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Jet Blue

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Meenakshi

JetBlue Airlines is a low-cost airline founded in 1998 that focuses on point-to-point travel between major metropolitan areas. It uses innovative strategies like leather seats instead of cloth, personal televisions, and secondary airports to reduce costs. JetBlue faces external threats like rising fuel prices and competition from major carriers, but maintains a strong brand through high customer satisfaction. The document analyzes JetBlue's business strategies, strengths, weaknesses and recommends expanding internationally and into new domestic markets to continue its success.

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JetBlue Airlines [Success Story] October 1, 2009 Efforts by:- Meenakshi Bisht Tushank Neeraj Garg
JetBlue Story JetBlue Innovative Strategies JetBlue SWOT Analysis JetBlue PEST Analysis JetBlue Market Positioning JetBlue Porters five forces JetBlue Mission Statement Recommendations Agenda
JetBlue is the brainchild of David Neeleman Concentrating on New york, Florida and California Started with an initial capital of $160 million Operations began on February 11,2000 The inaugural flight was between New Yorks JFK International airport and Fort Lauderdale April 11, 2002 announcement of initial public offering Serving 46 destinations with over 400 flights daily JetBlue story
Innovative strategies used by JetBlue Not to serve meals Providing personal television Leather seats instead of cloths Did not use old & cheap planes Use more fuel-efficient and less maintenance cost Airbus Did not fly too many routes Choose point-to-point flight
Continue Use secondary airport which did not handle too much traffic Reduce the Turnaround time Use electronic ticketing Paperless cockpit Customer-oriented approach Picking the right people Create fun
Strength Low Operating cost Strong brand Efficient employee Single fleet Consumer satisfaction Effective use of technology Advertisement SWOT Analysis
Weakness Relative new company Single fleet Concentration on middle class Shifting customers need
Opportunity Industry Route & fleet expansion Creation of Airlines Alliances Technological Improvements in Airplane design, operation and maintenance Deregulation of international air travel
Threat September 11 th attack/Accidents Security Increase in fuel price Strong Competition Global crisis New regulations by FAA union
Market Positioning Position Map Price Low High Quality Low Southwest American Airlines United Airlines Delta Frontier AirTran JetBlue
PEST ANALYSIS Political issue September11, terrorists attack Political stability Competitive Airline industry Regulatory factors
PEST ANALYSIS Economic issue Improved purchasing power Rise in Inflation Rise in oil prices
PEST ANALYSIS Social issue Greater customer awareness Increased entertainment level Security level of customers Bad services & lost baggage
PEST ANALYSIS Technological issue Beginning of e-ticketing Automated systems (cockpits) Advertisements (newly introduced animated)
Bargaining Power of Buyer High Threat from Substitute High Bargaining Power of Suppliers High Threat of New Entrance Low Competitive Rivalry High Porters five force analysis
Bargaining power of Buyer - High Standard product and services Several options available to customers with what airline they choose to fly. No switching cost customer need a reason to stay Customer can research easily using the internet Customer incentives such as True blue which allow customers to earn rewards, book flight in an easier/faster manner, and stay on top of the upcoming event/sales Customer loyalty : flying round trip across the US two times will earn you a free reward
Threat from substitute H igh Threat is high : numerous other airlines Switching costs among other airlines are low Switching costs among other transportation option are high for everything but short distance (Train, boat, car etc) High existing barriers bankruptcy laws allow loss maker to continue operating
Bargaining power of suppliers High Only two suppliers Airbus & Boeing Little/No chance to bargain with suppliers Fuel suppliers have a considerable amount of power because they control how much money is spent on the fuel used to fly the planes. The volume of fuel supplied to the airlines is extremely important because JetBlue has prescheduled flights that require a certain amount of fuel.
Threat of new entrance - Low Deregulation made it possible for new entrance Very high cost or capital required for entry Low profit margin Difficult to differentiate product & services Brand image and loyalty is important New airlines must be seen as safe and reliable Hundreds of gone defunct trying to compete against the large airlines
Competitive rivalry High Numerous competitors like Delta, United and American In times of low or moderate industry growth, the competition gets fiercer as each one tries to nab customers from the other in order to keep their capacity utilizations at acceptable levels The industry is extremely sensitive to economic cycles
Mission Bring Humanity Back to Air Travel Jet blue airways exists to provide superior services at low cost in every aspects of our customers air travel experience Core Values Safety Caring Integrity Fun Passion
Recommendations JetBlue needs to pursue a Cost Leadership Strategy Improve Fuel Hedge opportunities Initiate international Alliance Introduce point to point service in west coast markets
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Jet Blue

