...Problems at JetBlue JetBlue’s problems were caused by both management as well as technological issues. If JetBlue’s management team would have been better prepared or made different decisions then many problems could have been avoided. One of the things that airlines know is that bad weather can never be predicted or controlled no matter what the circumstance and any airlines should be prepared for the worst, especially during the off season when bad weather occurs the most. From my experience, delaying customers to their flights happens quite often, especially during bad weather. But every airline knows that a customer will only wait for so long before getting discouraged and upset. Having customers wait for several hours or sitting on a plane for up to 11 hours would cause most people to never consider that airline again, in turn JetBlue would be losing large quantities of customers due to bad management decision making. When customers where finally allowed off the plane and already upset they were not able to get ahold of airline agents or had an hour wait time to try to rebook or find out where their bags were. This just added to an already furious customer base. Although JetBlue had a system in place their system was only equipped to handle under normal circumstances and was not equipped for emergencies. If JetBlue had prepared their system for an emergency situation then customers could have handle the situation through the airline agency in a more timely manner and would...
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...Airline Lufthansa Companies Strategic Change and Strategic Challenge for Lufthansa Introduction The biggest airline in Germany- Lufthansa is one of the leading airline companies in the world, but it suffered from the danger of bankruptcy in 1991. However, the flexible strategic change programs made it survive. Thus, the implementation and effects of those programs are obviously attractive and deserve further study. Moreover, current business environment is full of opportunities and challenges, which poses Lufthansa to identify relative challenges and adopt some reaction to respond. Therefore, this report will discuss two parts: one is strategic change programs and the other is current strategic challenges for Lufthansa. In the first part, it will evaluate the strategic change programs which Lufthansa applied and also cover the effects of leadership and politics. The second part of this report will analyse the strategic challenges for Lufthansa based on current and future business environment. I. Strategic changes for Lufthansa Strategy is argued to be a useful tool for an organization to achieve its target in the long term, and its contribution to development of the organization is evident. However, it is impossible to use one strategy to respond the changeable demand due to the dynamic external environment, so the organization should change their strategies to adapt the market. 1. Strategic change program According to Balogun and Hailey (1999)...
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...Jet Blue Airways: Analysis of a Company The airline industry serves not only as a means of transportation to millions of people on a daily basis, but also a huge customer service industry. Customers analyze every aspect of air travel from the food services offered and convenience of completing business transactions, to the airline’s safety results and ratio of on-time departures. Many customers become brand loyal, where others will do business simply based on price. It is also vital to note that, like any company, brand perception plays a large role in the success or failure of a company within the airline industry. Because of the number of individuals impacted when a flight goes awry, it only takes one incident to completely destroy an airline company’s credibility for safety, which can also lead to reduced sales and ultimately profit. Airlines must also now adapt to the world of technology as many consumers are looking for airlines that provide high tech amenities, such as paperless boarding passes and the ability to use cell phones while in flight. To keep their customer’s content, airlines must use their Research and Development teams to meet these expectations or they will lose those customers to competition. At the creation of Jet Blue, its Chief Executive Officer, David Neelman, wanted to “combine the low fares of a discount airline carrier with the comforts of a small cozy den in people’s homes” (Thompson, Strickland, Gamble, 2009). He wanted leather seats...
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...low-cost player providing the distinctive ―JetBlue experience.‖ In its efforts to boost revenues, the airline began charging $10 to $20 for seats with extra legroom, doubled its ticket-change fee to $100, and introduced refundable tickets that cost more than nonrefundable ones. Further, the airline began charging $7 for a pillow-and-blanket kit, an amenity usually provided free of charge by other airlines.2 Breaking another low-cost rule, JetBlue moved away from ticket sales through its own Web site and signed up with travel agencies and the Galileo and Sabre global distribution systems in August 2006 and with online travel agencies such as Orbitz in January 2008. Further, it sold approximately 42.6 million shares of common stock to Deutsche Lufthansa, the German carrier, in January 2008 which indicates a move away from its ‗growing alone‘ strategy3 and also forged an interline agreement with Virgin Atlantic. With the interline agreement, passengers on JetBlue will be able to connect through Boston, New York, Washington to catch flights to London Heathrow on Virgin Atlantic. JetBlue customers connecting in Orlando will be able to fly to London's Gatwick...
