation of non-GAAP
financial measures used in this filing to the most directly
comparable GAAP financial measures.
Operating Expense per Available Seat Mile,
excluding fuel and related taxes, other
non-airline operating expenses, and special
items (“CASM Ex-Fuel”)
Operating expenses per available seat mile, or CASM, is a common
metric used in the airline industry. We exclude aircraft fuel and
related taxes, operating expenses related to other non-airline
businesses, such as our subsidiaries, JetBlue Technology
Ventures and JetBlue Travel Products, and special items from
operating expenses to determine CASM ex-fuel, which is a non-
GAAP financial measure.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
47
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In 2021, special items include contra-expenses recognized on
the utilization of federal grants received under various payroll
support programs, contra-expenses recognized on the Employee
Retention Credits provided by the CARES Act, and one-time costs
related to the ratification of the collective bargaining agreement
with our inflight crewmembers.
Special items in 2020 include contra-expenses recognized on the
utilization of payroll support grants received under the CARES
Act, contra-expenses recognized on the Employee Retention
Credits provided by the CARES Act, impairment charges on
our Embraer E190 fleet, losses generated from certain aircraft
sale-leaseback transactions, and one-time costs associated with
our voluntary crewmember separation programs.
Special items for 2019 include an impairment charge and one-time
costs related to the Embraer E190 fleet transition as well as one-
time costs related to the ratification and implementation of our
pilots’ collective bargaining agreement.
We believe that CASM ex-fuel is useful for investors because it
provides investors the ability to measure financial performance
excluding items beyond our control, such as fuel costs, which are
subject to many economic and political factors, or not related
to the generation of an available seat mile, such as operating
expense related to other non-airline businesses. 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.
NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE PER ASM, EXCLUDING FUEL
2021
2020
2019
2018
2017
(in millions; per ASM data in cents)
$ per ASM
$ per ASM
$ per ASM
$ per ASM
$ per ASM
Total operating expenses
$
6,117
11.30
$ 4,671
14.29 $ 7,294
11.43 $ 7,392
12.34 $ 6,039
10.78
Less:
Aircraft fuel and related taxes
1,436
Other non-airline expenses
43
2.65
0.08
631
35
1.93
0.10
Special items
(833)
(1.54)
(283)
(0.86)
1,847
46
14
2.89
0.08
0.02
1,899
44
435
3.17
0.07
0.73
1,363
35
—
2.43
0.06
—
Operating expenses,
excluding fuel
$ 5,471
10.11
$ 4,288
13.12 $ 5,387
8.44 $ 5,014
8.37 $ 4,641
8.29
Reconciliation of Operating Expense, Income
(Loss) before Taxes, Net Income (Loss) and
Earnings (Loss) per Share, excluding special
items and gain on equity investments
Our GAAP results in the applicable periods were impacted by
credits and charges that are deemed special items.
In 2021, special items include contra-expenses recognized
on the utilization of federal grants received under various
payroll support programs, contra-expenses recognized on the
Employee Retention Credits (ERCs) provided by the CARES Act,
and one-time costs related to the ratification of the collective
bargaining agreement with our inflight crewmembers.
Special items in 2020 include contra-expenses recognized on the
utilization of payroll support grants received under the CARES
Act, contra-expenses recognized on ERCs, impairment charges
on our Embraer E190 fleet, losses generated from certain aircraft
sale-leaseback transactions, and one-time costs associated with
our voluntary crewmember separation programs.
Special items in 2019 include one-time costs related to the
Embraer E190 fleet transition as well as one-time costs related
to the ratification and implementation of our pilots’ collective
bargaining agreement.
Certain net gains on our equity investments were also excluded
from our 2021 and 2019 GAAP results.
48
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
We believe the impact of these items distort our overall trends and that our metrics are more comparable with the presentation of our
results excluding the impact of these items. The table below provides a reconciliation of our GAAP reported amounts to the non-GAAP
amounts excluding the impacts of these items.
NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF OPERATING EXPENSE, INCOME (LOSS) BEFORE TAXES, NET INCOME (LOSS) AND EARNINGS
(LOSS) PER SHARE EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY INVESTMENTS
(in millions except per share amounts)
Total Operating Revenues
Total Operating Expenses
Less: Special items
TOTAL OPERATING EXPENSES EXCLUDING SPECIAL ITEMS
Operating income (loss)
Add back: Special items
OPERATING INCOME (LOSS) EXCLUDING SPECIAL ITEMS
Operating margin excluding special items
Income (loss) before income taxes
Add back: Special items
Less: Gain on equity investments
INCOME (LOSS) BEFORE INCOME TAXES EXCLUDING SPECIAL ITEMS AND
GAIN ON EQUITY INVESTMENTS
Pre-tax margin excluding special items and gain on equity investments
Net income (loss)
Add back: Special items
Less: Income tax benefit (expense) related to special items
Less: Gain on equity investments
Less: Income tax (expense) related to gain on equity investments
NET INCOME (LOSS) EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY
INVESTMENTS
Earnings (loss) per common share:
Basic
Add back: Special items, net of tax
Less: Gain on equity investments, net of tax
BASIC EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY INVESTMENTS
Diluted
Add back: Special items, net of tax
Less: Gain on equity investments, net of tax
Year Ended December 31,
$
$
$
$
$
$
$
$
$
$
$
$
2021
6,037
6,117
(833)
6,950
(80)
(833)
(913)
(15.1)%
(263)
(833)
44
(1,140)
(18.9)%
(182)
(833)
(249)
44
(13 )
(797)
(0.57)
(1.84)
0.10
(2.51)
(0.57)
(1.84)
0.10
$
$
$
$
$
$
$
$
$
$
$
$
2020
2,957
4,671
(283)
4,954
(1,714)
(283)
(1,997)
(67.5)%
(1,893)
(283)
—
(2,176)
(73.6)%
(1,354)
(283)
(69)
—
—
(1,568)
(4.88)
(0.77)
—
(5.65)
(4.88)
(0.77)
—
$
$
$
$
$
$
$
$
$
$
$
$
DILUTED EXCLUDING SPECIAL ITEMS AND GAIN ON EQUITY INVESTMENTS
$
(2.51)
$
(5.65)
$
2019
8,094
7,294
14
7,280
800
14
814
10.1 %
768
14
15
767
9.5 %
569
14
4
15
(4 )
568
1.92
0.04
0.04
1.92
1.91
0.03
0.04
1.90
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
49
PART II | ITEM 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Adjusted Debt to Capitalization Ratio
Adjusted debt to capitalization ratio is a non-GAAP financial measure which we believe is relevant in assessing the Company’s overall
debt profile. Adjusted debt includes aircraft operating lease liabilities, in addition to total debt and finance lease obligations. Adjusted
capitalization represents total equity plus adjusted debt. Investors should consider this non-GAAP financial measure in addition to,
and not as a substitute for, our financial measures prepared in accordance with GAAP.
NON-GAAP FINANCIAL MEASURE
ADJUSTED DEBT TO CAPITALIZATION RATIO
(in millions)
Long-term debt and finance lease obligations
Current maturities of long-term debt and finance lease obligations
Operating lease liabilities — aircraft
Adjusted debt
Long-term debt and finance lease obligations
Current maturities of long-term debt and finance lease obligations
Operating lease liabilities — aircraft
Stockholders' equity
Adjusted capitalization
Adjusted debt to capitalization ratio
Free Cash Flow
December 31,
2021
2020
$
3,651
$
4,413
$
$
355
256
4,262
3,651
355
256
3,849
$
$
450
273
5,136
4,413
450
273
3,951
$
8,111
$
9,087
53%
57 %
The table below reconciles cash provided by operations determined in accordance with GAAP to Free Cash Flow, a non-GAAP financial
measure. We believe 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 GAAP.
NON-GAAP FINANCIAL MEASURE
RECONCILIATION OF FREE CASH FLOW
(in millions)
2021
2020
2019
2018
Net cash provided by (used in) operating activities
$
1,642
$
(683)
$
1,449
$
1,200
Less: Capital expenditures
Less: Pre-delivery deposits for flight equipment
(907)
(88)
(715)
(76)
(932)
(224)
FREE CASH FLOW
$
647
$
(1,474)
$
293
$
(908)
(206)
86
2017
1,379
(1,074)
(128)
177
$
$
Year Ended December 31,
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 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
■ Average fare - The average one-way fare paid per flight segment
divided by available seat miles.
by a revenue passenger.
50
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
■ Operating expense per available seat mile, excluding fuel -
Operating expenses, less aircraft fuel, other non-airline expenses,
and special items, 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
■ Operating revenue per available seat mile - Operating revenues
revenue passengers.
divided by available seat miles.
■ Yield per passenger mile - The average amount one passenger
■ Passenger revenue per available seat mile - Passenger revenue
pays to fly one mile.
divided by available seat miles.
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 from the sensitivity analyses. See Notes 1, 4 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, 2021 cost per
gallon of fuel. Based on projected 2022 fuel consumption, such
an increase would result in an increase to aircraft fuel expense
of approximately $224 million in 2022. We did not have any fuel
hedges outstanding as of December 31, 2021.
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
$3.9 billion of our debt and finance lease obligations, with the
remaining $0.1 billion having floating interest rates. If interest
rates were on average 100 basis points higher in 2022 than
they were during 2021, our interest expense would increase
by approximately $1 million. This amount is determined by
considering the impact of the hypothetical change in interest
rates on our variable rate debt.
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.
If interest rates were an average 100 basis points lower in 2022
than they were during 2021, our interest income from cash and
investment balances would decrease by approximately $1 million.
This amount is determined by considering the impact of the
hypothetical interest rates on the balances of our money market
funds and short-term, interest-bearing investments.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
51
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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 the Financial Statements
We have audited the accompanying consolidated balance sheets
of JetBlue Airways Corporation (the Company) as of December 31,
2021 and 2020, the related consolidated statements of operations,
comprehensive income (loss), stockholders’ equity and cash
flows for each of the three years in the period ended December
31, 2021, and the related notes and financial statement schedule
listed in Item 15(2) (collectively referred to as the “consolidated
financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial
position of JetBlue Airways Corporation at December 31, 2021
and 2020, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended
December 31, 2021, 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, 2021, 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 22, 2022 expressed
an unqualified opinion thereon.
Basis for Opinion
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 audits 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.
Critical Audit Matters
The critical audit matters communicated below are matters
arising from the current period audit of the financial statements
that were communicated or required to be communicated to the
audit committee and that (1) relate to accounts or disclosures
that are material to the consolidated financial statements and
(2) involved our specially challenging, subjective, or complex
judgments. The communication of the critical audit matters
does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating
the critical audit matters below, providing separate opinions on
the critical audit matters or on the accounts or disclosures to
which they relate.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Loyalty Program - Breakage
Description of the
Matter
As discussed in Note 2 to the consolidated financial statements, under the customer loyalty program, the Company
issues points to customers based upon the fare paid for a ticket purchase or through sales to business partners,
including JetBlue’s co-branded credit card partners. The Company defers a portion of the transaction price allocable
to points issued and recognizes revenue when the points are redeemed for travel. The Company estimates breakage
for issued points using historical redemption patterns and records revenue for points that are not expected to be
redeemed. Estimates of breakage are evaluated annually, and changes to breakage estimates prospectively impact
Passenger revenue and Air traffic liability. The balance of the Company’s Air traffic liability associated with the loyalty
program was $891 million as of December 31, 2021.
Auditing management’s estimates and calculations used in its accounting for the loyalty program is significant to our
audit as the related impact to Passenger revenue and Air traffic liability is material and sensitive to changes in the
breakage rate. The estimate of breakage by management requires the Company to forecast redemption patterns,
which involves the application of judgment and estimation. As a result, auditing the Company’s accounting for the
loyalty program breakage estimate was complex and highly judgmental.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the
Company’s accounting for the loyalty program, including controls over management’s estimation of breakage rates
and review of the significant assumptions underlying the determination of estimated redemption patterns.
Our audit procedures included, among others, evaluating the significant assumptions and the accuracy and
completeness of the underlying data used in management’s calculation including the total number of points issued to
and redeemed by customers. We involved our valuation professionals to assist us in our evaluation of the methodology
used by the Company to estimate expected redemption patterns. We performed a sensitivity analysis of management’s
estimate of points expected to be redeemed to evaluate the impact on Passenger revenue and Air traffic liability. We
also tested the calculation used to determine the amount recognized as revenue for the period.
Loyalty Program – Co-Brand Agreement
Description of the
Matter
The balance of the Company’s Air traffic liability associated with the loyalty program was $891 million as of December 31,
2021. For the year ended December 31, 2021, the Company recognized revenue of $305 million classified as Loyalty
revenue – air transportation within passenger revenue and revenue of $306 million classified as Loyalty revenue
within other revenue associated with various partner agreements including, but not limited to, its co-branded credit
card agreements, in the consolidated statements of operations. As discussed in Note 2 to the consolidated financial
statements, in June 2021 the Company entered into an Amended and Restated Co-Branded Card Agreement with a
bank (the “Co-Brand Agreement”). The Company allocates the consideration received from the Co-Brand Agreement
based on its estimate of the relative standalone selling prices of the products and services delivered, which includes
air transportation, use of the Company’s brand name, access to customer lists, advertising and other airline benefits.
Auditing the Company’s accounting for the Co-Brand Agreement was complex and highly judgmental due to the
significant estimation required in determining the standalone selling price of the performance obligation related
to the Company’s brand and customer lists elements (collectively the “brand element”), primarily resulting from the
absence of observable standalone selling prices. A change in the estimated standalone selling prices of the brand
element could have a material impact on the air traffic liability balances and the timing of revenue recognition.
How We Addressed
the Matter in Our
Audit
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the
Company’s accounting for the Co-Brand Agreement, including controls specific to the estimated standalone selling
price of the Company’s brand element and the completeness and accuracy of the underlying data.
To test the estimated standalone selling price of the brand element, our audit procedures included, among others,
involving a valuation specialist to assist in testing the method used to develop the standalone selling price of the
Company’s brand element, and assessing the reasonableness of the inputs used to develop the estimate, which
included corroborating those inputs to publicly available data. Additionally, we performed sensitivity analyses to
evaluate the changes to the Company’s air traffic liability that would result from changes in the estimated standalone
selling prices of the Company’s brand element.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2001.
New York, New York
February 22, 2022
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
53
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, 2021, 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, 2021, 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 consolidated balance sheets of the Company as
of December 31, 2021 and 2020 and the related consolidated
statements of operations, comprehensive income (loss),
stockholders’ equity and cash flows for each of the three years in
the period ended December 31, 2021, and the related notes and
financial statement schedule and our report dated February 22,
2022 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 22, 2022
54
JETBLUE AIRWAYS CORPORATION | 2021 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 (2021 - $3; 2020-$2)
Inventories, less allowance (2021 - $24; 2020-$27)
Prepaid expenses and other
Total current assets
PROPERTY AND EQUIPMENT
Flight equipment
Pre-delivery deposits for flight equipment
Total flight equipment and pre-delivery deposits, gross
Less accumulated depreciation
Total flight equipment and pre-delivery deposits, net
Other property and equipment, gross
Less accumulated depreciation
Total other property and equipment, net
Total property and equipment, net
OPERATING LEASE ASSETS
OTHER ASSETS
Investment securities
Restricted cash
Intangible assets, net of accumulated amortization of $405 and $360, at 2021 and
2020, respectively
Other
Total other assets
TOTAL ASSETS
December 31,
2021
2020
$
2,018
$
824
207
74
124
3,247
11,161
337
11,498
3,227
8,271
1,205
662
543
8,814
729
39
59
284
470
852
1,918
1,135
98
71
123
3,345
10,256
420
10,676
2,888
7,788
1,202
591
611
8,399
804
2
51
261
544
858
$
13,642
$
13,406
See accompanying notes to consolidated financial statements.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
55
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 operating lease liabilities
Current maturities of long-term debt and finance lease obligations
Total current liabilities
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS
LONG-TERM OPERATING LEASE LIABILITIES
DEFERRED TAXES AND OTHER LIABILITIES
Deferred income taxes
Air traffic liability - non-current
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, 478 and 474 shares issued and
320 and 316 shares outstanding at 2021 and 2020, respectively
Treasury stock, at cost; 158 and 158 shares at 2021 and 2020, respectively
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income
Total stockholders’ equity
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
December 31,
2021
2020
499
1,618
480
359
106
355
3,417
3,651
690
843
640
552
2,035
—
5
(1,989)
3,047
2,786
—
3,849
13,642
$
$
365
1,122
409
215
113
450
2,674
4,413
752
922
616
78
1,616
—
5
(1,981)
2,959
2,968
—
3,951
13,406
See accompanying notes to consolidated financial statements.
