Liquidity and Capital Resources

At June 30, 2005, we had cash and cash equivalents of $56.8 million and investment securities of $505.1 million, compared to cash and cash equivalents of $18.7 million and investment securities of $430.4 million at December 31, 2004. Cash flows from operating activities were $147.9 million for the six months ended June 30, 2005 compared to $112.2 million for the six months ended June 30, 2004. The increase in operating cash flows was primarily due to the growth of our business. We rely primarily on operating cash flows to provide working capital.

Investing activities.    During the six months ended June 30, 2005, capital expenditures related to our purchase of flight equipment included expenditures of $268.7 million for eight Airbus A320 aircraft, $91.5 million for flight equipment deposits and $35.9 million for spare part purchases. Capital expenditures for other property and equipment, including ground equipment purchases and facilities improvements, were $83.3 million. Net cash used in the purchase and sale of available-for-sale securities was $80.0 million.

During the six months ended June 30, 2004, capital expenditures related to our purchase of flight equipment included expenditures of $245.2 million for seven Airbus A320 aircraft, $87.8 million for flight equipment deposits and $8.3 million for spare part purchases. Capital expenditures for other property and equipment, including ground equipment purchases and facilities improvements, were $31.4 million. Net cash used in the purchase and sale of available-for-sale securities was $22.1 million.

Financing activities.    Financing activities for the six months ended June 30, 2005 consisted of (1) the financing of eight aircraft with $264.7 million in floating rate equipment notes purchased with proceeds from our public offering of Series 2004-2 pass-through certificates, (2) the issuance of $250 million of 3¾% convertible debentures, raising net proceeds of approximately $243 million, and (3) scheduled maturities of $48.1 million of debt. The net proceeds from our convertible debt offering are being used to fund working capital and capital expenditures, including capital expenditures related to the purchase of aircraft and construction of facilities on or near airports.

We currently have shelf registration statements on file with the Securities and Exchange Commission related to the issuance of $1 billion aggregate amount of common stock, preferred stock, debt securities and/or pass-through certificates. The net proceeds of any securities we sell under these registration statements may be used to fund working capital and capital expenditures, including the purchase of aircraft and construction of facilities on or near airports. Through June 30, 2005, we had issued a total of $748 million in securities under these registration statements.

Financing activities for the six months ended June 30, 2004 consisted primarily of (1) the financing of five aircraft with $164.3 million in floating rate equipment notes purchased with proceeds from our public offering of Series 2004-1 pass-through certificates, (2) the financing of two aircraft with $68.0 million of 12-year floating rate equipment notes issued to various European banks, (3) the repayment of three spare engine notes totaling $9.4 million, and (4) scheduled maturities of debt of $33.2 million.

Working Capital.    Our working capital was $79.8 million at June 30, 2005. We expect to meet our obligations as they become due through available cash, investment securities and internally generated funds, supplemented as necessary by debt and/or equity financings and proceeds from sale and leaseback transactions. We expect to continue generating positive working capital through our operations. However, we cannot predict whether current trends and conditions will continue or what the effect on our business might be from the extremely competitive environment we are operating in or from events that are beyond our control, such as continued significant increases in fuel prices, the impact of airline bankruptcies or consolidations, U.S. military actions, or acts of terrorism. We have secured financing for 15 of our 16 remaining aircraft deliveries scheduled for 2005. We believe the working capital available to us will be sufficient to meet our cash requirements for at least the next 12 months.

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Contractual Obligations

Our noncancelable contractual obligations at June 30, 2005 include the following (in millions):

				Payments due in
				Total				2005				2006				2007				2008				2009				Thereafter
Long-term debt (1)				$	2,881			$	113			$	219			$	217			$	245			$	173			$	1,914
Operating leases					1,217				64				128				126				117				103				679
Flight equipment obligations					7,080				530				1,110				1,195				1,220				1,260				1,765
Short-term borrowings					20				20				—				—				—				—				—
Facilities and other (2)					1,219				132				77				73				84				102				751
Total				$	12,417			$	859			$	1,534			$	1,611			$	1,666			$	1,638			$	5,109

(1)	Includes actual interest and estimated interest for floating-rate debt based on June 30, 2005 rates.

