...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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...Trends in the U.S. Airline Industry One trend in the Airline Industry which has not endeared them to investors has been stock prices. According to Thompson, Strickland, and Gamble, (2010) a significant trend in a drop in stock value has occurred from 2002 to 2007. Analysts indicate positive directions in the next year, however with the Airline Index at $40, Jet Blue showing $5.54, and Southwest at $11.63 one is tempted to ask if there is any direction they can take but up, or out. One can anticipate airlines seeking cost cutting measures, added with increasing revenue streams in order to revitalize the value of the companies, and through such the value of investments. Analysts indicate a trend towards an increase in airline travel demand over the next year. As one of the leading analysts Dirks (2011), points out that despite increase in Video Telecommuting for business resulting in reduction in business travel, many families are finding the cost of fuel is causing them to rethink driving and relooking at air travel. Statistics support this and reflect that as of this past November among the top six airlines, two reported their best traffic levels in 18 months. Many airlines reflected increases in miles flown per passenger, and passenger numbers have returned to the high passenger counts of 2007. These factors are supplemented by the Official Airline Guide (2011) which tracks air industry trends. The OAG reports a record number of seat bookings in April 2011....
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...Structure The team analyzed Jet Blue’s organizational structure and has determined that the current structure is not effective. All of the airline’s direction comes from the upper management that oversees the lower level units. Jet Blue’s structure reflects a hierarchy structure. The structure should reflect a relationship between the CFO, COO, CCO, CIO, as well as other lower level structures. In order for the CFO to know how funds are spent interaction must take place on the same level. Currently the chart reflects everyone reporting to the CEO. It does not appear that there is any interaction happening on the second tier across. In order to know the strategic plan the lower level employees need to be involved within the organizational chart. Currently this industry is competitive, and other companies are offering the same fares as Jet Blue. Therefore, the organization needs to review its strength, weaknesses, opportunity, and threats. In order for the airlines to be successful the COO and the CFO need a game plan, as well as the operational supervisors. After all the goal of the airlines needs to be preserved. The concept is to attract and retain passengers. In order to receive feedback the organization chart should be reconstructed to reflect an effective structure between units. In this industry not only are you to be competitive in the industry, but also the organization must reflect a caring for their employees. Jet Blue generally flies to destinations along...
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... 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 be a major downfall for the company as a whole. Whether the threat is internal or external, our goal is to confront the issue directly and offer a strategy designed to convert the threat into an opportunity for the betterment of the company. As much as we would like for the strategy to be constant, the fact is that change is inevitable. Therefore, our strategy will be inclusive...
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...To: Professor Russ Ray From: Usman Mustafa Date: 9/05/2012 Re: Jet Blue Airways Case Attached Please find JetBlue airways case and their IPO prices Calculation table. The purpose of this memorandum is to discuss the initial public offering and the pricing of IPO of JetBlue Airways by using the selected multiples of comparable airlines. It also includes some advantages and disadvantages of a firm from going public. The multiples used to set IPO price were prices per share, earning per share, cash flow per share, total assets per share, and revenue per share of five comparable airlines. When looking to take a company public, investors first examine other comparable companies’ stock prices. The five Comparable airlines companies we chose are: Air Tran, Alaska Air, America West, Midwest, and Southwest Airline. The Prices for Jet Blue Airways are based on the selected multiples calculated with JetBlue’s financial statement, shares outstanding, and the two important multiples that are price per share and cash flow per share. 1. What are the advantages and disadvantages to a firm from going public? list at least three of each. Advantages: A. Going public will result in increased capital for the issuer. A public offering places a value on company's stock and insiders who retain stock may be able to sell their shares or use them as collateral. B. A company's debt-to-equity ratio improves after an initial public offering, which...
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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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...business strategy of Jet Blue airways. The company’s strategy advantages, i.e., the quality of services, market strategies, and employees trained and challenges of a company competing on price. Latterly, focus on how the company deals with high competitive market industry, shareholder and financial management. Assignment: #1 - Crafting and Executing Strategy 1. Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The trends in the U.S. airline industry, most of the U.S. airlines are operate in discount airline carrier by offering the passengers low fares, operated point to point system, used two types of aircraft and served only snacks, also provided quick turnaround times at airports. The most of the U.S. airline concentrated in the domestic route, however most the domestic flight can help the company gain small amount of the profits margin. It is the high competition between the pricing of each airline to attract the customer. Many airlines save the time ranged from 20 to 30 minutes during the flight because no meal served during the flight, so the plane do not have to wait for catering services to replenish the aircraft. Although, to save time for flight attendants to clean up all the trash, that is also help the airline save budget for the operation system. Most of the airline will use the pricing strategy to competition with other company and also reach the goal of the company. Lastly, the airlines industry is very competitive...