56
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
JETBLUE AIRWAYS CORPORATION
Consolidated Statements of Operations
(in millions, except per share data)
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
Special items
Total operating expenses
OPERATING (LOSS) INCOME
OTHER INCOME (EXPENSE)
Interest expense
Interest income
Gain on equity investments, net
Other
Total other expense
(LOSS) INCOME BEFORE INCOME TAXES
Income tax (benefit) expense
NET (LOSS) INCOME
(LOSS) EARNINGS PER COMMON SHARE
Basic
Diluted
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Years Ended December 31,
2021
2020
$
5,609
$
2,733
$
428
6,037
1,436
2,358
628
540
99
183
626
1,080
(833)
6,117
(80)
(192)
17
44
(52)
(183)
(263)
(81)
(182)
(0.57)
(0.57)
$
$
$
224
2,957
631
2,032
358
535
85
110
441
762
(283)
4,671
(1,714)
(179)
23
—
(23)
(179)
(1,893)
(539)
(1,354)
(4.88)
(4.88)
$
$
$
$
$
$
2019
7,786
308
8,094
1,847
2,320
474
525
99
290
619
1,106
14
7,294
800
(79)
32
15
—
(32)
768
199
569
1.92
1.91
See accompanying notes to consolidated financial statements.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
57
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JETBLUE AIRWAYS CORPORATION
Consolidated Statements of Comprehensive Income (Loss)
(in millions)
NET (LOSS) INCOME
Changes in fair value of derivative instruments, net of reclassifications
into earnings, net of taxes of $0, $0, and $(1) in 2021, 2020, and 2019,
respectively
Total other comprehensive (loss) income
COMPREHENSIVE (LOSS) INCOME
Years Ended December 31,
2021
2020
(182)
$
(1,354)
$
—
—
(2)
(2)
(182)
$
(1,356)
$
$
$
2019
569
5
5
574
See accompanying notes to consolidated financial statements.
58
JETBLUE AIRWAYS CORPORATION | 2021 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
Years Ended December 31,
2021
2020
Net (loss) income
$
(182)
$
(1,354)
$
Adjustments to reconcile net (loss) income to net cash provided by
operating activities:
Deferred income taxes
Impairment of long-lived assets
Depreciation and amortization
Stock-based compensation
Losses on sale-leaseback transactions
Losses on debt extinguishments
Unrealized (gains) losses on investments
Changes in certain operating assets and liabilities:
Decrease (increase) in receivables
Decrease in inventories, prepaid and other
Increase in air traffic liability
Increase (decrease) in accounts payable and other accrued liabilities
Other, net
Net cash provided by (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
Pre-delivery 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
Proceeds from sale-leaseback transactions
Other, net
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt
Proceeds from short-term borrowings
Proceeds from sale-leaseback transactions
Proceeds from issuance of common stock
Proceeds from issuance of stock warrants
(88)
—
540
28
—
50
(49)
(46)
138
447
806
(2)
1,642
(907)
(88)
(37)
—
(1,577)
1,910
—
(5)
(704)
1,010
—
—
46
14
Repayment of long-term debt and finance lease obligations
(1,892)
See accompanying notes to consolidated financial statements.
(329)
273
535
28
106
9
2
144
52
66
(255)
40
(683)
(715)
(76)
—
21
(1,962)
1,174
209
—
(1,349)
2,541
981
354
619
28
(372)
2019
569
139
—
525
31
—
—
(21)
(3)
188
118
(91)
(6)
1,449
(932)
(224)
(374)
534
(1,000)
880
—
(13)
(1,129)
981
—
—
51
—
(323)
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
59
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(in millions)
Repayment of short-term borrowings
Acquisition of treasury stock
Other, net
Net cash provided by (used in) financing activities
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash, cash equivalents and restricted cash at beginning of period
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD(1)
SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest
Cash payments for income taxes (net of refunds)
NON-CASH TRANSACTIONS
$
$
Years Ended December 31,
2021
—
(8)
—
(830)
108
1,969
2,077
180
3
$
$
2020
(1,000)
(167)
(1)
2,983
951
1,018
1,969
139
5
$
$
Operating lease assets obtained in exchange for operating lease liabilities
$
46
$
144
$
(1) Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets:
(in millions)
Cash and cash equivalents
Restricted cash
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH
December 31,
2021
2,018
59
2,077
$
$
2020
1,918
51
1,969
$
$
$
$
2019
—
(542)
(2)
165
485
533
1,018
62
(52)
7
2019
959
59
1,018
See accompanying notes to consolidated financial statements.
60
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JETBLUE AIRWAYS CORPORATION
Consolidated Statements of Stockholders’ Equity
(in millions)
Common
Shares
Common
Stock
Treasury
Shares
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
BALANCE AT DECEMBER 31, 2018
422 $
Net Income
Other Comprehensive Income
Vesting of Restricted Stock Units
Stock Compensation Expense
Shares Issued Under Crewmember
Stock Purchase Plan
Shares Repurchased
—
—
2
—
3
—
BALANCE AT DECEMBER 31, 2019
427 $
Net (Loss)
Other Comprehensive (Loss)
Vesting of Restricted Stock Units
Stock Compensation Expense
Shares Issued Under Crewmember
Stock Purchase Plan
Shares Repurchased
CARES Act Warrant Issuance
Shares Issued Under Common
Stock Offering
BALANCE AT DECEMBER 31, 2020
Net (Loss)
Vesting of Restricted Stock Units
Stock Compensation Expense
Shares Issued Under Crewmember
Stock Purchase Plan
Warrants Issued Under Federal
Support Programs
—
—
1
—
4
—
—
42
474 $
—
1
—
3
—
BALANCE AT DECEMBER 31, 2021
478 $
4
—
—
—
—
—
—
4
—
—
—
—
—
—
—
1
5
—
—
—
—
—
5
116 $ (1,272) $
2,203 $ 3,753 $
(3 ) $ 4,685
—
—
—
—
—
29
—
—
(6)
—
—
—
—
—
31
51
(504)
(32)
569
—
—
—
—
—
—
5
—
—
—
—
569
5
(6)
31
51
(536)
145 $ (1,782) $
2,253 $ 4,322 $
2 $ 4,799
—
—
—
—
—
13
—
—
—
—
(7)
—
—
(192)
—
—
—
—
—
28
35
32
28
583
(1,354)
—
—
—
—
—
—
—
—
(2)
—
—
—
—
—
—
(1,354)
(2)
(7)
28
35
(160)
28
584
158 $ (1,981) $
2,959 $ 2,968 $
— $ 3,951
—
—
—
—
—
—
(8)
—
—
—
—
—
28
46
14
(182)
—
—
—
—
—
—
—
—
—
(182)
(8)
28
46
14
158 $ (1,989) $
3,047 $ 2,786 $
— $ 3,849
See accompanying notes to consolidated financial statements.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
61
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, 2021, we served 107 destinations in 31 states,
the District of Columbia, the Commonwealth of Puerto Rico, the
U.S. Virgin Islands, and 24 countries in the Caribbean and Latin
America.
NOTE 1
Summary of Significant Accounting Policies
Basis of Presentation
Restricted Cash
JetBlue provides air transportation services across the United
States, the Caribbean, and Latin America, and between New York
and London. Our consolidated financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States, or GAAP, and include the accounts
of JetBlue and our subsidiaries. All majority-owned subsidiaries
are consolidated with all intercompany transactions and balances
being eliminated.
Use of Estimates
The preparation of our consolidated financial statements and
accompanying notes in conformity with GAAP requires 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 (the “FASB”) Accounting Standards
Codification® (“ASC” or the “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
to our consolidated financial statements 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, commercial paper,
and time deposits with maturities of three months or less when
purchased.
Restricted cash primarily consists of security deposits, funds held
in escrow for estimated workers’ compensation obligations, and
performance bonds for aircraft and facility leases.
Accounts Receivable
Accounts receivable are carried at cost. They primarily consist of
amounts due from credit card companies associated with sales of
tickets for future travel as well as amounts due from our co-branded
credit card partners. We estimate an allowance for doubtful accounts
based on known troubled accounts, if any, and historical experience
of losses incurred, as well as current and expected conditions.
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 time deposits, U.S. Treasury bills with
maturities between three and twelve months, commercial paper,
equity securities of publicly traded companies, and convertible
debt securities which are stated at fair value.
HELD-TO-MATURITY INVESTMENT SECURITIES
Our held-to-maturity investments consist of investment-grade
interest bearing instruments, such as corporate bonds and U.S.
Treasury notes, 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, 2021, 2020 or 2019. The estimated
fair value of these investments approximated their carrying value
as of December 31, 2021 and 2020.
62
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The carrying values of investment securities consisted of the following at December 31, 2021 and 2020 (in millions):
Available-for-sale securities
Time deposits
Commercial paper
Equity securities
Debt securities
Total available-for-sale securities
Held-to-maturity securities
Corporate bonds
Total held-to-maturity securities
TOTAL INVESTMENT SECURITIES
Equity Method Investments
Investments in which we can exercise significant influence
are accounted for using the equity method in accordance with
Topic 323, Investments - Equity Method and Joint Ventures of
the Codification. The carrying amount of our equity method
investments, which is recorded within other assets on our
consolidated balance sheets, was $32 million and $34 million
as of December 31, 2021 and 2020, respectively. In September
2019, we recognized a gain of $15 million on one of our equity
method investments related to its fair value measurement upon
the closing of a subsequent financing round.
Other Investments
Our wholly-owned subsidiary, JetBlue Technology Ventures, LLC
(“JTV”), has equity investments in emerging companies which do
not have readily determinable fair values. In accordance with
Topic 321, Investments - Equity Securities of the Codification, we
account for these investments using a measurement alternative
which allows entities to measure these investments at cost,
less any impairment, adjusted for changes from observable
price changes in orderly transactions for identifiable or similar
investments of the same issuer. The carrying amount of these
investments, which is included within other assets on our
consolidated balance sheet, was $72 million and $40 million as
of December 31, 2021 and December 31, 2020, respectively.
We recognized a gain of $37 million on these investments for
the year ended December 31, 2021. The gain was triggered by an
observable transaction for a similar security issued by a portfolio
company which indicated a change in overall valuation. We
estimated the fair value of our investment in the company using
third party valuations and considered specific circumstances
such as our expectation of a potential exit from the company,
prices from previous issuances of equity securities, the rights
and obligations of holders of similar securities within the
company, and estimates of volatility. Due to the use of significant
unobservable inputs, our investment is classified as Level 3 in the
fair value hierarchy.
In August 2021, we recognized a gain of $17 million in connection
with the initial public offering of a company within the JTV
December 31, 2021
December 31, 2020
$
790
$
1,130
2
26
8
826
37
37
—
—
7
1,137
—
—
$
863
$
1,137
investment portfolio. Subsequent to the initial public offering,
this investment is measured at fair value with unrealized holding
gains and losses recorded in earnings. Total net gain recognized
on this investment was $7 million in 2021. The carrying value of
this investment, which is included within short-term investment
securities on our consolidated balance sheet, was $26 million as
of December 31, 2021.
We have an approximate 10% ownership interest in the TWA
Flight Center Hotel at John F. Kennedy International Airport,
and it is also accounted for under the measurement alternative.
The carrying amount of this investment was $14 million as of
December 31, 2021 and 2020.
Derivative Instruments
Our derivative instruments include fuel hedge contracts, such as
jet fuel call options and call option spreads, which are stated at
fair value, net of any collateral postings. Derivative instruments
are included in other current assets and other current liabilities
on our consolidated balance sheets. We did not have any fuel
hedging contracts outstanding at December 31, 2021 or 2020.
Refer to Note 12 to our consolidated financial statements 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 first-in, first-out basis. These
items are expensed when used or consumed. An allowance for
obsolescence on aircraft spare parts and supplies 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, as well as the interest related to pre-delivery deposits
used to acquire new aircraft and the construction of our facilities.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
63
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Estimated useful lives and residual values for our property and equipment are as follows:
Property and Equipment Type
Estimated Useful Life
Residual Value
Aircraft
Inflight entertainment systems
Aircraft parts
25 years
5-10 years
Fleet life
Flight equipment leasehold improvements
Lower of lease term or economic life
Ground property and equipment
Leasehold improvements—other
Buildings on leased land
2-10 years
Lower of lease term or economic life
Lease term
20 %
0 %
10 %
0 %
0 %
0 %
0 %
Property under finance 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 finance leases is on a straight-line basis over
the expected useful life to their estimated residual values and is
included in depreciation and amortization expense.
We record impairment losses on long-lived assets used in
operations when events and circumstances indicate the assets
may be impaired and the undiscounted future cash flows
estimated to be generated by the assets are less than the assets’
net book value. If impairment occurs, the loss is measured by
comparing the fair value of the asset to its carrying amount.
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 five years. The net book value of
computer software, which is included in intangible assets on our
consolidated balance sheets, was $144 million and $121 million
as of December 31, 2021 and 2020, respectively. Amortization
expense related to computer software was $45 million, $44 million
and $52 million for the years ended December 31, 2021, 2020, and
2019, respectively. As of December 31, 2021, amortization expense
related to computer software is expected to be approximately
$46 million in 2022, $39 million in 2023, $28 million in 2024,
$14 million in 2025, and $4 million in 2026.
Indefinite-Lived Intangible Assets
Our indefinite-lived intangible assets consist primarily of
acquired Slots at certain High Density Airports which result in
no amortization expense. 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 evaluate our indefinite-lived 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 various market factors to determine
if events and circumstances could reasonably have affected the
fair value. As of December 31, 2021 and 2020, our indefinite-lived
intangible assets, which are included in intangible assets on our
consolidated balance sheets, were $139 million. We performed an
impairment assessment as of December 31, 2021 and determined
our indefinite-lived intangible assets were not impaired.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
Passenger Revenue
Ticket sales and the fees collected for related ancillary services
are initially deferred in air traffic liability. Air traffic liability
represents tickets sold but not yet flown, credits which can be
used for future travel, and a portion of the liability related to our
TrueBlue® loyalty program. We allocate the transaction price to
each performance obligation identified in a passenger ticket
on a relative standalone basis. Passenger revenue, including
certain ancillary fees directly related to passenger tickets, is
recognized when the transportation is provided. Taxes that we
are required to collect from our customers, including foreign
and U.S. federal transportation taxes, security taxes, and airport
facility charges, are excluded from passenger revenue. Those
taxes and fees are recorded as a liability upon collection and
are relieved from the liability upon remittance to the applicable
governmental agency.
The majority of the tickets sold are non-refundable. Non-
refundable fares may be canceled prior to the scheduled
departure date for a credit for future travel. Refundable fares
may be canceled at any time prior to the scheduled departure
date. Failure to cancel a refundable fare prior to departure will
result in the cancellation of the original ticket and an issuance
of a credit for future travel. Passenger credits can be used for
future travel up to a year from the date of issuance. Passenger
breakage revenue from unused tickets and passenger credits
will be recognized in proportion to flown revenue based on
estimates of expected expiration when the likelihood of the
customer exercising his or her remaining rights becomes
remote. Breakage revenue consists of non-refundable tickets
that remain unused past the departure date, have continued
validity, and are expected to ultimately expire unused, as well
as passenger credits that are not expected to be redeemed
prior to expiration. JetBlue uses estimates based on historical
experience of expired tickets and credits and considers other
factors that could impact future expiration patterns of tickets
and credits. Tickets which do not have continued validity past the
departure date are recognized as revenue after the scheduled
departure date has lapsed.
Passenger ticket costs primarily include credit card fees,
commissions paid, and global distribution systems booking fees.
Costs are allocated entirely to the purchased travel services and
are capitalized until recognized when travel services are provided
to the customer.
In response to the impact of COVID-19 on air travel, in 2020,
we extended the expiration dates for travel credits issued
from February 27, 2020 through June 30, 2020 to a 24-month
period. In January 2022, in response to the surge in COVID-19
cases and flight cancellations in late 2021, we further extended
the expiration dates for travel credits with an original expiration
date between February 1, 2020 through September 29, 2022 to
September 30, 2022. All passenger credits were classified as
current air traffic liability as of December 31, 2021.
Loyalty Program
Customers may earn points under our customer loyalty program,
TrueBlue®, based on the fare paid and fare product purchased for a
flight. Customers can also earn points through business partners
such as credit card companies, hotels, car rental companies, and
our participating airline partners.
POINTS EARNED FROM A TICKET PURCHASE
When a TrueBlue® member travels, we recognize a portion of the
fare as revenue and defer in air traffic liabilities the portion that
represents the value of the points net of spoilage, or breakage. We
allocate the transaction price to each performance obligation on
a relative standalone basis. We determine the relative standalone
selling price of TrueBlue® points issued using the redemption
value approach. To maximize the use of observable inputs, we
utilize the actual ticket value of the tickets purchased with
TrueBlue® points. The liability is relieved and passenger revenue
is recognized when the points are redeemed and the free travel
is provided.
POINTS SOLD TO TRUEBLUE® PARTNERS
Our most significant contract to sell TrueBlue® points is
with our co-branded credit card partner. Co-branded credit
card partnerships have the following identified performance
obligations: air transportation; use of the JetBlue brand name
and access to our frequent flyer customer lists; advertising; and
other airline benefits. In determining the relative standalone
selling price, JetBlue considered multiple inputs, methods
and assumptions, including: discounted cash flows; estimated
redemption value, net of fulfillment discount; points expected
to be awarded and redeemed; estimated annual spending by
cardholders; estimated annual royalty for use of JetBlue’s frequent
flyer customer lists; and estimated utilization of other airline
benefits. Payments are typically due monthly based on the volume
of points sold during the period, and the terms of our contracts
are generally from one to ten years. The overall consideration
received is allocated to each performance obligation based
on its relative standalone selling price. The air transportation
element is deferred and recognized as passenger revenue when
the points are redeemed. The other elements are recognized as
other revenue when the performance obligations related to those
services are satisfied, which is generally the same period as when
consideration is received from the participating company.
Amounts allocated to the air transportation element which
are initially deferred include a portion that are expected to be
redeemed during the following twelve months (included within
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Air traffic liability), and a portion that are not expected to be
redeemed during the following twelve months (included within Air
traffic liability - non-current). We periodically update this analysis
and adjust the split between current and non-current liabilities
as appropriate.