(2)	Amounts represent noncancelable commitments for the purchase of goods and services

There has been no material change in the terms of our debt instruments or financial covenants from the information provided in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2004 Form 10-K/A. There are no new financial covenants associated with our convertible debt issued in March 2005. At June 30, 2005, we were in compliance with the covenants of all of our debt and lease agreements. We have $25.1 million of restricted cash pledged under standby letters of credit related to certain of our leases which expire at the end of the related lease terms.

As of June 30, 2005, we operated a fleet of 77 Airbus A320 aircraft, of which 52 were owned and 25 were leased under operating leases. The average age of our fleet was 2.5 years at June 30, 2005.

As of June 30, 2005, including the acceleration of the delivery of one Airbus A320 from 2006 to 2005 and our July 2005 amendment to our Embraer E190 purchase agreement firmly ordering one additional E190 aircraft, we had on order 106 Airbus A320 aircraft and 101 Embraer E190 aircraft with options to acquire 50 additional Airbus A320 aircraft and 100 additional Embraer E190 aircraft which are scheduled for delivery through 2016 (on a relatively even basis during each year) as follows:

				Firm												Option								End of Year Cumulative Total Fleet(1)
Year				A320				E190				Total				A320				E190
Remainder of 2005					8				8				16				—				—				93
2006					16				18				34				—				—				127
2007					17				18				35				—				—				162
2008					17				18				35				2				—				199
2009					18				18				36				2				—				237
2010					18				18				36				2				—				275
2011					12				3				15				9				15				314
2012					—				—				—				20				18				352
2013					—				—				—				15				18				385
2014					—				—				—				—				18				403
2015					—				—				—				—				18				421
2016					—				—				—				—				13				434
					106				101				207				50				100

(1)	Assumes all options are exercised.

Committed expenditures for our 207 firm aircraft and 35 spare engines include estimated amounts for contractual price escalations and predelivery deposits. Debt financing has been arranged for all of

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our remaining 2005 Airbus A320 aircraft deliveries and lease financing has been arranged for 30 of the first 31 of our Embraer E190 aircraft deliveries. Although we believe that debt and/or lease financing should be available for our remaining aircraft deliveries, we cannot assure you that we will be able to secure financing on terms attractive to us, if at all, which may require us to modify our aircraft acquisition plans. Anticipated capital expenditures for facility improvements, spare parts, and ground purchases for the remainder of 2005 are projected to be approximately $75 million in the aggregate.

Boston's Logan International Airport Expansion.    In March 2005, we entered into a lease for Terminal C at Boston's Logan International Airport. We began operating out of this terminal in May 2005, and we plan on utilizing five of the 11 gates by the end of the year and gradually moving into the remaining gates over the next three years. We are committed to lease the entire terminal through 2009, which is reflected in the table above, with renewal options through 2029.

Off-Balance Sheet Arrangements

We have evaluated our interests in variable interest entities as defined by FASB Interpretation No. 46, Consolidation of Variable Interest Entities, and have determined that we hold a significant variable interest in, but are not the primary beneficiary of, certain pass-through trusts which are the purchasers of equipment notes issued by us and held by such pass-through trusts. The proceeds from the sale of the certificates are being held in escrow with a depositary. As aircraft are delivered, the proceeds are utilized to purchase our secured equipment notes issued to finance these aircraft. The proceeds held in escrow are not assets of ours, nor are the certificates obligations of ours or guaranteed by us; therefore they are not included in our condensed consolidated financial statements.

The certificates contain liquidity facilities whereby a third party agrees to make payments sufficient to pay up to 18 months of interest on the applicable certificates if a payment default occurs. The liquidity providers for our Series 2004-1 certificates are Landesbank Hessen-Thüringen Girozentrale and Morgan Stanley Capital Services Inc. The liquidity providers for our Series 2004-2 certificates are Landesbank Baden-Württemberg and Citibank, N.A.

We utilize a policy provider to provide credit support on the Class G-1 and Class G-2 certificates of both series of certificates. The policy provider has unconditionally guaranteed the payment of interest on the certificates when due and the payment of principal on the certificates no later than 18 months after the final expected regular distribution date. The policy provider is MBIA Insurance Corporation (a subsidiary of MBIA, Inc.). Financial information for the parent company of the policy provider is available at the SEC's website at http://www.sec.gov or at the SEC's public reference room in Washington, D.C.

