Jet Blue

In: Business and Management

Submitted By sup3rmn18
Words 1514
Pages 7
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 in the world is preparing for European green-house gas trading scheme. The trading scheme will likely increase cost and could past through to passengers or mitigated through other ways, and impact carriers credit quality over time. European airlines will most likely endure most of the impact by the new regulations. The International Air Transport Association (IATA), which represents major…...

Similar Documents

Jet Blue

...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,......

Words: 1291 - Pages: 6

Jet Blue

...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 to being able to run the airline successfully over time. This is precisely what Southwest had done and I feel that Jet Blue was trying to mimic a lot of Southwest’s ways to create this airline. As we have discussed in class if you can keep employees happy typically the company is successful as well. c. What biases might the executive team be subject to, based on its composition and norms, and how might these be ameliorated? i. They......

Words: 1407 - Pages: 6

It Jet Blue

...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......

Words: 357 - Pages: 2

Jet Blue

...Preguntas: 1. Realice un análisis del ambiente general para Jet Blue y para la industria de la aviación comercial. JetBlue es una aerolínea de vuelos a bajo costo en los Estados Unidos después de una combinación muy interesante de "bajo costo y la diferenciación" como su estrategia. Desde su creación en 1998, la aerolínea creció hasta convertirse en uno de los jugadores más grandes en el sector del transporte aéreo. El núcleo de la estrategia a bajo costo de JetBlue fue logrado a través de una fuerza de trabajo más pequeña y más productivos, los procesos automatizados; un mejor uso de la tecnología, el uso de nuevos modelos de aviones individuales que reducen los costos de mantenimiento. En el entorno general de la industria de aerolíneas, la discusión puede hacer frente a los factores políticos / legales, tecnológicos, económicos y de otro tipo. En cuanto a factores legales, la desregulación de la industria aérea en 1978 ofreció la oportunidad a varios competidores para entrar en el mercado. Permitió que surgieran nuevos segmentos de mercado como el de los servicios de punto a punto a bajo costo. Por lo tanto, cambió el panorama de la industria. La aparición de la tecnología(Internet) y otros avances tecnológicos han tenido un impacto en la forma en que las compañías aéreas llevan a cabo sus negocios. Por ejemplo, el Internet redujo la dependencia a agencias de ventas. La mayoría de las aerolíneas venden sus boletos a través de su pagina de internet. El servicio al......

Words: 2849 - Pages: 12

Jet Blue

...JET BLUE XBIX/219 Problems at JetBlue David Neeleman CEO was the founder and creator of JetBlue’s Airlines. His philosophy was to bring back humanity to the airline industry with a combination of innovation and technology. CEO Neeleman felt that customers were supposed to have the accessibility to high quality airline service at affordable prices. It has been said that his vision was Great in theory, but not very realistic. While for some time prices were able to remain affordable, but the quality of service at JetBlue failed tremendously when an ice storm hit the eastern cost on Valentine’s Day in 2007. All of the other airline competitors had cancelled flights where JetBlue thought that we would be able to fulfill all of their fight, but once they didn’t realize they would need to cancel flights until the weather got worse which in the end cause for thousands of stranded passengers in terminals and hundreds sitting around for hours on airplanes sitting as long as 10 + hours on the tarmack. What Jet Blue needed to was take an intense look at how the company managed its IT to help ensure that such severe incidents such as this doesn’t happen again. When David Neeleman was interviewed by the New York Times, he stated he had pilots emailing him stating “I am available, what do I do?” To insure that things such as this don’t happen again Jet Blue needs to upgrade their online, customer service for center reservation system to handle......

Words: 269 - Pages: 2

Sample Jet Blue

... 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......

Words: 2434 - Pages: 10

Jet Blue

...change customer behavior and can safe airlines money as they need less staff to handle check ins, less gate agents to answer questions and less customer service personnel to change flights, seat choices, book alternative flights, or provide upgrades as these things can Aircraft engines emit high noise pollution, gases contributing to global warming. The airline industry contributes about 11% of the greenhouse gases emitted by US transportation sector.   The airliners with the best fuel economy is the Boeing 747-400ER with 97MPG with all seats filled and a range of 3,265 nautical miles and the Boeing 737-900ER with 101MPG with all seats filled and a range of 1,000 nautical miles. Usage of Bio-fuels and mixing of algae fuel to jet fuels have shown some promise in reducing harmful levels of emission.  Competitive Drivers Porter’s Five Forces Threat of New Entrants: Low  Airline industry is a fairly difficult industry to penetrate due to high costs and investments. Business plan and strategic positioning has to be considered for further analytical framework. A larger number of world’s leading airlines operate out of United States, so this has shifted focus from threat of new entrants to the bargaining power of consumers. Investment in a hub system strategically affects the competition’s positions. The reason for major airlines’ move to place a high volume of aircraft orders can be related to strategic investment in overcapacity thereby stopping the......

