...#3 Jet Blue Airways A Cadre of New Managers Takes Control Strategic Management BUS 599 051*VA016*1122*001 Dr. Russell Handlon January 15, 2012 Case 3: Jet Blue Airways Question 1 Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The trends in the United States airline industry is high prices on gas, oil, maintenance, risks of terrorism, and less travelers flying rather its for personal or business. When these things happen it costs the airlines to make some changing by charging customers for checking their luggage, food, pillows, blankets, and leisure entertainment in order to meet the high spending cost of the airline business. Some airlines had to change their flight schedule to meet the needs of the customers during high peak time in popular vacation spots or other locations customers like to fly too by charges them lower fares. Some airlines have is shortage of pilots because the school of flying does not have enough instructors to train new pilots (Thompson, Strickland, & Gamble, 2010). Question 2 Discuss Jet Blue’s strategic intent. The founder of JetBlue Airway is David Neeleman, he wants to “bring humanity back to air travel.” Mr. Neeleman announced JetBlue’s “Passenger Bill of Right” is a policy for United States airline companies regarding vouchers, refunds in case of delays, cancellations, and other inconveniences (Thompson, Strickland, & Gamble, 2010). JetBlue Airways exists to provide...
Words: 1252 - Pages: 6
...JetBlue Soars into the Friendly Skies October 18, 2010 Discuss the trends in the U.S airline industry and how these trends might impact a company’s strategy. Despite the unpredictable and rising costs of aircraft fuel, oil and maintenance, threats of terrorism, and fear of decreases in business and leisure travelers, the airline industry has remained resilient in recent years. According to Air Transport Association of America (ATA), (2006), the airline industry lost about 13 billion dollars during the early 1990s, and earned about 23 billion dollars from 1995 until 2000. The industry suffered additional loss of 35 billion dollars from 2001 until 2005 yet, has recently begun to show another wave of growth. Additionally, the September 11 attacks, energy conservation, and the recent economic crisis greatly influenced the airline industry’s ability to affect the long term growth. Increased competition from new low-cost airlines and lack of trained pilots added to the bleak outlook. Charging for baggage, mergers, and elimination of meals are cost-cutting initiatives which drive trends at it relates to airline passengers. The airline industry, among other commerce industries has shown pockets of recovery after some painful years. According to ATA, the industry trade organization for major U.S airlines, this year there were eight months on consecutive revenue growth. Passenger travel skyrocketing to 17 percent in comparison to last year. (Thompson, Strickland, &...
Words: 1298 - Pages: 6
...Jet Blue Airways case study Introductіon Twelve years ago JetBlue was a breath of fresh air in an airline industry bogged down by the ways of legacy carriers that were unconcerned with customer service and known for price gouging. JetBlue was revolutionary. With a fleet of new planes -- all Airbus A320s, which cut down on repair costs -- a staff that worked primarily from home, and 40% of ticket sales executed online, the company emerged as the premier low-cost carrier focused on providing extra-friendly, efficient service (LaMotta, 2010). Jet blue was a discount airline carrier that offered passengers low fares; operated point-to-point systems; used two types of aircraft; served only snacks; and maintained quick turnaround times at airports. Its operating costs were low, especially compared to those of other major U.S. airline companies. In the first quarter of 2008, for example, JetBlue’s total operating expenses amounted to 12.77 cents per revenue passenger mile, compared to 20.95 cents per revenue passenger mile for Delta and 13.85 cents per revenue passenger mile for Southwest (Michael, 2010). According to (Enterprise, 2011) JetBlue Airways is a low-cost passenger airline that provides customer service primarily on point-to-point routes. The company primarily operates in the US. It is headquartered in Forest Hills, New York and employs 12,532 people. The company recorded revenues of $3,286 million during the financial...
