Welcome to JetBlue Airways Corporation’s first quarter 2009 earnings conference call. Today’s call is being recorded. We have on the call today Dave Barger, JetBlue’s CEO and Ed Barnes, JetBlue’s CFO. As a reminder, this morning’s call includes forward-looking statements about future events. Actual results may differ materially from those expressed in the forward-looking statements due to many factors, and therefore investors should not place undue reliance on these statements. For additional information concerning factors that could cause results to differ from the forward-looking statements please refer to the company’s annual and periodic reports filed with the Securities and Exchange Commission. This call also references non-GAAP results. You can find the reconciliation of those non-GAAP results in JetBlue’s earnings press release on the Investor Relations section of the company’s website at jetblue.com. At this time I would now like to turn the call over to Dave Barger. Please go ahead sir.

Thank you John. Good morning everyone and thank you all for joining us today. I’d like to start off by thanking our 11,500 crew members for rising to the challenge of a very difficult environment. Against the backdrop of a deepening recession our crew members delivered solid performance, resulting in our first profitable first quarter in four years. We reported net income of $12 million or $0.05 per diluted share which included an $8 million non-cash charge associated with the valuation of our auction rate securities. These results represent an improvement of $22 million compared to the first quarter of 2008. Excluding the special charge our net income would have been $20 million or $0.08 per diluted share. We are especially pleased to earn a profit in the first quarter, historically a seasonal weak period, and to be one of only a few major airlines to do so. In addition we reported a first quarter operating margin of 9.3% ahead of our guidance of 6 to 8%. While revenue was weaker than we had expected at the beginning of the quarter, we continued to outperform the industry in revenue growth. Lower fuel prices coupled with solid cost performance helped drive a 5% year-over-year decrease in our chasm. The actions we have taken over the past few years to build our brand, reduce capacity, bolster liquidity and strengthen our financial position have clearly helped us manage the challenges of a weak economy. In addition to improved financial results, our crew members delivered solid operational performance. Despite weather and operating challenges at JFK Airport, we reported a 79.2% on time arrival rate, our best first quarter on time arrival performance since 2005, and a 6 point 3 point improvement compared to the first quarter of 2008. On our last earnings call both…

Thanks Dave. Good morning and again thank you all for joining us. As Dave said we are very pleased to be one of the few major U.S. carriers to report a profit in the first quarter. These results reflect the hard work and commitment of our outstanding crew members who do a tremendous job delivering the JetBlue experience to our customers every day. While we made significant progress during the quarter, major challenges lie ahead. Uncertainty regarding future economic conditions continued to impact the demand environment while the credit markets have tightened amid anxieties about the global financial system. Fortunately we believe our ongoing focus on maintaining financial strength and mitigating risk has positioned us well. Despite the economic outlook, we believe JetBlue will earn a profit in every quarter this year. At the same time, and perhaps even more significant we’re on track to meet our 2009 goal of generating positive free cash flow for the first time JetBlue’s history. We ended the quarter with $634 million in cash and cash equivalents. In addition, we have about $221 million in student loan related auction rate securities, net of accounting losses, including an $8 million unrealized loss recorded during the first quarter. During the first quarter we sold 29 million of our auction rate securities at prices slightly higher than their 2008 year end valuation. We also recently extended our line of credit with Citigroup, which is collateralized by a portion of our auction rate securities to April, 2010. While the total availability under the line is $84 million we have drawn only $74 million, the proceeds of which are included in our quarter end cash balance. In addition, the quarter end cash balance includes a $53 million loan from UBS which is secured by our remaining auction rate securities.…

Thank you. (Operator Instructions) Your first question comes from Michael Linenberg - BAS-ML.

Two questions here and I guess this is for Ed. The cash on hand, the $634 million, just a clarification. Does that include the $63 million that you posted as collateral with your counterparties for the fuel hedges?

It does not include any of our fuel hedging collateral. No. Michael Linenberg – BAS-ML: And then my second question, and this is probably a question to Dave, you know we saw this morning Alaska come out and announce that they’re going to now institute a first bag fee and you know now when I look across the industry I think it’s just you guys and Southwest, and you know Southwest has actually given – they have a couple reasons, they think it’s revenue dilutive and it’s disruptive to their service. And I think there may be some technological considerations, so at this point they’re not there but where are you guys on that front? What are your reasons or just your philosophy, etc., how you’re thinking about it?

