JETBLUE AIRWAYS: GROWING PAINS I. Introduction A. Executive Summary 1. Summary statement of the problem: JetBlue Airways was a fairly new airline that was going up against such airlines like Southwest, AirTran, and Delta. Started in 1999, JetBlue Airway was able to turn profits fairly quickly; in 2001 the company had profits of $38.5 million (George & Regani, 2008, 20-4). From there on it seemed that the company would continue to be profitable especially with expansions in the works; moving into areas that competitors ignored, ordering more planes, expanding to the west coast, and building a new terminal at JFK. However, due to various external and internal factors the company once again posted losses in 2005 and 2006. 2. Summary statement of the recommended solution: The problem is that JetBlue is expanding too fast and too soon to keep up. The company needs to slow their growth so that the company can keep up with the pace. Furthermore, the company needs to continue to do what the company does best; superior customer service, low fares, short-to-medium routes instead of offering what the competitors are doing. This is lessening JetBlue’s differentiation from other companies creating just another option for customers. Finally, JetBlue needs to continue to make cuts as outlined in the Return to Profit plan so that the company reduces expenses. B. The Situation JetBlue Airways was a low-cost carrier that was founded in 1999 by David Neeleman. JetBlue was able to become competitive by offering passengers low fares and several value-added services such as leather seats, snacks instead of full meals, and free personal satellite television. JetBlue’s success was due to a variety of reasons. For one thing, JetBlue mainly used secondary airports targeting a market that other airlines missed. Furthermore, JetBlue used Airbus A-320 airplanes instead of Boeing 737s which ended up saving money because of maintenance and they were more fuel-efficient. Also, JetBlue created a family-like work culture that helped their workforce to have a positive attitude thus giving customers superior customer service.
Potential Analysis of Jet Blue: A Case Study
747 WordsFeb 3rd, 20183 Pages
Its main base is JFK international airport in Queens, NY. The airline's main destinations are U.S. hubs, flights to the Caribbean and Bahamas, and some to Central and South America. It is a non-union airline with a fleet of just under 200 craft, with another 50 ordered. The primary strategy for Jet Blue is the customer value proposition. The airline is not fancy, does not try to offer a number of amenities, only has a few routes, and is primarily trying to base ridership on low-cost fares. Revenue for 2011 was $4.5 billion, with operating income of $322 million and net income of $86 million. The company has a total of over $7 billion in assets showing that 2011 was a good year for the airline, even though revenues were slightly lower than the previous year (Jet Blue Annouces 2011 Annual Profit, 2012).
Part 2 Resource Analysis- The company uses unit level activities and manages these by choosing to maintain high aircraft utilization (operating a single aircraft type with a single class of service) and direct booking services save computer reservation fees (use of www.jetblue.com) which lowers operating costs. It uses batch level resources by using a uniform type of aircraft, in which the staff need only become an expert once not many times over.
Part 3 External Environment - Airlines, particularly smaller…