Points earned by TrueBlue® members never expire. TrueBlue®
members can pool points between small groups of people,
branded as Points Pooling™. Breakage is estimated using
historical redemption patterns to determine a breakage rate.
Breakage rates used to estimate breakage revenue are evaluated
annually. Changes to breakage estimates impact revenue
recognition prospectively.
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. Certain of these
agreements 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 $45 million
in 2021, $45 million in 2020 and $66 million in 2019.
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 realization of the asset 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.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
65
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Recently Adopted Accounting Standards
In December 2019, the FASB issued ASU 2019-12, Income Taxes
(Topic 740): Simplifying the Accounting for Income Taxes. The
update eliminates, clarifies, and modifies certain guidance
related to the accounting for income taxes. This update also
removed the requirement to calculate income tax expense for
standalone financial statements of wholly-owned subsidiaries.
We adopted the requirements of ASU 2019-12 as of January 1,
2021. The adoption of ASU 2019-12 did not have a material impact
on our consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, Debt —Debt with
Conversion and Other Options (Subtopic 470-20) and Derivatives
and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):
Accounting for Convertible Instruments and Contracts in an Entity’s
Own Equity (“ASU 2020-06”). This update simplifies the accounting
for certain convertible instruments by removing the separation
models for convertible debt with a cash conversion feature and
for convertible instruments with a beneficial conversion feature.
As a result, more convertible debt instruments will be reported
as a single liability instrument with no separate accounting
for embedded conversion features. Additionally, this update
amends the diluted earnings per share calculation for convertible
instruments by requiring the use of the if-converted method. The
treasury stock method is no longer available. Entities may adopt
the requirements of ASU 2020-06 using either a full or modified
retrospective approach, and it is effective for interim and annual
reporting periods beginning after December 15, 2021. Early
adoption is permitted for interim and annual reporting periods
beginning after December 15, 2020. We adopted the requirements
of ASU 2020-06 as of January 1, 2021. The adoption did not have
an impact on our condensed consolidated financial statements
as we did not have any convertible instruments outstanding as
of December 31, 2020. As discussed in Note 3 to our condensed
consolidated financial statements, in March 2021, we completed
a private offering for $750 million of 0.50% convertible notes due
2026. The carrying value of this convertible note was included
within long-term debt and finance lease obligations on our
consolidated balance sheet as of December 31, 2021.
In February 2021, a Securities and Exchange Commission (“SEC”)
rule intended to modernize, simplify, and enhance certain
financial disclosure requirements became effective. The impact
of this rule on our financial statements was not material, although
several disclosures in Management’s Discussion and Analysis of
Financial Condition and Results of Operations were updated. The
primary disclosure changes were to remove: 1) selected financial
data for the preceding five years and 2) discussions comparing
2020 and 2019 results, and direct readers of our Form 10-K to
these disclosures included in our prior SEC filings.
In November 2021, the FASB issued ASU 2021-10, Government
Assistance (Topic 832): Disclosures by Business Entities about
Government Assistance. This guidance requires business
entities to make annual disclosures about transactions with a
government (including government assistance) they account for
by analogizing to a grant or contribution model. The required
disclosure include the nature of the transaction, the entity’s
related accounting policy, the financial statement line items
affected and the amounts reflected in the current period financial
statements, as well as any significant terms and conditions. This
guidance is effective for financial statements issued for annual
periods beginning after December 15, 2021, and early adoption is
permitted. We adopted the requirements of ASU 2021-10 on our
consolidated financial statements as of and for the year ended
December 31, 2021. Refer to Notes 3 and 17 to our consolidated
financial statements for disclosures on the various assistance
received from the federal government in response to the COVID-19
pandemic.
Revenue Recognition
NOTE 2
The Company categorizes the revenue received from contracts with its customers by revenue source as we believe it best depicts the
nature, amount, timing, and uncertainty of our revenue and cash flow. The following table provides the revenue recognized by revenue
source for the years ended December 31, 2021, 2020, and 2019 (in millions):
Passenger revenue
Passenger travel
Loyalty revenue - air transportation
Other revenue
Loyalty revenue
Other revenue
TOTAL REVENUE
2021
2020
2019
$
5,304 $
2,551 $
305
306
122
182
168
56
7,395
391
201
107
$
6,037 $
2,957 $
8,094
TrueBlue® is our customer loyalty program designed to reward and recognize our customers. TrueBlue® points earned from ticket
purchases are recorded as a reduction to Passenger travel within passenger revenue. Amounts presented in Loyalty revenue - air
transportation represent the revenue recognized when TrueBlue® points have been redeemed and the travel has occurred.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
In June 2021, the Company entered into an Amended and Restated
Co-Branded Card Agreement with Barclaycard® (the “Co-Brand
Agreement”). The Co-Brand Agreement, which amends and
restates the existing Barclaycard® Co-Brand Agreement, extends
the term to 2031 and modifies certain other terms. The terms of
the Co-Brand Agreement are effective as of January 1, 2021. The
performance obligations such as air transportation; use of the
JetBlue brand name, and access to our frequent flyer customer
lists; advertising; and other airline benefits are consistent with the
previous agreement. We continue to use the accounting method
that allocates the consideration received based on the relative
standalone selling prices of those performance obligations. The
increase in loyalty program revenues are primarily related to brand
and non-air transportation elements. In addition, in July 2021, the
Company entered into an Amended and Restated Co-Branded
Card Agreement with MasterCard® to continue our partnership
as network provider under the Co-Brand Agreement.
Contract Liabilities
Our contract liabilities primarily consist of ticket sales for which transportation has not yet been provided, unused credits available to
customers, and outstanding loyalty points available for redemption (in millions):
Air traffic liability - passenger travel
Air traffic liability - loyalty program (air transportation)
Deferred revenue(1)
TOTAL
December 31, 2021 December 31, 2020
$
$
1,323
$
891
613
964
733
92
2,827
$
1,789
(1) Deferred revenue is included within other accrued liabilities and other liabilities on our consolidated balance sheets. The increase in deferred revenue was attributed
to the initial cash payments received from our new Co-Branded Credit Card agreements which are deferred and recognized as revenue over the terms of the related
contracts.
During the years ended December 31, 2021 and 2020, we
recognized passenger revenue of $589 million and $745 million
respectively, that was included in passenger travel liability at the
beginning of the respective periods.
The Company elected the practical expedient that allows entities
to not disclose the amount of the remaining transaction price and
its expected timing of recognition for passenger tickets if the
contract has an original expected duration of one year or less or if
certain other conditions are met. We elected to apply this practical
expedient to our contract liabilities relating to passenger travel
and ancillary services as our tickets or any related passenger
credits expire one year from the date of issuance.
TrueBlue® points are combined in one homogeneous pool and are
not separately identifiable. As such, the revenue is comprised of
the points that were part of the air traffic liability balance at the
beginning of the period as well as points that were issued during
the period.
The table below presents the activity of the current and non-current air traffic liability for our loyalty program, and includes points
earned and sold to participating companies (in millions):
Balance at December 31, 2019
TrueBlue® points redeemed
TrueBlue® points earned and sold
Balance at December 31, 2020
TrueBlue® points redeemed
TrueBlue® points earned and sold
BALANCE AT DECEMBER 31, 2021
$
$
661
(182)
254
733
(305)
463
891
The timing of our TrueBlue® point redemptions can vary; however, the majority of our points are redeemed within approximately three
years of the date of issuance.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
67
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
NOTE 3
Long-term Debt, Short-term Borrowings and Finance Lease
Obligations
Long-term debt and finance lease obligations and the related weighted average interest rate at December 31, 2021 and 2020 consisted
of the following (in millions):
Secured Debt
Fixed rate specialty bonds, due through 2036
$
43
4.9% $
43
4.9%
December 31, 2021
December 31, 2020
Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032
2019-1 Series A, due through 2028
2019-1 Series B, due through 2027
2020-1 Series A, due through 2032
2020-1 Series B, due through 2028
Fixed rate enhanced equipment notes, due through 2023
Fixed rate equipment notes, due through 2028
Floating rate equipment notes, due through 2028
Floating rate term loan credit facility, due through 2024
Secured CARES Act loan, due through 2025
Citibank line of credit, due through 2023
2020 aircraft sale-leaseback transactions, due through 2024
Finance Leases
Unsecured Debt
Unsecured CARES Act Payroll Support Program loan, due through 2030
Unsecured Consolidated Appropriations Act Payroll Support Program
Extension loan, due through 2031
Unsecured American Rescue Plan Act of 2021 Payroll Support loan,
due through 2031
0.50% convertible senior notes, due through 2026
Total debt and finance lease obligations
Less: Debt acquisition cost
Less: Current maturities
538
168
96
594
155
88
622
103
—
—
—
347
3
259
144
132
750
$
4,042
(36)
(355)
LONG-TERM DEBT AND FINANCE LEASE OBLIGATIONS
$
3,651
2.8%
3.0%
8.2%
4.1%
7.8%
4.5%
4.2%
2.7%
—%
—%
—%
7.4%
6.1%
2.0%
2.0%
2.0%
0.5%
567
176
109
635
172
115
895
153
712
106
550
352
63
2.8%
3.0%
8.2%
4.1%
7.8%
4.5%
4.2%
2.6%
6.4%
3.2%
2.2%
7.6%
4.6%
259
2.0%
—%
—%
—%
—
—
—
4,907
(44)
(450)
4,413
$
$
Fixed Rate Specialty Bonds
Fixed Rate Enhanced Equipment Notes
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.
2019-1 EQUIPMENT NOTES
In November 2019, we completed a public placement of equipment
notes in an aggregate principal amount of $772 million secured
by 25 Airbus A321 aircraft. The equipment notes were issued in
two series: (i) Series AA, bearing interest at the rate of 2.75% per
annum in the aggregate principal amount equal to $589 million,
and (ii) Series A, bearing interest at the rate of 2.95% per annum
in the aggregate principal amount equal to $183 million. Principal
and interest are payable semi-annually.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
In August 2020, we completed a public placement of equipment
notes in an aggregate principal amount of $115 million bearing
interest at a rate of 8.00% per annum. These equipment notes
are secured by 25 Airbus A321 aircraft, which were included in
the collateral pool of our 2019-1 Series AA and Series A offerings
completed in November 2019. Principal and interest are payable
semi-annually.
2020-1 EQUIPMENT NOTES
In August 2020, we completed a public placement of equipment
notes in an aggregate principal amount of $808 million secured
by 24 Airbus A321 aircraft. The equipment notes were issued in
two series: (i) Series A, bearing interest at the rate of 4.00% per
annum in the aggregate principal amount equal to $636 million,
and (ii) Series B, bearing interest at the rate of 7.75% per annum
in the aggregate principal amount equal to $172 million. Principal
and interest are payable semi-annually.
Fixed Rate Enhanced Equipment Notes, Due
Through 2023
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 aircraft. Principal and interest are payable
semi-annually.
Fixed Rate Equipment Notes, Due Through
2028
In 2019, we issued $219 million in fixed rate equipment notes due
through 2027, which are secured by 10 Airbus A320 aircraft and
two Airbus A321 aircraft. In 2018, we issued $567 million in fixed
rate equipment notes due through 2028, which are secured by
14 Airbus A320 aircraft and 10 Airbus A321 aircraft.
Floating Rate Equipment Notes, Due Through
2028
Interest rates adjust quarterly or semi-annually based on LIBOR,
plus a margin. In 2018, we issued $120 million in floating rate
equipment notes due through 2028, which are secured by six
Airbus A320 aircraft and one Airbus A321 aircraft.
Floating Rate Term Loan Credit Facility, Due
Through 2024
On June 17, 2020, we entered into a $750 million term loan credit
facility with Barclays Bank PLC, as administrative agent (the “Term
Loan”). The loans thereunder bore interest at a variable rate equal
to LIBOR (subject to a 1.00% floor), or at our election, another
rate, in each case, plus a specified margin. Our obligations were
secured on a senior basis by airport takeoff and landing slots at
LaGuardia Airport, John F. Kennedy International Airport, and
Reagan National Airport and the right to use certain intellectual
property assets comprising the JetBlue brand.
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
On June 17, 2021, the Company voluntarily repaid a portion of its
outstanding borrowings under the Term Loan. On June 30, 2021,
the Company repaid the full remaining amount of outstanding
borrowings under the Term Loan, which, together with its
repayment of June 17, 2021, totaled approximately $722 million,
plus accrued interest and associated fees. As of June 30, 2021, all
obligations under the Term Loan, including all pledges of collateral
were terminated in full. As of December 31, 2021, we did not have
a balance outstanding under the Term Loan.
Federal Payroll Support Programs
As a result of the adverse economic impact of COVID-19, we have
received assistance under various payroll support programs
provided by the federal government.
CARES ACT – PAYROLL SUPPORT PROGRAM
On March 27, 2020, Congress passed the Coronavirus Aid, Relief,
and Economic Security Act (the “CARES Act”). Under the CARES
Act, assistance was made available to the aviation industry in the
form of direct payroll support (the “Payroll Support Program”) and
secured loans (the “Loan Program”).
On April 23, 2020, we entered into a Payroll Support Program
Agreement (the “PSP Agreement”) under the CARES Act with the
United States Department of the Treasury (“Treasury”) governing
our participation in the Payroll Support Program. Under the
Payroll Support Program, Treasury provided us with a total of
approximately $963 million (the “Payroll Support Payments”)
consisting of $704 million in grants and $259 million in unsecured
term loans. The loans have a 10-year term and bear interest on
the principal amount outstanding at an annual rate of 1.00% until
April 23, 2025, and the applicable Secured Overnight Financing
Rate (“SOFR”) plus 2.00% thereafter until April 23, 2030. The
principal amount may be repaid at any time prior to maturity
at par. As part of the agreement, JetBlue issued to Treasury
warrants to acquire more than 2.7 million shares of our common
stock under the program at an exercise price of $9.50 per share.
CONSOLIDATED APPROPRIATIONS ACT – PAYROLL SUPPORT
PROGRAM 2
On January 15, 2021, we entered into a Payroll Support Program
Extension Agreement (the “PSP Extension Agreement”) with
Treasury governing our participation in the federal Payroll Support
Program for passenger air carriers under the United States
Consolidated Appropriations Act, 2021 (the “Payroll Support
Program 2”). Treasury provided us with a total of approximately
$580 million (the “Payroll Support 2 Payments”) under the program,
consisting of $436 million in grants and $144 million in unsecured
term loans, with funding received on January 15, 2021, March 5,
2021 and April 29, 2021. The loans have a 10-year term and bear
interest on the principal amount outstanding at an annual rate
of 1.00% until January 15, 2026, and the applicable SOFR plus
2.00% thereafter until January 15, 2031. In consideration for the
Payroll Support 2 Payments, we issued warrants to purchase
approximately 1.0 million shares of our common stock to Treasury
at an exercise price of $14.43 per share.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
69
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
AMERICAN RESCUE PLAN ACT – PAYROLL SUPPORT
PROGRAM 3
On May 6, 2021, we entered into a Payroll Support 3 Agreement
(the “PSP3 Agreement”) with Treasury governing our participation
in the federal payroll support program for passenger air carriers
under Section 7301 of the American Rescue Plan Act of 2021 (the
“Payroll Support Program 3”). Treasury provided us with a total
of approximately $541 million (the “Payroll Support 3 Payments”)
under the program, consisting of $409 million in grants and $132
million in unsecured term loans. The loans have a 10-year term
and bear interest on the principal amount outstanding at an
annual rate of 1.00% until May 6, 2026, and the applicable SOFR
plus 2.00% thereafter until May 6, 2031. In consideration for the
Payroll Support 3 Payments, we issued warrants to purchase
approximately 0.7 million shares of our common stock to Treasury
at an exercise price of $19.90 per share.
The warrants associated with each of the payroll support
programs described above will expire 5 years after issuance and
will be exercisable either through net cash settlement or net share
settlement, at our option, in whole or in part at any time.
The carrying values relating to the payroll support grants were
recorded within other accrued liabilities and were recognized
as a contra-expense within special items on our consolidated
statements of operations as the funds were utilized. The relative
fair value of the warrants were recorded within additional
paid-in capital and reduced the total carrying value of the
grants. Proceeds from the payroll support grants and from the
issuance of payroll support warrants were classified within
operating activities and financing activities, respectively, on
our condensed consolidated statements of cash flows. Our
funding from all payroll support grants were fully utilized as of
December 31, 2021.
The carrying values relating to the unsecured payroll support
loans were recorded within long-term debt and finance lease
obligations on our consolidated balance sheets. The proceeds
from the loans were classified as financing activities on our
condensed consolidated statement of cash flows.
CARES Act – Secured Loan Program
Under the CARES Act Loan Program, JetBlue had the ability to
borrow up to a total of approximately $1.9 billion from Treasury.
We entered into a loan and guarantee agreement (the “Loan
Agreement”) with Treasury and made an initial drawing of $115
million under the CARES Act Loan Program on September 29,
2020. In connection with this initial drawing, we entered into a
warrant agreement with Treasury, pursuant to which we issued
to Treasury warrants to purchase approximately 1.2 million
shares of our common stock at an exercise price of $9.50 per
share. The warrants will expire five years after issuance and will
be exercisable either through net cash settlement or net share
settlement, at our option, in whole or in part at any time.
On September 15, 2021, the Company repaid the full amount
of outstanding borrowings under the Loan Agreement, which,
together with accrued interest and fees, totaled approximately
70
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
$118 million. As of December 31, 2021, we did not have a balance
outstanding and all obligations under the Loan Agreement,
including all pledges of collateral, were terminated in full.