Yes and good morning Mike. First bag fee, clearly we know that technically we can do that. We’re doing that with the second bag fee today so, as we look at the landscape I think it’s probably – there’s a fine line between nickel-and-diming the customer and what’s the core product. It’s not a secret as well that we have a change to our reservation system or passenger service system that’s taking place over the course of the next year or two, which I think will also allow us to the extent that we do go forward with this, maybe do it in a very thoughtful manner. I mean, right now I think customers and part of our core brand they truly value the fact that the first bag is part of the purchase price. And so I think we’re going to have much greater flexibility with the change to our PSS system and we’ll continue to take a look at the landscape as well.

Your next question comes from William Greene - Morgan Stanley.

You know it seems like there is some movement within the industry here now to add wireless connectivity to flights and I wonder if you think that’s going to put the value of live TV at risk? And I know you’ve looked at monetizing it, so can you talk a little about maybe should we monetize it now and perhaps try to do that faster, given this movement towards wireless?

Good morning Bill. A comment on live TV and wireless and again we’ve made the determination that the narrow band enabling PDAs across our fleet to go forward with that. That will take place later this year. That was our test with Beta Blue. A very successful test and we’ll start on the 320 fleet later this year with the campaign continuing with the 190s in 2010. All that said, live TV and our team are keeping a very careful eye. The broadband and the different products that are out there on different carriers and observing behaviors such that if it makes sense to be a follower in this space, we can do that. And I think the jury’s still out on if somebody’s going to purchase really broadband for $9.95 or $12.95 on uncertain stage lengths. Longer haul, I think you know very, very appropriate if you start taking a look at transcon. So I think my headline with live TV, build the ability to do that to the extent that JetBlue or other customers want to do that. We think the PDA application is outstanding. And then the company is also the implied entertainment in the inflight entertainment space as well. So we’ll take it – it’s still, it’s core to our brand and we’ll evaluate opportunities to as they may show on the horizon to the extent there’s opportunities to look at strategic options for live TV. So we’re certainly don’t think this is the right time to do that today in today’s economy.

Can I ask for some clarification on some of the RASM commentary? If I think back to some comments you made in the middle of the first quarter, I think you backed away from RASM guidance for the full year saying demand was sort of a bit cloudy. But now you’re sort of giving the 2009 outlook again. Does that suggest maybe that you feel more conviction that you have a better sense for the direction of RASM here now? Is it based on the economy? It’s not clear to me sort of what might have changed.

Yes, I think even with the first quarter as we attempted to really provide transparency for the full year with our guidance, it – we now have the first quarter behind us, obviously into the second quarter. So I think just better transparency into what we’re seeing with the demand environment. So the shift in our numbers I think are just trying to be again more surgical and more realistic now that we have the first quarter and half of April under our belts, Bill. So that’s why we adjusted the RASM that was offered in today’s commentary.

Just one last question on the pilots. Since that unionization effort failed, have you taken a different approach to wages? Have you had to address some of those wage concerns for either them or any of the work groups? Thanks.

Yes absolutely Bill. In fact if I may just a comment, the financials for the first quarter, if I may, this is again the first profitable first quarter in four years. I think it’s important that these numbers were appear – they were not built on the backs of labor or our workforce. We did not furlough crew members. We did not mandate pay cuts for those on the front line or within leadership. We are being prudent because we’re building the company and the culture for the long term. I think clearly the pilot campaign, absolutely lessons learned. And I think as we look at leadership issues, comp, benefits, quality of life, they all play into how we look at what are the necessary actions with the pilot group on a go forward basis? Or any one of our large work groups or any of our crew members. And so I think I’ll probably leave it at that, Bill, but there were a lot of lessons learned. I mean, the value of a direct relationship and to collaborate on solutions with our workforce to me is a huge competitive advantage.

Your next question comes from Jamie Baker - J.P. Morgan.

