...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...
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...#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 first ceremonial flight was launched and, John F. Kennedy International Airport (JFK) its hub. The first flight was between Buffalo and New York City, JFK (C-54). JetBlue’s strategy consists of business approaches to grow the business, attract and please customers, compete successfully, conduct operations, and achieve the targeted levels of organizational performance (p. 6). JetBlue...
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...Analysis of Jet Blue Airways BUS 599 October 19, 2010 Analysis of Jet Blue Airways JetBlue Airways Corporation is an American low cost airline. Since 2001, the U.S. airline industry has faced an unprecedented set of challenges. Following the terrorist attacks of September 11, 2001, the airline industry reported tremendous losses and several of the largest U.S. airlines filed for Chapter 13 bankruptcy protection (Flouris, Walker, 2005). As a result, the airline industry has been more creative in their strategic marketing plans to remain financially viable. Many airlines have led the way with innovative ideas to retain, gain, and build their customer base. JetBlue Airlines has followed the path of most airlines but as one of the leading low cost air carriers, Jet Blue’s business strategy differentiates from most airlines. Trends in the U.S. Airline Industry and Impact on Strategy Trends in today’s U.S. airlines industry continue to show a drastic departure from business practices of previous years. With the constant increases in the price of conducting business, airlines are searching for ways to make or increase profit. Passengers are often charged for many amenities once offered free of charge by the airlines. Due to one of the most severe economic recessions in recent years, passengers should expect these trends in the airline industry to continue. However, prospects for the airline industry look a lot brighter as the industry continues to persevere and move...
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...JetBlue Airways Air travel is a large and expanding industry. It facilitates economic growth, world trade, international investment, tourism, and is critical to globalization. Over the past ten years, air travel has grown by approximately seven percent per year. However, the airline industry suffered its largest downturn between 2008 and 2009, due to the economic downturn. Airlines carried 767,627,651 passengers in 2009, down from 809,447,811 passengers in 2008. Airlines have been forced to accommodate the economic recession by cutting flights, rescheduling existing routes, and looking for new revenue streams. As the economic recession revives itself, the demand for flights has begun to increase with 787,182,312 passengers flying in 2010; a significant upturn from the previous couple of years. Business travel has grown as companies increase their international presence in terms of their investments, supply and production chains and their customers. The rapid growth of global trade markets in goods and services and international investment have all contributed to growth in business travel. The domestic travel industry in the United States is typically a low cost, low fare environment. Most of the major airlines have undergone cost restructuring. Some airlines have sought the protection of Chapter 11 bankruptcy to restructure and reduce costs and then emerged as strong low-cost competitors. The majority have entered into cross-border alliances to improve profitability...
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... CRAFTING AND EXECUTING STRATEGY Submitted by: John-Miguel Onkony Winter Quarter 2011 Strayer University Introduction This document presents an analysis of one case presented in the textbook (Thompson, A.A., Strickland, A.J., & Gamble, J.E. (2010). Crafting and executing strategy: The quest for competitive advantage: Concepts and cases: 2009 custom edition (17th ed.). New York: McGraw-Hill-Irwin.), entitled “JetBlue: A Cadre of New Managers Takes Control”. The case describes the reasons for the success of JetBlue, a three-year-old, low-cost airline, operating in the USA. Trends in the U.S. Airline Industry and their Impact on Company’s Strategy Since 2001, the US airline industry has faced an unprecedented set of challenges. Following the terrorist attacks of September 11, 2001, the airline industry reported tremendous losses and several of the largest US airlines went into bankruptcy. To recover from this situation and try to remain financially viable, many measures have been taken by airlines. As a result, the airline industry has been a very dynamic industry over the last few years. U.S. legacy carriers said international air travel boosted sales...
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...airline industry. These trends present a noteworthy challenge to an airline’s performance and business strategy. These subsequent trends will be introduced and discussed: 1) crude oil prices; 2) rise of video teleconferencing; 3) global economic decline; 4) social media and brand perception; and 5) post 9/11 security requirements. In analyzing these trends, crude oil prices and their effect on the industry will be explored first. Trends in the U.S. Airline Industry According to Oil-Price.Net, crude oil prices were reported at $103 per barrel as of April 15, 2012. Government figures suggest that jet fuel prices have risen 12 percent since January, which is a 4 percent from last year. In response to the increase, Delta, Frontier, American JetBlue, Southwest and others have increased fares in an attempt to offset costs (USA Today, 2012). While increased fees, fares and related charges have been levied upon the travelers to assist in offsetting the cost of fuel, it is important to mention that these fees and increases are also a source of revenue generation for the airlines. When fuel costs decline, the fees and charges do not and could possibly increase an airline’s profit margin. Fuel cost is not the only significant challenge to the airline industry. As technology has evolved, business travel has declined as a result of teleconferencing capabilities. Corporations are often trying to cut or keep costs low while still delivering a quality product and reporting a respectable profit...