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...Case: AIR CANADA TAKES OFF WITH MAINTENIX Air Canada is Canada's most prominent airline. It is the largest provider of scheduled passenger services in the Canadian market, the Canada-U.S. trans-border market, and in the international market to and from Canada. The airline serves over 33 million customers annually and provides direct passenger service to over 170 destinations on five continents. But the company's information systems had plenty of room for improvement. When Air Canada technicians worked on planes, they used several different legacy software packages installed over the past 15 years. The systems weren't able to interact with one another or with finance and inventory systems. The inefficiencies of these systems were costing Air Canada the time of its engineers and money that could have been used on maintaining its planes, instead of needlessly maintaining excess inventory. Air Canada turned to Mxi Technologies for help in addressing these problems. Mxi is reknowned in the airline industry for its Maintenix software package, which provides integrated, intelligent aviation MRO (maintenance, repair, and operations) software to aviation organizations hoping to improve productivity. The benefits of Maintenix that interested Air Canada were enhanced visibility of fleet-wide data, timelier decision-making; support of its currently existing business model, and increased operational efficiencies. Maintenix provides a system platform that is accessible via the Web...
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...1. Evaluate the composition of the top executive team at JetBlue: a. Is the team appropriately composed for starting a successful airline and running it successfully over time, respectively? i. I believe they are appropriately composed to start a successful airline. Neelman is the CEO and he had previously been a part of a successful start up. Additionally he went and recruited top talent that he had personally done business with or had been very successful with similar airlines such as Southwest. Even though they were all top talent throughout the industry, all of the members were more interested in creating something new and fun. ii. This could potentially be a problem down the road because if they enjoy creating something new so much maybe they would leave Jet Blue to go start the next big startup airline. I believe they are equipped with the talent to run a successful airline but keeping the talent actively engaged and keeping them interested will be a problem after the airline gets up and running b. Has it developed norms that are appropriate for starting a successful airline and running it successfully over time, respectively? i. It developed the norms of starting a successful airline when they went out and raised $130 million for the start up and also instilled the 30 minute turnaround. On top of that they wanted to run an airline that had a morale that was both fun for crew members and for customers. ii. The norms will lead...
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...Professor Samir Moussalli MGMT499 November 18, 2010 Analysis Conducted by PSPS Associates Outline I. Management Summary II. Introduction a. Purpose b. goals III. Background IV. Strategy Formulation a. Vision b. External Opportunities & Threats c. Internal Strengths & Weaknesses d. Long Term Objectives e. Alternative Strategies f. Strategy Selection V. Strategy Implementation a. Annual Objectives b. Policies c. Employee Motivation d. Resource Allocation VI. Strategy Evaluation a. Internal Review b. External Review c. Performance Measurement d. Corrective Action In this analysis of Jet Blue Airlines, we will take an in-depth look at the internal and external factors surrounding the operation and continued success of the airline. We will reveal the opportunities, both internally and externally. As well as expose threats that could potentially...
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...Week 9 Final Evaluating Financial Health Accounting 230 – Financial Reporting: Peeking Under the Financial Hood Continental Airlines Continental Airlines (Continental) was incorporated in 1980. Based out of Houston, Texas, Continental Airlines is fifth largest airline in the world. This is based on the 2009 number of scheduled miles flown by revenue passengers (SEC1). Continental and its smaller divisions offer more than 2,750 departures in the Americas, Europe and Asia. Continental currently employs more than 43,000 people. More than 67 million people per year choose continental as their chosen air carrier (Unknown2). With such a big company comes incredible opportunity for large amounts of profit to be made or lost. Current Happenings Recently, Continental merged with former competitor United. The merger took place May 3, 2010. This merger was created to provide customers with a higher quality of service, improve career opportunities within the company and to improve profitability and shareholder value over a longer term (Unknown2). The related costs associated with the merger, and other unique charges, was $24 million. The majority of these costs were related to financial advising fees, legal fees, and consultant fees, cost of communication and accounting fees. The merger is expected to bring between $800 million and $900 million in revenue annually (Unknown1). Current Financial Performance – 2010 The second quarter for 2010 proved to be extremely profitable...
