Jet Blue Case Study Essay example

Before David Neeleman’s non-compete agreement with Southwest Airlines expired, he envisioned the concept of starting a low-fare airline that would combine common sense, innovation, and technology and bring the humanity back into air travel (Gittel & O’Reilly, 2001). In 1998, JetBlue was born. In order for David to fulfill his goal of a “do-it-right” kind of airline, he needed to recruit superior industry veterans who were willing to start from scratch and place an emphasis on employees and customers. Each of these individuals, from the President, General Counsel, CFO, and the HR director, wanted to create an airline that was fun, had

Business Strategy – BAD 4013 – SUMMER 1999 Case Study Southwest Airlines I. Strategic Profile and Case Analysis Purpose The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit. Twenty-seven years ago, Rolling King, owner of floundering commuter airline, and Herb Kelleher, King’s lawyer, got together and decided to start a different kind of airline that would provide a short-haul, low-fair, high-frequency, point-to-point service in the United States. The company began service on June 18, 1971 with flights between Dallas, Houston, and San Antonio (“The Golden Triangle” as Herb called it). Southwest Airlines is the fourth

JetBlue Airways Corporation was formed in August 1998 as a low-fare, low-cost but high service passenger airline serving select United States market. JetBlue's operations strategy was designed to achieve a low cost, whilst offering customers a pleasing and differentiated flying experience. JetBlue has had a successful business model and strong financial results during that period, and performed well in comparison to other airline companies in the US during the period between 2000 and 2003. It had been the only other airline apart from Southwest airlines, to have been profitable during the aftermath of the September 11, 2001

1. JetBlue's strategy for success in the marketplace is based on the cost leadership strategy, as outlined by Michael Porter (QuickMBA, 2010). This strategy relies on delivering products or services at a lower price than competitors, and using that cost leadership as the basis by which to attract customers. JetBlue essentially built their business model after Southwest Airlines, and the company's founders had experience with Southwest that helped them learn about the business. The JetBlue approach to cost leadership is focused on the mass market.

Only two years in existence, Jet Blue decided to become a public company and issue an initial public offering. Jet Blue’s decision came in 2002, just as the airline industry experienced a substantial downturn following the terrorist attacks of September 2011. Despite these challenges, Jet Blue remained profitable and experienced aggressive growth. In order to support this enormous growth and offset portfolio losses, the public offering seemed to be best course of action.

Therefore, Southwest as well as Jet Blue are considered as low cost carriers (LCC). Jet Blue offers fares up to 65 per cent lower than legacy competitors. Jet Blue Airways positions itself by connecting large, typically northeastern, US cities with warmer cities in the southeast. Jet Blue´s emphasis is like Southwest´s on low fares and point to point transportation. Jet Blue entered the market like Southwest with only one machine, the A320. In this way they could ensure serving a variety of medium- and long-haul routes and numerous overnight flights. Jet Blue could also standardize its training and servicing processes around the aircraft. This allowed them to gain flexibility in scheduling and capacity management. Another feature for customers to make travelling with this airline more attractive are added comfort features such as assigned seating, leather upholstery and satellite TV on individual screens in every seat. Their key principle was that flight cancellation should be avoided at all costs. In 2005, Jet Blue broadened their portfolio in entering the market of medium-sized cities, which was served only by regional airlines. They entered this market using a new midsized aircraft called E190. In launching this new machine, they were able to use synergy of combining the A320 and the E190 profitably while serving now smaller and bigger airports. This portfolio mix gives Jet Blue a yet matchless, strategic competitive advantage compared to the other airlines.

Jet-blue Airways is American low cost airline head quartered near New-York city. It’s foundedin August 1998 by David Neeleman with Joel Peterson as a chairman and David Barger as apresident and CEO. By late 2006,like some other airlines, JetBlue faced some softening demand and high cost due to the increase in fuel prices. Barger realizes that JetBlue needs to take further steps to slow its rate of growth. Barger was not sure about the reductions across E190 and A320. The E190 showedpromising growth opportunities and challenges for JetBlue. At the same time, the A320 wasconsidered as proven plane that had succeededover past 6 years. Most of the airline industries were using hub-and-spoke system and point-to-point services. Due to this service, South West Airlines showed consistent profits. After September 11th, the airline industry experienced trouble due to attack. Looking at the history of Jet-blue, it started with just 10airplanes in 2000 and by 2011 the company planned to have 290 planes in service. To support customers, Jet Blueprovided

The second major strategic issue facing JetBlue is that it needs to attract customers. Initial customer response has been strong, a function of low fares, strong customer service and new airplanes. The company's first year growth objectives have it trying to go from none-existence to filling fifty-three flights per day. This will require an extensive marketing effort for each new market in which it operates, especially as the company is not affiliated with any airline groupings that might drive business from other carriers.

JetBlue Airways, the latest entrant in the airlines industry has gone through the initial stages (entrepreneurial and collectivity) of the organizational life cycle rapidly under the successful leadership of David Neelman. JetBlue Airways is currently in the formalization stage of the life cycle where in it needs to create procedures and control systems to effectively manage its growth. Also as it proceeds to grow further to reach the elaboration stage, JetBlue needs to continue to align itself with the environment in order to maintain its sustained growth.

Within case analysis assignment, the JetBlue case is analyzed strategically in this document to set answers for following basic questions:

JetBlue has always identified itself as a customer service company first, focused on providing customers a unique experience on every flight and with every interaction with JetBlue. (Annual report, 2005)

JetBlue Airways has been affected by key external factors. The political factor that has affected JetBlue is the resentment towards union formation. Currently, JetBlue is a non-union company. This helps it keep its fixed costs low. Further, there are positive

JetBlue is related to three types of the management concepts in my personal understand, they are: product and marketing. First of all, in product concepts the company focuses on offer the best to fulfill their customer’s expectation “holds that consumers will favor products that offer the most in quality,

JetBlue is a pro at utilizing its resources and structure. As such, JetBlue has proven to be efficient in its internal environment. Out of the physical and human aspects of the internal environment JetBlue focuses on human as the key factor. JetBlue views its employees and their skills as the key to a successful structure by emphasizing elements of loyalty, satisfaction, service quality, productivity, capability, and output quality. JetBlue reflects a culture of employees that understand how to retain customers and can perform under various situations with an equally varied consumer base. In addition to human capital, JetBlue uses physical assets to set them apart from the rest. The airline fleet of JetBlue is very precisely selected. From its new Airbus A321 to its Airbus 320, JetBlue prides itself on comfort and luxury. Other perks offered by JetBlue include lower priced airfare compared to that of its competitors and in-flight entertainment options that succeed its competition. Internal weaknesses include a

I believe the situation was handled well, because after the February 14th delays, JetBlue executives developed a passenger Bill of Rights to help deal with the situation if it happens to arise again. The Bill of Rights provides real compensation for delays and cancellations, and it is believed to be stronger, deeper, and much more defined than any other customer commitments you could find in the airline industry.