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...JetBlue Airways Sandra Green Strayer University BUS599 October 16, 2011 Dr. Obi Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The airline industry exists in a competitive market. In recent years there have been more lows than highs due to the economy, oil prices, post 9/11, and mergers. The terrorist attacks on September 11, 2001 led to a decrease in passenger traffic, bankruptcy, and lay-offs, which resulted in a major decrease in production, and a rise in labor costs. Prior to September 11, many airlines were already in bad shape, and were in the process of restructuring. Layoffs loomed on the horizon and on September 15, Continental announced it would cut 12,000 jobs. United and American followed with 20,000, Northwest 10,000, U.S. Airway, 11,000, and Delta 13,000. (Ward, 2002) Jet Blue and Southwest airlines were the only airlines that refused to cut jobs. “Before 9/11, the airline industry as a whole earned a profit five straight years from 1996 to 2000.” (Ackman, 2004) Things are starting to look up for the industry with airlines reporting their biggest earnings in a decade. (Martin, 2011) In 2008, crude oil prices rose to a record $140.00 dollars per barrel. (Thompson, Strickland, & Gamble page C-68) This caused many airlines to offset higher fuel costs by charging consumers additional fees. These fees included fuel surcharges, charging for first checked bag, and charging for pillows, blankets...
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...JetBlue Strategic plan Michele Branam STR581 March 26, 2013 Billie Hutson, PhD TABLE OF CONTENTS Abstract …………pg. 4 Introduction pg. 5 MISSION, VISION, AND VALUE STATEMENT…………………………………PG. 5 ENVIRONMENTAL ANALYSIS…………………………………………………..PG. 5 ENVIRONMENTAL SCAN………………………………………………................PG. 6 SWOT ANALYSIS PG. 6 PEST ANALYSIS………………………………………..………………………..…PG. 8 STRATEGY…………………………………………………………………………..PG. 9 VALUE DISCIPLINE..……………………………………………………….……...PG. 9 GENERIC STRATEGY………………………………………………………………PG. 10 GRAND STRATEGY………………………………………………………………..PG. 10 RECOMMENDATIONS.…………………………………………………………....PG. 11 OBJECTIVES………………………………………………………………………...PG. 11 FUNCTIONAL TACTICS…………………………………………………….……..PG. 13 ACTION ITEMS…………………………………...………………………………..PG. 13 MILES STONES AND DEADLINES………………………………………………PG. 14 TASKS AND OWNERSHIP………………………………………………….……..PG. 14 RESOURCE ALLOCATION………………………………………………………..PG. 14 KEY SUCCESS FACTORS…………………………………………………………PG. 15 BREAK EVEN ANALYSIS………………………………………….…….……….PG. 16 FORECASTED FINANCIALS……………………………………………………...PG. 17 BUDGET……………………………………………………………………………PG. 18 CONTINGENCY PLAN……………………………………………………………PG. 18 CONCLUSION…………………………………..………………..…………..…….PG. 18 REFERENCES………………………………………………………………………PG. 20 Abstract The airline industry received devastating blows from the global economic downturn of 2008. An uncertain and volatile market, JetBlue will adopt a strategic...
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...has created, will help to ensure the company long term success. Addressed in this report will be the following topics: (1) What are the trends in the U.S. airline industry? How might these trends impact a company’s strategy? , (2) What is Jet Blue’s strategic intent? , (3) What are Jet Blue’s financial objectives? Has the company has been successful in achieving their objective? , (4) What are Jet Blue’s strategic elements of cost, organizational culture, and human resource practices? Does each of these elements provide the organization with a competitive advantage? , and (5) What are Jet Blue’s strategies for 2008 and beyond? Will Jet Blue be successful implementing these strategies or not? Strategic Planning: Jet Blue Airways What are the trends in the U.S. airline industry? How might these trends impact a company’s strategy? With the constant changes in the country’s economy, airlines are having more difficulties reaching a competitive advantage. The constant raise in fuel and oil cost to fuel airplanes has caused airlines to come up with a plan to maintain these cost. In addition, the airlines also focus on increasing profit return to shareholders and company executives. To achieve this goals airlines have started to charge fees for services such as for checking in in-person, booking with a credit card, overweight baggage by the pound, luggage per distance, booking online, bags that want fit under the seat, transferring tickets to another persons name, and to use the bathroom...
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...Analysis of JetBlue Airways JetBlue Airways is a young airline that is very successful and is also growing rapidly. In this analysis, the human resource strategies, policies, and practices will be reviewed and analyzed with suggestions as to how human resources practices and equal opportunity employment law relates to JetBlue and how these practices and laws can be beneficial to all of the organization's human resources areas but also how they can be beneficial to JetBlue as an organization with a bright future. Hiring Practices JetBlue already has impressive hiring practices because they focus on finding the right people with great attitudes. However, there are three national equal employment laws that have been identified that will impact JetBlue's hiring practices. The first law identified is the Age Discrimination Act of 1967 which prohibits "employers from discriminating against individuals who were 40 to 65 years old" (Mondy, 2012). In making sure not to discount hiring people over the age of 40 whether they have previous airline experience or not can benefit JetBlue as an organization because many workers that are over the age of 40 have a great work ethic along with great customer service skills as noted by CVS executive, Stephen Wing (Mondy, 2012). This also creates diversity in the workplace which only enhances the organization. The second law identified is Title VII of the Civil Rights Act of 1964 that was amended in 1972. Title VII prohibits an employer...
