SecProbe.io

CORRESP
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filename1.htm

August
4,  2006

VIA EDGAR AND FACSIMILE

United
States Securities and Exchange Commission
Division of Corporation
Finance
 100 F. Street N.E., Stop 3561
 Washington, D.C.
20549

Attention:
Ms.
Linda  Cvrkel
Branch
Chief

Re:
JetBlue Airways
Corporation
Form 10-K for the Fiscal Year Ended December  31,
2005
Filed February  14, 2006
 File No.
000-49728

Ladies and Gentlemen:

On behalf of JetBlue
Airways Corporation, or JetBlue, set forth below are our responses to
the comments of the Staff of the Division of Corporation Finance of the
Securities and Exchange Commission, or the Staff, regarding the above
referenced filing set forth in the Staff’s letter dated
July  24,  2006. For your convenience, we have repeated
each of the comments set forth in the Staff’s letter followed by
our responses to that comment.

Form 10-K for the Year
Ended December  31,  2005

Item 8.
Financial Statements and Supplementary Data

Notes
to Consolidated Financial Statements

Note 3
— Leases, page 53

1.
We have reviewed
your response to our prior comment number 3. However, we do not believe
that you have fully addressed the concerns raised in our prior comment.
Given the amount of proceeds generated from your 2005 and 2006 sale and
leaseback transactions, please specifically disclose the amount of
gains or losses from your sale and leaseback transactions that have
been deferred and the period over which these gains or losses will be
recognized. Alternatively, please specifically disclose that
the gains or losses from your sale and leaseback transactions are not
material.

Response:   In 2005, the six sale and
leaseback transactions that we entered into resulted in the deferral of
approximately $6  million in related gains, which are being
recognized over the 18 year lives of the related aircraft leases.
Neither the deferred gains nor the annual amortization of the deferred
gains related to these transactions were considered material to our
2005 financial statements. In future filings, if material, we will
specifically disclose the amount of losses or deferred gains related to
our sale and leaseback transactions and the related amortization
periods. If not material, we will specifically disclose that the losses
or deferred gains from these transactions are not material.

Note 4 — Assets Constructed for Others, page
54

2.
We have reviewed your response to our
prior comment number 4. However, we do not believe that you have fully
addressed the concerns raised in our prior comment. In your response,
you state that subsequent to the construction period, you expect to
account for your lease of the airport terminal as ‘‘a
financing’’ under SFAS No. 66. Based upon your footnote
disclosures, such accounting treatment appears to be similar to the
accounting treatment used for a capital lease. However, we note per
paragraph 28 of SFAS No. 13, leases involving terminal space and other
airport facilities owned by a governmental unit ordinarily would be
classified as operating leases. As such, please tell us what
consideration has been given to paragraph 28 of SFAS No. 13, FIN 23,
and EITF 99-13 in your analysis of the expected treatment of your
terminal lease subsequent to the construction period. Assuming an
adequate response to our comment, we believe that you should expand
your disclosures in the MD&A section of future filings to discuss
the expected accounting treatment of your airport terminal lease both
during and subsequent to the construction period.

Response:   We agree with
the Staff’s assessment that a lease of this nature, which
includes the operation of an airport passenger terminal on
government-owned property, is ordinarily classified as an operating
lease as provided by FIN23 and Paragraph 28 of SFAS 13. However, since
we are constructing this facility and not entering into the lease of an
existing facility, GAAP requires that we refer to the guidance in EITF
97-10 for proper classification. EITF 99-13 addressed this apparent
conflict in guidance and concluded that ‘‘the
construction of government-owned properties subject to a future lease
of the completed improvements should be included in the scope of Issue
97-10. Accordingly, if the lessee is deemed to have substantially all
of the construction period risk as defined in Issue 97-10, the lessee
should be considered the owner of the property for accounting purposes,
with the subsequent sale-leaseback accounted for pursuant to Statement
98.’’

Applying the guidance in EITF 97-10,
we have evaluated our new terminal lease at JFK and concluded, as
described in our response dated May  19,  2006 to the
Staff’s prior comment letter dated May  8,  2006,
that we bear substantially all of the construction period risk;
therefore, we are considered the owner of the project for accounting
purposes.

We currently expect that we will not satisfy the
SFAS 98 sale-leaseback criteria and thus not qualify for sale-leaseback
accounting due to our continuing involvement in the property following
the construction period, as evidenced by a collateralized letter of
credit that we anticipate will be outstanding on the projected sale
date. As a result, instead of applying sale-leaseback accounting, which
would result in treatment as an operating lease, we must account for
the transaction as a financing under SFAS 66.

As discussed
with Ms.  Cvrkel and Mr.  Sears of the Staff in our
telephone conversation on August  2,  2006, in future Form
10-Q and Form 10-K filings, we will expand the disclosure in our
financial statements to include the specific reasons why we do not
currently expect to qualify for sale and leaseback accounting upon
construction completion. We will also expand our MD&A disclosure to
include a more detailed discussion of our accounting treatment,
consistent with our expanded footnote
disclosure.

In connection with our above
responses to the Staff’s comments, JetBlue acknowledges
that:

•
JetBlue is responsible for the
adequacy and accuracy of the disclosure in the
filing;

•
Staff comments or changes to
disclosures in response to Staff comments do not foreclose the
Commission from taking any action with respect to the filing;
and

•
JetBlue may not assert Staff
comments as a defense in any proceeding initiated by the Commission or
any person under the federal securities laws of the United
States.

We appreciate the Staff’s comments. If any
of our responses require further explanation, please do not hesitate to
contact me at (203)
656-7604.

Sincerely,

/s/ HOLLY
NELSON

Senior Vice
President and Controller

(principal accounting
officer)

Cc: Mr.  Jeffrey
Sears,  Division of Corporation
Finance