Quick question on fuel. The second quarter $1.96 all in seems a bit high given that so far in April Gulf Coast spot has averaged around $1.40 level. I didn’t see a reconciliation to fuel hedge for the quarter in the release. Can you walk us through what the quarterly assumption is there?

Jamie, we will have that in our guidance that’s coming our later today. That $1.96 does include the impact of our fuel hedges. It’s also based on the forward curve as of the end of last week. So it should be pretty easy for Lisa to walk you through that later.

David, I recently flew JetBlue for the first time on my company’s dime. That may not mean anything but I’m curious whether arc data or any other tools that you might have at your disposal suggest that business travelers might be trading – well, I don’t want to say trading down, trading over to JetBlue?

Yes, good morning Jamie. First of all we appreciate the travel and I think it’s a little bit early. It’s one of our key initiatives is to be more relevant to the corporate traveler, the business flyer, the non-discretionary traveler. We’re seeing anecdotal evidence of a trial, especially as consumers – mainly the small and medium sized unmanaged businesses are looking for better value. It’s really part of this more campaign and it’s why we’re adding additional frequencies into city pairs between for example Boston over to Chicago, Pittsburgh down into the Carolinas. So anecdotally we’re seeing it and we’re also seeing as a result of surveys onboard the airplanes. We do issue surveys to a percent of the customers on every flight, and we get some nice data back on the purpose of the trip. And of course we have pure information in terms of the booking paradigm when somebody’s booking for travel, too. So I think we’re pleased with the directionality of what we’re seeing with the smaller and the medium size business customer.

Does Southwest’s entry into La Guardia, which I think is just really a re-branding of former ATA service, but nonetheless does that change your appetite or your willingness to bid for slots that might be coming available there?

Jamie, I think that a strong balance sheet and being opportunistic for whether it’s slots gates at key airports that are important to us, that allows us to have that flexibility, whether it’s at a La Guardia which is part of our New York strategy or whether as we announced today with BWI out of Boston across metroplex down in Washington with access into a DCA. I don’t think the Southwest decision has changed our strategy. At some of these airports the ability to really gain access, I think, is the largest issue and probably DCA would be the airport with the most difficulty of gaining access. So that’s probably the way I would characterize how we’re looking at some of these key airports.

Your next question comes from Duane Pfenningworth - Raymond James.

I wonder if you could talk about your transition on the reservation system side from Open Skies to Sabre? Why you’re making this change and what would this enable you to do with partners such as Lufthansa that you can’t currently do?

Good morning Duane. I think it’s a natural evolution in this chapter of our company’s growth, and very, very pleased with Navitaire over the first Open Skies system over the first nine plus years of our history. And then we take a look at not just our growth but also where we’re growing. Later this year 20% of our ASMs will be into international or Caribbean markets. The ability to as we take a look at the booking flow through the website and the ability to monetize the booking flow. By the way, this is all prior to whether it’s opportunities with Aer Lingus or Lufthansa and the Lufthansa family of airlines that we plan to have connectivity with later this year. So we just think this is prudent for this time because it really, we think, optimizes our revenue opportunities. And for this chapter of our growth, it was prudent for us to make the move anyway. And we do have a team of 30 leaders across the company dedicated to the PSS, Passenger Service System transition, and my hat’s off to Rick [Zetty] and team because this is a very, very key investment for this company, and I’m very pleased with their traction.

Thanks and I think Jim may have a question. [Unidentified Analyst] – Raymond James: Just quickly here, your transcon business down - capacities down 27% in the first quarter. What is it going to be, up or down, in the summer season?

Transcon as we close the year and good morning, Jim, we’re still – transcon is still key to our airline. And we anticipate as we close the year about 30% of our ASMs will be in transcon markets. We’re opening LAX in the June timeframe as part of our LA base and strategy of note. So it’s still key and at the same time I think as we start to see the advance purchase gates collapse, such as one day events purchase with fares that just we don’t think are prudent even in this oil environment, we’ll reallocate ASMs appropriately, such as what we’re doing with north, south into the Caribbean, the announcement with Barbados today as an example. I think that transcon for the most part has gone north, south into the Caribbean Jim but it is still a core part of our network. [Unidentified Analyst] – Raymond James: And is it up or down for the summer season?

