The document provides an analysis of JetBlue Airlines. It discusses JetBlue's founding, competitive strategy, strengths and weaknesses. Key points include:
- JetBlue was founded in 2000 and had significant financial success in its early years, achieving profits while other airlines lost billions.
- It differentiates itself from competitors like Southwest by offering amenities like seat-back TVs and leather seats.
- JetBlue keeps costs low through efficiencies like operating a standardized fleet and selling tickets exclusively online.
- Though it faces threats from larger competitors, JetBlue has significant strengths in management, customer focus, and low costs relative to the industry.
I recently graduated from Penn State University with a degree in Advertising and a minor in Business. I worked with four students during the Fall semester of my senior year in completing an Advertising campaign for JetBlue Airlines.
Jet Blue Airway: Case Analysis (Strategic Audit)Anna Osmanay
The presentation analyses a case of Jet Blue Airway. Jet Blue Airway is an airline company that operates in the United States. Background information about the company as well as a strategic audit of the company is presented. The strategic audit has to do with the internal and external analysis of the environment of the company.
In what way can we see that JetBlue made an entrance in an industry from the old mass production paradigm and still were able to take advantage of the ideas of the new ICT paradigm? How JetBlue make flying easier for a whole new customer segment (the low-cost segment) through focus on efficiency and new technology.
I recently graduated from Penn State University with a degree in Advertising and a minor in Business. I worked with four students during the Fall semester of my senior year in completing an Advertising campaign for JetBlue Airlines.
Jet Blue Airway: Case Analysis (Strategic Audit)Anna Osmanay
The presentation analyses a case of Jet Blue Airway. Jet Blue Airway is an airline company that operates in the United States. Background information about the company as well as a strategic audit of the company is presented. The strategic audit has to do with the internal and external analysis of the environment of the company.
In what way can we see that JetBlue made an entrance in an industry from the old mass production paradigm and still were able to take advantage of the ideas of the new ICT paradigm? How JetBlue make flying easier for a whole new customer segment (the low-cost segment) through focus on efficiency and new technology.
Communicating in a Crisis : The Case of Jet AirwaysKrishna Chaitanya
This gives you a clear idea on how to communicate in an organization to employees when surrounded by a crisis. It also elicits examples on what a business leader's role is. Jet air-ways case study simplifies this HR leadership role.
Since the birth of flight in 1903, air travel has emerged as a crucial means of transportation for people and products. The hundred-plus years following the invention of the first aircraft have brought about a revolution in the way people travel. The airline business is a major industry, relied upon by millions not only for transportation but also as a way of making a living.
Communicating in a Crisis : The Case of Jet AirwaysKrishna Chaitanya
This gives you a clear idea on how to communicate in an organization to employees when surrounded by a crisis. It also elicits examples on what a business leader's role is. Jet air-ways case study simplifies this HR leadership role.
Since the birth of flight in 1903, air travel has emerged as a crucial means of transportation for people and products. The hundred-plus years following the invention of the first aircraft have brought about a revolution in the way people travel. The airline business is a major industry, relied upon by millions not only for transportation but also as a way of making a living.
Lets learn service recovery from Jet Blue Airline when they faced a problem in a nightmare Valetine"s day. Then, we try to help Lion Air which also has many problems within this company. Hopefully Lion can learn and improve their service recovery in order to leverage their quality as in revenue.
this is a case about jet blue.how jet blue change its strategy to recover its sales r customers..what features they revise or how they satisfy their customers
Why JetBlue Added First Class to its Transcontinental FlightsDexter King, MBA
Ty Montague's (CEO at Co:Collective) article "Why JetBlue does not need First Class" inspired me to write a response that tries to understand why JetBlue actually does need First Class. I try to keep these strategic musings to under 20 slides.
This is a Media Plan that I did for the client jetBLue. This was a project in my media planning class for Grady the school of Journalism and Mass Communication.
Global Operations and Supply Chain Management: Airbus vs. Boeing Final Assig...Jamar Johnson
Final Assignment performed by Jamar Johnson and IE Business School classmates for our Global Operations and Supply Chain Management course. The class was taught by Professor and Associate Dean of IE Business School, Luis Solis.
