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Three years ago, we set out with the very simple goal of bringing humanity back to air travel by combining product innovation with excellent service and communication. Today, having carried more than twelve million Customers, we are clearly delivering on our objectives. Our approach is straightforward: with a radical application of common sense, we aim to give Customers the things they want, and nothing they don't. The JetBlue experience is refreshingly easy and comfortable: satellite television at every leather seat, new planes, easy-to-understand low fares and 20 desirable destinations, all delivered by friendly Crewmembers who believe in service. 2002, our first year as a public company, was an important year for the airline and a significant one in the industry. In April, JetBlue was listed on NASDAQ through our initial public offering. Notably, a significant percentage of Crewmembers are investing in the company’s future as stockholders via our stock purchase plan. Our first annual meeting will take place on May 21, 2003 in our hometown, New York, and we look forward to welcoming many of you there. We thank you for your confidence in our company. Last year, JetBlue carried more than 5.75 million Customers to 20 cities throughout the U.S., proving that the airline experience can indeed be a very positive part of travel. We are clearly delivering an innovative product. We are now known across the country for our fleet of 41 new Airbus A320 jets, each individually named by our Crewmembers (such as Blue Crew, Red White & Blue, and Song Sung Blue). This fleet features 24 channels of DIRECTV® programming, including NBC, CNN, Telemundo and ESPN, which has helped to further enhance the JetBlue brand. Our airline remains the only U.S. scheduled airline offering free live satellite television to every one of our Customers. In the fall of 2002, we purchased the membership interests of LiveTV, LLC to control the execution and marketing of this important aspect of our brand. Our combination of new airplanes, a differentiated product and great service has led to considerable recognition. Over the course of 2002, JetBlue was voted the number one domestic airline in the Conde Nast Traveler 2002 Readers’ Choice Awards and received the highest score of any airline in the Conde Nast Traveler 2002 Business Traveler Awards “coach-only” category. Among other awards, we were named the “It” airline by Entertainment Weekly and Marketer of the Year by Advertising Age. To further enhance our brand loyalty, we implemented our Customer loyalty program, TrueBlue Flight Gratitude, in mid 2002. By the end of the year, more than 400,000 Customers had joined this program, and that number has been growing steadily in 2003. These accolades are reflected in internal surveys of our Customers: in a recent poll, 94% of our Customers rank their JetBlue Experience as ‘Much Better’ or ‘Somewhat Better’ than other airlines; and 98.7% said they would recommend JetBlue to others. We are extremely proud of these results in an industry not known for its hospitality. Without a doubt, this year proved to be a challenging one for our industry following in the wake of the events of September 11th. The negative economy, the financial burden of aviation security enhancements and the somber and chaotic landscape of the U.S. airline industry provided the backdrop to a year in which JetBlue doubled in size as measured by available seat miles. Our Crewmembers wrote a new chapter in airline history during this challenging year as we reported net income of $54.9 million and an operating margin of 16.5% in 2002, a higher margin than all of the major U.S. airlines. This performance was made possible by the efforts of our Crewmembers who shared in the results through a $16.8 million contribution to the JetBlue Profit Sharing Retirement Plan, representing 15.5% of 2002 eligible pay. Our financial success in 2002 improved upon our 2001 results (net income of $38.5 million and an operating margin of 8.4%) and we believe that JetBlue has been, and continues to be, built for long-term success in good times as well as difficult times. JetBlue’s cost per available seat mile (CASM) was 6.43 cents, lower than any of the major U.S. airlines which reported an average CASM of 9.58 cents. Low unit costs allow us to offer fares low enough to stimulate new demand and to attract Customers away from higher-priced competitors. We achieved industry-leading reliability metrics of 99.8% completion factor on scheduled flights and an on-time performance of 85.7%. We also attained an 83% load factor with 63% of our tickets booked online at www.jetblue.com, both higher than any of the major U.S. airlines. The competitive landscape continues to be ever-changing across the U.S. airline industry. Traditional airlines are revamping their cost structures and new “airline within an airline” concepts are being designed to compete directly against JetBlue. While imitation remains the sincerest form of flattery, we take these competitive challenges seriously and view them as opportunities to further improve our airline. Most importantly, we will always work to keep our brand fresh and focus on our number one asset – our Crewmembers. In 2002, JetBlue opened two new locations – San Juan, Puerto Rico and Las Vegas, Nevada, in May and November, respectively. These new locations increased our route system to 20 destinations, including our home base of New York’s JFK Airport, our West Coast base of operations at Long Beach, California and Washington D.C.’s Dulles Airport. We have already announced two new cities in 2003 - Atlanta, Georgia and San Diego, California and we will continue to open new cities as well as add flights between existing cities. This approach of “connecting the dots” allows us to add capacity in a cost efficient manner. Although we are appreciative of our success in 2002, we are not complacent about our future. We realize that we are only as good as our last arrival. That’s why we focus on every aspect of the Customer experience, from the first interaction of making a reservation to the last – ensuring on-time delivery of the final piece of baggage at the flight’s destination. Our plan for continued success is found in our 2003 Flight Plan. This Flight Plan comprises goals in three key categories – People, Performance and Prosperity. In other words, great People drive solid operating Performance which yields continued Prosperity. As we plan on taking delivery of a new A320 roughly every four weeks for years to come, we remain focused on hiring the best people, those who have the technical skills required and the right attitude to take care of our Customers and each other. To this end, we make every effort to hire those who live our Values – Safety, Caring, Integrity, Fun and Passion. We remain dedicated to providing the best airline experience, always striving to surpass expectations for our Crewmembers, Customers, Stockholders and our valued Business Partners – including the FAA, Airbus, International Aero Engines and the Port Authority of New York and New Jersey to mention just a few. The formula is simple yet we must never take it for granted as we continue to build JetBlue into one of America’s great companies and the airline of choice for everyone. On behalf of our 4,970 dedicated Crewmembers, thank you for your continued support of JetBlue. Most Sincerely,
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