In the summer season, I think again on a year-over-year basis it will be down. The exact number I think that we’ll have to get to you off the call, Jim. But again 27% of our ASMs in the first quarter were dedicated to transcons and 30% we believe as we close the full year of 2009. [Unidentified Analyst] – Raymond James: Okay, here’s where I’m going with that. I believe that on a – looking at JetBlue relative to other carriers, you’re removing far less capacity. And looking at transcon it appears that JetBlue’s been a leader in taking fares down. I believe you did $99 transcon fares and then you did a one day $14 sale. So I’m curious one, about transcon, and then about the total system why you’re not taking down more capacity?

I appreciate where you’re trying to go with the question, Jim. Transcon not too long ago was north of 50% at our airline. So we think that we’re probably in the right range as it currently stands. And again it’s part of our network and it’s a network that we’re going to defend. And I think that when we look at pricing, a one day event such as we put forth with $14 fares and that’s less than a first bag fee for our competitors, that’s very much in key with the reverence of our brand. And you bet we’re going to take opportunities to challenge the competitive landscape. So clearly I don’t believe JetBlue has been leading the fare sales in the transcon markets. And it’s core to our network, Jim. We think we’re right placed right now and we’re going to defend it. It’s core to Boston. It’s core to New York. It’s core to Washington and also the transcons that we have in south Florida.

Your next question comes from Gary Chase - Barclays Capital.

I was doing a little bit of math here on some of the things you said which is always a scary proposition, at least on my part, but everybody’s always so sensitive on the revenue stuff I want to make sure that I understand what you’re pointing to. If I look at what you’re suggesting for the combination between March and April, given what you showed in your March traffic release for PRASM, April looks like it’s going to be up about 5ish percent call it, and then the other two months of the quarter are going to be down somewhere between 6 and 8 in order to get to your PRASM guidance for the quarter. And the specifics don’t necessarily matter. I guess what I’m driving at is, it would seem that at least from where you’re going to be in May and June, if that’s right, that the full year guidance has some pick up in the second half. Is that what it is? Or is there some sort of network change towards shorter stage length year on year or something else that we ought to understand about how that progression works?

Good morning Gary. I think the early look to the math as we take a look at the Easter holiday shift and then May and June, directionally accurate. How we’re looking at really what we’re seeing in the current environment. Less visibility that we’re seeing, closer end bookings, everything that that means as well. That usually means less change fees because people are booking closer in. We believe that GDP will be negative as we move through the first three quarters is the way that we’re modeling it. We think, again, we start to take a look at something that looks flat towards the end of the year. And so it’s I think directionally fair to say that we’re also modeling I think just responsibly, you know, revenue towards the second semester of the year that drives those numbers that we gave guidance to today. All that said, we’ll be perfectly candid and transparent. This is a real difficult environment in which to model and we haven’t seen the increased degradation, but at the same time we haven’t seen the considerable strength that one would anticipate as well. So I think the key travel dates around what we saw with President’s weekend and Easter, the strength, basically the same average fares on a year-over-year basis, speaks well to the summer timeframe for our network, and also the peaks over the second half of the year.

But when you say directionally accurate, you mean they are going to be down more than what you’re projecting as you move into like the third and fourth quarter, right?

No, I think –

In other words May and June are going to be down a good bit more than what the guidance implies for PRASM in the third and fourth quarter?

Well I think it’s – you know, again, we’re looking at some level of strength continuing into the second semester, Gary, but it’s not a significant number at this point. I mean, all things considered, relative to where we’re sitting with our first quarter numbers.

And then the chasm guidance for the quarter, you came in below that. There is a change to chasm ex fuel for the year but you also have more capacity growth, which was a little bit of tailwind. Was there something – and there have been a lot of calls this morning, so if you said this I do apologize, but was there something timing related in the first quarter that would lead us to believe either you’re going to sort of make it all back in the second, third and fourth?

Hi Gary. Good morning. No, I don’t think it was related to a timing difference. It’s just managing our costs appropriately.

