JetBlue Airways Andrea Lusso Network Planning 3 4 5 6 BOS • Focused on business relevance • Plus a healthy trade in leisure/VFR • 120 flights/day. Goal is 150 • Growth in new routes, increased relevance, increased schedules LGB • Big origin traffic • Good mix of leisure and business • New terminal • International growth NYC • Leisure and VFR focused • Serving the underserved • Growing with larger gauges and key new markets FLL • VFR and international focused • Growth will be in Latin America • 60 flights/ day. Goal is 100+ MCO • Big destination year-round • Not a lot of origin traffic, but plenty of draw from everywhere in the network SJU • Great leisure destination year-round • Good VFR and business market • Caribbean anchor 7 THANK YOU Andrea Lusso Network Planning WestJet January 2014 1996… 5 destinations 6 nonstop routes 3 aircraft 10 2014… 87 destinations 228 nonstop routes 108 aircraft 11 WestJet – continued growth We now carry nearly 20 million guests each year… …and generate over $3.5 billion in annual revenues. 2/10/2014 The result is a consistently profitable and growing operation. Net Earnings (millions of dollars) Reported in Canadian GAAP up to 2009 with 2005-2008 restatements. 2010 - 2013 reported under IFRS. 13 Future Growth Drivers Growth drivers • Encore • Fleet • Alliances • Plus product • WestJet Rewards • Geographic expansion 2/10/2014 15 WestJet Encore provides right-sized aircraft for new markets, and feeds the 737 network. • • • • Employee engagement: voted 91% in favor of launching carrier Organizational structure: wholly owned subsidiary Fleet size: up to 45 x 78-seat Q400 turboprop aircraft Encore allows us to: – – – 2/10/2014 Add new markets to the WestJet network Connect the dots between existing WestJet cities Replace and redeploy 737 flying to optimize the network 16 WestJet’s recent order provides fleet flexibility for the next 15 years. 737-NG 737-MAX Q400 186 192 197 174 165 45 151 45 45 202 45 207 213 45 45 45 135 34 121 25 112 2/10/2014 56 62 65 118 118 118 118 118 118 118 118 118 118 2021 2022 2023 2024 2025 2026 2027 2015 118 2020 2014 117 2019 2013 97 45 2018 110 91 23 45 2017 105 86 11 228 2016 105 100 2012 7 2011 100 2010 91 4 34 44 29 39 50 45 225 16 97 2009 86 43 219 17 Airline partnerships expand our network WestJet Rewards – rewarding frequent guests WestJet RBC World Elite MasterCard Rated number one travel rewards card in Canada out of 200 cards reviewed by MoneySense magazine (Sep. 2013). 2/10/2014 19 Fare bundles help guests customize their experience while generating ancillary revenue. 2/10/2014 20 Growth opportunities exist in many geographies. Revenue Share by Region $10B $7B $6B $2B Domestic Transborder Caribbean/Mexico Long Haul Source: Internal estimates using public capacity and traffic information. 2/10/2014 Restricted & Confidential 21 Thank you! ACI-NA Air Service Data Seminar January 28, 2014 The Airline Industry Innovator 23 Disclaimer This presentation includes forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s belief as of that time with respect to future events, and are subject to significant risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Forward-looking statements include, without limitation, statements regarding the Company’s intentions and expectations regarding the delivery schedule of the aircraft on order and announced new service routes and customer savings programs. Important factors that could cause such differences include, but are not limited to: the competitive environment in our industry; our ability to keep costs low; changes in our fuel cost; the impact of worldwide economic conditions, including the impact of the economic recession on customer travel behavior; actual or threatened terrorist attacks, global instability and potential U.S. military actions or activities; ability to generate non-ticket revenues; restriction on third-party membership programs; external conditions, including air traffic congestion, weather and outbreak of disease; air travel substitutes; labor disputes, employee strikes and other labor-related disruptions including in connection with our current negotiations with the union representing our flight attendants; ability to attract and retain qualified personnel; loss of key personnel; aircraft-related fixed obligations; dependence on cash balances and operating cash flows; ability to hedge fuel requirements; our aircraft utilization rate; maintenance costs; our