Words: 3369 - Pages: 14

Jet Blue Airways

...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

Jet Blue

...strategic vision and must be considered when implementing business objectives with the end goal of strengthening the business. Moving toward success requires in-depth analysis of industry trends.   Discuss Jet Blue’s strategic intent. As America’s first and only airline to develop its own Customer Bill of Rights, JetBlue Airways’ strategic intent is to become America’s favorite Airline. (Thompson et al., 2010, p. 52). The New York-based airline grew from 1 million to 10 million passengers in 2001 and 2003 respectfully. In seven years, JetBlue quadrupled its number of cities served, grew its fleet from ten to 134 aircraft and increased sales by 47 percent. (Thompson et al., 2010, p. 55). Their operating cost consistently falls well below that of the major U.S. Airlines. According to Thompson, a company pursues strategic intent when it aggressively pursues its strategic objectives with resources and competitive actions. The ability of JetBlue’s leadership to consistently respond to the objectives despite the struggles on startup companies is commendable and ranks them alongside the larger carriers who have been in existence for many decades. In such a short period, and in pursuit of achievement, JetBlue has captured business and customers from its rivals.    Discuss Jet Blue’s financial objectives and whether or not the company has been successful in achieving this objective. Many airlines stockholders suffered financially in this decade, and JetBlue suffered as well. In......

Words: 1298 - Pages: 6

Jet Blue

...Crafting and Executing Strategy Assignment 1 By Sarisa Sukbumrung BUS 599 Dr. Johnnie. Drake E. Drake, Jr. Strayer University Fall 2011 Abstract The objectives of this paper are to illustrate the 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...

Words: 1389 - Pages: 6

Jet Blue

...re-booking rates. It is through these challenges that are faced in the airline industry that JetBlue looks to use its corporate culture and innovative way of thinking to capitalize on other airlines shortcomings in the customer service department. JetBlue can create additional value through the flawless execution of their customer service, which in turn allows them to deliver that superior value that most other airlines in the industry have simply overlooked for so many years. “Across the airline experience, from check-in, to the flight, to deplaning, passengers are being affected by the ramifications of carriers making staff cutbacks and have expressed that performance and attitudes of airline staff are suffering…” (Tews, 2008). The big Blue and their executive team most likely came to the conclusion that they need to keep their customers happy; since the airline industry relies on the travelers and the key for airlines is not booking travelers, but getting travelers to re-book with an airline, they [JetBlue] decided it was more important to retain as many of the JetBlue crewmembers in order to maintain the high level of customer service they felt satisfactory. JetBlue looked to other places to eliminate items in order to keep costs low such as: eliminating in flight meals, charging for beverages and snacks, and eliminating paper tickets. For a traveler the tradeoff between having larger seats and satellite TV vs. a subpar meal and soda should be a no brainer; couple the......

Words: 3980 - Pages: 16

Jet Blue

...overall, I would award him above par in all other categories. Citibank should not ignore his exemplary financial performance nor should they ignore their own contribution or lack thereof towards James’ customer service performance. This could be achieved by Citibank recognizing James through an award, outside the scorecard system, and by working with him towards improving customer service in the branch and provide training to ensure that he has the skills necessary to succeed as well as an understanding of the importance of customer service in his work. With this additional training and improved skills, James may be better able to create a culture valuing customer service in his branch and set an example for his employees. As we saw in “Jet Blue” and “How I learned to let my workers lead” it was not just management that exuded the values and beliefs of the organization, it was all of its employees (3). Those employees embodied the values because they were hired based on them (3), trained and supported to develop them and led by leaders who exhibited them (4). To ensure that the scorecard continues to be relevant to Citibank’s strategic evaluation, Citibank is also responsible for ensuring the fairness, efficiency and effectiveness of the benchmarks and indicators used through analysis of the results each year. There are two criticisms of the customer satisfaction measure which should be examined. First, the surveys determining the grades for customer satisfaction are......

Words: 1106 - Pages: 5

Jet Blue

...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, and headsets. Airlines also cut costs by lowering wages, grounding aircraft, and doing away with meals during......

Words: 1652 - Pages: 7

Checkpoint: Jet Blue

...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......

Words: 293 - Pages: 2

Jet Blue & Beyond

...Running Head: JET BLUE AIRLINES & BEYOND Jet Blue Airlines & Beyond Rashed Sulaiman Burgess Business 599 Strategic Management Leonardo Serrano Strayer University April 18, 2012 Introduction The life’s lessons and advice that David Neeleman experienced earlier in life, shaped him into the man that he is today. He thought about one day being the leader of his own business entity. While working at a grocery store he was advised by his grandfather to “never disappoint customers, satisfied customers would return” (Thompson, Strickland, and Gamble, Crafting & Executing Strategy, 2009). This piece of advice is what Jet Blue’s operation revolves around. The priority of the airlines is taking care of the customers, so that brand commitment is created. David Neeleman used his personal experiences of flying as a blue print to shape his Airlines. He wanted to make sure that customers are always comfortable and that they never have any bad experiences when they fly. Neeleman created his own solutions to resolve growing trends, and created a strategy that will eject JetBlue to the top. His efforts were not in vain, because Jet Blue enjoyed increased revenues in their first 3 years. The aims and ideals of David Neeleman are embedded into the brains of his employees and they shared the same objectives. He would not hire anyone who disagreed with how Jet Blue was operated. Jet Blue will continue to grow and......

Words: 1902 - Pages: 8