Did any part of the cost forecast rise in the second half, Ed?

Nothing that I could specifically point to. Gary Chase – Barclays Capital: And then just quickly the fuel consumption also came in a little lower, possible that less congestion at JFK or is there another explanation for that?

I think it’s probably a whole host of things, you know, whether it be, you know, just runway time or using our aircraft a little bit more efficiently.

Your next question comes from Bob McAdoo - Avondale Partners LLC.

Can you just kind of go back over with all the ins and outs of airplanes and whatever, what your fleet composition was year end ’08, ’09 and ’10? What you’ve done with the deferrals and whatever else?

Sure Bob. Our aircraft composition at the end of ’08 was 107 A320s and 35 E190s. During the first quarter we added three A320s. So we ended the quarter with 110 A320s. We took delivery of two net E190s, four in total, but then we sold two of the E190s so we ended the quarter with 37 for a total of 147 aircraft. For the remainder of the year we take four additional A320s in the second quarter, so we’ll end the year with 41 E190s and 109 A320s including the lease return that we have in November. So a total of 150 aircraft at the end of the year.

And what do you have coming in in 2010?

In 2010 we take delivery just the three A320s.

So that would be 53 net of anything that you might –

We have another lease return in 2010 as well.

And then you had talked about this total ancillary which is some above the line, below the line or in passenger, not in passenger of $19. What would that have been a year ago? Since you’ve done your More Leg Room and that kind of stuff?

I don’t have that number at my fingertips but I’m sure that Lisa can give it to you later on, Bob.

I saw that one of the competitors had a $79 Boston-LA fare for awhile. Is that – I mean, I assume you match that. When you do that in these non-peak times, is the customer response as dramatic as you would hope? I mean, obviously the $14 fare you get a lot of excitement. Does the $79 fare generate a lot more business in these kind of non-peak times or how would you characterize that?

Yes, good morning Bob. It’s of course when we do that it’s capacity controlled, but I think it’s fair to say that we’ve been pleased with the response especially when you start to take a look at a new market such as Boston-LAX. So I mean it’s an opportunity for brand awareness into LAX, but I’m pleased with the results. In fact, speaking of LAX we’re pleased with the bookings that we’re seeing with LAX, even though we’re roughly just under 60 days before start up.

Did you match the Boston to the LA basin like to Long Beach or whatever?

Yes. We tend to take a look at LA with all three of the airports that we’ll be servicing, and again capacity controlling obviously into the airport. But we tend to look at the geography as one, as opposed to airport specific.

Your next question comes from Helane Becker - Jesup & Lamont Securities Corporation. Helane Becker - Jesup & Lamont Securities Corporation: Two questions. One, Dave a lot has been made in the press and trade I guess publications lately about Long Beach and some of the issues there with the facilities. And I was just wondering if you could kind of address that in the context of outing capacity to LAX and how Long Beach longer term might fit into your plans?

Sure. It’s a headline we remain committed to Long Beach but at the same time with the disappointments is the word that I’ll use with the upgrade of the facilities at Long Beach. And we respect the fact that it’s a capacity controlled airport, it’s a curfewed airport, but we just don’t think the customer experience warrants the current infrastructure especially with the commitments that we have been put in place by the city of Long Beach. So I think very encouraged by meetings that took place this week with the Long Beach airport leadership team here in New York as we talk about gates and parking and food and beverage opportunities. And as we look at – and we’ll see exactly what plays along those lines with making really some of the improvements real at Long Beach. All that said, I think we look at the LA basin similar to who we look at New York or Washington that it’s a multiple airport area. And so Burbank and LAX and Long Beach can all work quite well together because customers have certain preferences to airports in that part of the world especially considering the congestion of the roads. So that’s how we’re currently looking at it. I’m very encouraged by the visit that took place this week, by the Long Beach Airport Authority and look forward to seeing some of these improvements in the near future. Helane Becker - Jesup & Lamont Securities Corporation: I know you’ve said over the last year or so Internet sales have kind of leveled off in the like 76, 77 area. Do you think that the plateau that we should think about and as a result I guess maybe with more international flying you’re seeing a higher percentage of like as a percent of revenue your sales and marketing is going up just a little bit. And I was kind of wondering if you could talk about that? Is like the mid-70s what we should be thinking about?