We have also made certain guarantees and indemnities to other unrelated parties that are not reflected on our balance sheet, which we believe will not have a significant impact on our results of operations, financial condition or cash flows.

Critical Accounting Policies and Estimates

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2004 Form 10-K/A.

Other Information

New Service.    We continue to add new destinations, as reflected by our new daily non-stop service from Newark, New Jersey to Fort Lauderdale, Orlando, West Palm Beach, Tampa and Fort Myers, Florida in October 2005 and to San Juan, Puerto Rico in November 2005.

Facilities.    During the second quarter of 2005, we opened a new 100,000 square foot hangar and LTV installation facility in Orlando, Florida, a 107,000 square foot training and support campus at the Orlando International Airport and the JetBlue Technical Operations Campus, which is a 140,000 square foot hangar and support center at JFK.

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LiveTV.    In April 2005, LiveTV entered into an agreement with Virgin Blue, an Australian airline, for the sale of certain hardware and installation, programming and maintenance of their live in-seat satellite television system. Virgin Blue has committed to equip 51 of their Boeing 737 aircraft with the LiveTV system and has the option to install the system on additional aircraft.

Improved Customer Product.    During the second quarter of 2005, we completed the modifications on all of our aircraft to increase the number of available LiveTV channels from 24 to 36 and also added movie channel offerings from News Corporation's Fox Entertainment Group. In the fourth quarter of 2005, we plan to begin installation of free XM Satellite Radio to our fleet.

Forward-Looking Information.    This report contains forward-looking statements relating to future events and our future performance including, without limitation, statements regarding financial forecasts or projections, our expectations, beliefs, intentions or future strategies that are signified by the words "expects", "anticipates", "intends", "believes", "plans", or similar language. Our actual results and the timing of certain events could differ materially from those expressed in the forward-looking statements. All forward-looking statements included in this report are based on information available to us on the date of this report. It is routine for our internal projections and expectations to change as the year or each quarter in the year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of each quarter or the year. Although these expectations may change, we may not inform you if they do. Our policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter.

Forward-looking statements involve risks, uncertainties and assumptions and are based on information currently available to us. Actual results may differ materially from those expressed in the forward looking statements due to many factors, including without limitation, our extremely competitive industry, our ability to implement our growth strategy, including the integration of the Embraer E190 aircraft into our operations, our significant fixed obligations and our reliance on high daily aircraft utilization, increases in maintenance costs, fuel prices and interest rates, our dependence on the New York market, seasonal fluctuations in our operating results, our reliance on sole suppliers, government regulation, the loss of key personnel and potential problems with our workforce, the potential liability associated with the handling of our customer data, and future acts of terrorism or the threat of such acts or escalation of U.S. military involvement overseas.

Additional information concerning these and other factors is contained in our SEC filings, including but not limited to, our 2004 Form 10-K/A and our Form 10-Q/A for the quarterly period ended March 31, 2005.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in market risks from the information provided in Item 7A. Quantitative and Qualitative Disclosures About Market Risk included in our 2004 Form 10-K/A, except as follows:

Aircraft Fuel.    As of June 30, 2005, we had hedged approximately 25% of our expected remaining 2005 fuel requirements using crude oil swaps. Our results of operations are affected by changes in the price and availability of aircraft fuel. Market risk is estimated as a hypothetical 10% increase in the June 30, 2005 cost per gallon of fuel, including the effects of our fuel hedges. Based on our projected twelve month fuel consumption, such an increase would result in an increase to aircraft fuel expense of approximately $52 million, compared to an estimated $23 million for 2004 measured as of June 30, 2004. See Note 8 to our unaudited condensed consolidated financial statements included elsewhere in this report for additional information.

Fixed Rate Debt.    On June 30, 2005, our $425.0 million aggregate principal amount of convertible debt had an estimated fair value of $414.2 million, based on quoted market prices.

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Item 4.    Controls and Procedures.

