1.
JET BLUE AIRWAY: CASE ANALYSIS
(STRATEGIC AUDIT)
Anna Osmanay
Anatolia College –American College of
Thessaloniki (ACT)

2.
JET BLUE: BACKGROUND
 Developed in 1998 by Neeleman and Tom Kelly.
 Started operations on February 11, 2000.
Business model:
 Values: safety, caring, integrity, fun & passion.
 Choice of operations: NYC airport (JFK)  less
domestic competition, then.
Positioning:
 Colorful and fun airline.
 Low cost company but a value player.

3.
Positioning:
 Leather seats instead of cloth.
 Passengers allowed to choose their seats.
 Provision of snacks instead of meals.
 Free personal satellite TV per passenger.
Operations:
 Its operations  key to its low costs.
 Aircraft choice  very popular and cost efficient.
 Single class: Uniform level of service.
 Flying to secondary cities (better business).
JET BLUE: BACKGROUND

4.
JET BLUE:BACKGROUND
Operations:
 >70% of passenger’s tickets booked from home
(through internet).
 Lower costs: Customer service executives  work from
home (through internet).
Culture:
 Family like atmosphere
 Positive attitude of employees.

5.
STRATEGIC AUDIT
Current Situation:
Current Performance (good in general):
 Lower debts compared to others years.
 Higher capital.
 Higher sales.
 High earnings/share ratio.
Mission: JetBlue is an award-winning airline whose mission
is “to bring humanity back to air travel and to make flying
more enjoyable.”

6.
The airline does this by delivering value, service, style,
and comfort to their customers—and to their employees,
all of whom are called “crewmembers.”
Objectives:
 To restore the company's financial health.
 To continue to grow the business, while maintaining its
effective organizational culture.
 To maintain their low cost profile and increase
efficiency.

7.
Strategies:
 Low-cost strategies:
1. Cost management throughout operations (including
electronic tickets, paperless cockpits, on-line check-in)
2. Only two aircraft types and a single travel class
3. Participatory leadership/management
 Differentiation strategies:
1. Superior customer service
2. Tangible items include easy-to-use reservation system
(ticket-less travel, pre-assigned seating, new airplanes,
cabin features)
3. Employee morale, completion rate

8.
Strategic Managers:
 Very educated
 Highly motivated & well trained
 Provide a better experience to the customers
External Environment/Opportunities,Threats:
 Social: High demand for air travel (o), obese passengers
contribute to higher fuel consumption (higher costs) (t)
 Legal: Increase in labor wages & bankruptcy of many
rival airlines (o), mergence of new competitors and
regulations (t)
 Environmental & Ethical: High oil prices (t)

9.
 Political:Rising security rules and obligations (t)
 Technological: Utilization of the internet for sales & new
aiplanes fleet (o), reliability of the internet and system
downtime (t)

10.
EXTERNAL ANALYSIS (EXHIBIT 1.1)
External Factors
Opportunities
• High demand for air travel
• Increase in labor wages &
bankruptcy of many rivals
• Utilization of the internet
• New airplanes fleet
Threats
• Obese passengers-higher
fuel consumption
• Mergence of new competitors
and regulations
• High oil prices
• Rising security rules and
obligations
• Reliability of the internet and
system downtime
Total Scores
Weight
.20
.15
.05
.10
.10
.15
.15
.05
.05
1
Rating
4
4
4
3
2
3
3
3
2
Weighted
Score
.80
.60
.02
.30
.20
.45
.45
.01
2.83

11.
INTERNAL ANALYSIS (TOTAL WS: 3.2) - EXHIBIT 1.2
Fractions Weight
(Total: 1) Rating
Weighted
Score
(WS:3.2)
Opportunities
JetBlue fleet maintains a new fleet
of aircrafts
.05 3 .15
JetBlue offer in-flight entrainment .10 4 .40
JetBlue hires the best crew in
terms of skills and employees
.15 4 .60
Availability of customer service
management
.15 4 .60
Has a very clear strategy in terms
of leadership
.05 3 .15
It maintains a higher net income &
P/S ratio compared to industry
.10 2 .20
It maintains a higher revenue &
P/E ratio compared to industry
.15 3 .45
It maintained a higher operating
and gross profit margin
.15 3 .45
Threats

12.
RECOMMENDATIONS
1. Market Development: add domestic locations and fly
internationally.
2. Market Penetration: by increasing advertising and
expand to Social Media (eg. TV, radio, internet).
3. Related Diversification: build partnership travel
website (info: Different Travel Diversification, find
hotels, restaurants, hot spots etc.).