Words: 1499 - Pages: 6
...Jet Blue Airways – Crafting and Executing Strategy BUS 599 Dr. Menon Assignment 1 January 15, 2012 Jet Blue Airways – Crafting and Executing Strategy Company Background JetBlue Airways Corporation is an American low-cost airline that was founded by David Neeleman who was born in Brazil during 1959. JetBlue Airways Corporation is headquartered in the New York City borough of Queens and its main base is located at the John F. Kennedy (JFK) International Airport. Prior to its name JetBlue Airways, David Neeleman founded this company under the name “New Air” and several of the employees who once worked for JetBlue Airways also worked for Southwest Airlines prior to working for JetBlue. During February 2000, JetBlue Airways received formal U.S. authorization to launch its first ceremonial flight between Buffalo and New York City, which then made the John F. Kennedy (JFK) International Airport its core location. Upon its initial opening, JetBlue Airways aimed to carry some of Southwest Airlines’ different approaches over to its corporation, such as offering low-cost travel; however, JetBlue also wanted to differentiate itself by offering in-flight entertainment, televisions on every seat along with satellite radio and to overall “bring humanity back to air travel, " as Neeleman once stated (JetBlue Airways and Thompson, A. A., Strickland, A. J., & Gamble, J. E., 2010). Over the course of six, rapid years, JetBlue Airways grew to be one of the largest airline...
Words: 2822 - Pages: 12
...Jet Blue Airways JetBlue Airways took to the skies in 2000 under a novel concept: bringing humanity back to air travel. Based at New York's Kennedy International Airport, JetBlue, a non-union airline, distinguished itself from other low-fare carriers such as Southwest Airlines by offering seat-back entertainment systems with live television, comfortable seats and blue corn chips. During the last six years, when traditional airlines were piling up more than $40 billion in losses, JetBlue grew to $1.7 billion in annual revenue and became increasingly popular with travelers. But now that fuel prices have pushed up expenses for all airlines, and older carriers have sharply cut their own labor costs, the advantage JetBlue enjoyed as a start-up is greatly reduced. JetBlue — too new to have built up excessive costs that can now be trimmed, is trying mightily to raise fares in a bid to restore profits after surging fuel prices caused it to lose $42.4 million during the fourth quarter of 2009. The trends in the U.S. airline industry and how these trends might impact a company’s strategy The airline industry is susceptible to upturns and downturns with the trends in the economy. A growing economy and booming business mean greater demand for air travel, and a slow-down in the economy means reduced demand, consequent unutilized capacity and intensified competition. The availability of venture capital and other capital sources have an impact on the number of new entrants...
Words: 1903 - Pages: 8
...At the beginning of JetBlue, this company had a goal, plan and ideas to how the company would grow into a successful organization throughout the aviation world. With a successful hard work accomplished staff of JetBlue Airways believe that success was within the hard effort of every employee that choose to work for the organization. Rhodes the Executive Vice President for the people had a goal that has a staff of only 10 people that grew 1000. JetBlue Airways wanted to increase the staff to 5000 within 4 years. With successful staff within JetBlue Airways, this company had the opportunity to become an excellent organization for years to come. Ann Rhoades previously worked for Southwest Airlines from 1988 to 1994. With her experience dealing with the excellent customer service, she dedicated her staff to deliver excellent service there was opportunity for JetBlue Airways to strive for success. As an organization JetBlue was has been able to accomplish success because of their innovative ways of handling business, and introducing new method to the airway society. JetBlue was started as a start-up in the early 1999 with a strategy to bring technology throughout many areas of the organization. Introducing technology of the foundation to increasing the overall success of JetBlue as worked well for the founder of JetBlue Airway David Neeleman. JetBlue Airways believe that using paperless technology by substituting computers and aviation information for everything including, airline...
Words: 528 - Pages: 3
...head: CRAFTING AND EXECUTING STRATEGY – Jet Blue Airways Jet Blue Airways LaKessica B. Carter Dr. Akpan BUS599 - Strategic Management April 17, 2011 With the constant changes with the airline industries and the chaotic state each have represented for a number of years constant strategic planning and trends are the focus today. A trend can shape a company or cause it to head back to the drawing board. An airline, such as Jet Blue Airways has to change strategically and adapt to the economic state and conditions. JetBlue Airways specializes in cheap point-to-point flights with high levels of customer service. Due to the dramatic changes in industry structure have occurred against the backdrop of strongly growing airline activity. This part of a trend involves veering into a new direction. Airline industries are no stranger to trends. The paper will focus will be on JetBlue Airlines and the trends and directions in which it is headed. Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. In 2010, things were looking better for the airline industry but things changed severely with the recessions in 2008-2009. In order to cope with the downfall several airlines have been forced to respond by cutting back on flights, rescheduling existing routes and searching for new revenue streams such as charging for aisle seats and baggage. According to the text, JetBlue began several new strategies in order to adjust by reevaluating...