Read Case 10 Southwest Airlines. Answer questions 1-4 in a three.docxcatheryncouper
Read Case 10: Southwest Airlines. Answer questions 1-4 in a three to five page APA style paper, and supported with the concepts outlined in your text and from your previous classes.
1. Describe the current state of the airline industry and analyze what an airline can do to be successful in the current industry climate.
2. Perform a SWOT analysis for Southwest Airlines.
3. Assess the competitive position of Southwest Airlines by completing a competitor profile for Southwest airlines and at least two of its major competitors.
4. What alternatives does Southwest Airlines face to address the problem of declining financial performance?
Southwest Airlines 2008
1 In 2008, Southwest Airlines (Southwest), the once scrappy underdog in the U.S. airline industry, carried more domestic passengers than any other U.S. airline. The company, unlike all of its major competitors, had been consistently profitable for decades and had weathered recessions, energy crises, and the September 11 terrorist attacks. In the first quarter of 2008, the company was profitable and experienced record first quarter revenue and a record pas- senger load factor (percentage of available seats sold). However, the earnings release made it clear that the “threat of volatile and unprecedented jet fuel prices” was a major issue that threatened future growth. Operating expenses were rising, and Southwest announced that it would cut 2009 growth in available seats to less than 3%. Over the previous decade, growth had been about 5–10% a year. This cut in planned growth was consistent with previous responses to difficult environments. An insight into Southwest’s operating philosophy can be found in the company’s 2001 Annual Report:
Southwest was well poised, financially, to withstand the potentially devastating hammer blow of September 11. Why? Because for several decades our leadership philosophy has been: We manage in good times so that our Company and our People can be job secure and prosper through bad times. . . . Once again, after September 11, our philosophy of managing in good times so as to do well in bad times proved a marvelous prophylactic for our Employees and our Shareholders.
THE U.S. AIRLINE INDUSTRY
The U.S. commercial airline industry was permanently altered in October 1978 when Presi- dent Carter signed the Airline Deregulation Act. Before deregulation, the Civil Aeronautics Board regulated airline route entry and exit, passenger fares, mergers and acquisitions, aattract and retain the world’s top talent have combined to create a combination of path-dependent resources that are very difficult for even the wealthiest software and Internet companies worldwide to easily emulate, acquire, or accelerate. It will take years for any competitor to develop the expertise, infrastructure, reputation, and capabilities to compete effectively with Google. Coca-Cola’s brand name, Gerber Baby Food’s reputation for quality, and Steinway’s exper- tise in piano manufacture would ta ...
Case study assignment help by world’s best assignment writing experts at affordable prices. You will get first class assignment help without any mistake.
NOTE This Industry overview is only a starting point for your an.docxhenrymartin15260
NOTE: This Industry overview is only a starting point for your analysis. Environment and industry issues can change rapidly and some of the information here may therefore be out-of-date.
You MUST supplement this information with additional research.
The Airline Industry
4940- Summer, 2014
Few inventions have changed how people live and experience the world as much as the invention of the airplane. During both World Wars, government subsidies and demands for new airplanes vastly improved techniques for their design and construction. Following World War II, the first commercial airplane routes were set up in Europe. Over time, air travel has become so commonplace that it would be hard to imagine life without it. The airline industry certainly has progressed. It has also altered the way in which people live and conduct business by shortening travel time and altering our concept of distance, making it possible for us to visit and conduct business in places once considered remote.
The airline industry exists in an intensely competitive market. In recent years, there has been an industry-wide shakedown, which will have far-reaching effects on the industry's trend towards expanding domestic and international services. In the past, the airline industry was at least partly government owned. This is still true in many countries, but in the U.S., all major airlines have come to be privately held. The U.S. airline industry has been in a chaotic state for a number of years. According to the Air Transport Association, the airline industry’s trade association, the loss from 1990 through 1994 was about $13 billion, while from 1995 through 2000, the airlines earned about $23 billion and then lost about $35 billion from 2001 through 2005. Against this backdrop of poor financial performance, dramatic changes in industry structure have occurred. Growth in air passenger traffic has outstripped growth in the overall economy and the U.S. airline industry remains in the midst of an historic restructuring. Over the last five years, U.S. network airlines have reduced their annualized mainline costs excluding fuel by more than 25%, or nearly $20 billion.