Citibank Line of Credit
We have a revolving Credit and Guaranty Agreement with
Citibank N.A. as the administrative agent, for up to $550 million
(the “Revolving Facility”). The term of the Revolving Facility runs
through August 2023. Borrowings under the Revolving Facility
bear interest at a variable rate equal to LIBOR, plus a margin.
The Revolving Facility is secured by aircraft, simulators, and
certain other assets as permitted thereunder. The Revolving
Facility includes covenants that require us to maintain certain
minimum balances in unrestricted cash, cash equivalents, and
unused commitments available under revolving credit facilities.
In addition, the covenants restrict our ability to, among other
things, dispose of certain collateral, or merge, consolidate, or
sell assets.
We borrowed the full amount of $550 million under the Revolving
Facility on April 22, 2020.
We repaid the full balance of this facility in the first quarter
of 2021. As of December 31, 2021, we did not have a balance
outstanding or any borrowings under the Revolving Facility.
2020 Aircraft Sale-Leaseback Transactions
In 2020, we executed $563 million of aircraft sale-leaseback
transactions. Of these transactions, $354 million did not
qualify as sales for accounting purpose. The assets associated
with these transactions remain on our consolidated balance
sheets within property and equipment and the related
liabilities under the lease are classified within debt and
finance leases obligations. These transactions are treated as
cash from financing activities on our consolidated statements
of cash flows. The remaining $209 million of sale-leaseback
transactions qualified as sales and generated a loss of $106
million. The assets associated with these transactions
which qualified as sales are recorded within operating lease
assets. The liabilities are recorded within current operating
lease liabilities and long-term operating lease liabilities on
our consolidated balance sheets. These transactions are
treated as cash from investing activities on our consolidated
statements of cash flows.
We did not execute any aircraft sale-leaseback transactions in
2021.
Finance Leases
As of December 31, 2021, various computer equipment under
finance leases were included in property and equipment at a
cost of $4 million with accumulated amortization of $1 million.
The future minimum lease payments under these non-cancelable
leases are $1 million in 2022, $2 million in 2023, and no payments
in the years thereafter.
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
As of December 31, 2020, two finance leased Airbus A320 aircraft
and two finance leased A321 aircraft, and various computer
equipment under finance leases were included in property and
equipment at a cost of $188 million with accumulated amortization
of $54 million.
0.50% Convertible Senior Notes, Due
Through 2026
In March 2021, we completed a private offering for $750 million of
0.50% convertible notes due 2026. The notes are general senior
unsecured obligations and will rank equal in right of payment with
all of our existing and future senior unsecured indebtedness and
senior in right of payment to our existing and future subordinated
debt. The notes will effectively rank junior in right of payment to
any of our existing and future secured indebtedness to the extent
of the value of the assets securing such indebtedness and are
structurally subordinated to all of our indebtedness and other
liabilities. The net proceeds from this offering were approximately
$734 million.
Holders of the notes may convert them into shares of our common
stock prior to January 1, 2026 only under certain circumstances
(such as upon the satisfaction of the sale price condition, the
satisfaction of the trading price condition, notice of redemption,
or specified corporate events) and thereafter at any time at a
rate of 38.5802 shares of common stock per $1,000 principal
amount of notes, which corresponds to an initial conversion
price of approximately $25.92 per share. The conversion rate is
subject to adjustment upon the occurrence of certain specified
events, including, but not limited to, the issuance of certain stock
dividends on common stock, the issuance of certain rights or
warrants, subdivisions, combinations, distributions of capital
stock, indebtedness or assets, cash dividends and certain issuer
tender or exchange offers.
Upon conversion, the notes will be settled in cash up to the
aggregate principal amount of the notes to be converted
and, at our election, in shares of our common stock, cash or a
combination of cash and shares of our common stock in respect
of the remainder, if any, of our conversion obligation.
We are not required to redeem or retire the notes periodically.
We may, at our option, redeem any of the notes for cash at
a redemption price of 100% of their principal amount, plus
accrued and unpaid interest at any time on or after April 1,
2024 if the last reported sale price of our common stock has
been at least 130% of the conversion price then in effect for at
least 20 trading days (whether or not consecutive), including
the trading day immediately preceding the date on which we
provide notice of redemption, during any 30 consecutive trading
day period ending on, and including, the trading day immediately
preceding the date on which we provide a notice of redemption
to the holders.
As discussed in Note 1 to our consolidated financial statements,
we early adopted the provisions of ASU 2020-06. Accordingly,
we evaluated the conversion feature of this note offering for
embedded derivatives in accordance with ASC 815, Derivatives
and Hedging, and the substantial premium model in accordance
with ASC 470, Debt. Based on our assessment, separate
accounting for the conversion feature of this note offering is
not required.
Interest expense recognized in 2021 was $6 million, of which,
$3 million was related to the amortization of debt issuance
costs.
As a result of the various debt payoffs described above, we
recognized debt extinguishment expense of $50 million and
$9 million, in 2021 and 2020, respectively. These expenses are
included within other expense on our consolidated statements
of operations.
As of December 31, 2021, we believe we were in compliance with
all of our covenants in relation to our debt and lease agreements.
Maturities of our debt and finance leases, net of debt acquisition costs, for the next five years are as follows (in millions):
2022
2023
2024
2025
2026
Thereafter
$
Maturities
347
557
332
192
929
1,649
Aircraft, engines, and other equipment and facilities having a net book value of $5.7 billion at December 31, 2021 were pledged as
security under various financing arrangements. Cash payments for interest related to debt and finance lease obligations aggregated
to $180 million, $139 million and $62 million in 2021, 2020, and 2019, respectively.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
71
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at December 31, 2021 and 2020
were as follows (in millions):
Public Debt
Fixed rate special facility bonds, due through 2036
$
42
$
45
$
42
$
45
December 31, 2021
December 31, 2020
Carrying Value
Estimated
Fair Value
Carrying Value
Estimated
Fair Value
Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032
2019-1 Series A, due through 2028
2019-1 Series B, due through 2027
2020-1 Series A, due through 2032
2020-1 Series B, due through 2028
Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023
Fixed rate equipment notes, due through 2028
Floating rate equipment notes, due through 2028
Floating rate term loan credit facility, due through 2024
Unsecured CARES Act Payroll Support Program loan,
due through 2030
Secured CARES Act loan, due through 2025
Citibank line of credit, due through 2023
2020 sale-leaseback transactions, due through 2024
Unsecured Consolidated Appropriations Act Payroll Support
Program Extension loan, due through 2031
Unsecured American Rescue Plan Act of 2021 Payroll Support
loan, due through 2031
0.50% convertible senior notes, due through 2026
532
166
94
587
153
88
620
103
—
259
—
—
347
144
132
736
442
150
121
634
199
88
706
99
—
219
—
—
374
121
111
673
560
174
107
627
170
114
891
152
702
259
104
546
352
—
—
—
440
152
139
658
223
116
1,017
144
759
207
104
533
393
—
—
—
TOTAL(1)
$
4,003
$
3,982
$
4,800
$
4,930
(1) Total excludes finance lease obligations of $3 million and $63 million at December 31, 2021 and 2020, 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 non-public debt are 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 to our
consolidated financial statements for an explanation of the fair
value hierarchy structure.
We have financed certain aircraft with Enhanced Equipment Trust
Certificates, or EETCs. One of the benefits of this structure 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 financial statements. Our assessment of our 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 and liquidity facilities,
and also to lower our total borrowing cost. We concluded that
we are not the primary beneficiary in these trusts because our
involvement in them is 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 financial statements.
72
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Short-term Borrowings
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, 2021 and
2020, we did not have a balance outstanding or borrowings under this line of credit.
Leases
NOTE 4
Operating lease assets represent our right to use an underlying
asset for the lease term, and lease liabilities represent our
obligation to make lease payments arising from the lease.
Operating lease assets and liabilities are recognized at the lease
commencement date based on the estimated present value of
lease payments over the lease term. When available, we use the
rate implicit in the lease to discount lease payments to present
value. For leases that do not provide a readily determinable
implicit rate, we estimate our incremental borrowing rate to
discount the lease payments based on information available at
lease commencement.
Leases with a term of 12 months or less are not recorded on the
balance sheet. Our lease agreements do not contain any residual
value guarantees. For facility leases, we account for the lease and
non-lease components as a single lease component.
The table below presents the lease-related assets and liabilities recorded on our consolidated balance sheets as of December 31, 2021
and 2020 (in millions):
Assets
Classification on Balance Sheet
Operating lease assets
Operating lease assets
Finance lease assets
Property and equipment, net
TOTAL LEASE ASSETS
Liabilities
Current:
Classification on Balance Sheet
Operating lease liabilities
Current operating lease liabilities
Finance lease liabilities
Current maturities of long-term debt and finance lease obligations
Long-term:
Operating lease liabilities
Long-term operating lease liabilities
Finance lease liabilities
Long-term debt and finance lease obligations
TOTAL LEASE LIABILITIES
Weighted average remaining lease term (in years)
Operating leases
Finance leases
Weighted average discount rate
Operating leases
Finance leases
$
$
$
$
As of December 31,
2021
729
3
732
106
1
690
2
799
$
$
$
$
2020
804
131
935
113
37
752
26
928
As of December 31,
2021
2020
9
2
6.00%
6.09%
9
2
5.99%
4.60%
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
73
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Flight Equipment Leases
We operated a fleet of 282 aircraft as of December 31, 2021. Of
our fleet, 62 aircraft were accounted for as operating leases and
none were accounted for as finance leases. These aircraft leases
generally have long durations with remaining terms of 19 months
to 7 years.
Less than half of aircraft operating leases can be renewed at rates
based on fair market value at the end of the lease term for one or
two years. None of our aircraft operating leases have variable rent
payments. We have purchase options for 30 of our aircraft leases
for fixed amounts at specified periods within the lease terms.
As a result of the unprecedented decline in demand for travel
caused by the COVID-19 pandemic, we recorded impairment losses
of $273 million for the year ended December 31, 2020 relating to
our Embraer E190 fleet. These losses were attributed to aircraft
and related spare parts including the ones under operating leases.
No impairment loss was recorded in 2021. Refer to Note 17 to our
consolidated financial statements for further details.
Facility Leases
Our facility leases are primarily for space at the airports we serve.
These leases are classified as operating leases and reflect our
use of passenger terminal service facilities consisting of ticket
Lease Costs
counters, gate space, operations support area, and baggage
service offices. We lease space directly or indirectly from the
local airport authority on varying terms dependent on prevailing
practices at each airport. The remaining terms of our airport
leases vary from 1 month to 14 years. Our leases at certain airports
contain provisions for periodic adjustments of rental rates based
on the operating costs of the airports or the frequency of use
of the facilities. Some of these leases also include renewal
options and/or termination options that are factored into our
determination of lease payments when appropriate. Because of
the variable nature of the rates, these leases are not recorded
as operating lease assets and operating lease liabilities on our
consolidated balance sheets.
We also have leases for our corporate offices, training center, and
various hangars and airport support facilities at our focus cities.
Other Ground and Property Equipment
We lease certain IT assets, ground support equipment, and
various other pieces of equipment. The lease terms of our ground
support equipment are less than 12 months. The amount of other
equipment we have is not significant.
The table below presents certain information related to our lease costs during the years ended December 31, 2021, 2020, and 2019
(in millions):
Operating lease cost
Short-term lease cost
Finance lease cost:
Amortization of assets
Interest on lease liabilities
Variable lease cost
Sublease income
TOTAL NET LEASE COST
Other Information
2021
2020
$
165
$
160
$
1
—
1
562
10
739
$
1
6
2
282
(5)
$
446
$
2019
180
2
9
3
391
(19)
566
The table below presents supplemental cash flow information related to leases during the years ended December 31, 2021, 2020, and
2019 (in millions):
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases
Operating cash flows for finance leases
Financing cash flows for finance leases
2021
2020
2019
$
160
$
146
$
3
59
4
28
136
5
17
74
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Lease Commitments
The table below presents scheduled future minimum lease payments for operating and finance leases recorded on our consolidated
balance sheets, as of December 31, 2021 (in millions):
2022
2023
2024
2025
2026
Thereafter
Total minimum lease payments
Less: amount of lease payment representing interest
Present value of future minimum lease payment
Less: current obligations under leases
LONG-TERM LEASE OBLIGATIONS
As of December 31, 2021
Operating Leases
Finance Leases
$
$
151
152
130
91
73
443
1,040
(244)
796
(106)
690
$
$
1
2
—
—
—
—
3
—
3
(1)
2
We did not have any lease commitments that have not yet commenced as of December 31, 2021.
Reaffirming our commitment to New York, in February 2022, we executed a new lease for our primarily corporate offices that will extend
our stay in the present Long Island City location until 2039. The term of this lease will begin in 2023. We expect the new lease will
increase our lease commitments by approximately $3 million in 2024, $6 million in 2025, $7 million in 2026, and $97 million thereafter.
We have an one-time option to terminate the lease in 2034. At the end of the initial lease term, we have the option to renew the lease
for either one renewal term of 10 years, or two renewal terms of five years each.
Stockholders’ Equity
NOTE 5
On December 8, 2017, the Board of Directors approved a two-year
share repurchase program, or the 2017 Authorization, of up to
$750 million worth of common stock beginning on January 1, 2018.
The 2017 Authorization was completed in 2019.
On September 19, 2019, the Board of Directors approved a share
repurchase program, or the 2019 Authorization, of up to $800
million worth of common stock beginning on October 1, 2019 and
ending no later than December 31, 2021.
Our share repurchase programs include authorization for
repurchases in open market transactions pursuant to Rules 10b-18
and/or 10b5-1 of the Exchange Act, and/or one or more privately-
negotiated accelerated stock repurchase transactions.
In 2019, we entered into four separate accelerated share
repurchase (“ASR”) agreements for a sum of $535 million. A
total of 28.1 million shares were repurchased under these ASR
agreements with an average price paid per share of $19.02.
During the first quarter of 2020, we repurchased 13.0 million
shares through an ASR at an average price of $12.27 per
share. In accordance with the agreements under various
federal governmental assistance programs with Treasury, we
are prohibited from making any share repurchases. We have
suspended our share repurchase program as of March 31, 2020.
The total shares purchased by JetBlue under each of the ASRs in
2020 and 2019 were based on the volume weighted average prices
of JetBlue’s common stock during the terms of the respective
agreements.
On December 4, 2020, we completed the public offering of 42.0
million shares of our common stock at a public offering price
of $14.40 per share. Proceeds from the offering were used for
general corporate purposes.
As of December 31, 2021, we had a total of 21.8 million shares
of our common stock reserved for issuance. These shares are
primarily related to our equity incentive plans. Refer to Note 7 to
our consolidated financial statements for further details on our
share-based compensation.
As of December 31, 2021, we had a total of 158.5 million shares of
treasury stock.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
75
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(Loss) Earnings Per Share
NOTE 6
Basic earnings per share is calculated by dividing net (loss) income
by the weighted average number of shares outstanding during
the period. Diluted earnings per share is calculated similarly
but includes potential dilution from restricted stock units, the
Company’s Crewmember Stock Purchase Plan, convertible notes,
warrants issued under various federal payroll support programs,
and any other potentially dilutive instruments using the treasury
stock and if converted method. Anti-dilutive common stock
equivalents excluded from the computation of diluted earnings
per share amounts were 3.4 million and 2.0 million for the years
ended December 31, 2021 and 2020, respectively. There were
no anti-dilutive common stock equivalents for the year ended
December 31, 2019.
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):
Net (loss) income
Weighted average basic shares
Effect of dilutive securities
WEIGHTED AVERAGE DILUTED SHARES
Earnings per common share
Basic
Diluted
2021
2020
$
(182)
$
(1,354)
$
318.0
—
318.0
277.5
—
277.5
$
$
(0.57)
(0.57)
$
$
(4.88)
(4.88)
$
$
2019
569
296.6
1.8
298.4
1.92
1.91
As discussed in Note 5 to our consolidated financial statements, JetBlue entered into various ASR agreements in 2020, and 2019
and purchased approximately 13.0 million, and 28.1 million shares, respectively, for $160 million and $535 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.
Share-Based Compensation
NOTE 7
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, the JetBlue Airways Corporation 2011 Incentive
Compensation Plan, or 2011 Plan, and the JetBlue Airways
Corporation 2020 Omnibus Equity Incentive Plan, or the 2020 Plan.
The 2002 Plan was replaced by the 2011 Plan and has an immaterial
amount of vested deferred stock units outstanding as of
December 31, 2021.
The 2011 Plan was replaced by the 2020 Plan in May 2020.
We additionally have a Crewmember Stock Purchase Plan, or
CSPP, that is available to all eligible crewmembers.
Unrecognized stock-based compensation expense was
approximately $21 million as of December 31, 2021. This amount
relates to a total of 2.2 million unvested restricted stock units, or
RSUs, performance stock units, or PSUs, and deferred stock units,
or DSUs, that were outstanding under our 2011 and 2020 Plans. We
expect to recognize this stock-based compensation expense over
a weighted average period of approximately 19 months.
The total stock-based compensation expense, which is included
within salaries, wages and benefits on our consolidated
statements of operations, for the years ended December 31,
2021, 2020, and 2019 was $28 million, $28 million, and $31 million,
respectively.