Words: 1417 - Pages: 6
...its clients. Aside from that, Jet Blue Airways Corporation also reaches out to the public by being active into community service. Essentially, Jet Blue is committed to enriching the lives of children and supporting the communities they serve through their core values of caring, fun and passion. In connection, one of the best community services offered by the company is giving books to children of not wealthy parents in one of the cities in the United States. The unwritten mission statement of Jet Blue Airways Corporation is reflected in its core values and principles created and set by the company. In lieu of mission statement, Jet Blue Airways Corporation is presenting a strategic set of core values. These core values include safety, caring attitude, integrity, fun and passion. The company commits to safety as the first priority in all business operations. In order to do so, the company adheres to rules and regulations implemented by regulatory agencies whenever is needed. Maintaining high standards in a consistent manner is the primary goal of the company when it comes to safety matters. Thus, the company never compromises safety of its crewmembers and customers during and after flights. The company also takes social responsibility for the benefit of the people in general and strives to be a role model in the business community. The company cares for its employees and the customers in one-way or another. In addition, Jet Blue Airways Corporation...
Words: 1674 - Pages: 7
...JetBlue Airways IPO Valuation Summary In July 1999, David Neeleman announced his plan to launch a new airline that would bring “ humanity back to air travel.” Despite the fact the airline industry had 87 new-airline failures in U.S. over the past 20 years. Neeleman’s plan convinced a group of investors and quickly raised $130 million from venture-capital community. This is the way JetBlue Airways established. With its strong capital base, JetBlue acquired a fleet of new Airbus A320 aircraft and focused on low-cost, point-to-point service to large metropolitan areas with high average fares or highly traveled markets that were underserved. This strategy brought JetBlue Airways an excellent position in the beginning phase. JetBlue Airways started to expand aggressively and remained profitable even after the terrorist attacks of September 2001 by insisting on its low-fare strategy. In April 2002, barely two years since established, JetBlue meet its initial public offering (IPO). The initial price range for JetBlue shares was $22 to $24, but facing sizable excess demand, the management increased the range as $25 to $26. After the whole process of IPO including SEC review and comments, roadshow, pricing, tombstone advertisements, JetBlue finally launched in NASDAQ at $27/share as initial pricing, closed at $45/share on the first day of trading. With the proper strategy in IPO process, JetBlue make a huge success on its IPO. Questions Why JetBlue Airways can still remain profitable...
Words: 644 - Pages: 3
...JETBLUE AIRWAYS 2 JetBlue Airways What is JetBlue’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? The strategy for JetBlue’s success in the marketplace is described in the company’s 10-K/A filling. Their goal is to ³establish JetBlue as a leading low-fare, low-cost passenger airline by offering customer’s high-quality customer service and a differentiated product.´ (JetBlue,2005) By doing this, they are trying to ³stimulate market demand while maintaining a continuous focus on cost-containment and operation efficiencies.´ (JetBlue, 2005) Based on the filing, JetBlue relies on product leadership customer value proposition. The four key elements to their strategy are: Stimulate demand with low fares Emphasize low operation costs Offer point to point flights to underserved and/or overpriced large markets Differentiate our product and service (JetBlue, 2005) Due to the strategies, JetBlue has been able to grow largely as a company and become one of the leading airlines which focus on customer satisfaction at a low operating cost. JETBLUE AIRWAYS 3 What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages 17-23 of the 10-K/A.) As in...
Words: 933 - Pages: 4
...The University of the West Indies, St. Augustine Faculty of Social Sciences Department of Management Studies M.Sc. Aviation Management AVMT 6001 – Accounting for Business Decisions AVMT 6001 – Group Project 2 Managerial Accounting - JetBlue Airways Corporation Group Members: Cherrish Bridgemohan - 807001633 Rajiv Debie - 04708006 Israel Duncan - 814004144 Kenrick Duncan - 814002425 Neil Shepherd - 814004177 Signatures: Cherrish Bridgemohan ___________________________ Rajiv Debie Israel Duncan Kenrick Duncan Neil Shepherd ___________________________ ___________________________ ___________________________ ___________________________ November 16, 2014 Table of Contents I. II. Table of Abbreviations ........................................................................................................................ 5 Executive Summary............................................................................................................................ 6 III. Introduction......................................................................................................................................... 7 IV. Background – JetBlue Airways ......................................................................................................... 7 V. Management Accounting Information.............................................................................................. 8 Financial Accounting versus Management Accounting ...........................