Restatement

We have identified adjustments that were required to be recorded in prior periods relating to the way we had accounted for 1) rent expense under operating leases for certain airport properties with minimum rent escalations, 2) depreciation expense for leasehold improvements with respect to certain airport locations and other facilities, and 3) the inadvertent recognition of passenger revenue related to unpaid ticket reservations. The lease adjustments were originally recorded in the second quarter of 2005 since, at that time, these amounts were not considered to be material to our financial statements in any individual prior period and the cumulative amount was not expected to be material to our 2005 financial results. However, when combined with the revenue adjustment discovered in September 2005, the impact of these items, in the aggregate, was determined to be material to our expected 2005 financial results. Descriptions of these adjustments follow:

Rent Expense.    Statement of Financial Accounting Standards No. 13, Accounting for Leases, or SFAS No. 13, provides that rent expense for operating leases containing minimum escalations should be recognized ratably over their respective lease term. Historically, we have accounted for our airport ground and facilities leases on an as-incurred basis. An extensive review of our leases revealed, however, that some of these leases contain minimum rent escalations, which resulted in rent expense not recognized in accordance with generally accepted accounting principles. The adjustment recognized rent expense on a straight-line basis as required. The adjustment resulted in $0.4 million and $1.1 million increased rent expense in 2004 and 2003, respectively, and $1.5 million decreased rent expense for the three and six months ended June 30, 2005.

Depreciation Expense for Leasehold Improvements.    Improvements made to leased space should be depreciated over their related lease term or their useful economic life, whichever is shorter. Historically, we had assumed renewal of our leases for airport space and depreciated these improvements over their expected useful economic lives. Based on recent interpretative guidance from the SEC staff, we have restated our financial statements to reflect depreciation of our leasehold improvements over the shorter of their economic lives or their remaining lease terms, including any reasonably assured renewal periods. The adjustment resulted in increased depreciation expense of $0.2 million and $0.3 million in 2004 and 2003, respectively. The adjustment decreased depreciation expense by $1.2 million and $1.1 million for the three and six months ended June 30, 2005, respectively.

Passenger Revenue.    In September 2005, during the performance of our monthly reconciliation control over air traffic liability, we discovered that we had inadvertently recognized passenger revenue related to unpaid ticket reservations. The adjustment decreased passenger revenue by $1.4 million in 2004 and $0.9 million and $1.9 million for the three and six months ended June 30, 2005, respectively.

After management's initial review of the potential adjustment to passenger revenue on October 3, 2005 and taking into account our previously determined adjustments related to lease agreements, which were recorded in the second quarter of 2005, management recommended to our Audit Committee that, upon completion of our analysis of the financial impact of the unpaid ticket reservations error described above, our previously filed 2005 financial statements should be restated to reflect the correction of each of these items as the impact of these items, in the aggregate, was determined to be material to our expected 2005 financial results. The Audit Committee agreed with this recommendation. On October 10, 2005, upon completion of our analysis, the Audit Committee approved our restated financial statements included in Amendment No. 1 to both of our Forms 10-Q for the quarters ended March 31, 2005 and June 30, 2005, which were filed with the SEC on October 12, 2005. This restatement was determined not to be material to our business, financial condition or results of operations for any individual prior year; however, our financial statements for the years ended December 31, 2004 and 2003 included in our Annual Report on Form 10-K/A were corrected to reflect these adjustments in the proper periods and reported under Item 8.01 in our Current Report on Form 8-K filed on October 12, 2005.

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Evaluation of Disclosure Controls and Procedures

In connection with the restatement, we reevaluated our disclosure controls and procedures. We concluded that our failure to correctly apply SFAS No. 13, and its related interpretations, with respect to the recognition of rent expense related to operating leases with minimum rent escalation clauses and depreciation expense for leasehold improvements combined with the error in the recognition of passenger revenue did, in the aggregate, constitute a material weakness in our internal control over financial reporting. Solely as a result of this material weakness, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2005.