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...U.S. airline industry and how these trends might impact a company’s strategy. The rising oil prices are increasing the cost of the flight in spite of reduction in the prices of the flight. There is less scope now to get the tickets urgently because all the tickets are booked at least 2 months before to counteract the demand. Although the fares are declining but the airlines increasing the prices of checking, refreshment, which ultimately have negligible impact in the prices of the flights. It has been seen that most of the travelers are selecting economy class instead of business class so that they can meet their expenditure as per their budget. But the airlines are trying to sell their business class seats first to generate higher revenue. To reach their target, the nearby hotels are making contract with the airlines. The specific percentage is associated with the airlines. The main objective of them is to attract more customers to increase their revenue (Thompson, Strickland & Gamble, 2010). Therefore they are cutting their cost by decreasing the fares but on the other hand they are giving fewer facilities to the passengers like they are not providing any meal if providing it is chargeable. Again it is seen that some flights are providing only drinks and cakes to the customer. But the registrations of flights tickets are seem to be very easier and convenient for the customer. Now they can book the ticket online without bearing any charge of brokers. 2. Discuss Jet Blue’s...
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...Assignment #1 Case #3 Jet Blue Airways Daisy L Kenney Professor Kimberly Anthony BUS599 Strategic Management July 10, 2011 Case #3 Jet Blue Airways 1. Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The trend in US airline industry is to use price discrimination and differential pricing to increase the revenue of the airlines. For this there are computerized programs that help increase the revenues of the airlines. Further, the current trend among airlines is to reduce operating costs. The current trend in airlines industry is to lease aircraft and avoid entering into long term contracts so that the financing remains modes. Finally, the current trend of alliance among airlines especially that of code sharing or selling the tickets of another airlines. Overall, the airline industry is very competitive, turbulent and volatile. 2. Discuss Jet Blue’s strategic intent. The strategic intent of Jet Blue Airways is to improve its profitability, revenue optimization, Improved capacity management, cost reduction, and delivering high quality service. Since its IPO, Jet Blue Airways posted its first loss in 2005. There is a difficulty in the strategic intent of Jet Blue Airways. It is...
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...Jet Blue, Strategic Review “First class, that’s what’s wrong. It used to be a better meal, now it’s a better life.” — From the film “Jerry McGuire” SAMPLE Business Strategy Empire State College March 12, 2014 Jet Blue, Strategic Review Abstract: A firm’s strategy is defined as its theory about how to gain competitive advantages. (Barney & Hesterly. Strategic Management and Competitive Advantage. pg 4.). In this strategic planning document, we will define Jet Blue’s initial niche and strengths in the market place, review its resources, and suggest a business strategy for continued profitability. Primarily, we will articulate the need to refine its current positioning to regain consumer confidence and grow market share. Overview Formed in 1998, Jet Blue (ticker: JBLU) began commercial air travel operations in February, 2000. Designated as an LCC (“Low Cost Carrier”), it did not launch as a typical no-comfort airline. In reality, Jet Blue was seen as a “value player” (Barney & Hesterly. Strategic Management and Competitive Advantage. Pg. 162). As a new entrant in a mature industry, Jet Blue used specific resources to position itself as a cost leader. These resources are the foundation of our Resource Based View (“RBV”) of the company. We will attempt to compare Jet Blue’s standing with that of Southwest Airlines (ticker: LUV), considered a market leader in its designated regions, and build on a strategy to differentiate the airline. SWOT Recap/Analysis |Strengths...
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...Strategic Management January 9, 2012 Discus the trends in the U.S. airline industry and how these trends might impact a company’s strategy. Change is the only thing that is constant. The airline industry has been through many changes in the past ten years. The September 11 event of 2001 sparked many changes. Security has been strictly enforced and fuel prices are at an all-time high. Many air-line companies have implemented baggage fees to help recover from the rising fuel prices and etc. There are some recent trends that have helped the air-line industry and also affected the air-line industry. With booming cellular data usage on the rise, many companies have turned to mobile apps. Smart phone applications are convenient for customers and the companies are taking advantage of the availability of these mobile devices. It is instant access and information in the palms of their hands. Airlines are increasing their reliance on technology to streamline passenger experience at check in and at the gate. Despite unfounded security concerns, paperless boarding passes have been adopted by some airlines and are being tested by others. A bar code is sent to the phone and then scanned by a barcode reader at security and during boarding. The TSA actually prefers the electronic bar codes, because they are much harder to counterfeit than printable boarding passes. One of the most recent trends that will impact the air-line industry is the European emissions regulations. Everyone...