While some of the cost savings realized in the industry were the product of identifying greater operational efficiencies, most of the savings were generated by renegotiation of existing contractual arrangements with creditors, aircraft lessors, suppliers and airline employees and achieved either through the bankruptcy process itself or under threat of bankruptcy. A portion of industry capacity still operates in bankruptcy. But, it is down from a high of 46 percent in 2005. As a result, several carriers that were near liquidation now have lower cost structures that should allow them to show improved performance.
Economic profile of the Air line industry: The airline industry has always exhibited cyclicality because travelers' demand is sensitive to the performance of the macro economy yet airl.
What are the greatest challenges facing the future of the corporate aviation ...1BlueHorizon Group
Leonard Favre Speech at Middle East Corporate Aviation Summit (MECAS 2012) - Al Bateen Executive Airport Abu Dhabi (Aeropodium conference - www.aeropodium.com)
3. JETBLUE AIRLINES
• The primary subject matter of this
business policy case concerns the
competitive strategy and background
of a new, very successful airline-
jetBlue Airways (jetBlue). The time
frame of the case is from the firm’s
inception to the end of fiscal year
2002.
4. JETBLUE AIRLINES
• . The case has a difficulty level of
four-five, appropriate for senior
level undergraduates or for first
year MA students. The case is
designed to be taught in one
seventy minute class and will
require two to three hours of
outside preparation by the
students.
5. SYNOPSIS
• JetBlue is a new, very successful low cost
airline. In their first year of operations (2001)
they achieved a $32 million net profit on
revenues of approximately $320 million. This
particularly notable in that the entire
industry lost approximately $10 billion during
the same year. JetBlue flies point-to-point
routes- much like Southwest Airlines and
offers distinctive service features- reserved
seating, leather seats, seat back TV’s with
twenty-four channels, and very customer
oriented personnel.
6. SYNOPSIS
JetBlue, at least sperficially, appears to be an
example of a Low Cost Leader. In their initial
foray into the New York to Florida market they
offered ticket prices about half of the existing
competitor’s ticket prices and a serious focus
on customer convenience- including such things
as no mandatory Saturday night stay to get the
lowest ticket price. All tickets are sold online or
though a unique Salt Lake City reservation
system.
7. SYNOPSIS
They were the first airline to introduce
electronic ticketing and their use of
Information Technology is extensive.
JetBlue’s founder, David Neeleman, is a
young, forty-three year old career
entrepreneur with dyslexia. He is a
practicing Mormon with nine children and
prior to founding JetBlue had experience
with two other airline startups.
8. THE FIVE FORCE INDUSTRY
COMPETITION
• One might infer that jetBlue is forcing American
and other major carriers into a price war. One of
the points that should come out in this
discussion is the relative ability of other airlines
to match jetBlue’s fare schedule. One of the
most important metrics to assess operating
performance of airlines is cost per seat mile and
jetBlue has a real advantage in this area. Their
cost per seat mile, in 2002, is about 2/3 of the
industry average!
10. THE FIVE FORCE INDUSTRY
COMPETITION
• JetBlue has significantly outperformed the
industry in most important financial ratios. In
terms of valuation ratios, PE is thirty-one.
Twelve for the most recent month compared to
an industry average of 38.43.
• One ratio that needs careful assessment is the
Debt Equity (D/E) ratio. By comparison, jet Blue
carries a fairly high D/E ratio. This can have an
effect on future borrowing for new aircraft.
11. THE FIVE FORCE INDUSTRY
COMPETITION
• Growth rates in earnings per share and
sales are far above its competitors. The
implication is that jetBlue is growing
rapidly while many of its competitors are
declining. The most significant ratio
differences are in profitability and
management effectiveness. In every
category, JetBlue is out performing the
competition significantly.
13. JETBLUE AIRLINES
• Strengths: Management, Costs,
Utilization, Profitability, and Focus.
Customer-driven Mission Statement,
Appeals to high class people who
want low fares,Customer Bill of
Rights, and Leather seats, Individual
TV sets (Direct TV), and extra leg
room.
14. JETBLUE AIRLINES
• Weaknesses: A significant weakness
would be size as it is possible that
larger competitors could overwhelm
JetBlue in some markets. Low Brand
Awareness, Less Experience, Low
Budget, Small Airline, Less Planes,
and Less People.