Remediation of Material Weakness in Internal Control

We have performed an extensive review of our leases and our leasehold improvements in an effort to ensure that this Amendment No. 1 reflects all necessary adjustments to our unaudited financial statements for the three and six months ended June 30, 2005. We have also designed new internal control procedures to remediate the controls over unpaid ticket reservations and to ensure that new leases and changes to existing leases, as well as future leasehold improvements, will be accounted for in accordance with generally accepted accounting principles, including the following:

•	We have designed a checklist to facilitate the identification of terms in all new lease agreements and amendments to existing lease agreements that require additional analysis or accounting;

•	We have added an additional review of the depreciable lives for leasehold improvements to ensure that the assigned lives are consistent with generally accepted accounting principles, and;

•	We have added a control to our monthly account reconciliation process to review the age of receivables to ensure timely follow-up has been performed on unpaid ticket reservations. We have also reemphasized with our employees who are responsible for resolving unpaid reservations about the importance of performing these duties on a timely basis.

We believe we have taken the steps necessary to remediate these significant deficiencies, which when aggregated, were determined to have resulted in a material weakness in our internal controls; however, we cannot confirm the effectiveness of our enhanced internal controls until we and our independent auditors have conducted sufficient testing. Accordingly, we will continue to monitor vigorously the effectiveness of these processes, procedures and controls, and will make any further changes as management determines appropriate.

Changes in Internal Controls

Other than as expressly noted above in this Item 4, there were no changes in our internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f), identified in connection with the evaluation of our controls performed during the quarter ended June 30, 2005 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings.

Beginning September 2003, we became aware that several lawsuits were commenced against us in the 3rd Judicial District Court of Utah, San Diego Superior Court, the U.S. District Court for the Central District of California, the U.S. District Court for the Eastern District of New York and the U.S. District Court for the Southern District of Florida, alleging various causes of action, including fraudulent misrepresentation, breach of contract, violation of privacy rights, as well as violations of consumer protection statutes and federal electronic communications laws. These claims arose out of our providing access to limited customer data to a government contractor in connection with a test project for military base security. The Utah action has been dismissed with prejudice. The San Diego action was dismissed although the plaintiffs have appealed and we have a motion to dismiss pending in the consolidated actions in the U.S. District Court for the Eastern District of New York. In light of this, the litigation remains in its preliminary stage and we are unable to determine the impact it may have upon us.

In the ordinary course of our business, we are party to various other legal proceedings and claims which we believe are incidental to the operation of our business. We believe that the ultimate outcome of these proceedings to which we are currently a party will not have a material adverse effect on our financial position, results of operations or cash flows.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

For the quarter ended June 30, 2005, 20,215 shares of common stock were surrendered or withheld in connection with the payment of the exercise price or withholding of taxes in respect of the exercise of outstanding stock options.

Item 4.    Submission of Matters to a Vote of Security Holders.

At our annual meeting of stockholders held on May 18, 2005, our stockholders approved the election of each of the persons named below to our Board of Directors for a three-year term by the vote indicated below:

				For				Withheld
Michael Lazarus					81,504,469				1,475,244
David Neeleman					82,545,385				434,328
Frank Sica					82,728,037				251,676

There were no broker non-votes on this matter. Following the meeting, the terms of office of our other directors, David Barger, David Checketts, Kim Clark, Joy Covey, Neal Moszkowski, Joel Peterson and Ann Rhoades continued.

Additionally, at our annual meeting, our stockholders ratified the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2005 by the vote indicated below:

				For				Against				Abstain
Ernst & Young LLP					82,821,676				94,456				63,581

There were no broker non-votes on this matter.

Item 6.    Exhibits

Exhibits: See accompanying Exhibit Index included after the signature page of this report for a list of the exhibits filed or furnished with or incorporated by reference in this report.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JETBLUE AIRWAYS CORPORATION                            (Registrant)

Date: October 12, 2005

By:            /s/ HOLLY NELSON

Vice President and Controller (principal accounting officer)

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EXHIBIT INDEX

Exhibit Number				Exhibit
10.1				Amendment to JetBlue Airways Corporation 401(k) Retirement Plan, dated March 31, 2005. Incorporated by reference to exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2005.
12.1				Computation of Ratio of Earnings to Fixed Charges.
31.1				Certifications Pursuant to Rule 13a-14(a)/15d-14(a), furnished herewith.
31.2				Certifications Pursuant to Rule 13a-14(a)/15d-14(a), furnished herewith.
32.1				Certification Pursuant to Section 1350, furnished herewith.

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