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...Jet Blue Airways Linda Newman Bus 599 Dr. Romuel “Roy” B. Nafarrete Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The U.S. airlines is started to see improvement demand for air travel in beginning 2010 after being affected by the economic downturn. Business travel, is directly affected by economic environment, to an all time low 2009 as many corporations slashed their travel budget (www.jetblueairway.com). The airline industry is facing most difficult times in history. There was a worldwide recession with terrorist attack September 11, 2001 that led to decrease in passenger traffic, reduction in revenue and rising fuel prices. Following the September 11 attack, the president signed into law the stabilization act which provided compensation to U.S. Passengers, and cargo for losses that incurred by the airline industry as a result of terrorist attack(www.jetblue.com). Passenger’s confidence in air travel was damage greatly after the 911 attack. Airlines were forced to cutback on flight and reschedule existing routes, and forced to charge for extra baggage Consumers are constantly searching for ways to save money, and the airlines industry has tried to adjust to the increasing demand and by cutting and controlling costs (Thompson, Strickland, Gamble, 2009.pg c-53). David Neeleman founded jet Blue, after working for two other airlines (Morris Air and Southwest) in which he was not satisfied with their...
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...Discuss the trends in the U.S. airline industry and how these trends might impacta company's strategy The trend in US airline industry is to use different pricing to attract more customers and to increase the income of the airlines. The airlines use different software that will help them profit on their returns. The trend now for airlines is to decrease the operating cost for the airlines. Nowadays airlines are going into the business of leasing the aircraft verses buying them out right to save on cost. Right now, the level of mergers with airlines have increased due to the operating cost getting so high and to decrease the competition. With merging airlines together this means that many of the cost will have to be shared such as the cost of tickers and baggage fees. Customers can see the difference when they take a flight. There is a cost for everything from headphone to drinks. Airlines are cutting back on meals. Most flights only offer drinks and snacks such as cookies or crackers. “The inculcation of this set of core values within the jetBlue organization is best summarized as delivery of “the jetBlue experience”. The depth of delivery of the jetBlue experience is best measured by the level of customer satisfaction. The J.D. Powers and Associates 2007 North American Airline Satisfaction Study ranks jetBlue the highest airline in customer satisfaction, both among low-cost and traditional carriers. The study ranks, in order of importance: cost and fees; flight crew; in-flight...
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...Business Failure Analysis Derrick Canty LDR 531 April 13, 2010 Tim Buchanan For several decades, Switzerland’s former national airline, Swissair, has had a reputation as being an almost perfect embodiment of traditional Swiss virtues like technical innovativeness combined with reliability and solidity at the same time. They were so financially stable that they were known as the “Flying Bank.” Established in 1931, Swissair epitomized international transportation until the late 1990s, when the management decided to follow the aggressive borrowing and acquisition policy known as the Hunter strategy. This strategy was a major expansion program initiated by Swissair aimed to grow its market share through acquisition of small airlines rather than entering into alliances agreements. The buying spree created a major cash flow crisis for parent company SAirGroup (Swissair Group), and was exacerbated by environment caused by the September 11 attacks. Those attacks put a void in the company’s plans and Swissair found itself hamstrung with debt. Unable to make payments to creditors on its large debt, and the refusal of UBS AG (Union Bank of Switzerland) to extend its line of credit a month later forced the entire Swissair fleet to be grounded in October 2001. Management was the blame for how this company failed because of failure to conduct a market research and not taking competition seriously. Swissair figured that they could just “muscle” the little guy and...