Yes, I think the jetblue.com in the mid-70s from the standpoint of distribution is a good number to be thinking about. As we start to obviously we’re in the OTAs, we’re in the GDSs as well to be relevant to the corporate customer. It’s important to have visibility to the small, medium size business customer that’s currently un-managed. And so that will be certainly part of our distribution strength on a go forward basis. And you’re right. As we’re migrating into markets such as Bogotá, the ability to or throughout the Dominican Republic or the Commonwealth of Puerto Rico, the ability to have multiple distribution pass is very important to us as well. So that mid-70s is a good number I think Helane.

Your next question comes from Kevin Crissey – UBS. Kevin Crissey – UBS: I just wanted to talk – I think the number was 9 to 10% chasm ex fuel increase in Q2 if we adjust for the aircraft sales and basically last year’s comp and stage length. Is that the right number, 9 to 10% chasm ex fuel?

That’s correct. Kevin Crissey – UBS: How should we be thinking about that relative to – that’s basically among the worst in the industry in terms of you have less capacity being cut, you don’t have the tension headwinds that some others have. Why should investors look at that as an okay number?

I think one of the things that we have to look at is our stage length is declining and so as a result of that, we are going to have some inefficiencies in our costs. I think the other thing that Dave alluded to before is that we believe that during these times of recession is not the appropriate time to make earnings on the back of our crew members. And so we haven’t done some of the things that our competitors have done such as furlough or institute wage decreases. And I think it’s important that as we move forward that we protect our brand, protect our culture. And continue to make investments in our infrastructure that are necessary for our growth into the future. And I think that what you’re seeing in that 9 to 10% is kind of the culmination of all those things, of not wanting to disappoint our customers, our crew members, and really wanting to invest into the future. Kevin Crissey – UBS: And then on live TV, [Cal] is installing that here basically right now if I’m not mistaken and you guys have a revenue split on that. Is that right? And should we see that flow to other revenue and is it meaningful in ’09 or when does it become meaningful?

Well, we do have an arrangement with Continental. We haven’t really made the terms of that arrangement public but certainly any of the revenues derived out of that would go into other revenues in our financial statements. Kevin Crissey – UBS: Is it something that we should give any real attention to in ’09 or is it really an ‘010 event from a magnitude perspective?

Probably from a magnitude perspective on a full year 2010 is probably when it’s going to be a more meaningful number. We will have quite a full installations on our aircraft through 2009 and continuing into 2010. Kevin Crissey – UBS: And the cost of that is reflected in your chasm ex fuel as well or is it just hidden in the CapEx?

The cost of the installations themselves are in the CapEx guidance.

Your last question comes from Bill Mastoris - Broadpoint Capital.

In the past you’ve talked about managing your capacity with some aircraft sales and in the past you’ve been very successful in doing so. Is that any part of your future plans as far as managing capacity? I know you’ve mentioned that you’re going to return a couple off lease, but would aircraft sales be a part of that should the opportunity arise?

Well I think last year you saw kind of a change in our philosophy in just seeing that there was potentially going to be some softness in the resale market that we really went to more of a deferral strategy. We will continue to consider aircraft sales as opportunities come about, but those would probably be offset by the optionality in our aircraft contracts as well to take future deliveries. I think we’re pretty okay with our current fleet size and composition.

And Ed in the past you have actually purchased some of the convertibles, the 3 and three-quarters out in the open market. Did that activity continue in the first quarter? Are there any plans to do that at any time in the future?

We didn’t do any in the first quarter but it’s something that again we kind of keep focused on and as opportunities arise we would certainly consider doing that again.

This concludes our session with investors and analysts. With that I’ll turn the call back over to David Barger for any closing remarks.

Thank you John. In closing thank you for those of you joining us via the webcast today. We very much appreciate it and again to our 11,500 plus crew members thank you very much for all of your support over the first quarter. Looking forward to a good year. Thank you.

Thank you ladies and gentlemen. That concludes today’s conference. Thank you for participating. You may all disconnect at this time.