Exhibit 7

JETBLUE AIRWAYS IPO VALUATION

Recent Valuation Multiples
Actual for 2001

AirTran
Alaska Air
America West
AMR (American)
ATA
Continental
Delta
Frontier
Midwest
Northwest
Ryanair
Southwest
United
WestJet

Price/
Share
(1)
6.6
29.1
3.5
22.3
15.0
26.2
29.3
17.0
14.6
15.7
32.1
18.5
13.5
15.9

Book
Equity/
Share
(2)
0.5
32.1
12.5
35.1
10.8
20.9
32.7
5.4
8.3
-5.1
5.5
5.3
59.6
2.8

Book Debt/ EBITDA*/

Share
Share
(3)
(4)
4.0
1.2
33.8
3.3
10.2
-4.3
69.3
-7.0
32.9
8.5
82.0
9.8
70.3
-1.4
0.0
3.2
2.7
-0.1
66.9
1.6
3.3
1.3
1.8
1.5
186.2
-37.0
1.0
2.1

EBIT/
Share
(5)
0.8
-1.7
-6.2
-16.2
-2.0
1.4
-11.8
3.0
-1.6
-4.4
0.9
1.1
-56.1
1.3

Earnings/
Share
(6)
0.3
-1.5
-4.4
-11.5
-2.6
-1.6
-9.9
2.0
-1.1
-5.0
0.7
0.7
-39.6
0.8

Trailing

AirTran
Alaska Air
America West
AMR (American)
ATA
Continental
Delta
Frontier
Midwest
Northwest
Ryanair

Market to
Total
book
Capital
EBITDA
multiple
multiple
multiple
[1/2]
[(1+3)/(2+3)] [(1+3)/4]
13.5
2.4
8.6
0.9
1.0
19.2
0.3
0.6
-3.2
0.6
0.9
-13.1
1.4
1.1
5.6
1.3
1.1
11.0
0.9
1.0
-71.6
3.2
3.2
5.3
1.8
1.6
-298.3
-3.1
1.3
51.6
5.8
4.0
26.4

EBIT
multiple PE Multiple
[(1+3)/5]
[1/6]
13.0
25.3
-37.0
-19.3
-2.2
-0.8
-5.7
-1.9
-23.8
-5.7
77.0
-16.7
-8.4
-3.0
5.7
8.4
-11.0
-13.5
-18.8
-3.1
38.5
44.0

Southwest
United
WestJet

3.5
0.2
5.6

2.9
0.8
4.4

13.4
-5.4
8.1

18.6
-3.6
12.7

27.6
-0.3
19.6

Data source: Actual numbers for 2001 are from company annual reports. Estimates for 2002 are from Valueline when available, otherwise
consensus analyst estimates are used. All stock prices are quoted as of December 31, 2001. Ryanair figures are based on the respective
American Deposit Receipt prices. Westjet figures are in Canadian dollars. 1 US dollar = 1.5870 Canadian dollars as of March 31, 2002. The
calculation procedure for the valuation multiples is defined in the lower panel based on the numbered variables defined in the upper panel.

Estimates for 2002

EBIT/
Share
(7)
0.8
2.7
-4.5
12.4
-6.4
11.1
8.4
0.6
1.6
7.2
1.2
1.4
NA
1.6

Earnings/
Share
(8)
0.3
-0.8
-4.1
-3.9
-7.2
-1.2
-3.1
0.4
0.8
-2.5
0.9
0.7
-15.4
0.6

Leading
EBIT
PE
multiple Multiple
[(1+3)/7]
[1/8]
13.9
20.0
23.3
-38.8
-3.0
-0.8
7.4
-5.7
-7.5
-2.1
9.8
-22.4
11.8
-9.4
26.6
45.9
11.2
17.4
11.5
-6.3
30.3
34.1

14.3
NA
10.6

when available, otherwise

ased on the respective
s as of March 31, 2002. The
defined in the upper panel.

