Case Study Analysis. Karen Pelletier Geneice Bassue Lee Dubois James Lowe. History of the Company. Incorporated in 1998 in Delaware, commenced service in 2000 - primary base of operations at JFK in New York.
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Incorporated in 1998 in Delaware, commenced service in 2000 - primary base of operations at JFK in New York.
2002 - Operated 108 flights per day -- 52 daily flights between JFK and FL -- 26 daily flights between JFK and upstate NY -- 18 daily flights between JFK and the western US.
2002 - Stock trading just below $20
2004 - Revenues of $1.22 billion.
July 2005 - 52 week high was $26.40.
Jet Blue’s mission is to be the leading low-fare, low-cost passenger airline offering high quality customer service to underserved markets and customer who are looking for the best value in their flight. We have the newest most advanced planes that are reliable, fuel efficient, utilizes paperless cockpit technology, live in-flight satellite TV and security cameras. Our philosophy is to give customers the best price value for their ticket, offering things our competitors don’t offer. At JetBlue we feel that hiring educated employees that are highly motivated and well trained will provide a better experience to the customers. We feel that our high-value, high quality service philosophy will lead the way to our becoming the number one in the industry.
At JetBlue our goal is to provide the best, most affordable flight experience of any air carrier while providing superior service.
“The company’s goal has been to establish itself as a leading low-fare, low-cost passenger airline by offering customers high-quality customer service and differentiated products. “
They focus on serving underserved markets and large metropolitan areas that have high average fares with a diversified geographical flight schedule that includes both short and long haul routes.
Rising Fuel Costs
Lots of competition
Cutting costs while increasing revenues and profits.
#6 in World’s Top Low Cost Carriers by Net Profit, 2004
#4 in World’s Top Low Cost Carriers by Load Factor, 2005
#4 in Most Profitable Airlines, 2004 ($47.5 million)
#3 in Most Admired U.S. Airlines, 2006
Increasing demand for air travel.
Untapped international market.
All other airlines that have much higher fares.
Other airlines who have been hurting since 9-11 and heading for Chapter 11.
Increasing use of the Internet.
Potential use of luggage-tracking technology.
Many airlines including JetBlue face union labor contracts.
Unions can strike whenever no agreements are made.
Fuel costs are high and are a HUGE part of
Breakeven load factor is rising.
Higher security required at airports is causing
higher fees on tickets and more customer dissatisfaction.
Low fares compared to other airlines.
Superior customer service.
Low labor wages that save them money.
More efficient and reliable planes.
Only airline to offer live TV in-flight.
High commitment to hiring better employees.
Through their current workings, they are able to
build good brand loyalty.
Low fares could mean less money being made,
Much higher average airborne time and higher
% of diverted flights.
Smaller and more unheard of than any airline.
Fuel consumption, as a % of expenses, is rising
Very low percentage of full-time employees.
Extra bells and whistles could cost company $$.
Extend flights to major hubs in Europe to start off, then as that takes off, offer flights to Asia, Australia, etc.
This is an example of Market Development
Cost: $100,000,000 for 3 planes, fuel for a year and maintenance costs.
Increase Advertising and Expand to Other Media
JetBlue could advertise on TV, Radio, and Online to boost revenues and popularity of the airline.
This is an example of Market Penetration.
Cost: About $4,000,000.
Build Partnership Travel Website.
Build a website where users can look up information about different travel destinations, find hotels, restaurants, hot spots, etc, and book a flight through JetBlue all while comparing prices from other airlines.
This is an example of Related Diversification.
Cost: About $30,000 to start off, then about $60,000 per year to maintain (for a small site).