  • 1. JetBlue Airlines [Success Story] October 1, 2009 Efforts by:- Meenakshi Bisht Tushank Neeraj Garg
  • 2. JetBlue Story JetBlue Innovative Strategies JetBlue SWOT Analysis JetBlue PEST Analysis JetBlue Market Positioning JetBlue Porters five forces JetBlue Mission Statement Recommendations Agenda
  • 3. JetBlue is the brainchild of David Neeleman Concentrating on New york, Florida and California Started with an initial capital of $160 million Operations began on February 11,2000 The inaugural flight was between New Yorks JFK International airport and Fort Lauderdale April 11, 2002 announcement of initial public offering Serving 46 destinations with over 400 flights daily JetBlue story
  • 4. Innovative strategies used by JetBlue Not to serve meals Providing personal television Leather seats instead of cloths Did not use old & cheap planes Use more fuel-efficient and less maintenance cost Airbus Did not fly too many routes Choose point-to-point flight
  • 5. Continue Use secondary airport which did not handle too much traffic Reduce the Turnaround time Use electronic ticketing Paperless cockpit Customer-oriented approach Picking the right people Create fun
  • 6. Strength Low Operating cost Strong brand Efficient employee Single fleet Consumer satisfaction Effective use of technology Advertisement SWOT Analysis
  • 7. Weakness Relative new company Single fleet Concentration on middle class Shifting customers need
  • 8. Opportunity Industry Route & fleet expansion Creation of Airlines Alliances Technological Improvements in Airplane design, operation and maintenance Deregulation of international air travel
  • 9. Threat September 11 th attack/Accidents Security Increase in fuel price Strong Competition Global crisis New regulations by FAA union
  • 10. Market Positioning Position Map Price Low High Quality Low Southwest American Airlines United Airlines Delta Frontier AirTran JetBlue
  • 11. PEST ANALYSIS Political issue September11, terrorists attack Political stability Competitive Airline industry Regulatory factors
  • 12. PEST ANALYSIS Economic issue Improved purchasing power Rise in Inflation Rise in oil prices
  • 13. PEST ANALYSIS Social issue Greater customer awareness Increased entertainment level Security level of customers Bad services & lost baggage
  • 14. PEST ANALYSIS Technological issue Beginning of e-ticketing Automated systems (cockpits) Advertisements (newly introduced animated)
  • 15. Bargaining Power of Buyer High Threat from Substitute High Bargaining Power of Suppliers High Threat of New Entrance Low Competitive Rivalry High Porters five force analysis
  • 16. Bargaining power of Buyer - High Standard product and services Several options available to customers with what airline they choose to fly. No switching cost customer need a reason to stay Customer can research easily using the internet Customer incentives such as True blue which allow customers to earn rewards, book flight in an easier/faster manner, and stay on top of the upcoming event/sales Customer loyalty : flying round trip across the US two times will earn you a free reward
  • 17. Threat from substitute H igh Threat is high : numerous other airlines Switching costs among other airlines are low Switching costs among other transportation option are high for everything but short distance (Train, boat, car etc) High existing barriers bankruptcy laws allow loss maker to continue operating
  • 18. Bargaining power of suppliers High Only two suppliers Airbus & Boeing Little/No chance to bargain with suppliers Fuel suppliers have a considerable amount of power because they control how much money is spent on the fuel used to fly the planes. The volume of fuel supplied to the airlines is extremely important because JetBlue has prescheduled flights that require a certain amount of fuel.
  • 19. Threat of new entrance - Low Deregulation made it possible for new entrance Very high cost or capital required for entry Low profit margin Difficult to differentiate product & services Brand image and loyalty is important New airlines must be seen as safe and reliable Hundreds of gone defunct trying to compete against the large airlines
  • 20. Competitive rivalry High Numerous competitors like Delta, United and American In times of low or moderate industry growth, the competition gets fiercer as each one tries to nab customers from the other in order to keep their capacity utilizations at acceptable levels The industry is extremely sensitive to economic cycles
  • 21. Mission Bring Humanity Back to Air Travel Jet blue airways exists to provide superior services at low cost in every aspects of our customers air travel experience Core Values Safety Caring Integrity Fun Passion
  • 22. Recommendations JetBlue needs to pursue a Cost Leadership Strategy Improve Fuel Hedge opportunities Initiate international Alliance Introduce point to point service in west coast markets