76
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
2011 Incentive Compensation Plan
At our Annual Stockholders Meeting held on May 26, 2011, our
stockholders approved the JetBlue Airways Corporation 2011
Incentive Compensation Plan. Upon inception, the 2011 Plan had
15.0 million shares of our common stock reserved for issuance.
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. 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.
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 Stockholders Meeting held on May 21, 2015, our
stockholders 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.
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following is a summary of RSU activity under the 2011 Plan for the year ended December 31, 2021 (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 under the 2011 Plan that vested during the year ended
December 31, 2021, 2020 and 2019 was $19 million, $18 million and
$15 million, respectively. The weighted average grant-date fair
value of share awards during the years ended December 31, 2020
and 2019 was $17.96, and $17.27, 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, 2020, and 2019,
we granted a nominal amount of DSUs, almost all of which remain
outstanding at December 31, 2021. In 2019, we granted a nominal
amount of PSUs to members of our executive leadership team,
payment of which are based upon achievements of certain
performance criteria. No PSUs were granted in 2020 as a result of
the economic uncertainty brought on by the COVID-19 pandemic.
Shares
Weighted Average
Grant Date Fair Value
2.1
—
(1.0)
(0.2)
0.9
$
$
18.08
—
18.43
17.90
17.72
2020 Omnibus Equity Incentive Plan
At our Annual Stockholders Meeting held on May 14, 2020, our
stockholders approved the JetBlue Airways Corporation 2020
Omnibus Equity Incentive Plan. Upon inception, the 2020 Plan had
10.5 million shares of our common stock reserved for issuance.
The 2020 Plan, by its terms, will terminate no later than May 2030.
Under the 2020 plan, we grant RSUs to certain crewmembers and
members of our Board of Directors. The vesting periods for the
RSUs varies by grant but no less than one year. We also grant
DSUs to members of our Board of Directors, and PSUs to certain
members of our executive leadership team under the 2020 Plan.
The following is a summary of RSU activity under the 2020 Plan for the year ended December 31, 2021 (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 under the 2020 Plan that vested during the year
ended December 31, 2021 was $1 million. The weighted average
grant-date fair value of share awards during the years ended
December 31, 2021 and 2020 was $18.11 and $13.82, respectively.
We have granted a nominal amount of DSUs under the 2020 Plan
since its adoption in May 2020. Similar to the 2011 Plan, the vesting
period for DSUs under the 2020 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.
In 2021, we granted a nominal amount of PSUs to members of
our executive leadership team, payment of which are based upon
achievements of certain performance criteria.
Shares
Weighted Average
Grant Date Fair Value
0.1
1.4
(0.1)
(0.1)
1.3
$
$
13.82
18.11
14.90
18.15
17.98
Crewmember Stock Purchase Plans
In May 2011, our stockholders approved the 2011 Crewmember
Stock Purchase Plan, or the 2011 CSPP. At inception, the 2011 CSPP
had 8.0 million shares of our common stock reserved for issuance.
At our Annual Stockholders Meeting held on May 21, 2015, our
stockholders 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.
In May 2020, our stockholders approved the JetBlue Airways
Corporation 2020 Crewmember Stock Purchase Plan, or the 2020
CSPP to replace the 2011 CSPP which was set to expire in April
2021. At inception, the 2020 CSPP had 17.5 million shares of our
common stock reserved for issuance. The 2020 CSPP, by its terms,
will terminate no later than May 2030. The other terms of the 2020
CSPP are substantially identical to those of the 2011 CSPP.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
77
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our CSPPs have 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 enroll in CSPP
nearly year-round, with the exception of specific blackout dates.
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 our CSPPs for the years ended December 31,
2021, 2020, and 2019 was approximately $9 million, $6 million
and $9 million, respectively. Under the plans, crewmembers
purchased 3.4 million, 4.1 million, and 3.2 million new shares for
the years ended December 31, 2021, 2020, and 2019, respectively,
at weighted average prices of $13.93, $8.94, and $16.06 per share,
respectively.
Under the CSPPs, should we be acquired by merger or sale of
substantially all of our assets or sale of more than 50% of our
outstanding voting securities, all outstanding purchase rights
will automatically be exercised immediately prior to the effective
date of the acquisition at a price equal to 85% of the fair market
value per share immediately prior to the acquisition.
Taxation
The Compensation-Stock Compensation topic of the Codification
requires deferred taxes be recognized on temporary differences
that arise with respect to stock-based compensation attributable
to nonqualified stock options and awards. However, no tax benefit
is recognized for stock-based compensation attributable to
incentive stock options, or ISO, or CSPP shares until there is a
disqualifying disposition, if any, for income tax purposes. A portion
of our historical stock-based compensation was attributable to
CSPP shares; therefore, our effective tax rate was subject to
fluctuation.
NOTE 8
Our income tax (benefit) expense consisted of the following for the years ended December 31 (in millions):
Income Taxes
Deferred:
Federal
State
Deferred income tax (benefit) expense
$
Current:
Federal
State
Foreign
Current income tax expense (benefit)
$
2021
(44)
(44)
(88)
3
5
(1)
7
TOTAL INCOME TAX (BENEFIT) EXPENSE
$
(81)
$
2020
(247)
(82)
(329)
(199)
(9)
(2)
(210)
(539 )
$
$
2019
119
20
139
36
19
5
60
199
On March 27, 2020, the CARES Act was enacted in response to the
COVID-19 pandemic. The CARES Act permits net operating loss
(NOL) carryovers and carrybacks to offset 100% of taxable income
for taxable years beginning before 2021. In addition, the CARES
Act allows NOLs incurred in 2018, 2019, and 2020 to be carried
back to each of the five preceding taxable years to generate a
refund of previously paid incomes taxes. As of December 31, 2021,
the Company has filed its Application for Tentative Refund.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Income tax (benefit) expense reconciles to the amount computed by applying the U.S. federal statutory income tax rate to (loss) income
before income taxes for the years ended December 31 as follows (in millions):
Income tax (benefit) expense at statutory rate
$
State income tax, net of federal benefit
Nondeductible expenses
Net operating loss carryback
Foreign tax credit re-characterization
Foreign rate differential
Valuation allowance
Unrecognized tax benefit
Other, net
2021
(55)
(36)
5
—
—
(5)
4
7
(1)
$
2020
(398)
$
(71)
5
(73)
(13)
2
10
(3)
2
2019
161
31
8
—
—
(3)
—
—
2
TOTAL INCOME TAX (BENEFIT) EXPENSE
$
(81)
$
(539 )
$
199
The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions):
2021
2020
Deferred tax assets:
Deferred revenue/gains
Employee benefits
Foreign tax credit
Other
Net operating loss carryforward
Operating lease liabilities
Rent expense
Total deferred tax assets
Valuation allowance
Deferred tax assets, net
Deferred tax liabilities:
Accelerated depreciation
Operating lease assets
Other
Total deferred tax liabilities
NET DEFERRED TAX LIABILITY
$
301
$
70
83
4
522
189
108
1,277
(73)
1,204
(1,845)
(182)
(20)
(2,047)
$
(843) $
161
71
77
4
335
204
120
972
(69)
903
(1,625)
(197)
(3)
(1,825)
(922)
We have a U.S. foreign tax credit carryforward of $83 million which
expires from 2022 to 2031.
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. At
December 31, 2021, we provided a $73 million valuation allowance
to reduce the deferred tax assets to an amount that we consider
is more likely than not to be realized. Of the total valuation
allowance, $66 million relates to foreign NOL carryforward, and
$7 million relates to U.S. foreign tax credit carryforward that
begins to expire in 2022.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
79
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
Unrecognized tax benefits at January 1,
Increases for tax positions taken during the period
Decreases for tax positions taken during the period
Increases for tax positions taken during a prior period
Decreases for tax positions taken during a prior period
UNRECOGNIZED TAX BENEFITS DECEMBER 31,
$
$
2021
32
2
(1)
19
(12)
40
$
$
2020
36
$
1
—
—
(5)
32
$
2019
33
6
—
—
(3)
36
Interest and penalties accrued on unrecognized tax benefits were
not significant. If recognized, $10 million of the unrecognized tax
benefits as of December 31, 2021 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 2016 through 2020 remain subject
to examination by the relevant tax authorities.
Crewmember Retirement Plan
NOTE 9
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 three 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.
Certain Federal Aviation Administration, or FAA, licensed
crewmembers receive an additional contribution of 3% of eligible
compensation, which we refer to as Retirement Advantage.
Effective August 1, 2018 and through December 31, 2020, our
pilots received a non-elective Company contribution of 15%
of eligible pilot compensation per the terms of the finalized
collective bargaining agreement between JetBlue and the
NOTE 10 Commitments
Flight Equipment Commitments
As of December 31, 2021, our firm aircraft orders consisted of 64
Airbus A321neo aircraft and 62 Airbus A220 aircraft, all scheduled
for delivery through 2027. In February 2022, we exercised our
option to purchase 30 additional Airbus A220-300 aircraft under
our existing agreement with Airbus Canada Limited Partnership.
The 30 additional A220-300 aircraft are expected to be delivered
from 2022 to 2026. Options for 20 additional A220-300 aircraft
remain available to us. With the addition of these 30 Airbus A220
aircraft, our flight equipment purchase obligations are expected
to be $1.0 billion in 2022, $1.7 billion in 2023, $2.0 billion in 2024,
$1.6 billion 2025, $1.3 billion in 2026 and 1.0 billion thereafter. We
are scheduled to receive three new Airbus A321neo aircraft and
ten new Airbus A220 aircraft in 2022.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
Air Line Pilots Association, or ALPA, in lieu of the above 401(k)
Company matching contribution, Retirement Plus, and Retirement
Advantage contributions. This non-elective Company contribution
was increased to 16% beginning on January 1, 2021. The Company’s
non-elective contribution of eligible pilot compensation vests
after three years of service.
Our 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 and the
equivalent of Retirement Plus contributions for pilots. 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.
Total 401(k) company match, Retirement Plus, Retirement
Advantage, pilot retirement contribution, and profit sharing
expensed for the years ended December 31, 2021, 2020, and 2019
were $213 million, $177 million, and $196 million, respectively.
In October 2019, the Office of the U.S. Trade Representative
announced a 10% tariff on new commercial aircraft and related
parts imported from certain European Union member states,
which include aircraft and other parts we are already contractually
obligated to purchase, including those noted above. The U.S.
Trade Representative increased the tariff to 15% effective March
2020. In March 2021, the U.S. Trade Representative announced
a four-month suspension of the tariff that was followed by
an announcement in June 2021 that the suspension will be
extended for five years. We continue to work with our business
partners, including Airbus, to evaluate the potential financial and
operational impact of these announcements on our future aircraft
deliveries, including after the suspension is lifted. The imposition
of this or any tariff could substantially increase the cost of new
aircraft and parts.
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Other Commitments
We utilize several credit card processors to process our ticket
sales. Our agreements with these processors do not contain
covenants, but do generally allow the processor to withhold
cash reserves to protect the processor from potential liability
for tickets purchased, but not yet used for travel. While we
currently do not have any collateral requirements related to our
credit card processors, we may be required to issue collateral
to our credit card processors, or other key business partners,
in the future.
As of December 31, 2021, we had approximately $26 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.
In April 2018, JetBlue inflight crewmembers elected to be
represented by the TWU. The NMB certified the TWU as the
representative for JetBlue inflight crewmembers. The parties
reached a final agreement for the first collective bargaining
agreement which was ratified by our inflight crewmembers in
December 2021. The agreement is a five-year, renewable contract
effective December 13, 2021. During the fourth quarter of 2021, we
recorded a one-time ratification bonus totaling $8 million to be
allocated amongst our inflight crewmembers as determined by
TWU. Refer to Note 17 to our consolidated financial statements
for additional information.
As of December 31, 2021, approximately 46 percent of our full-time
equivalent crewmembers were represented by labor unions and
approximately 20 percent were covered by collective bargaining
agreements that are currently amendable or that will become
amendable within one year.
Except for our pilots and inflight crewmembers who are
represented by ALPA, and TWU, respectively, our other frontline
crewmembers do not have third party representation.
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.
Contingencies
NOTE 11
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 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
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 or loan up to 25 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.
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.
We are unable to estimate the potential amount of future
payments under the foregoing indemnities and agreements.
Under a certain number of our operating lease agreements we
are required to restore certain property or equipment to its
original form upon expiration of the related agreement. We have
recorded the estimated fair value of these retirement obligations
of approximately $5 million as of December 31, 2021.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
81
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Legal Matters
Occasionally, we are involved in various claims, lawsuits, regulatory
examinations, investigations, and other legal matters involving
suppliers, crewmembers, customers, and governmental agencies,
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 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 and record a loss contingency when it is probable a liability
has been incurred and the amount of the loss can be reasonably
estimated. These subjective determinations are based on the
status of such legal or regulatory proceedings, the merits of our
defenses, and consultation with legal counsel. Actual outcomes
of these legal and regulatory proceedings may materially differ
from our current estimates. It is possible that resolution of one or
more of the legal matters currently pending or threatened could
result in losses material to our consolidated results of operations,
liquidity, or financial condition.
To date, none of these types of litigation matters, most of which are
typically covered by insurance, has had a material impact on our
operations or financial condition. We have insured and continue
to insure against most of these types of claims. A judgment on
any claim not covered by, or in excess of, our insurance coverage
could materially adversely affect our consolidated results of
operations, liquidity, or financial condition.
On September 21, 2021, the United States Department of Justice
(the “DOJ”), along with the Attorneys General of each of the
States of Arizona, California, and Florida, the Commonwealths
of Massachusetts, Pennsylvania, and Virginia, and the District of
Columbia, filed a lawsuit in the United States District Court for the
District of Massachusetts against JetBlue Airways Corporation
(“JetBlue”) and American Airlines, Inc. (“American” and, together
with JetBlue, the “Carriers”) concerning the Carriers’ previously
implemented Northeast Alliance (the “NEA”). The lawsuit asserts
and seeks an adjudication that the NEA violates Section 1 of the
Sherman Act, and that the Carriers be permanently enjoined from
continuing and restrained from further implementing the NEA.
Also on September 21, 2021, the Department of Transportation
(the “DOT”) published a Clarification Notice relating to the
agreement that had been reached between the DOT, JetBlue, and
American in January 2021, at the conclusion of the DOT’s review of
the NEA (“DOT Agreement”). The DOT Clarification Notice stated,
among other things, that the DOT Agreement remains in force
during the pendency of the DOJ action against the NEA and, while
the DOT retains independent statutory authority to prohibit unfair
methods of competition in air transportation, the DOT intends
to defer to DOJ to resolve the antitrust concerns that the DOJ
has identified with respect to the NEA. The DOT simultaneously
published a Notice Staying Proceeding in relation to a complaint
by Spirit Airlines, Inc. regarding the NEA, pending resolution of
the DOJ action described above.
JetBlue believes the lawsuit is without merit and, along with
American, intends to defend itself vigorously. Given the nature
of this case, we are unable to estimate the reasonably possible
loss or range of loss, if any, arising from this matter. In November
2021, JetBlue and American filed a motion to dismiss the DOJ’s
lawsuit against the NEA. Motion practice has concluded and the
parties await a decision, while the lawsuit proceeds concurrently.
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 jet fuel. Prices
for the underlying commodities have historically been highly
correlated to jet 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. We do not hold or
issue any derivative financial instruments for trading purposes.
planned jet fuel consumption occurs, rather than recognizing
the gains and losses on these instruments into earnings during
each period they are outstanding. When the underlying jet 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. If a hedge does not qualify
for hedge accounting, the periodic changes in its fair value are
recognized in interest income and other. 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 at
December 31, 2021 or 2020.
Aircraft fuel derivatives
We attempt to obtain cash flow hedge accounting treatment for
each fuel derivative that we enter into. This treatment is provided
for under ASC 815, Derivatives and Hedging which allows for gains
and losses on qualifying hedges to be deferred until the underlying
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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
Hedge effectiveness losses recognized
in aircraft fuel expense
Losses on derivatives resulting from the discontinuance of
hedge accounting recognized in interest income and other
Hedge (gains) losses on derivatives recognized in
comprehensive income
Percentage of actual consumption economically hedged
$
$
$
Year Ended December 31,
2021
2020
2019
$
$
$
—
—
—
— %
$
$
$
7
8
11
25 %
5
—
(1)
6 %
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 receivable 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 JetBlue or our counterparty if
market risk exposure exceeds a specified threshold amount.
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.
There were no offsetting derivative instruments as of
December 31, 2021 and 2020.
NOTE 13 Fair Value
Under ASC 820, Fair Value Measurement, 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 observable inputs such as unadjusted quoted prices in
active markets for identical assets or liabilities;
Level 2 quoted prices in active markets for similar assets and
liabilities, and other inputs that are observable directly or
indirectly 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.
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):
Assets
Cash equivalents
$
1,515
$
—
$
Available-for-sale investment securities
26
800
$
—
—
As of December 31, 2021
Level 1
Level 2
Level 3
Assets
Cash equivalents
$
1,330
$
130
$
Available-for-sale investment securities
—
1,137
$
—
—
As of December 31, 2020
Level 1
Level 2
Level 3
Total
1,515
826
Total
1,460
1,137
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
83
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to Note 3 to our consolidated financial statements for fair
value information related to our outstanding debt obligations
as of December 31, 2021 and 2020. The carrying values of all
other financial instruments approximated their fair values at
December 31, 2021 and 2020.
recorded $10 million of losses on these securities during the year
ended December 31, 2021. Gains and losses on these securities
were not significant during the years ended December 31, 2020,
and 2019.
