WHAT THEY DO
JetBlue lures customers away from other airlines with a combination of low fares, new planes, and amenities such as leather seats and free onboard television. It shuttles about 500 flights each day among 50 destinations in the U.S., Mexico, the Caribbean, and Bermuda.

WHERE THEY CAME FROM
The best-funded startup in aviation history debuted in February 2000, when a brand-new Airbus A320 departed on JetBlue’s first flight, from New York City to Fort Lauderdale, Florida.

Chief executive David Neeleman is an experienced entrepreneur—in 1984, he co-founded Morris Air (sold to Southwest in 1993), and in 1996, he helped start WestJet, a Canadian low-fare carrier. In the 1990s, while waiting for a noncompete agreement with Southwest to expire, he devised a business plan for a new discount airline that would be streamlined by technology—no booking agents, no endless paperwork for pilots to fill out. He incorporated JetBlue in 1998 with $130 million in venture capital (including $40 million from George Soros, who still controls about 10 percent of the company). With 11 planes serving 11 cities, JetBlue set out to chart a new, hipper course for discount travel.

WHAT THEY GOT RIGHT
As many airlines were battered into bankruptcy by labor disputes, high maintenance costs for aging fleets, and a post-9/11 decline in air travel, JetBlue ballooned between 2000 and 2007, becoming a $2.3 billion company.

Credit youthful good looks—and an innovative approach to travel. Discount seems an unlikely adjective for an airline with sleek new planes and 36 channels of free DirecTV on each seatback. (The satellite-television feature has proved so popular, JetBlue paid $81 million for the company that designed it, hoping to profit from the technology when other airlines come looking for it.)

But behind-the-scenes saving helped promote growth. JetBlue doesn’t offer expensive comforts like lounges, full meals, and first-class seating. Its workers aren’t unionized, and some even work from home—nearly all reservation agents are in Utah, answering phones for an hourly wage. The company doesn’t indulge its executives. Neeleman, a devout Mormon who considers his attention deficit disorder to be an asset in running the company, takes a relatively low salary of $200,000 and no stock options. He and his fellow executives declined their guaranteed $75,000 bonuses in 2005 after the company had a down year.

WHAT THEY GOT WRONG
They let customers sit for hours—up to 10 in one instance—on the tarmac when a February 2007 ice storm snarled air traffic across the country. The incident led to front-page coverage of thousands of cancellations. Neeleman published letters of apology and introduced a passengers’ Bill of Rights that promises compensation to travelers who are stranded or delayed, but the incident left the airline’s customer-centric image deeply tarnished. Earlier glitches involved business costs. In 2005, the costs of rapid expansion began to catch up with JetBlue. But what landed the company $20.3 million in the red was a Hurricane Katrina-induced fuel spike that it failed to hedge against. Meanwhile, competitors (especially Delta) cut fares drastically to match JetBlue’s on popular routes. The result: two down years.

WHAT’S NEXT
The airline’s priority right now is a balanced budget. JetBlue is implementing cost-cutting initiatives, including removing seats from planes to decrease the number of onboard staff needed and implementing slight fare increases—think $10. It lowered growth estimates twice in 2006, a trend that will likely continue until profits stabilize. But JetBlue still plans to more than double its fleet by 2011.

JetBlue bucked discount-carrier logic by making New York City’s John F. Kennedy International Airport—an expensive, delay-ridden place—its hub. The arrangement has proved so successful that the airline is building an $875 million terminal there for its expanding fleet. JetBlue is also forging partnerships with foreign carriers to fly passengers arriving at J.F.K. to their domestic destinations: The company recently announced a pact with Aer Lingus, the first of what it says will be many such deals. —Julia Ramey