15. JETBLUE AIRLINES
• Opportunities: expansion to
additional markets- particularly
underserved markets and regional
markets. International alliances,
Capitalize on domestic Hubs, and
several coastal destinations.
16. JETBLUE
•
AIRLINES other
Threats: Competition (particularly
low cost airlines), the price of fuel, and
unions. Major aircraft carriers with large
budgets, Negativity surrounding the
current views of the airline industry,
extremely High Crude and Oil Prices, and
Similar Objectives and strategies as other
low-cost airlines.
18. CORPORATE STRATEGY
• JetBlue is following strategy but
interestingly they are differentiating
themselves from Southwest in several
ways such as assigned seating, leather
seats, and in particular, seat back TV.
This notion that a firm can both be a
differentiator and low cost leader files in
the face of Michael Porter’s conventional
wisdom.
19. FIVE FORCE ANALYSIS OF THE
AIR LINE INDUSTRY
The degree of competitiveness, power, and strength is
indicative of the five-force analysis. Michael Porter’s Five
Force Analysis Model indicate the factors that directly
influence the firm and it’s competitive actions and responses
are:
•The threat of new entrants
•The power of new suppliers
•The power of buyers
•The threat of new substitutes
•The intensity of the rivalry
• between competitors
21. THE THREAT OF NEW
ENTRANTS: LOW
• Potential and existing competitors
influence average industry profitability. In
JetBlue’s case, the threat is from existing
competitors already in the market. This is
mainly due to the current economic state
we are in which greatly affects the
market entry barriers. The cost of entry
consists of extremely high costs and
massive capital requirements.
22. THE THREAT OF NEW
ENTRANTS: LOW
• . In this economy, it would be nearly
impossible to find funding with the
excessive risk, lower buyer confidence,
and debt to asset ratio of the airline
industry. Major competitors of JetBlue are
already decreasing flights and merging
with one another in order to consolidate
debt and stay in business since fixed costs
are extremely high.
23. THE THREAT OF NEW
SUBSTITUTES: LOW
• The bargaining power of suppliers,
particularly aircraft manufactures and
employee groups, is fairly high. JetBlue
is able to offset the bargaining power of
fuel suppliers, which is a very important
cost area, with a successful fuel- hedging
program.
•
25. The cabins have only one class of seats which
combined an overall first class experience. There has little or no
threat to closing as the airline industry offers entry with little no no
appeal.
26. The cabins have only one class of seats which
combined an overall first class experience. There has little or no
threat to closing as the airline industry offers entry with little no no
appeal.
28. POWERS OF SUPPLIERS: HIGH
The key inputs in the airline industry are the jet fuel and the aircraft suppliers. The
airplane manufacturing industry is dominated by Boeing and an JetBlue’s Airbus
supplying the majority of airplanes for the me large airline companies. For this reason,
the suppliers have most of the bargaining powering leverage and increasing prices when
costs rise.
29. On the bright side, since JetBlue's fleet consists of only two
types of aircrafts it keeps the cost of the airplanes lower
than if they had a fleet of vastly different types of airplanes.
30. • Nevertheless, most airline companies have
very LITTLEBARGIN
power given that there is a market price for
jet fuel and most airline companies pay exactly
or close to that price.
31. • In addition, the volume of fuel supplied to the
airlines is extremely important because jetBlue has
prescheduled flights that require a certain amount
of fuel. As a result, the bargaining powers of
suppliers is high.
32. • In addition, the volume of fuel supplied to the airlines
is extremely important because jetBlue has prescheduled flights that require
a certain amount of fuel. As a result, the bargaining powers of suppliers is
high.
• Never the less, most airline companies have very littlebargaining
power given that there is a market price for jet fuel and most airline
companies pay exactly or close to that price. Nevertheless, most airline
companies have very LITTLEBARGIN
power given that there is a market price for jet fuel and most airline
companies pay exactly or close to that price. In addition, the volume of fuel
supplied to the airlines is extremely important because jetBlue has
prescheduled flights that require a certain amount of fuel. As a result, the
bargaining powers of suppliers is high.
• Never the less, most airline companies have very littlebargaining
power given that there is a market price for jet fuel and most airline
companies pay exactly or close to that price.