Editor's Notes

  1. With the exception of a few carriers such as Southwest Airlines and JetBlue, many of America's airlines are have been losing significant amounts of money. The problems they face are daunting. One of the problems involves travelers concerns about flying after the attacks on the United States on September 11, 2001. Another problem involves the increased costs of security, which the airlines must absorb. The latest blow involves the massive increases in the cost of jet fuel. With the price of crude oil at more than $50 a barrel, already an all time high, and with prices continuing to rise every airline is feeling the financial pinch. Add in the fact that so called full service airlines are losing passengers to discount airlines such as Southwest and JetBlue and it becomes easy to see why airline stocks are in disfavor on Wall Street, and why many airlines' stock values have plummeted. JetBlue is in the transportation sector of the economy and operates as a commercial airline. JetBlue is one of the few exceptions to this rule. By virtue of the fact that the company has been able to control cost, and generate higher revenues in a post-911 world, its stock price has managed to remain steady
  2. With the exception of a few carriers such as Southwest Airlines and JetBlue, many of America's airlines are have been losing significant amounts of money. The problems they face are daunting. One of the problems involves travelers concerns about flying after the attacks on the United States on September 11, 2001. Another problem involves the increased costs of security, which the airlines must absorb. The latest blow involves the massive increases in the cost of jet fuel. With the price of crude oil at more than $50 a barrel, already an all time high, and with prices continuing to rise every airline is feeling the financial pinch. Add in the fact that so called full service airlines are losing passengers to discount airlines such as Southwest and JetBlue and it becomes easy to see why airline stocks are in disfavor on Wall Street, and why many airlines' stock values have plummeted. JetBlue is in the transportation sector of the economy and operates as a commercial airline. JetBlue is one of the few exceptions to this rule. By virtue of the fact that the company has been able to control cost, and generate higher revenues in a post-911 world, its stock price has managed to remain steady
  3. Safety: It always comes first. We each wear the hat of the Chief Safety Officer. Its everyones job to ensure a safe environment and experience for our Customers and each other. Caring: Respect and understanding are the hallmarks of who we are. Caring is what brings the JetBlue Experience to life. Integrity: Doing the right thing. Its the only way to do business, so we communicate openly and honestly. Thats how we earn trust--from each other and our Customers. Fun: Work should be a friendly environmenta place that you like. The equation is simple: we enjoy our jobs and our Customers enjoy the JetBlue Experience. Passion: JetBlue is more than just an airline. We deliver a great experience and an excellent product with dedication and enthusiasm. Thats what keeps our Customers coming back.
  4. In order to continue their success, jetBlue needs to pursue a Cost Leadership Strategy. A large part of their identity, as a company, is centered around their low-cost flights paired with other luxuries they have provided for their customers. Without the low-cost alternative to the major airlines, jetBlue would not have had the same level of success. In addition, with other new low-cost airlines like Independence Air following suit with jetBlue, they must maintain this aspect of their identity. Provided that they continue to expand at a safe pace and can expand to other markets, jetBlue will continue their trend of cheap airline fairs. The greatest American example of low cost identity is Wal-Mart. Its customer base started and continued because people knew that they could count on low prices in their stores. For the sake of analogy, if jetBlue can parallel Wal-Marts attitude with a similar Cost Leadership Strategy, then their continued success is evident.