Cash equivalents
Our cash equivalents include money market securities and time
deposits which are readily convertible into cash, have maturities
of three months or less when purchased, and are considered to
be highly liquid and easily tradable. The money market securities
are valued using inputs observable in active markets for identical
securities and are therefore classified as Level 1 within our fair
value hierarchy. The fair values of remaining instruments are
based on observable inputs in non-active markets, which are
therefore classified as Level 2 in the hierarchy.
Available-for-sale investment securities
Our available-for-sale investment securities include investments
such as time deposits, equity securities of publicly traded
companies, and convertible debt securities. Our investments in
equity securities of publicly traded companies are classified as
Level 1 in the fair value hierarchy as their fair values are based
on unadjusted quoted prices in active markets for identical
assets. The fair values of our time deposits and convertible debt
securities are based on observable inputs in non-active markets,
which are therefore classified as Level 2 in the hierarchy. We
Other investments
As discussed in Note 1 to our consolidated financial statement,
JTV has equity investments in emerging companies which do
not have readily determinable fair values. In accordance with
Topic 321, Investments - Equity Securities of the Codification, we
account for these investments using a measurement alternative
which allows entities to measure these investments at cost,
less any impairment, adjusted for changes from observable
price changes in orderly transactions for identifiable or similar
investments of the same issuer. We recognized a gain of
$37 million on these investments for the year ended December 31,
2021. The gain was triggered by an observable transaction for a
similar security issued by a portfolio company which indicated
a change in overall valuation. We estimated the fair value of
our investment in the company using third party valuations and
considered specific circumstances such as our expectation of a
potential exit from the company, prices from previous issuances
of equity securities, the rights and obligations of holders of
similar securities within the company, and estimates of volatility.
Due to the use of significant unobservable inputs, our investment
is classified as Level 3 in the fair value hierarchy.
NOTE 14 Accumulated Other Comprehensive Income (Loss)
Comprehensive income (loss) includes changes in fair value of our aircraft fuel derivatives which qualify for hedge accounting. A roll
forward of the amounts included in accumulated other comprehensive income (loss), net of taxes for the years ended December 31,
2021, 2020, and 2019 is as follows (in millions):
Balance of accumulated (loss), at December 31, 2018
Reclassifications into earnings, net of taxes of $(1)
Change in fair value, net of taxes of $0
Balance of accumulated income, at December 31, 2019
Reclassifications into earnings, net of taxes of $(5)
Change in fair value, net of taxes of $5
Balance of accumulated income, at December 31, 2020
Reclassifications into earnings, net of taxes of $0
Change in fair value, net of taxes of $0
BALANCE OF ACCUMULATED INCOME, AT DECEMBER 31, 2021
Aircraft Fuel
Derivatives(1)(2)
(3)
4
1
2
9
(11)
—
—
—
—
$
$
$
$
(1) Reclassified to aircraft fuel expense.
(2)
In 2020, the Company made several capacity reductions in response to the COVID-19 pandemic. These capacity reductions led to the discontinuance of hedge accounting
on a number of our aircraft fuel derivatives as the forecasted consumption of aircraft fuel was no longer probable. Losses of $5 million that were previously deferred in
other comprehensive loss were reclassified to interest income and other during the year ended December 31, 2020.
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JETBLUE AIRWAYS CORPORATION | 2021 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 of the Company’s operations in
2021, 2020 and 2019.
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. As
of December 31, 2021, we served 33 locations in the Caribbean and
Domestic
Caribbean & Latin America
Atlantic
TOTAL
Latin American region, or Latin America as defined by the DOT.
We also served two destinations in Europe, or Atlantic as defined
by the DOT. Our management includes the three destinations in
Puerto Rico and one destination 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):
$
$
2021
3,869 $
2,150
18
2020
1,890 $
1,067
—
6,037 $
2,957 $
2019
5,633
2,461
—
8,094
Our tangible assets primarily consist of our fleet of aircraft. Except for our transatlantic service to London which is operated by the
long range variant of the Airbus A321neo aircraft, our fleet is deployed systemwide, 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, 2021 and 2020 are summarized below (in millions, except per share
amounts):
2021
Operating revenues
Operating income (loss)
Net income (loss)
Basic earnings (loss) per share
Diluted earnings per share
2020
Operating revenues
Operating (loss)
Net (loss)
(Loss) per share
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
$
$
$
$
733 $
1,499 $
1,972 $
(294)
(247)
(0.78) $
N/A $
147
64
0.20 $
0.20 $
186
130
0.41 $
0.40
1,588 $
215 $
492 $
(334)
(268)
(410)
(320)
(516)
(393)
(0.97) $
(1.18 ) $
(1.44) $
1,834
(119)
(129)
(0.40)
N/A
661
(454)
(373 )
(1.31)
Our 2021 and 2020 results include the effects of various special items. Refer to “Part II - Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations” within this Report for additional details.
The sum of the quarterly results may not equal the annual amount reported due to immaterial rounding differences.
The sum of the quarterly earnings per share amounts does not equal the annual amount reported since per share amounts are computed
independently for each quarter and for the full year based on respective weighted average common shares outstanding and other
dilutive potential common shares.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
85
PART II | ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
NOTE 17 Special Items
The following is a listing of special items presented on our consolidated statements of operations (in millions):
Year Ended December 31,
2021
2020
2019
Special Items
Federal payroll support grant recognition(1)
$
(830) $
(685 ) $
CARES Act employee retention credit(2)
Union contract costs(3)
Fleet impairment(4)
Severance and benefit costs(5)
Losses on sale-leaseback transactions(6)
Embraer E190 fleet transition costs(7)
(11)
8
—
—
—
—
(36)
—
273
59
106
—
TOTAL
$
(833) $
(283 ) $
—
—
8
—
—
—
6
14
(1) As discussed in Note 3 to our consolidated financial statements, we received assistance in the form of grants and unsecured loans under various federal payroll support
programs. Funds under these federal payroll support programs were to be used exclusively for the continuation of payment of crewmember wages, salaries and benefits.
The carrying values of the payroll support grants (after consideration of the warrants we issued) were recorded within other liabilities and were recognized as contra-
expenses within special items on our consolidated statements of operations as the funds were utilized. We utilized $830 million and $685 million of payroll support grants
for the year ended December 31, 2021 and 2020, respectively. Our payroll support grants were fully utilized as of December 31, 2021.
(2) The Employee Retention Credit (“ERC”) under the CARES Act is a refundable tax credit which encourages businesses to keep employees on the payroll during the COVID-19
pandemic. Eligible employers can qualify for up to $5,000 of credit for each employee based on qualified wages paid after March 12, 2020 and before January 1, 2021.
The Internal Revenue Service (“IRS”) subsequently issued Notice 2021-23 and Notice 2021-49 which collectively extended the ERC eligibility to cover qualified wages paid
after December 31, 2020 and before January 1, 2022. Qualified wages are the wages paid to an employee for the time that the employee is not providing services due to an
economic hardship, specifically, either (1) a full or partial suspension of operations by order of a governmental authority due to COVID-19, or (2) a significant decline in gross
receipts. Our policy is to recognize the ERC when it is filed with the IRS. We recognized $11 million and $36 million of ERC as contra-expenses within special items on our
consolidated statements of operations for the year ended December 31, 2021 and 2020, respectively.
In April 2018, JetBlue inflight crewmembers elected to be represented by the Transport Workers Union of America, or TWU. The National Mediation Board, or NMB,
certified the TWU as the representative for JetBlue inflight crewmembers. The parties reached a final agreement for the first collective bargaining agreement which was
ratified by our inflight crewmembers in December 2021. The agreement is a five-year, renewable contract effective December 13, 2021. During the fourth quarter of 2021,
we recorded a one-time ratification bonus totaling $8 million to be allocated amongst our inflight crewmembers as determined by TWU.
In April 2014, JetBlue pilots elected to be represented by the Air Line Pilots Association, or ALPA. The NMB certified ALPA as the representative for JetBlue pilots. The
parties reached a final agreement for our first collective bargaining agreement which was ratified by the pilots in July 2018. The agreement is a four-year renewable
contract, which became effective August 1, 2018. For the year ended December 31, 2019, union contract costs include various one-time costs incurred to implement the
provisions of the collective bargaining agreement into our IT systems.
(3)
(4) Under ASC 360, Property, Plant, and Equipment, we are required to assess long-lived assets for impairment when events and circumstances indicate that the assets may
be impaired. An impairment of long-lived assets exists when the sum of the forecasted undiscounted future cash flows expected to be generated directly by the assets
are less than the book value of the assets. Our long-lived assets include both owned and leased properties which are classified as property and equipment, and operating
lease assets on our consolidated balance sheets, respectively.
Our operations were adversely impacted by the unprecedented decline in demand for travel caused by the COVID-19 pandemic. To determine if impairment exists in our
fleet, we grouped our aircraft by fleet-type and estimated their future cash flows based on projections of capacity, aircraft age, maintenance requirements, and other
relevant conditions. Based on the assessment, we determined the future cash flows from the operation our Embraer E190 fleet were lower than the carrying value. For
those aircraft, including the ones that are under operating lease, and related spare parts in our Embraer E190 fleet, we recorded impairment losses of $273 million for the
year ended December 31, 2020. These losses represent the difference between the book value of these assets and their fair value. In determining fair value, we obtained
third party valuations for our Embraer E190 fleet, which considered the effects of the current market environment, age of the assets, and marketability. For our owned
Embraer E190 aircraft and related spare parts, we made adjustments to the valuations to reflect the impact of their current maintenance conditions to determine fair
value. Our estimate of fair value was not based on distressed sales or forced liquidations. The fair value of our Embraer E190 aircraft under operating lease and related
parts was based on the present value of current market lease rates utilizing a market discount rate for the remaining term of each lease. Since the fair value of our
Embraer E190 fleet was determined using unobservable inputs, it is classified as Level 3 in the fair value hierarchy. We evaluated the remaining fleet types and determined
the future cash flows of our Airbus A320 and Airbus A321 fleets exceeded their carrying value as of December 31, 2020.
No fleet impairment loss was recorded for the year ended December 31, 2021.
As the extent of the ongoing impact from the COVID-19 pandemic remains uncertain, we will update our assessment as new information becomes available.
In 2020, the unprecedented declines in demand and in our capacity caused by COVID-19 led to a significant reduction to our staffing needs. In June 2020, we announced a voluntary
separation program which allowed eligible crewmembers the opportunity to voluntarily separate from the Company in exchange for severance, health coverage for a specified
period of time, and travel privileges based on years of service. Virtually all of our crewmembers were eligible to participate in the voluntary separation program with the exception
of our union-represented crewmembers and crewmembers of our wholly-owned subsidiaries (JetBlue Technology Ventures and JetBlue Travel Products). Separation agreements
for the majority of the crewmembers who elected to participate in the voluntary program were executed in the third quarter of 2020. One-time costs of $59 million, consisting of
severance and health benefits, were recorded for the year ended December 31, 2020 in connection with the program. Approximately $44 million of this charge was disbursed in
2020. Substantially all of the remaining balance has been disbursed as of December 31, 2021 with the residual amount expected to be disbursed by mid-2022. Accruals related to
the voluntary separation program are primarily recorded in accrued salaries, wages and benefits, and accounts payable on our consolidated balance sheets.
In 2020, we executed $563 million of aircraft sale-leaseback transactions. Of these transactions, $354 million did not qualify as sales for accounting purposes. The
remaining $209 million qualified as sales and generated a loss of $106 million. These losses represent the difference between the book value of these assets and their
fair value. We estimated the fair value of the related aircraft considering third party valuations and considered specific circumstances such as aircraft age, maintenance
requirements and condition, and therefore classified as Level 3 in the fair value hierarchy.
(6)
(5)
86
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART II | ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
(7)
In July 2018, we announced our decision to exit the Embraer E190 fleet and order 60 Airbus A220-300 aircraft, formerly known as the Bombardier CS300, for expected deliveries
beginning in 2020 with the option to purchase 60 additional aircraft. Fleet transition costs for the year ended December 31, 2019 include certain contract termination costs
associated with the transition. In 2019, we converted 10 of our options for the A220-300 aircraft into firm orders. Options for 50 additional A220-300 aircraft deliveries
remained available to us as of December 31, 2021. In anticipation for the surge in demand created by the NEA with American, in 2021, we announced our decision to delay
the retirement of the 30 Embraer E190 aircraft that we own. We reassessed our Embraer E190 assets and adjusted the depreciable lives and salvage value to align with our
expected transition dates to the Airbus A220-300 through 2025. Although the Company has not finalized its retirement plans for the Embraer E190 aircraft at December 31,
2021, we do not believe the impact of the change in useful lives of these aircraft will have a material impact on our consolidated financial statements in future periods.
ITEM 9
CHANGES IN 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, 2021. Based on that evaluation, our CEO and
CFO concluded that our disclosure controls and procedures were
effective as of December 31, 2021.
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, 2021 to provide
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,
2021. Ernst & Young LLP has issued their report which is included
elsewhere herein.
reasonable assurance regarding the reliability of financial reporting
and the preparation of consolidated financial statements for
external reporting purposes in accordance with GAAP.
Changes in Internal Control Over Financial Reporting
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, 2021 that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B OTHER INFORMATION
None.
ITEM 9C
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT
PREVENT INSPECTIONS
Not Applicable.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
87
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
Executive Officers of the Registrant
Certain information concerning JetBlue’s executive officers as
of December 31, 2021 follows. There are no family relationships
between any of our executive officers.
Robin Hayes, age 55, is our Chief Executive Officer. He was
promoted to Chief Executive Officer on February 16, 2015 and
served as our President from January 2014 to May 2018. 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.
Joanna Geraghty, age 49, is our President and Chief Operating
Officer. She was appointed to the position in May 2018. Ms. Geraghty
joined JetBlue in 2005 and was most recently our Executive Vice
President Customer Experience from 2014 to 2018. She served as
Executive Vice President Chief People Officer from 2010 to 2014
and was previously the airline’s Vice President and Associate
General Counsel and Director of Litigation and Regulatory Affairs.
Ursula Hurley, age 40, is our Chief Financial Officer. She was
appointed to the position in June 2021. Ms. Hurley first joined
JetBlue’s finance team in 2004 and subsequently served in
positions of increasing responsibility, including as Director,
Assistant Treasurer & Fuel from June 2012 to July 2017 and
Vice President Structural Programs from July 2017 to July 2018.
From July 2018 to April 2021, Ms. Hurley was the Vice President
Treasurer, responsible for debt and cash management, cash
flow, fuel and interest rate hedging, strategic sourcing, and fleet
strategy, including aircraft and engine sourcing.
Brandon Nelson, age 47, is our General Counsel and Corporate
Secretary. He was appointed to the position in November 2018.
Mr. Nelson joined JetBlue in 2005 and previously served as
88
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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.
Director, Corporate Counsel and Assistant Secretary before being
promoted in 2009 to Vice President, Associate General Counsel.
Prior to JetBlue, Mr. Nelson practiced corporate and business
litigation law at firms in California and New York, including
Shearman & Sterling LLP.
Carol Clements, age 46, is our Chief Digital and Technology Officer.
She was appointed to the position in April 2021. Prior to joining
JetBlue, Ms. Clements served as Chief Technology Officer for Pizza
Hut where she oversaw its e-commerce channels, restaurant
& delivery technology, and data & analytics. Ms. Clements also
spent 11 years at Southwest Airlines where she held a variety of
leadership roles.
Alexander Chatkewitz, age 57, 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.
Steve Priest, age 51, served as our Chief Financial Officer from
February 2017 to June 2021. 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 venture
business with American Airlines, Iberia, and Finnair, as well as
several other leadership roles.
Mr. Priest resigned from his position as Chief Financial Officer
effective June 11, 2021.
PART III | ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES
PART III | ITEM 14 PRINCIPAL ACCOUNTING FEES AND SERVICES
Eash Sundaram, age 50, was our Chief Digital & Technology
Officer. Mr. Sundaram joined JetBlue in March 2012 as our Chief
Information Officer. Prior to joining JetBlue, Mr. Sundaram served
as the Chief Information Officer at Pall Corporation and has also
held various leadership positions in the Healthcare and Supply
Chain Management industries.
Mr. Sundaram retired from his role as our Chief Digital &
Technology Officer effective February 2, 2021.
Scott Laurence, age 48, was our Head of Revenue and Planning. He
was appointed to the role in June 2019 and joined JetBlue in 2008.
Mr. Laurence oversees JetBlue’s sales and revenue management
organization, network planning, and operational planning &
analysis. Prior to joining JetBlue, Mr. Laurence served in various
commercial roles at US Airways and United Airlines for 13 years.
Mr. Laurence resigned from his position as Head of Revenue and
Planning in January 2022.
The other information required by this Item will be included in
and is incorporated herein by reference from our definitive proxy
statement for our 2022 Annual Meeting of Stockholders to be filed
with the SEC pursuant to Regulation 14A within 120 days after the
end of our 2021 fiscal year, or our 2022 Proxy Statement.
ITEM 11 EXECUTIVE COMPENSATION
The information required by this Item will be included in and is incorporated herein by reference from our 2022 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, 2021, 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
Weighted average
exercise price
of outstanding
options, warrants
and rights
Number of securities
remaining available
for future issuance under
equity compensation
plans (excluding securities
reflected in first column)
2,731,412
—
2,731,412
$
$
17.67
—
17.67
21,774,972
—
21,774,972
Warrants issued to the U.S. Department of Treasury under the government support programs discussed in Note 3 to our consolidated
financial statements are not reflected in this table.