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...Classic Airlines and Marketing University of Phoenix Marketing MKT/571 Classic Airlines and Marketing Classic Airline is the fifth largest airline in the world, has 375 jets, located in 240 cities and has 2300 daily flights. After 25 years of service Classic has 32,000 employees and in the past year has earned a profit of 10 million out of 8.7 billion in sales, but they face many challenges. The challenges that Classic Airlines faces are the uncertainty of flying and the effect it has on the industry. In the past year Classic has experienced a 10% decrease in share process and the rising cost of fuel and labor have limited the ability of Classic to compete for frequent fliers. Classic will obtain answers regarding the Frequent Flier Program from the customers. Interviewing of current members of the reward program will allow Classic to gather information about customer satisfaction. The feedback received from this interview showed that Classic will need to update the current reward program specifically the rules for redemption. Classic Airline wants passengers’ activity to increase in the reward program and to attract potential customers. Development of a marketing plan that focuses on the needs of the customers while allowing the airline to increase profits and attract new customers could be beneficial to Classic Airline, Market-oriented planning strategic planning is the managerial process of developing and maintaining a viable fit between the organization’s...
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...Management and Leadership Paper Charles Lee University of Phoenix United Airlines presently manages nearly 3,000 flights daily on United, and United Express. This includes more than 200 domestic and international flights from Los Angeles, San Francisco, Washington D.C., Chicago, and Denver. United is recognized as one of the largest international airlines in the United States, enjoying global air rights in the Asia-Pacific area, in Europe, and in Latin America (United Air Lines, 2009). United’s stock is presently listed under the Stock Market symbol UAUA. United Airlines is devoted to cost containment, improved revenue, and sustainable operations that will enhance a very competitive margin. United’s selection of services and products are designed to ensure customers receive the very best price. United also invests substantially in their employees to provide the right amount of accountability that will ensure operations are at peak-performance levels (United Air Lines, 2009). Healthy Work Culture United Airlines exerts tremendous amounts of time and energy working and negotiating with, unions and labor-management task forces negotiating with workers seeking to recoup bankruptcy concessions there is some cause for concern in the area of bankruptcy. The relations between United Airlines and labor-management have intensified as talks regarding contracts become sober in a time of financial loss for the airline. The recession forced United Airlines, along with many others...
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...Synopsis: JetBlue is a low-cost domestic airline in the United States following a rather interesting combination of ‘low-cost and differentiation’ as its strategy. From its inception in 1998, the airline grew to become the 11th largest player in the airline industry in a short span of 6 years. It had been the only other airline apart from Southwest airlines, to have been profitable during the aftermath of the September 11, 2001 attacks on World Trade Center, and at a time when the entire airline industry was experiencing losses. The core of JetBlue’s strategy was low-cost achieved through a smaller and more productive workforce; automated processes; better use of technology; use of brand new single model planes that reduced maintenance costs and training costs at the same time. However, moving into the growth phase, JetBlue was contemplating the introduction of a new model of planes, i.e., EMBRAER, that are smaller than the A320s that they were using. These planes were to be utilized for penetrating mid-size cities and also during off-peak times on existing routes. This had potential implications for its low-cost strategy. Also, the success of JetBlue invited the attention of its competitors. New discount carriers such as ‘Song’ were being launched that closely imitated JetBlue’s differentiated product offering. This posed questions to the viability of both the bases of JetBlue’s competitive advantage. Added to this, was the prospect that JetBlue would come head-to-head...
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...Abstract We will be discussing some of the thoughts and issues that can be pin pointed to the service shut down of JetBlue Airlines. We will also look at a few different scenarios as to what could have been done differently to avoid such a catastrophe. We will look at things such as management's position in the technology department’s lack of planning. Jet Blue My thoughts as to what contributed to the shutdown of JetBlue were lack of management planning and technology shortfalls. JetBlue had a lot of things going for them as far as being a fairly new airline with a massive volume of passengers. They were very affordable and got you where you needed to go in a timely fashion. One of the issues that affect the jet blue was their lack of Internet options that they offered. The Internet is a vital aspect of any airport they communicate with passengers to let them know about cancellations, delays, rules and regulations, what you can and cannot travel with or any other important information. I am not sure if JetBlue did not want to spend the additional money to have their system upgrade it to be used with the Internet so that passengers could reschedule their flight but this turned out to be a apprehensive will mistake. For the amount of passengers that traveled with them daily the phone lines should have been able to accommodate a lot more people representatives and customers. They also made a mistake when they came to not having a tracking system for cost luggage. I am not...
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