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...Case Study JET BLUE 1) Jet Blue, with the motto of Happy Jetting not only fulfills the customers satisfaction rate, it sets the bar high. What do customers want when they fly abroad to another country or from one place to another? Cheap prices, comfortability, and a good service. With todays economy these are hard to offer in the market unless you are willing to pay the price. This is where Jet Blue plays the role. Jet Blues fuel efficient jets allow lower fuel costs which saves the customers pocket, good news for everyone. These small jets do not only consume less fuel, they also come with an extra 3 inches of legroom which can be very confortable for bigger customers or for long flights. Customers flying usually get hungry thousands of feet about the ground, that is where Jet Blues quality service comes in. They offer quality beverages and snacks with a variety of choices for completely free of charge, which most airlines lack. Along with comfortable leather seats and extra leg room there are entertainment systems with various channels, and satellite television for each person, along with free wi-fi service for people with smarth phones and laptops. 2) When a customer buys a Jet Blue flight they are up for a treat. Low fare prices are the first thing one notices with Jet Blue. Not to be confused with cheap, low quality flights where you might think you are flying as a hostage without food and space. Customers that know Jet Blue are aware that it is the complete opposite...
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...Crafting and Executing Strategy: Jet Blue Airlines Name: David T. Browne Instructor: Professor Joy Thomas Bus 599: Strategic Management – Crafting & Executing Strategy Date: October 15th, 2011 Abstract The purpose of this paper is to evaluate Jet Blue Airways (JetBlue) company’s crafting and executing of strategy in an industry that has been undergoing challenging changes. These trends are unique to the industry and affect how organizations strategize to remain competitive. To do this analysis, this paper takes a deeper look into JetBlue’s strategic intent which is born of its business model. Next, the paper examines JetBlue’s financial objectives and the methodology by which they have been able to achieve those objectives. Then the paper looks at the company’s operations through the elements of its human resources, organizational culture, handling of costs (which is an industry wide problem) to find out if these elements create a competitive advantage. Finally, 2008 was an important year in the strategic direction of the company therefore the paper looks at how the strategies implemented have performed and if they will allow the company to survive thereafter. Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The airline industry has been at the peak of a cost and profit battle for more than a few years now. High fuel and other costs have made some airline giants either file for bankruptcy...
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...Problems at Jet Blue XBIS/219 Jet Blue was the answer to the airline industries problems. It was a private company that provided an option to larger airlines that were very impersonal. During Jet Blue’s introduction to the world, a small managerial issue was left out, how does Jet Blue handle the same problems that the larger airlines have? Early success let Jet Blue believe that they were untouchable and immune to the problems of the larger airlines; however, not planning for problems, does not mean they won’t show up. Jet Blue did everything “right” to make sure that they were better than the larger airlines, but management only looked at how they could be better and did not focus on the standard problems that both themselves and the larger airlines face. Had the management looked forward toward possibilities of problems instead of trying to be better, they would have seen that all airlines face the same issues hen it comes to weather. Technology is in place to handle any problems that are related to weather and had Jet Blue management looked at every situation they may have faced and put technology in place to help handle it, then Jet Blue would not have had such a problem. Looking at any situation after the fact is always going to be easy to access the situation. I would have tried to find which situations would cause us the most problems, before they happened. I understand that offering amenities and smaller planes does make jet Blue better, but when air flights...
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...Case # 3 Jet Blue Airways Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy Overall the US airline industry is a cut-throat business which is extremely competitive. The cliché ‘it’s a dog eat dog world’ applies perfectly here. Over the past few years the situation grew even worse due to the recession, increased unemployment, the weakened dollar exchange, and difficulty predicting how OPEC will behave month to month. The fluctuation in the oil market has a direct effect on ticket prices bought in bulk or reserved six to nine months in advance. Airline pay close attention to the oil Futures Market to make sure their purchases of fuel is hedged. Airline companies are divided into a few categories. Jet Blue is in the discount airline category, where lowering the fixed cost is an important factor. For a discount airline to offer cheaper price, services must be cut as well as the number of airports serviced. Only destinations with high volume are able to be serviced, thus a traveler may be forced to have multiple connections to reach their destination. Airplanes must be leased instead of bought to reduce the upfront cost. In-flight meals and unlimited beverages are curtailed or completely removed. The absence of complimentary cases of beer or soda cans adds to savings on gasoline as well as price per can which is factored into lowering the ticket price. Full service airlines such as Singapore and Lufthansa, cater to a...
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