Module 2 reformulation regional airlines jetblue
This presentation is the property of its rightful owner.
Sponsored Links
1 / 21

Module 2: Reformulation Regional Airlines - jetBlue PowerPoint PPT Presentation


  • 100 Views
  • Uploaded on
  • Presentation posted in: General

Module 2: Reformulation Regional Airlines - jetBlue. Michelle Kelly. Background. Low Budget Airline Headquartered in Queens, NY Major Airport: JFK Market Share: 5.1% Serve 84 destinations in 24 states. Background. Started in 1998 by former Southwest employees Modeled after Southwest

Download Presentation

Module 2: Reformulation Regional Airlines - jetBlue

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Module 2 reformulation regional airlines jetblue

Module 2: ReformulationRegional Airlines - jetBlue

Michelle Kelly


Background

Background

  • Low Budget Airline

  • Headquartered in Queens, NY

  • Major Airport: JFK

  • Market Share: 5.1%

  • Serve 84 destinations in 24 states


Background1

Background

  • Started in 1998 by former Southwest employees

  • Modeled after Southwest

    • Difference: jetBlue aims to be low cost but high quality.

  • One of the only airlines to make a profit after 9/11

  • Since, fuel costs have severely hurt profits


Balance sheet

Balance Sheet


Balance sheet assets

Balance Sheet - Assets


Discussion

Discussion

  • Restricted Cash

    • Restricted cash primarily consists of security deposits and performance bonds for aircraft and facility leases and funds held in escrow for estimated workers’ compensation obligations

    • Not available for use in operations, therefore classified as Financial Asset.


Discussion1

Discussion

  • Asset Constructed for Other

    • Built new Terminal 5 at JFK

    • Technically lease the ground the terminal sits on from Port Authority of New York and New Jersey (PANYNJ)

    • Considered the owner for financial reporting purposes

    • Used in operations, therefore considered an Enterprise Asset


Balance sheet liabilities and s e

Balance Sheet – Liabilities and S/E


Balance sheet liabilities and s e1

Balance Sheet – Liabilities and S/E


Discussion2

Discussion

  • Air Traffic Liability

    • Tickets Sold but not yet used

    • Liabilities related to “True Blue” loyalty program and jetBlue credit cards

    • Related to operations, therefore Enterprise Liability

  • Construction Obligation

    • Related to building Terminal 5 at JFK

    • jetBlue has to pay back the PANYNJ the portion of the terminal they helped to pay for

    • Financial Liability


Net enterprise assets nea

Net Enterprise Assets (NEA)


Net financial liabilities nfl

Net Financial Liabilities (NFL)


Common shareholders equity

Common Shareholders Equity


Income statement

Income Statement


Income statement1

Income Statement


Discussion3

Discussion

  • Depreciation and Amortization/Capitalized Interest

    • Capitalized Interest is the interest the company must by paid on the debt owed to the PANYNJ

    • Occurs due to building of Terminal 5 (similar to depreciation)

    • Capitalized Interest increases the value of asset and is not deductible for tax purposes

    • Like Depreciation, included in calculation of EPAT


Calculation of income taxes

Calculation of Income Taxes


Statement of comprehensive income

Statement of Comprehensive Income


Enterprise profit after tax epat

Enterprise Profit After Tax (EPAT)


Financing expenses after tax

Financing Expenses After Tax


Unanswered questions

Unanswered Questions

  • Should the agreement jetBlue has with PANYNJ be considered a capital lease?

    • Even after paying back Construction Obligation, jetBlue still doesn’t own terminal

  • Is including capitalized interest in EPAT appropriate?

  • Why was there negative interest income in 2011?

  • Should taxes related to fuel costs be separated and added to the total tax expense when calculating EPAT to get a better idea of the true tax burden?


  • Login