28.4
-0.9
26.9

Exhibit 8
JETBLUE AIRWAYS IPO VALUATION
Historical Annual Growth Rates for Low Fare Airlines

$ Revenue Growth
Year
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Source: Compustat

AirTran

456%
186%
-4%
49%
18%
-20%
35%
-22%

ATA

Frontier

1%
21%
18%
2%
20%
21%
39%
23%
-58%

49%
125%
39%
56%
105%
79%
237%

Ryanair

20%
N/A
N/A
39%
68%

$ Gross Equipment Growth

Southwest

-20%
5%
28%
32%
51%
101%
42%
46%
32%
35%
45%
18%
35%
49%
10%
-5%
24%
14%
10%
14%
20%
21%
18%
13%
10%
16%
19%
19%
16%
12%

AirTran

2204%
175%
-40%
-4%
108%
15%
24%
7%

ATA

Frontier

11%
24%
23%
5%
4%
17%
22%
15%
-1%

186%
66%
26%
50%
50%
43%
-6%

oss Equipment Growth

Ryanair

25%
15%
29%
11%
21%

Southwest

177%
55%
61%
54%
35%
59%
66%
68%
57%
27%
23%
35%
20%
27%
13%
1%
11%
18%
17%
11%
28%
36%
13%
11%
19%
12%
9%
14%
19%
-2%

Exhibit 9

$ figures in millions

Actual
2001
21

Number of aircraft
$ Revenue/plane
Expected inflation
Operating margin

$15.258

$ Depreciation/plane
$ CapEx/New planes
Expected inflation
NWC Turnover

$0.496
$21.273

Financial Data
Revenue
Cash expenses
Depreciation
EBIT
Tax
NOPAT
Capital expenditure
Net working capital
Fixed assets

$17.638
$0.156
$0.133

$18.414
$0.044
$0.152

$19.224
$0.044
$0.152

$20.070
$0.044
$0.152

$20.953
$0.044
$0.152

$9.449

$0.521
$22.336
$0.050
$9.449

$0.547
$23.453
$0.050
$9.449

$0.574
$24.626
$0.050
$9.449

$0.603
$25.857
$0.050
$9.449

$0.633
$27.150
$0.050
$9.449

$320
$283
$10
$27
$9
$18

$600
$502
$18
$80
$27
$53

$884
$723
$26
$134
$46
$89

$1,192
$975
$36
$181
$62
$120

$1,485
$1,215
$45
$226
$77
$149

$1,802
$1,474
$54
$274
$93
$181

$234
$34
$530

$290
$63
$802

$328
$94
$1,104

$345
$126
$1,413

$310
$157
$1,679

$326
$191
$1,950

$0.084

34%

1
Estimate
2002
34

JETBLUE AIRWAYS IPO VALUATION

JetBlue Financial Forecast
2
3
4
5
Estimate
Estimate
Estimate
Estimate
2003
2004
2005
2006
48
62
74
86

 Net working capital

$30

Free Cash Flow

Discounting Factor @ 9.23%
Discounted FCF @9.23%
NPV (Enterprise Value PV)
Less : preferred shares
Less : long term debt
Add :cash
Equity value
Common Stock Outstanding
Price
WACC

9.499%

$30

$33

$31

$34

-$250
-$243
-$222
0.9155
0.8381
0.7673
-228
-203
-169
1,437
-210
-301
118
1,043
40.6
26 Price Band $25 to $27

-$148
0.7025
-103

-$124
0.6431
-79

6
Estimate
2007
98

7
Estimate
2008
108

8
Estimate
2009
113

9
Estimate Terminal
Value
2010
117

$21.875
$0.044
$0.152

$22.838
$0.044
$0.152

$23.843
$0.044
$0.152

$24.892
$0.044
$0.152

$0.665
$28.507
$0.050
$9.449

$0.698
$29.933
$0.050
$9.449

$0.733
$31.430
$0.050
$9.449

$0.770
$33.001
$0.050
$9.449

$2,144
$1,753
$65
$326
$111
$215

$2,466
$2,016
$75
$375
$127
$247

$2,694
$2,202
$83
$410
$139
$270

$2,912
$2,380
$90
$443
$151
$292

$342
$227
$2,227

$299
$261
$2,451

$157
$285
$2,526

$132
$308
$2,568

$36

$34

$24

$23

-$98
0.5888
-57

-$11
0.5390
-6

$172
0.4935
83

$227
0.4518
100

$4,747
0.4518
2098

Price / Earning
Airlines (positive earnings)
Airtran
Frontier
Ryanair
Southwest
Westjet
Average
Median
JetBlue Trailing
JetBlue Leading

