JetBlue Airways faces several challenges going forward including maintaining its culture as it grows, managing two different fleet types, dealing with increasing maintenance costs as planes and engines age, and a growing senior leadership pool. The document discusses JetBlue's history and strategy of providing low-cost air travel with superior customer service. It analyzed JetBlue's financial position in terms of liquidity, stability, and profitability and found short-term liquidity and long-term profitability to be issues as profits declined. Maintaining this strategy amid industry competition will be a challenge.

1. SHREYA
PGFB1144
WRITE UP
ON
JETBLUE AIRWAYS: CHALLENGES
AHEAD
Submitted To Submitted By
Dr. Deepak Singh Shreya
PGFB1144
PGDM (G)
2011-13
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2. SHREYA
PGFB1144
Strategic Issue: To provide a low cost carrier segment within the airline industry and to achieve
an image of far superior customer service.
Challenges:
Maintaining JetBlue’s culture as it grows, dealing with the surfing complexities of two fleet
types, managing maintenance expenses as airplanes and engines begin to age, and dealing with
an increasing senior level pool
Summary
The case talks about how to achieve the position which jet airways were holding before 2005.
David Neeleman the founder and chairperson of Jet Airways Corporation sought to bring
“humanity back to air travel”. They have faced a rapid growth between the years 2000-2004 and
named as “Best Overall Airline” by Onboard Service Magazine. There was cut-throat
competition in the industry the main competitors were Southwest Airlines, AMR Crop., United
Airlines and US Airways. The bargaining power of the suppliers were very high as the employee
and fuel were the two main components and according to the recent trends fuel price is rising at
rapid pace which is leading to increase in the expenses of the airways which tended to increase
the price of tickets. Bargaining power of customer was also high but to prevent customer to shift
to others they provided new and innovative services in order to make their experience better.
In order to reduce the cost many new technologies were used like removing paper use and
establishing use of laptop which make system effective and opening online reservations, check in
which helped both customers and airlines because it resulted in saving times.
The recent strategies used by Jet Airways are “Return to Profitability” as it incurred losses in the
years 2006. Jet Airways also started “JetBlue Card” in which after collecting 100 points a free
round trip was offered to the customer.
As we see the financial condition of the Jet Airways it was basically measured by three
components:
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3. SHREYA
PGFB1144
 Short Term Liquidity
 Long Term Stability
 Company Profitability
Jet Airways was struggling in short term liability since 2005 we can see that payable turnover
ratio was increasing which shows that jet airways are paying its suppliers at a minimum time
even though the receivables are not able to pay.
Long term stability is issue with the jet airways as it is difficult to maintain decreasing profits.
They have maintained a fairly debt to asset mix and company profitability was decreasing as
they were not paying dividends and there was declining return on equity and inconsistency of net
income was a negative thing for Jet Airways.
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