PART I  ITEM 1A Risk Factors Our salaries, wages and benefits costs will increase as our workforce ages. There are risks associated with our presence in some of our international  emerging markets, including political or economic instability and failure  to adequately comply with existing legal requirements. Our high aircraft utilization rate helps us keep our costs low, but also  makes us vulnerable to delays and cancellations in our operating regions;  such delays and cancellations could reduce our profitability. Our business is highly dependent on the New York metropolitan market  and increases in competition or congestion or a reduction in demand  for air travel in this market, or governmental reduction of our operating  capacity at JFK, would harm our business. We may be subject to risks through the commitments and business of  LiveTV, our wholly-owned subsidiary. We rely heavily on automated systems to operate our business; any  failure of these systems could harm our business. We may be subject to unionization, work stoppages, slowdowns or  increased labor costs; recent changes to the labor laws may make  unionization easier to achieve. We are dependent on automated systems and technology to operate our  business, enhance customer service and achieve low operating costs.  The performance and reliability of our automated systems and data center  is critical to our ability to operate our business and compete effectively.  These systems include our computerized airline reservation system, flight  operations system, telecommunications systems, website, maintenance  systems, check-in kiosks, in-flight entertainment systems and our primary  and redundant data centers. Our website and reservation system must be  able to accommodate a high volume of traffic and deliver important flight  information. These systems require upgrades or replacement periodically,  which involve implementation and other operational risks. Our business  may be harmed if we fail to operate, replace or upgrade our systems or  data center infrastructure successfully. Our business is labor intensive and, unlike most other airlines, we have  a non-union workforce. The unionization of any of our employees could  result in demands that may increase our operating expenses and adversely  affect our financial condition and results of operations. Any of the different  LiveTV has agreements to provide in-flight entertainment products and  services with JetBlue and six other airlines. At December 31, 2013, LiveTV  services were available on 461 aircraft under these agreements, with firm  commitments for 196 additional aircraft through 2015 and with options for 9  additional installations through 2016. Performance under these agreements  requires LiveTV to hire, train and retain qualified employees, obtain  component parts unique to its systems and services from their suppliers  and secure facilities necessary to perform installations and maintenance  on those systems. Should LiveTV be unable to satisfy its commitments  under these third party contracts, our business could be harmed. We are highly dependent on the New York metropolitan market where we  maintain a large presence with approximately one-half of our daily flights  having JFK, LaGuardia, Newark, Westchester County Airport or Newburgh’s  Stewart International Airport as either their origin or destination. We have  experienced an increase in flight delays and cancellations at these airports  due to airport congestion which has adversely affected our operating  performance and results of operations. Our business could be further  harmed by an increase in the amount of direct competition we face in the  New York metropolitan market or by continued or increased congestion,  delays or cancellations. Our business would also be harmed by any  circumstances causing a reduction in demand for air transportation in the  New York metropolitan area, such as adverse changes in local economic  conditions, negative public perception of New York City, terrorist attacks  or significant price or tax increases linked to increases in airport access  costs and fees imposed on passengers. In addition, to the extent we continue to grow our business, opening new  markets requires us to commit a substantial amount of resources even  before the new services commence. Expansion is also dependent upon  our ability to maintain a safe and secure operation and requires additional  personnel, equipment and facilities. We have expanded and expect to continue to expand our service to countries  in the Caribbean and Latin America, some of which have less developed legal  systems, financial markets, and business and political environments than the  United States, and therefore present greater political, legal, economic and  operational risks. We emphasize legal compliance and have implemented and  continue to implement and refresh policies, procedures and certain ongoing  training of employees with regard to business ethics, anti-corruption policies  and many key legal requirements; however, there can be no assurance our  employees will adhere to our code of business ethics, anti-corruption policies,  other Company policies, or other legal requirements. If we fail to enforce our  policies and procedures properly or maintain adequate record-keeping and  internal accounting practices to accurately record our transactions, we may  be subject to sanctions. In the event we believe or have reason to believe  our employees have or may have violated applicable laws or regulations, we  may be subject to investigation costs, potential penalties and other related  costs which in turn could negatively affect our reputation, and our results  of operations and cash flow. Expansion to new international emerging markets may have risks due to  factors specific to those markets. Emerging markets are countries which  have less developed economies and are vulnerable to economic and political  problems, such as significant fluctuations in gross domestic product, interest  and currency exchange rates, civil disturbances, government instability,  nationalization and expropriation of private assets, trafficking and the  imposition of taxes or other charges by governments. The occurrence of  any of these events in markets served by us and the resulting instability  may adversely affect our business. We maintain a high daily aircraft utilization rate (the amount of time our  aircraft spend in the air carrying passengers). High daily aircraft utilization  allows us to generate more revenue from our aircraft and is achieved in  part by reducing turnaround times at airports so we can fly more hours on  average in a day. Aircraft utilization is reduced by delays and cancellations  from various factors, many of which are beyond our control, including  adverse weather conditions, security requirements, air traffic congestion and  unscheduled maintenance. The majority of our operations are concentrated  in the Northeast and Florida, which are particularly vulnerable to weather  and congestion delays. Reduced aircraft utilization may limit our ability to  achieve and maintain profitability as well as lead to customer dissatisfaction. crafts or classes of our employees could unionize at any time, which  would require us to negotiate in good faith with the employee group’s  certified representative concerning a collective bargaining agreement. In  February 2014, the Airline Pilots Association filed a petition with the National  Mediation Board, or NMB, seeking to become the collective bargaining  representative of our pilots. The NMB will hold an election from March  through April, 2014. In 2010, the NMB changed its election procedures  to permit a majority of those voting to elect to unionize (from a majority  of those in the craft or class). These rule changes fundamentally alter the  manner in which labor groups have been able to organize in our industry  since the inception of the Railway Labor Act. Ultimately, if we and a newly  elected representative were unable to reach agreement on the terms of a  collective bargaining agreement and all of the dispute resolution processes  of the Railway Labor Act were exhausted, we could be subject to work  stoppages. In addition, we may be subject to other disruptions by organized  labor groups protesting our non-union status. Any of these events would  be disruptive to our operations and could harm our business. As our employees’ tenure with JetBlue matures, our salaries, wages and  benefits costs increase. Our pilot pay structure, for example, is based on  an industry derived average and to the extent our competitors continue  consolidating and/or begin raising their pilot salaries in the face of a possible  pilot shortage, or if overall pilot wages increase across the industry due to  regulatory changes, we may have to address increased salary cost pressure  to retain our pilots in an environment where our capacity is also forecast  to continue to grow. As our work force ages, we expect our medical and  related benefits to increase as well, despite an increased corporate focus  on Crewmember wellness. JETBLUE AIRWAYS CORPORATION  -  2013 Annual Report 16