Price/share
6.6
17
32.05
18.48
15.85

28.84
34.12

Total Capital Multiplt tra

Price/Share
AirTran
Alaska air
America west
ATA
Frontier
Ryanair
Southwest
WestJet
Average
Median
Jetblue Trailing

6.6
29.1
3.5
14.95
17
32.05
18.48
15.85

27.5

EBIT Multiple

Airlines (positive earnings)

Airtran
Frontier
Ryanair
Southwest
Westjet
Average
Median
JetBlue Trailing
JetBlue Leading
Exhibit 10

Price/share
6.6
17
32.05
18.48
15.85

Discounted cash flow analysis

& WACC

Southwest Capital Structure

Market Value Equity
16,071,992.00
Market Value Debt
1,842,000.00
Enterprise Value
17,913,992.00
Southwest D/E Ratio
0.11
JetBlue Beta
SW Levered beta
1.10
SW Unlevered beta
1.02
Southwest tax rate
31%
JetBlue Tax Rate
34%
Jetblue D/E Ratio
0.30
Jetblue Levered beta
1.22
Jetblue Unlevered beta

1.02

Jetblue - Cost of Capital

Pretax cost of debt
Tax Rate
After - tax cost of debt
Dividends of preffered Stock
Convertible P/S
Cost of P/S
Equity Beta
Rf
Rm-Rf
Cost of Common Stock
Debt
Preffered Stock
Common Stock
WACC

7.41%
34%
4.89%
16,970
210,441
8.06%
1.22
5.00%
5.00%
11.10%
19.00%
13.00%
67.00%
9.499%

Assumptions & Data Input:

1 1. Growth rate @ 4.5% P.a.
2 2. Debt to capital ratio calculated using Total capital multiple estimate
3 3. Risk free rate and market premiun as of 2002.
4 4. No of shares outtstanding after the IPO is 40578829 shares
5 Market Value for equity shares of similar risk class = $26
6 Total no of outstanding shares after IOP (round up) = 40.6
7 Enterpise Value = Equity Value + Debt+Prefered Stock - Cash - Other Financial ass
8 Equity Value = EV -Debt-Prefered stock + Cash

Price / Earnings multiple

Trailing
Earnings/ Share
PE Multiple
0.26
2.03
0.73
0.67
0.81
0.9
0.73
1.14

Total Capital Multiplt trailing

Book Equity/Share

Leading
Earnings/ Share
25.29
0.33
8.37
0.37
44.02
0.94
27.59
0.65
19.57
0.59
24.968
0.58
25.29
0.59
25.29
1.2

Book Debt/Share

0.49
32.12
12.47
10.79
5.36
5.54
5.26
2.82

5.16

Total Capital Multiple

3.96
2.37
33.8
0.95
10.2
0.6
32.9
1.1
0.01
3.17
3.33
3.99
1.79
2.88
0.97
4.44
2.44
2.625
8.59
2.625

Trailing
Book Debt/Share

EBIT/ Share
3.96
0.01
3.33
1.79
0.97

0.81
2.99
0.92
1.09
1.32
1.426
1.09
1.426

EBIT Multiple
13.04
5.69
38.45
18.6
12.74
17.704
13.04
17.70

776.8* $20.69
Exhibit 5

0.3

Total Debt / Total Value Equity

Levered Beta = Unlevered Betax (1 + ((1 Tax Rate)x (Debt/Equity)))

1.22

Levered Beta/(1 + ((1 Tax Rate) x (Debt/Equity)))

multiple estimate

k - Cash - Other Financial assets

Cost of Capital
Kd
Kp
Ke
WACC

Weight
19%
13%
67%
1.000

Determination of Weight of capital structure

Value
Equity share
$
1,055.60
Debt
$
301.00
Prefered Stock
$
210.00
Total capitalisation
$
1,566.60

Leading
PE Multiple
20
45.95
34.1
28.43
26.86
31.07
28.43
28.43

Leading
EBIT/ Share EBIT Multiple
0.76
0.64
1.17
1.42
1.59
1.12
1.17

13.89
26.58
30.26
14.27
10.58
19.12
14.27

1.2

19.12

K
4.89
8.06
11.1

Weight
0.6738159071
0.1921358356
0.1340482574
1

WACC
0.940
1.080
7.479
9.499

Weight %
Cost
67% Ke
19% Kd
13% Kp