Words: 19006 - Pages: 77
...Running head: ASSIGNMENT #1 CRAFTING AND EXECUTING STRATEGY Assignment #1 Crafting and Executing Strategy Jet Blue Airways Strayer University BUS599016VA016-1116-001 Strategic Management July 11, 2011 Abstract This paper examines the business strategy of Jet Blue Airways. The paper will also examine strategic elements that provide the organization with a competitive advantage. The company’s competitive strategy and the impact of the trends in the U.S. airline industry will also be discussed. Assignment #1 Crafting and Executing Strategy Jet Blue Airways David Neeleman worked in the travel and airline industry before starting JetBlue. He was well versed in customer service. He learned from his grandfather as a teenager never to disappoint customers; satisfied customers would return. As a young man Neeleman also learned to be frugal (C-53). David Neeleman started JetBlue Airways as a company that would combine the low fares of a discount airline with the comforts of a den. Passengers would save money, consume gourmet snacks, sit on leather seats, and watch television. Many of JetBlue’s ideas came from Neeleman’s own personal experiences. He decided to add leather seats because he was once assigned a cloth seat that was soaked with urine. Leather seats were more durable and easier to clean. Individual monitors provided entertainment. He decided to provide 24-channel live television via satellite for free (C-53). On February 11, 2000, JetBlue’s...
Words: 1447 - Pages: 6
...JetBlue Airways: Managing Growth Case Analysis Instructed by: Prof. Jonathan Lee Section3 Team 2 Jie Yan | 103795915 | Ling Lu | 103999797 | Nan Liu | 103744807 | Renhan Zhu | 103943651 | Yishi Shi | 103956048 | 2014/10/20 Part I: Issue Identification In May 2007, David Barger, President and CEO of JetBlue Airways, expressed the great need to slow down the airline’s growth in response to increasing fuel costs and the consequences stemmed from the Valentine’s Day crisis. As an LCC, JetBlue had to decrease its growth rate by reducing deliveries of E190 and A320 due to its weak financial position and the market’s softening demand. Considering the performance of JetBlue after the addition of E190 to its fleet, JetBlue overestimated its capacity of handling this large scale of expansion. The new CEO, David Barger was now facing with JetBlue’s key issue that he should reconsider the distribution of E190 and A320, and building long-term managing strategies for sustainable development. Besides, with a big movement of launching E190 in 2005, some small but critical problems loomed: Compensation of pilots, satisfaction of customers and employees, challenges for staff to adopt unexpected changes, complexity resulting from the integration of E190 and A320. Without experience of operating two types of aircrafts and combining them, as well as without sufficient capital, large scale of purchases of the new aircraft would definitely lead to operational failure...
Words: 2588 - Pages: 11
...Case Outline of JetBlue Airways Corporation I. Problem: The main problem facing JetBlue Airways Corporation is: how to maintain low-costs structure and continue enlarging its market share in the competitive airline industry with increasing fuel costs. II. Strategic Considerations A. Industry Analysis 1. History a). American aviation pioneers attempted to start airlines using airships in the mid-19th industry. b). Aktiengesellschaft was world’s first airline which was founded in November 16, 1909 with the government assistance, and operated airships manufactured by Zeppelin Corporation. c). Tony Jannus conducted the United States’ first scheduled commercial flight on January 1914. d). In 1918, the United States Postal Service won the financial support from Congress to begin air mail service. e). In 1925, Stout Aircraft Company began to construct Ford Trimotor with 12-passenger capacity which became the first successful American airliner. f). At the same time, Pan American World Airways created an air network that linked America to the world. g). At the end of twenty century, a new style of cost airline appeared, offering a no-frills product at a lower price. The representative low-cost carriers are Southwest Airlines, JetBlue and AirTran Airways. h). The September 11th terrorist attacks resulted the airline industry bailout which lost $30 billion with 100,000...
Words: 2121 - Pages: 9
...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...
Words: 612 - Pages: 3
