David BargerThank you, Sandra. Good morning, everyone, and thank you all for joining us today. We're very pleased to announce another profitable quarter for JetBlue. This morning, we reported a first quarter profit of $30 million or $0.09 per diluted share, an improvement of $27 million compared to the first quarter of 2011 and the best first quarter performance in our history. Operating margin increased 3 points to 7.4% as the 19% increase in total revenues covered $80 million and higher fuel cost. While high fuel prices continue to pressure the industry, JetBlue was able to fully offset the increase in fuel expense with record revenues. A strong pricing environment and the ability to execute on our network strategy in key markets, such as Boston and the Caribbean, allowed us to achieve these strong results. JetBlue ended the quarter with approximately $1.2 billion in unrestricted cash and short-term investment or 26% of trailing 12 months revenue. We continue to believe a strong liquidity position is paramount particularly in light of today's volatile fuel prices. These results, of course, would not have been possible without the hard work and dedication of JetBlue's 14,000 crew members, who delivered the JetBlue experience to our customers, an experience that we believe is unrivaled in the industry and an important reason why our customers choose JetBlue over other airlines. I'd like to take this opportunity to thank our crew members for doing a great job in running a safe, reliable operation. Despite an uncertain economic environment, demand trends remain strong throughout the quarter. Passenger unit revenues increased 8% year-over-year even with 12% more capacity as we, once again, outperformed the A4A domestic average. While the first quarter is typically weak from a seasonal perspective, we saw a significant strength in close-in bookings as our efforts to attract high-yielding business traffic continue to pay off. We believe these results -- these revenue results demonstrate the success of our network strategy particularly in Boston.
To that end, the East Coast short-haul markets were, once again, among the best performing markets in our network. During the quarter, we continued to build relevance in Boston, as measured by the percentage of domestic and international trips JetBlue serves on a nonstop basis. Our relevance to Boston customers has grown from approximately 35% in 2007 to nearly 60% today, significantly higher than any other carrier at Logan Airport.Increased relevance, particularly for the business customer, drives revenue and has played an important role in the success of our network strategy. As part of our efforts to increase relevance, we plan to commence new nonstop service from Boston to Dallas/Fort Worth on May 1. With this new service, we will serve 8 of the top 10 markets in Boston as measured by passenger revenue. We believe our Boston network strategy is working well as profitability continues to trend ahead of expectations. We also continue to be very pleased with the performance of our network in the Caribbean and Latin America. We plan to build on our recent success in Bogota, Colombia with new service from Fort Lauderdale Hollywood International Airport to Bogota's El Dorado International airport beginning on May 7. Bogota is consistently among our most profitable market, and we expect to announce further expansion in this region in the very near future. We continue to see significant potential for profitable growth in the Caribbean and in Central and South America. To that end, San Juan, Puerto Rico continues to play an increasingly important role in our network as we seize on changes in the competitive landscape and expand service there. We recently announced our plans to move into new and larger facilities in San Juan. We believe these new facilities will allow JetBlue to efficiently accommodate future growth planned at the airport and improve the overall customer experience.
During the quarter, we continued to expand the scope of our network to our growing number of airline partnerships as we announced new agreements with Japan Airlines and Korean Air. In addition, we recently announced plans to begin a one-way cochair relationships with JAL and Emirates. With one-way cochair, partners will be able to place their code on JetBlue operative fights, which we expect will better facilitate international point of sale, driving more traffic on JetBlue.Read the rest of this transcript for free on seekingalpha.com