reliance on automated systems and the risks associated with changes made to those systems; use of personal data; lack of marketing alliances; government regulation; our ability to fulfill growth strategy; operational disruptions; our indebtedness and similar obligations; our liquidity; our reliance on third-party vendors and partners; single fuel provider; an aircraft accident or incident; our aircraft and engine suppliers; changes in the U.S. Domestic, Caribbean and Latin American markets; insurance costs; environmental regulations; and other risk factors included under “Risk Factors” in its Annual report on Form 10-K and other filings with the Securities and Exchange Commission. In addition, in this presentation, the words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “predict,” “potential” and similar expressions, as they relate to our company, our business and our management, are intended to identify forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth or referred to above. Forward-looking statements speak only as of the date of this presentation. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forwardlooking information, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. 24 Spirit’s Model Creates Largest Potential Market Our low fares appeal to the largest potential audience Low Price Spirit Breakeven Spirit’s Market Potential High Price Legacy Breakeven Small Finite Market High Touch Too many carriers competing for share Not well received by legacy customers No Frills, Unbundled 25 Price Above All What are the most important factors when purchasing airline tickets? (participants selected up to three factors) Price Schedule Non-stop vs. connecting flight Luggage charges and other fees Frequent flier benefits Extra legroom Airports served [which area of airport selected] Reputation of airline service Business class availability 0 200 400 600 800 Source: elliott.org 26 Low Fare, High Choice Spirit’s A La Carte Revenue Structure Gives Customers the Choice to Pay Only for What They Value Checked bags Carry-on bag Seat assignment $9 Fare Club Big Front Seat Co-branded credit card Hotel Rental car On-board drinks & snacks Other 27 Lowest Cost Producer in Our Primary Markets Spirit’s unit cost advantage is one of our most important assets as we grow Adjusted CASM LTM 3Q13 (¢) +89% Higher than Spirit 20.00 18.00 +56% 16.00 +61% 14.00 +26% 12.00 +8% 10.00 8.00 Spirit Overlap With Spirit Network (3) Southwest JetBlue Delta American United 30% 14% 20% 59% 30% Notes 1. Cost data based on public company reports for the twelve months ended September 30, 2013; Reflects mainline operations only; Stage length adjusted to 941 miles, formula = other airline CASM x (other airline stage length / Spirit stage length)0.5; Stage length for Spirit, JetBlue and Southwest derived from public company reports for twelve months ended September 30, 2013; American, Delta and United derived from Form 41 data for the twelve months ended June 30, 2013. 2. Excludes special items and unrealized mark-to-market gains and losses for all carriers shown; see Appendix for reconciliation detail for Spirit Adjusted CASM. 3. Based on publicly available data as of 5/9/2013 for routes as of July 2013; Airports within same metropolitan areas considered single market; Includes seasonal service markets. Over 260 Daily Flights In Over 130 Nonstop Markets 29 Spirit’s Business Model Drives High Margins Carefully managed growth drives industry-leading margins Adjusted Pre-Tax Margin LTM 3Q131 18.0 17.3 16.0 Pro forma Adjusted for Hurricane Sandy 14.5 11.8 12.0 7.1 6.1 6.0 5.9 3.9 3.2 1.7 0.0 Spirit Capacity Growth(2) 22.9 Allegiant 12.3 Alaska 7.8 Delta 0.0 US Airways Southwest JetBlue 2.6 1.1 6.0 American 0.7 Notes 1. Excludes unrealized mark-to-market fuel hedge gains and losses and special items for all carriers shown. See Appendix for Spirit reconciliation details to most comparable GAAP measure. 2. Capacity growth = % change in consolidated available seat miles for last twelve months ended September 30, 2013 as compared to last twelve months ended September 30, 2012. United (6.0) 30 Serious Fleet Growth Spirit’s aircraft fleet is projected to grow from 54 at the end of 2013 to over 140 by the end of 2021 Spirit Airlines Fleet End of Year 160 140 # of aircraft 120 A321 ceo/neo 100 80 60 A320 ceo/neo 40 20 0 2013 As of December 31, 2013 A319 2014 2015 2016 2017 2018 2019 2020 2021 31 Thank You! 32