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 2022 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 2022 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 2022 Proxy Statement.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
89
PART IV
ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES
1.
Financial statements:
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Consolidated Balance Sheets — December 31, 2021 and December 31, 2020
Consolidated Statements of Operations — For the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Comprehensive Income — For the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Cash Flows — For the years ended December 31, 2021, 2020 and 2019
Consolidated Statements of Stockholders’ Equity — For the years ended December 31, 2021, 2020 and 2019
Notes to Consolidated Financial Statements
2.
Financial Statement Schedules:
Schedule II — Valuation of Qualifying Accounts and Reserves
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.
3.
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.
ITEM 16 FORM 10-K SUMMARY
Omitted.
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JETBLUE AIRWAYS CORPORATION | 2021 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 22, 2022
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 Brandon
Nelson 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.
Signature
/S/ ROBIN HAYES
Robin Hayes
/S/ URSULA HURLEY
Ursula Hurley
/S/ ALEXANDER CHATKEWITZ
Alexander Chatkewitz
/S/ B. BEN BALDANZA
B. Ben Baldanza
/S/ PETER BONEPARTH
Peter Boneparth
/S/ MONTE FORD
Monte Ford
/S/ ELLEN JEWETT
Ellen Jewett
/S/ ROBERT LEDUC
Robert Leduc
/S/ TERI P. MCCLURE
Teri P. McClure
/S/ SARAH ROBB O’HAGAN
Sarah Robb O’Hagan
/S/ VIVEK SHARMA
Vivek Sharma
/S/ THOMAS WINKELMANN
Thomas Winkelmann
Capacity
Chief Executive Officer and Director
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer)
Date
February 22, 2022
February 22, 2022
Vice President, Controller, and Chief Accounting
Officer (Principal Accounting Officer)
February 22, 2022
Director
Director
Director
Director
Director
Director
Director
Director
Director
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
February 22, 2022
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
91
PART IV
Exhibit Index
3.1
3.1(a)
3.2
3.3
4.1
4.3
4.3(a)
4.3(b)
4.3(c)
4.3(d)
4.3(e)
4.3(f)
4.3(g)
4.3(h)
4.3(i)
4.3(j)
4.3(k)†
4.3(l)
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).
Certificate of Amendment of the 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 14, 2020 and filed on May 20, 2020.
Amended and Restated Bylaws of JetBlue Airways Corporation—incorporated by reference to Exhibit 3.2 to our Current
Report on Form 8-K dated May 14, 2020 and file on May 20, 2020.
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).
Pass Through Trust Agreement, dated as of November 12, 2019, between JetBlue Airways Corporation and Wilmington
Trust Company—incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K dated November 12, 2019.
Trust Supplement No. 2019-1AA, dated as of November 12, 2019, between JetBlue Airways Corporation and Wilmington
Trust Company, as Class AA Trustee, to the Pass Through Trust Agreement dated as of November 12, 2019—incorporated by
reference to Exhibit 4.2 to our Current Report on Form 8-K dated November 12, 2019.
Trust Supplement No. 2019-1A, dated as of November 12, 2019, between JetBlue Airways Corporation and Wilmington
Trust Company, as Class A Trustee, to the Pass Through Trust Agreement dated as of November 12, 2019—incorporated by
reference to Exhibit 4.3 to our Current Report on Form 8-K dated November 12, 2019.
Form of Pass Through Trust Certificate, Series 2019-1AA (included in Exhibit A to Exhibit 4.3(a))—incorporated by reference
to Exhibit 4.4 to our Current Report on Form 8-K dated November 12, 2019.
Form of Pass Through Trust Certificate, Series 2019-1A (included in Exhibit A to Exhibit 4.3(b))—incorporated by reference
to Exhibit 4.5 to our Current Report on Form 8-K dated November 12, 2019.
Intercreditor Agreement (2019-1), dated as of November 12, 2019, among JetBlue Airways Corporation, Wilmington Trust
Company, as Trustee of the JetBlue Airways Pass Through Trust 2019-1AA and the JetBlue Airways Pass Through Trust
2019-1A, Crédit Agricole Corporate and Investment Bank, acting through its New York Branch, as Class AA Liquidity
Provider and Wilmington Trust Company—incorporated by reference to Exhibit 4.6 to our Current Report on Form 8-K
dated November 12, 2019.
Revolving Credit Agreement (2019-1AA), dated as of November 12, 2019, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the trustee of JetBlue Airways Pass Through Trust 2019-1AA and as
Borrower, and Crédit Agricole Corporate and Investment Bank, acting through its New York Branch, as Class AA Liquidity
Provider—incorporated by reference to Exhibit 4.7 to our Current Report on Form 8-K dated November 12, 2019.
Revolving Credit Agreement (2019-1A), dated as of November 12, 2019, between Wilmington Trust Company, as
Subordination Agent, as agent and trustee for the trustee of JetBlue Airways Pass Through Trust 2019-1A and as Borrower,
and Crédit Agricole Corporate and Investment Bank, acting through its New York Branch, as Class A Liquidity Provider—
incorporated by reference to Exhibit 4.8 to our Current Report on Form 8-K dated November 12, 2019.
Participation Agreement (N976JT), dated as of November 12, 2019, among JetBlue Airways Corporation, Wilmington
Trust Company, as Pass Through Trustee under the Pass Through Trust Agreements, Wilmington Trust Company, as
Subordination Agent, Wilmington Trust Company, as Loan Trustee, and Wilmington Trust Company, in its individual
capacity as set forth therein*—incorporated by reference to Exhibit 4.9 to our Current Report on Form 8-K dated
November 12, 2019.
Indenture and Security Agreement (N976JT), dated as of November 12, 2019, between JetBlue Airways Corporation and
Wilmington Trust Company, as Loan Trustee†—incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K
dated November 12, 2019.
Form of Series 2019-1 Equipment Notes (included in Exhibit 4.3(i))—incorporated by reference to Exhibit 4.11 to our Current
Report on Form 8-K dated November 12, 2019.
Schedule I
Trust Supplement No. 2020-1A, dated as of August 17, 2020, between JetBlue Airways Corporation and Wilmington Trust
Company, as Class A Trustee, to the Pass Through Trust Agreement dated as of November 12, 2019—incorporated by
reference to Exhibit 4.2 to our Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020.
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JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART IV
Exhibit Index
4.3(m)
4.3(n)
4.3(o)
4.3(p)****
4.3(q)****
4.3(r)****
Trust Supplement No. 2020-1B, dated as of August 17, 2020, between JetBlue Airways Corporation and Wilmington Trust
Company, as Class B Trustee, to the Pass Through Trust Agreement dated as of November 12, 2019—incorporated by
reference to Exhibit 4.3 to our Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020.
Form of Pass Through Trust Certificate, Series 2020-1A (included in Exhibit A to Exhibits 4.3(l))-incorporated by reference
to Exhibit A to Exhibit 4.2 to our Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020.
Form of Pass Through Trust Certificate, Series 2020-1B (included in Exhibit A to Exhibit 4.3(m))-incorporated by reference
to Exhibit A to Exhibit 4.3 to our Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020.
Intercreditor Agreement (2020-1), dated as of August 17, 2020, among JetBlue Airways Corporation, Wilmington Trust
Company, as Trustee of the JetBlue Airways Pass Through Trust 2020-1A and the JetBlue Airways Pass Through Trust
2020-1B, Natixis S.A., acting through its New York Branch, as Class A Liquidity Provider and Class B Liquidity Provider,
and Wilmington Trust Company, as Subordination Agent-incorporated by reference to Exhibit 4.6 to our Current Report on
Form 8-K dated August 17, 2020 and filed on August 18, 2020.
Revolving Credit Agreement (2020-1A), dated as of August 17, 2020, between Wilmington Trust Company, as Subordination
Agent, as agent and trustee for the trustee of JetBlue Airways Pass Through Trust 2020-1A and as Borrower, and Natixis
S.A., acting through its New York Branch, as Class A Liquidity Provider-incorporated by reference to Exhibit 4.7 to our
Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020.
Revolving Credit Agreement (2020-1B), dated as of August 17, 2020, between Wilmington Trust Company, as Subordination
Agent, as agent and trustee for the trustee of JetBlue Airways Pass Through Trust 2020-1B and as Borrower, and Natixis
S.A., acting through its New York Branch, as Class B Liquidity Provider-incorporated by reference to Exhibit 4.8 to our
Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020.
4.3(s)****,††
Participation Agreement (N946JL), dated as of August 17, 2020, among JetBlue Airways Corporation, Wilmington
Trust Company, as Pass Through Trustee under the Pass Through Trust Agreements, Wilmington Trust Company, as
Subordination Agent, Wilmington Trust Company, as Loan Trustee, and Wilmington Trust Company, in its individual
capacity as set forth therein-incorporated by reference to Exhibit 4.9 to our Current Report on Form 8-K dated August 17,
2020 and filed on August 18, 2020.
4.3(t)****,††
Indenture and Security Agreement (N946JL), dated as of August 17, 2020, between JetBlue Airways Corporation and
Wilmington Trust Company, as Loan Trustee-incorporated by reference to Exhibit 4.10 to our Current Report on Form 8-K
dated August 17, 2020 and filed on August 18, 2020.
4.3(u)****,††† Participation Agreement (N2002J), dated as of August 17, 2020, among JetBlue Airways Corporation, Wilmington
Trust Company, as Pass Through Trustee under the Pass Through Trust Agreements, Wilmington Trust Company, as
Subordination Agent, Wilmington Trust Company, as Loan Trustee, and Wilmington Trust Company, in its individual
capacity as set forth therein-incorporated by reference to Exhibit 4.11 to our Current Report on Form 8-K dated August 17,
2020 and filed on August 18, 2020.
4.3(v)****,†††
Indenture and Security Agreement (N2002J), dated as of August 17, 2020, between JetBlue Airways Corporation and
Wilmington Trust Company, as Loan Trustee-incorporated by reference to Exhibit 4.12 to our Current Report on Form 8-K
dated August 17, 2020 and filed on August 18, 2020.
4.3(w)
4.3(x)††
4.3(y)†††
4.3(z)
4.3(aa)
Form of Series 2020-1 Equipment Notes (included in Exhibits 4.3.(t) and 4.3(v))-incorporated by reference to Exhibits 4.10
and 4.12 to our Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020.
Schedule I (setting forth the details by which the documents referred to therein differ from the corresponding
representative sample of documents included as Exhibits 4.3(s) and 4.3(t) with respect to Aircraft bearing Registration No.
N946JL)-incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K dated August 17, 2020 and filed on
August 18, 2020.
Schedule II (setting forth the details by which the documents referred to therein differ from the corresponding
representative sample of documents included as Exhibits 4.3(u) and 4.3(v) with respect to Aircraft bearing Registration No.
N2002J)-incorporated by reference to Exhibit 99.2 to our Current Report on Form 8-K dated August 17, 2020 and filed on
August 18, 2020.
Trust Supplement No. 2019-1B, dated as of August 27, 2020, between JetBlue Airways Corporation and Wilmington Trust
Company, as Class B Trustee, to the Pass Through Trust Agreement dated as of November 12, 2019-incorporated by
reference to Exhibit 4.2 to our Current Report on Form 8-K dated August 27, 2020 and filed on August 28, 2020.
Form of Pass Through Trust Certificate, Series 2019-1B (included in Exhibit A to Exhibit 4.3(z))-incorporated by reference to
Exhibit A to Exhibit 4.2 to our Current Report on Form 8-K dated August 27, 2020 and filed on August 28, 2020.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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Exhibit Index
4.3(ab)****
4.3(ac)****
4.3(ad)****,
††††
Amended and Restated Intercreditor Agreement (2019-1), dated as of August 27, 2020, among JetBlue Airways
Corporation, Wilmington Trust Company, as Trustee of the JetBlue Airways Pass Through Trust 2019-1AA, the JetBlue
Airways Pass Through Trust 2019-1A and the JetBlue Airways Pass Through Trust 2019-1B, Crédit Agricole Corporate and
Investment Bank, acting through its New York Branch, as Class AA Liquidity Provider, Class A Liquidity Provider and Class B
Liquidity Provider, and Wilmington Trust Company, as Subordination Agent-incorporated by reference to Exhibit 4.4 to our
Current Report on Form 8-K dated August 27, 2020 and filed on August 28, 2020.
Revolving Credit Agreement (2019-1B), dated as of August 27, 2020, between Wilmington Trust Company, as Subordination
Agent, as agent and trustee for the trustee of JetBlue Airways Pass Through Trust 2019-1B and as Borrower, and Crédit
Agricole Corporate and Investment Bank, acting through its New York Branch, as Class B Liquidity Provider-incorporated
by reference to Exhibit 4.5 to our Current Report on Form 8-K dated August 27, 2020 and filed on August 28, 2020.
First Amendment to Participation Agreement (N976JT), dated as of August 27, 2020, among JetBlue Airways Corporation,
Wilmington Trust Company, as Pass Through Trustee under the Pass Through Trust Agreements, Wilmington Trust
Company, as Subordination Agent, Wilmington Trust Company, as Loan Trustee, and Wilmington Trust Company, in its
individual capacity as set forth therein-incorporated by reference to Exhibit 4.6 to our Current Report on Form 8-K dated
August 27, 2020 and filed on August 28, 2020.
4.3(ae)††††
First Amendment to Indenture and Security Agreement (N976JT), dated as of August 27, 2020, between JetBlue Airways
Corporation and Wilmington Trust Company, as Loan Trustee-incorporated by reference to Exhibit 4.7 to our Current
Report on Form 8-K dated August 27, 2020 and filed on August 28, 2020.
4.3(af)
Form of Series 2019-1 Equipment Notes (incorporated by reference to Exhibit 4.11 to our Form 8-K filed on November 12,
2019, as amended by Exhibit 4.7 to our Current Report on Form 8-K dated August 27, 2020 and filed on August 28, 2020).
4.3(ag)††††
Schedule I (setting forth the details by which the documents referred to therein differ from the corresponding
representative sample of documents included as Exhibits 4.3(ad) and 4.3(ae) with respect to Aircraft bearing Registration
No. N976JT)-incorporated by reference to Exhibit 99.1 to our Current Report on Form 8-K dated August 27, 2020 and filed
on August 28, 2020.
4.4
4.5
4.5(a)
4.14
4.14(a)
4.15
4.15(a)
4.16
4.16(a)
4.17
4.17(a)
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).
Indenture, dated March 25, 2021, between JetBlue Airways Corporation, as issuer, and Wilmington Trust, National Association,
as trustee—incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
Form of 0.50% Convertible Senior Note due 2026, dated March 25, 2021 (included as Exhibit A to Exhibit 4.5)—incorporated
by reference to Exhibit 4.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
Warrant Agreement, dated as of April 23, 2020, between JetBlue Airways Corporation and the United States Department of the
Treasury—incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
Form of Warrant (incorporated by reference to Annex B to Exhibit 4.14)—incorporated by reference to Exhibit 4.2 to our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.
Warrant Agreement, dated as of September 29, 2020, between JetBlue Airways Corporation and the United States
Department of the Treasury—incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter
ended September 30, 2020.
Form of Warrant—incorporated by reference to Exhibit 4.1(a) to our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2020.
Warrant Agreement, dated as of January 15, 2021, between JetBlue Airways Corporation and the United States Department
of the Treasury—incorporated by reference to Exhibit 4.16 to our Annual Report on Form 10-K for the year ended
December 31, 2020.
Form of Warrant (incorporated by reference to Annex B to Exhibit 4.16)—incorporated by reference to Exhibit 4.16(a) to our
Annual Report on Form 10-K for the year ended December 31, 2020.
Warrant Agreement, dated as of May 6, 2021, between JetBlue Airways Corporation and the United States Department of
the Treasury—incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30,
2021.
Form of Warrant (included as Annex B to Exhibit 4.17)—incorporated by reference to Exhibit 4.1 to our Quarterly Report on
Form 10-Q for the quarter ended June 30, 2021.
4.18
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
94
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PART IV
Exhibit Index
10.3**
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)**
V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation, including Side Letters
No. 1 through No. 3 and No. 5 through No. 9—incorporated by reference to Exhibit 10.2 to the Registration Statement on
Form S-1, as amended (File No. 333-82576).
Side Letter No. 10 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation,
dated April 25, 2002—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2002 (File No. 000-49728).
Side Letter No. 11 to V2500 General Terms of Sale between IAE International Aero Engines AG and NewAir Corporation,
dated February 10, 2003—incorporated by reference to Exhibit 10.8 to our Annual Report on Form 10-K for the year ended
December 31, 2002 (File No. 000-49728).
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).
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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Exhibit Index
10.3(q)**
10.3(r)**
10.3(s)**
10.3(t)**
10.3(u)**
10.3(v)**
10.3(w)**
10.3(x)**
10.3(y)**
10.3(z)**
10.3(aa)**
10.3(ab)**
10.3(ac)**
10.3(ad)**
10.3(ae)**
10.3(af)**
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).
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.
96
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART IV
Exhibit Index
10.3(ag)
10.4
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)**
Amendment No. 4 to the V2500 General Terms of Sale between IAE International Aero Engines and New Air Corporation,
dated March 20, 2018—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018.
Form of Performance-Contingent Executive Retention Award Agreement—incorporated by reference to Exhibit 10.4 to our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2021.
