Compare JetBlues mix of debt and equity financing (after its expected proceeds

from the IPO) to that for Southwest Airlines. Which company is more heavily

levered? After JetBlues IPO, do you think the firm should increase, decrease, or

not change its debt-equity mix? Explain your reasoning. (In your calculations

you will need a market value of JetBlues equity. Use a projected offering price

of $22 per share times the total number of shares estimated to be outstanding

immediately after the IPO, as indicated in Exhibit below .)

Jetblue	31-Dec-00	31-Mar-01	30-Jun-01	30-Sep-01	31-Dec-01
Operating Statistics:
Revenue passengers	523,246	644,419	753,937	791,551	926,910
Revenue passenger miles (000)	469,293	600,343	766,350	863,855	1,051,287
Available seat miles (000 )	623,297	745,852	960,744	1,131,013	1,370,658
Load factor	75.30%	80.50%	79.80%	76.40%	76.70%
Breakeven load factor	79.40%	73.20%	70.60%	74.60%	76.20%
Aircraft utilization (hours per day)	11.8	13.1	13.1	12.8	11.8
Average fare	$90.65	$96.15	$101.01	$101.66	$99.37
Yield per passenger mile (cents)	10.11	10.32	9.94	9.29	8.76
Passenger revenue per available seat mile (cents)	7.61	8.31	7.93	7.1	6.72
Operating revenue per available seat mile (cents)	7.85	8.56	8.16	7..30	6..97
Operating expense per available seat mile (cents)	8.03	7..55	7.01	6..93	6.68
Departures	4,620	5,283	6,332	6,936	7,783
Average stage length (miles)	833	871	937	1,007	1,087
Average number of operating aircraft during period	9.2	10.5	13.2	15.9	19.4
Full-time equivalent employees at period end	1,028	1,350	1,587	1,876	2,116
Average fuel cost per gallon (cents)	103.38	86.03	83.24	79.53	60.94
Fuel gallons consumed (000)	8,348	9,917	12,649	14,958	17,571
Percent of sales through jetblue.com during period	32.60%	37.60%	39.40%	45.10%	51.30%