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JetBlue Airways Management Discusses Q2 2012 Results - Earnings Call Transcript

Customer response to our growth in both new and existing business markets within our network continues to serve JetBlue very well.

Bolstering the success, we recently announced plans to introduce a new tier within our TrueBlue frequent flyer program called TrueBlue Mosaic, which will recognize and reward our most frequent and high-valued customers. We believe the program's enhancements, including Even More Speed and dedicated 24-hour customer service lines, will help us strengthen and deepen our relationship with our customers.

We continue to profitably grow in the Caribbean and Latin America, an area of significant focus for JetBlue. We recently announced plans to begin our third Colombian route with nonstop service to Cartagena, Colombia from JFK later this year, pending government approval. We also announced plans to begin serving Samana, our sixth destination in the Dominican Republic, as well as Grand Cayman in the Cayman Islands, JetBlue's 23rd Caribbean destination, both pending receipt of government approval.

During the quarter, we announced 3 new interline partnerships agreements with Air China, LOT Polish Airlines and Turkish Airlines. And just yesterday, we announced that partnership with Cathay Pacific, our 21st partner. We've been very pleased with the growth trajectory of our partnership traffic and remain on track with our target of adding between 7 and 9 total interline agreements in 2012.

During the quarter, we deepened several of our existing partnerships. We recently began providing reciprocal precompiler mileage benefits with Emirates with whom we have a one-way co-chair agreement. We also began handling Hawaiian Airlines fights at our JFK terminal and have plans to begin servicing Aer Lingus' operations from JFK Terminal 5 to Dublin and Shannon in early 2013. These relationships not only bring incremental traffic and improved facility utilization for JetBlue, but also generate high-margin ancillary revenue through airport concessions.

As we grow, we believe continued focus and discipline around cost is critical to our success. Mark will discuss our cost performance in detail, however, I would like to highlight some of the steps we've recently taken to help reduce our largest expense, which, of course, is fuel. JetBlue is the first FAA certified A320 carrier in the United States to use satellite-based special required navigation performance with authorization required, also known as RMPAR, approaches at 2 of JFK's prime and most used runways, runways 13 left and 13 right. The unique procedures associated with this technology allow for shorter flight times and reduce greenhouse emissions. We estimate this could result in fuel savings of approximately 3,000 gallons per day.

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