Form of Director/Officer Indemnification Agreement—incorporated by reference to Exhibit 10.15 to our Annual Report on
Form 10-K for the year ended December 31, 2020.
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).
10.17(m)**
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).
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
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PART IV
Exhibit Index
10.17(n)**
10.17(o)**
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)**
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).
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).
98
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART IV
Exhibit Index
10.18(i)**
10.18(j)**
10.18(k)**
10.20
10.20(a)
10.21*
10.22*
10.22(a)*
10.30**
10.31*
10.31(a)*
10.31(f)*
10.31(g)*
10.31(h)*
10.31(j)*
10.33**
10.33(b)**
10.33(c)**
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.
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.
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.
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.
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.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
99
PART IV
Exhibit Index
10.33(d)**
10.33(e)**
10.33(f)**
10.33(g)**
10.33(h)**
10.33(i)**
10.33(j)**
10.33(k)**
10.33(l)***
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-incorporated by reference to Exhibit 10.33(i) to our Annual Report on Form 10-K for the year
ended December 31, 2017.
Amendment No. 9 to Airbus A320 Family Purchase Agreement, dated as of March 30, 2018, 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 March 31, 2018.
Amendment No. 10 to Airbus A320 Family Purchase Agreement, dated as of July 7, 2018, 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, 2018.
Amendment No. 11 to Airbus A320 Family Purchase Agreement, dated as of July 7, 2018, between Airbus S.A.S. and JetBlue
Airways Corporation-incorporated by reference to Exhibit 10.33(l) to our Annual Report on Form 10-K for the year ended
December 31, 2018.
10.33(m)**** Amendment No. 12 to Airbus Family Purchase Agreement, dated as of April 9, 2019, 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, 2019.
10.33(n)****
10.33(o)****
10.33(p)****
10.35*
10.36
10.36(a)
Amendment No. 13 to Airbus Family Purchase Agreement, dated as of June 20, 2019, between Airbus S.A.S. and JetBlue
Airways Corporation-incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2019.
Amendment No. 14 to Airbus Family Purchase Agreement, dated as of May 4, 2020, 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, 2020.
Amendment No. 15 to Airbus Family Purchase Agreement, dated as of October 8, 2020, between Airbus S.A.S. and JetBlue
Airways Corporation-—incorporated by reference to Exhibit 10.33(p) to our Annual Report on Form 10-K for the year ended
December 31, 2020.
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.
First Amendment, dated August 1, 2019, to the Amended and Restated Credit and Guaranty Agreement, dated as of April
6, 2017, among JetBlue Airways Corporation, as Borrower, the Subsidiaries of the Borrower party thereto as Guarantors,
the Lenders party thereto 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 September 30, 2019.
100
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART IV
Exhibit Index
10.36(b)****
10.38**
10.38(a)**
10.39*
10.41*
10.41(a)*
10.41(b)*
10.41(c)*
10.42*
10.43*
10.43(a)*
10.43(b)*
10.44*
10.44(a)*
10.45**
10.46
10.47
10.48
Second Amendment, dated February 20, 2020, to the Amended and Restated Credit and Guaranty Agreement, dated as of
April 6, 2017, among JetBlue Airways Corporation, as Borrower, the Subsidiaries of the Borrower party thereto as Guaran-
tors, the Lenders party thereto 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 March 31, 2020.
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.
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.
Amendment No. 2 to the Employment Agreement between JetBlue Airways Corporation and Robin Hayes, dated February
13, 2020—incorporated by reference to Exhibit 10.41(B) to our Current Report on From 8-K dated February 13, 2020 and filed
on February 18, 2020.
Amendment No. 3 to the Employment Agreement between JetBlue Airways Corporation and Robin Hayes dated September
5, 2021—incorporated by reference to Exhibit 10.2 to our current report on Form 8-K dated September 5, 2021 and filed on
September 7, 2021.
Offer Letter between Ursula Hurley and JetBlue Airways Corporation, dated June 15, 2021—incorporated by reference to
Exhibit 10.1 to our current report on Form 8-K dated May 11, 2021 and filed on June 21.
JetBlue Executive Retention Award - Ursula Hurley dated February 12, 2021—incorporated by reference to Exhibit 10.5 to
our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.
JetBlue Executive Retention Award - Ursula Hurley dated April 12, 2021—incorporated by reference to Exhibit 10.6 to our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.
JetBlue Executive Retention Award - Ursula Hurley dated September 5, 2021—incorporated by reference to Exhibit 10.1 to
our Current Report on Form 8-K dated September 5, 2021 and filed on September 7, 2021.
Separation Agreement dated May 17, 2018 by and between James Hnat and JetBlue Airways Corporation—incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K dated May 18, 2018.
Separation Agreement and General Release dated July 15, 2019 by and between Martin St. George 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, 2019.
Amended and Restated PW100G-JM Engine Purchase and Support Agreement by and between International Aero En-
gines, LLC and JetBlue Airways Corporation, dated as of March 30, 2018—incorporated by reference to Exhibit 10.3 to our
Quarterly Report on Form 10-Q for the quarter ended March 31, 2018.
Delayed Draw Term Loan Credit Agreement dated as of March 13, 2020 among JetBlue Airways Corporation, as Borrower, the
subsidiaries of the Borrower party hereto, as Guarantors, the Lenders party hereto, and Morgan Stanley Senior Funding, Inc.,
as Administrative Agent—incorporated by reference to Exhibit 10.1 to our Current Report on From 8-K dated March 13, 2020.
Payroll Support Program Agreement, dated as of April 23, 2020, between JetBlue Airways Corporation and the United
States Department of the Treasury—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the
quarter ended March 31, 2020.
Promissory Note, dated as of April 23, 2020, issued by JetBlue Airways Corporation in the name of the United States of
the Treasury—incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended March
31, 2020.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
101
PART IV
Exhibit Index
10.49
10.50*
10.50(a)*
10.50(b)*
10.50(c)*
10.50(d)*
10.51*
10.52*****
10.52(a)
10.52(b)
10.53
10.54****
Term Loan Credit Agreement dated as of June 17, 2020 among JetBlue Airways Corporation, as Borrower, the subsid-
iaries of the Borrower party hereto, as Guarantors, the Lenders party hereto, and Barclays Bank PLC, as Administrative
Agent—incorporated by reference to Exhibit 10.1 to our Current Report on From 8-K dated June 17, 2020.
JetBlue Airways Corporation 2020 Omnibus Equity Incentive Plan—incorporated by reference to Exhibit 10.31 to our
Current Report on From 8-K dated May 14, 2020 and filed on May 20, 2020.
Form of Performance Share Unit Award Agreement (2020 Omnibus Incentive Plan)—incorporated by reference to Exhibit
10.7 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.
Form of RSU Award Agreement for Non-Employee Directors (2020 Omnibus Incentive Plan)—incorporated by reference to
Exhibit 10.8 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.
Form of RSU Award Agreement, Crewmembers (2020 Omnibus Incentive Plan)—incorporated by reference to Exhibit 10.9 to
our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.
Form of Deferred Stock Unit Award Agreement (2020 Omnibus Incentive Plan)—incorporated by reference to Exhibit 10.10
to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.
JetBlue Airways Corporation 2020 Crewmember Stock Purchase Plan—incorporated by reference to Exhibit 10.35 to our
Current Report on From 8-K dated May 14, 2020 and filed on May 20, 2020.
Loan and Guarantee Agreement, dated as of September 29, 2020, among JetBlue Airways Corporation, as Borrower, the
Subsidiaries of JetBlue Airways Corporation party thereto from time to time, as Guarantors, the United States Department
of the Treasury, as Lender, and The Bank of New York Mellon as Administrative Agent and Collateral Agent—incorporated by
reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.
Amendment, dated November 3, 2020, to Loan and Guarantee Agreement, dated as of September 29, 2020, among Jet-
Blue Airways Corporation, as Borrower, the Subsidiaries of JetBlue Airways Corporation party thereto from time to time, as
Guarantors, the United States Department of the Treasury, as Lender, and The Bank of New York Mellon as Administrative
Agent and Collateral Agent—incorporated by reference to Exhibit 10.52(a) to our Annual Report on Form 10-K for the year
ended December 31, 2020.
Letter of Amendments to Loan and Guarantee Agreement, dated as of January 15, 2021, between JetBlue Airways Corpora-
tion and the United States Department of the Treasury—incorporated by reference to Exhibit 10.3 to our Quarterly Report on
Form 10-Q for the quarter ended March 31, 2021.
Amended and Restated JetBlue Airways Corporation Severance Plan dated July 8, 2020—incorporated by reference to
Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.
Northeast Alliance Agreement, dated as of July 15, 2020, between JetBlue Airways Corporation and American Airlines,
Inc.—incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the quarter ended September
30, 2020.
10.54(a)****
First Amendment to the Northeast Alliance Agreement, dated as of September 11, 2020, between JetBlue Airways Corpo-
ration and American Airlines, Inc.—incorporated by reference to Exhibit 10.54(a) to our Annual Report on Form 10-K for the
year ended December 31, 2020.
10.55****
10.56****
10.57
10.58
10.59
Codeshare Agreement, dated as of July 15, 2020 between, JetBlue Airways Corporation and American Airlines, Inc.—
incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.
Mutual Growth Incentive Agreement, dated as of July 15, 2020, between JetBlue Airways Corporation and American Airlines,
Inc.—incorporated by reference to Exhibit 10.5 to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.
Payroll Support Program Extension Agreement, dated as of January 15, 2021, between JetBlue Airways Corporation and
the United States Department of the Treasury—incorporated by reference to Exhibit 10.57 to our Annual Report on Form
10-K for the year ended December 31, 2020.
Promissory Note, dated as of January 15, 2021, issued by JetBlue Airways Corporation in the name of the United States
of the Treasury—incorporated by reference to Exhibit 10.58 to our Annual Report on Form 10-K for the year ended
December 31, 2020.
Payroll Support Program 3 Agreement, dated as of May 6, 2021, between JetBlue Airways Corporation and the United
States Department of the Treasury—incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2021.
102
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
PART IV
Exhibit Index
10.60
21.1+
23+
31.1+
31.2+
32++
Promissory Note, dated as of May 6, 2021 issued by JetBlue Airways Corporation in the name of the United States
Department of the Treasury—incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter
ended June 30, 2021.
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.
101.INS
XBRL Instance Document
101.SCH
XBRL Taxonomy Extension Schema Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104
†
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 4.3(k) filed herewith contains a list of documents applicable to each Aircraft (other than Aircraft bearing
Registration No. N976JT) that relate to the offering of the JetBlue Airways Pass Through Certificates, Series 2019-1, which documents are substantially identical to
those which are filed herewith as Exhibits 4.3(h) and 4.3(i), except for the information identifying such Aircraft in question and various information relating to the
principal amounts of the Equipment Notes relating to such Aircraft. Exhibit 4.3(k) sets forth the details by which such documents differ from the corresponding
representative sample of documents filed herewith as Exhibits 4.3(h) and 4.3(i) with respect to Aircraft bearing Registration No. N976JT.
†† Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 4.3(x), incorporated herein by reference to Exhibit 99.1 to our Current Report on Form 8-K dated August 17, 2020
and filed on August 18, 2020, contains a list of documents applicable to each Aircraft (other than Aircraft bearing Registration No. N946JL) that relate to the offering of the
JetBlue Airways Pass Through Certificates, Series 2020-1, which documents are substantially identical to those which were filed as Exhibits 4.9 and 4.10 to our Current Report
on Form 8-K dated August 17, 2020 and filed on August 18, 2020, incorporated by reference herein, except for the information identifying such Aircraft in question and various
information relating to the principal amounts of the Equipment Notes relating to such Aircraft. Exhibit 99.1 sets forth the details by which such documents differ from the
corresponding representative sample of documents filed as Exhibits 4.9 and 4.10 with respect to Aircraft bearing Registration No. N946JL.
††† Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 4.3(y), incorporated herein by reference to Exhibit 99.2 to our Current Report on Form 8-K dated August 17,
2020 and filed on August 18, 2020, contains a list of documents applicable to each Aircraft (other than Aircraft bearing Registration No. N2002J) that relate to the offering
of the JetBlue Airways Pass Through Certificates, Series 2020-1, which documents are substantially identical to those which were filed as Exhibits 4.11 and 4.12 to our
Current Report on Form 8-K dated August 17, 2020 and filed on August 18, 2020, incorporated by reference herein, except for the information identifying such Aircraft
in question and various information relating to the principal amounts of the Equipment Notes relating to such Aircraft. Exhibit 99.2 sets forth the details by which such
documents differ from the corresponding representative sample of documents filed as Exhibits 4.11 and 4.12 with respect to Aircraft bearing Registration No. N2002J.
†††† Pursuant to Instruction 2 to Item 601 of Regulation S-K, Exhibit 4.3(ag), incorporated herein by reference to Exhibit 99.1 to our Current Report on Form 8-K dated August
28, 2020 and filed on August 28, 2020, contains a list of documents applicable to each Aircraft (other than Aircraft bearing Registration No. N976JT) that relate to the
offering of the JetBlue Airways Pass Through Certificates, Series 2019-1B, which documents are substantially identical to those which were filed as Exhibits 4.6 and 4.7 to
our Current Report on Form 8-K dated August 28, 2020 and filed on August 28, 2020, incorporated by reference herein, except for the information identifying such Aircraft
in question and various information relating to the principal amounts of the Equipment Notes relating to such Aircraft. Exhibit 99.3 sets forth the details by which such
documents differ from the corresponding representative sample of documents filed as Exhibits 4.6 and 4.7 with respect to Aircraft bearing Registration No. N976JT.
+
Filed herewith
++ Furnished herewith
*
** 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
Compensatory plans in which the directors and executive officers of JetBlue participate.
Confidential Treatment Request filed with the Commission.
**** Information in this exhibit identified by brackets is confidential and has been excluded because it (i) is not material and (ii) is the type of information that the registrant
treats as private or confidential.
***** Pursuant to Item 601(a)(5) of Regulation S-K, schedules have been omitted and will be furnished on a supplemental basis to the Securities and Exchange Commission
upon request.
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
103
FINANCIAL STATEMENT SCHEDULE
JETBLUE AIRWAYS CORPORATION
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(in millions)
Year Ended December 31, 2021
Valuation allowance for deferred tax assets
Allowance for obsolete inventory parts
Allowance for doubtful accounts
TOTAL
Year Ended December 31, 2020
Valuation allowance for deferred tax assets
Allowance for obsolete inventory parts
Allowance for doubtful accounts
TOTAL
Year Ended December 31, 2019
Valuation allowance for deferred tax assets
Allowance for obsolete inventory parts
Allowance for doubtful accounts
TOTAL
(1) Uncollectible accounts written off, net of recoveries.
Balance at
beginning of
period
Additions Charged
to Costs and
Expenses
Deductions
Balance at end
of period
$
$
$
$
$
$
$
$
$
$
$
69
27
2
98
31
22
1
54
21
18
1
$
$
$
$
$
19
4
14
37
38
5
6
49
10
4
6
40
$
20
$
15
7
13(1)
35
—
—
5 (1)
5
—
—
6 (1)
6
$
$
$
$
$
$
73
24
3
100
69
27
2
98
31
22
1
54
104
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
FINANCIAL STATEMENT SCHEDULE
EXHIBIT 21.1 List of Subsidiaries
As of December 31, 2021
NAME OF SUBSIDIARY
BlueBermuda Insurance, LTD
JetBlue Technology Ventures, L.L.C.
JBTP, LLC
Troupe, Inc.
TrueBlue Intellectual Property Assets Holdings 1 Ltd.
TrueBlue Intellectual Property Assets Holdings 2 Ltd.
TrueBlue Intellectual Property Assets Ltd.
STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION
Bermuda
Delaware
Delaware
Delaware
Cayman Islands
Cayman Islands
Cayman Islands
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
105
FINANCIAL STATEMENT SCHEDULE
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. 333-202143) of JetBlue Airways Corporation,
(6) Registration Statement (Form S-3 ASR No. 333-230007) of JetBlue Airways Corporation,
(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, and
(8) Registration Statement (Form S-8 No. 333-239511) pertaining to the JetBlue Airways Corporation 2020 Omnibus Equity Incentive Plan
and 2020 Crewmember Stock Purchase Plan;
of our reports dated February 22, 2022, with respect to the consolidated financial statements and financial statement schedule listed in Item 15(2)
of JetBlue Airways Corporation, and the effectiveness of internal control over financial reporting of JetBlue Airways Corporation included in this
Annual Report (Form 10-K) of JetBlue Airways Corporation for the year ended December 31, 2021.
/s/ Ernst & Young LLP
New York, New York
February 22, 2022
106
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
FINANCIAL STATEMENT SCHEDULE
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)
b)
c)
d)
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;
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;
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
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 22, 2022
By:
/s/ ROBIN HAYES
Chief Executive Officer
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
107
FINANCIAL STATEMENT SCHEDULE
EXHIBIT 31.2
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial
Officer
I, Ursula Hurley, 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)
b)
c)
d)
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;
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;
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
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 22, 2022
By: /s/ URSULA HURLEY
Chief Financial Officer
108
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
FINANCIAL STATEMENT SCHEDULE
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, 2021, as filed with the
Securities and Exchange Commission on February 22, 2022 (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 22, 2022
Date: February 22, 2022
By:
/S/ ROBIN HAYES
Chief Executive Officer
By: /S/ URSULA HURLEY
Chief Financial Officer
JETBLUE AIRWAYS CORPORATION | 2021 ANNUAL REPORT
109
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