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...Jet Blue Airlines Strategic Management (Bus 599) October 16, 2011 In today’s society there are very few things that are limited in number. There are an immense number of companies that provide goods and services; those companies include but are not limited to wireless telephone companies, grocery stores, clothing stores, car dealerships, and airline companies. There are many different airline companies used daily for both national and international travel. JetBlue Airways is one amongst a number of airline companies. At one point JetBlue Airways was a discount airline carrier; which offered customer’s low fares, operated point-to-point systems, used two types of aircraft, served only snacks, and maintained quick turnaround times at airports. One of the airline company’s focal goals was for their customers to feel as if they were in a small cozy den in someone’s home. However, in the first six months of the year 2008 the US economy slowed and crude oil prices rose to a record of $140 per barrel. By this happening businesses had to cut back on employee travel and this rise in crude oil prices also stopped consumers from going on vacations. The rise in oil prices made air travel more expensive. There operating costs were low, especially compared to those of other major US airline companies (Thompson, Strickland & Gamble, 2010). Discuss Jet Blue’s strategic Intent Being affected by the increase in oil prices, Jet Blue decided to invest in the new airbus A320 which offered...
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...------------------------------------------------- MARKETING ------------------------------------------------- CASE ANALYSIS JETBLUE * SYNOPSIS This case illustrates the success that JetBlue Airline has achieved since founded in 1999, though it had trouble in 2007 during Valentine´s day and a few more, it managed to overcome the issue and become one of the most known companies for excellent customer service. The author mentions that JetBlue truly cares about the customer because JetBlue doesn´t sell just airplane tickets and its customers neither seek for airplanes tickets when buying at JetBlue. They buy the whole experience in which each detail included in the service made the customer feel special with things such as ´´legroom seats´´, plenty of food and drinks and a zone for entertainment which seeks to satisfy the client while they wait for their flight even though if its delayed among other tangible elements that the company offers. All the actions of JetBlue are encouraged to reflect their slogan “Happy Jetting”. Furthermore, another topic highlight in the case is the culture that the company professes, the way they treat each other, “the human side of the equation”. An example of this is the opportunity to workers to do their job from home. Employees are so satisfied with the company that they care for it, which reflects in how they do their job and their attitude towards clients. As the CEO communicated, “everything can be copied, except the culture”. All this combination...
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...JetBlue Airway, Inc. was a low-cost carrier (LLC) airline company that began operations in early 200. With a unique “anti-establishment” business model and “value player” positioning strategy, JetBlue established itself as a low cost, hardworking, and dependable airlines company. After the 2001 September terrorist attacks, JetBlue seized the opportunity to expand by launching an initial public offering. When other airlines were slow to resume operations, JetBlue tool advantage of the situation by increasing safety measures, boosting services offered, and expanding operations. Between 2002 and 2003, JetBlue grew rapidly until profits dropped significantly in 2004. With rising fuel cost, aggressive competition, and an aging fleet, JetBlue was forced to announce a recovery plan. Just as profits slowly recovered in 2006, a snowstorm hit the United States, causing a huge customer service and database management crisis that negatively affected JetBlue’s reputation. JetBlue initially achieved profitability in the challenging aviation industry due to its business model and processes, positioning and culture. Unlike its competitors, JetBlue chose New York as its base, which allowed for domestic fight leadership at JFK airport. By combining low fares with valuable services, such as snacks and personal satellite television, JetBlue was able to position itself among it customers. Tactically, JetBlue bought economical and easy to maintain aircraft and chose routes and airports that...
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...Running head: JetBlue Airways: Business Strategy JetBlue Airways and its Business Strategy: Abstract Business Strategy is termed the determination of a basic long-term goals and objectives of an enterprise and the adoption of actions to gather all resources in order to carry out these goals (Jayasinghe, 2009). In order for businesses to succeed they come up with a direction in which it will lead them down a long-term achievement of objectives enabling them to grow and expand. In order to become successful a new business owner must determine what market it should enter and if it will be able to compete with other similar markets. Once the market is decided such as the airline industry, then the business has to decide how it will perform better than the competition and what item(s) it will bring to the market in order to be assorted from the competition. JetBlue Airways founding father, David Neeleman wanted to start an airline “that would combine the low fares of a discount airline carrier with the comforts of a small cozy den in people’s homes” (Rovenpor & Michel, 2009). His thinking brought on the evolution that JetBlue Airways would be identified as a customer service first company which would focus on providing customers a unique experience on every flight for each interaction they had with the airline (JetBlue Experience, 2005). When a new business is entering this market it has to decide how to compete with the other similar discount airlines, such as Southwest...
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...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 superior service in every aspect of our customer’s air travel experience. In order to reaffirm this commitment, we set forth this Bill of Right for our customers (JetBlue Airways, 2012). Mr. Neeleman plan on combining low air fares of a discount airline carrier with comfortable seating just like if you were at house (Thompson, Strickland, & Gamble, 2010). Customers would save a...
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