33. JETBLUE
AIRLINES
• Never the less, most airline companies have very littlebargaining
power given that there is a market price for jet fuel and most airline
companies pay exactly or close to that price. Nevertheless, most
airline companies have very LITTLEBARGIN
power given that there is a market price for jet fuel and most airline
companies pay exactly or close to that price. In addition, the volume
of fuel supplied to the airlines
is extremely important because jetBlue has prescheduled flights that
require a certain amount of fuel. As a result, the bargaining powers
of suppliers is high.
• Never the less, most airline companies have very littlebargaining
power given that there is a market price for jet fuel and most airline
companies pay exactly or close to that price.
34. JETBLUE
LITTLEBARGIN AIRLINES
power given that there is a market price for
jet fuel and most airline companies pay exactly or close to
that price. In addition, the volume of fuel supplied to the
airlines is extremely important because jetBlue has
prescheduled flights that require a certain amount of fuel.
As a result, the bargaining powers of suppliers is high.
Never the less, most airline companies have very
littlebargaining
power given that there is a market price for jet fuel and mo
st airline companies pay exactly or close to that price
36. INTENSITY OF RIVALRY
AMONG COMPETITORS: High
• The intensity of rivalry among
• competitors in the industry is very high.
• This is due to the numerous companies that
• strive for the dominant market share in the industry.
Airlines typically try their hardest to differentiate
themselves to gain a competitive advantage yet some of
these failed attempts typically derive unhealthy, negative
reactions from the others. Additional factors that may
• contribute to rivalry include high interest rates and
debt, feeling a generalized sense of deprivation as the
industry growth slowly decreases along with the
diminishing in disposable income necessary to have in
order to make a living.
38. Power of Buyers: High
• There are several options available
• to customers with what airline they
choose to fly. Since products and services are essentially standard,custo
mers of this industry are price conscious under their belief that all
airline companies will get them to their destination but would
• prefer to fly with the one that can get them there cheaper.
• with websites such as www.cheaptickets.com
universal booking and ticketing on-line, it’s easily accessible for
customers to research the best price. The recession and overall increase
in fixed costs has hit the industry limited airlines with not flying at full
capacity and many seats were left empty. High bargaining power for the
buyers is a product of this condition because it keeps the average flight
cost lower than what it should be. Providing the given current industry
conditions were much more prosperous, it would be far more feasible
for promoted competition for the title and position of price leader of
the air lines.
42. AIRLINE INDUSTRY ON THE
DECLINE FOR MOST
• Of course, the internet is a “double edged sword”, readily available
information and prices at the click of a touch pad. With all things
considered, it is clear that the airline industry and it’s
• employees are under extreme duress.
• Despite the deflating economic circumstances of the airline
industry, several major carriers have announced that currently new
subsidiaries are to compete against the low cost providers. Thus the
threat of new entrants in the low cost sector of the airline industry is
substantial.
• However, initially, on June10, 2003, jetBlue announced an order for
one hundred new EMBAER 190 AIRCRAFTS. THE EMBAER 190,
of course, is the regional jet that seats one hundred passengers.
• However, initially, on June10, 2003, jetBlue announced an order for
one hundred new EMBAER 190 AIRCRAFTS. THE EMBAER 190,
of course, is the regional jet that seats one hundred passengers.
43. However, initially, on June10, 2003, jetBlue announced an order for one
hundred new EMBAER 190 AIRCRAFTS. THE EMBAER 190,
ofcourse, is the regional jet that seats one hundred passengers.
44. Thus it seems that JetBlue was already prepared and was announcing intentions
to enter the regional airline business. Leading the industry with a brand new
business model, in that they had previously standardized Airbus A 320’s to have
already served major airports. Achieved by the rationale for standardizing A
320’s in efforts to minimize parts inventories and personal training.
45. JETBLUE AIRLINES
JetBlue has managed to accomplish this during these last
decades of our darkest hours following the September 11
attacks. In reporting an astonishing net income of $28.3 million
of total revenues on $224.9 million
To report a profit in the third quarter while most of our
industry is reporting unprecedented losses is a great tribute
to the dedication and hard work of the entire jetBlue team,"
said David Neeleman, CEO of jetBlue.
JetBlue has managed to accomplish this during these last
decades of our darkest hours following the September 11
attacks. In reporting an astonishing net income of $28.3 million
of total revenues on $224.9 million