JetBlue Presentation

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Opportunities

• Growing US airline industry
• Commercial partnerships
• Business customers account for significant portion of domestic flights
• Improved fuel efficiency
• Availability of technological designs

Threats

Fluctuating fuel prices

Intense competition

Developments in the communications

New FAA rules and laws

New training requirements

Groups looking to unionize JetBlue’s pilots

SWOT Analysis

Strengths

Strategic Posture

• Strong corporate culture
• Highly aircraft utilization helps to maintain low cost structure
• Strong brand recognition
• Innovative technology and processes

Current Performance

• JetBlue focuses on providing customer satisfaction
• Expecting every employee to be equally responsible for it’s success
• Mission: safety, caring, integrity, passion and fun

Weaknesses

• Pilot retention
• Slow expansion rate (CI #1)
• Highly dependent domestic metropolitan markets (CI#1)
• Inefficient operations communication (CI #3)

• Record revenue for 2012
• Experienced their best year since their 13th year in business
• Estimated revenue for 2013

Financial Growth

Technological

• E-Commerce and E-Check-Ins
• Social Media
• Fly-Fi (In-Air Connectivity)
• Aircraft Improvements
• Alternative Fuels

Quick Company Overview

JetBlue Critical Case Issues

• Founded: 1998 by David Neeleman
• First Flight: 2000 from NYC to Fort Lauderdale
• Headquarters: New York City, John F. Kennedy International Airport (T5)
• Service Offerings: 80 destinations in US, Mexico, Colombia and the Caribbean
• Employees: 14,000
• Alliance Partners: Air Lingus, South African Airlines, Cape Air & Lufthansa

Industry Analysis

Strategic Alternative #1: Improve JetBlue’s CRM

Financial Ratios

Strategic Alternative #2, Create Risk Management Force

Critical Case #1, Customer Service

Critical Case #2, Operations Management & Logistics

Critical Case #3, Software & Mechanical Disruptions

Critical Case #4, Expansion into Europe & South America

• Addresses current customer relation management problems
• Cancellations in North East
• High call Volume
• Refunds
• Pro’s
• Lower wait times when customers call JetBlue
• Customers not switching to other airlines
• Con’s
• Resources may be more properly allocated
• Must properly be implanted

• Strategies for unexpected scenarios
• Employee performance
• Stranded customers
• Pilot Retention
• Pro’s
• Create larger benefit packages for pilots
• Preparation for unexpected events
• Prevent employee disruption
• Con’s
• Increase cost
• False sense of security

Critical Case #4, Expansion into Europe & South America:

Strategic Alternative #3, Refresh Aircraft Fleet

• Create strategic alliance with other airlines
• Face European Markets
• Other Airlines have created strategic partnerships in the past
• Pro’s
• Create an Alliance with Lufthansa and other airlines to run various flight services throughout Europe
• Gain market share
• Join another niche market
• Con’s
• Possible loss of market share
• Loss of control

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• Second Quarter of 2014 release of 36 new Airbus A321’s
• Sleek Style Seating
• 10” Touchscreen Displays
• Private First Class Seating
• Pro’s
• Retire old with new ones
• Less mechanical Problems
• Gain larger customer base
• Con’s
• Capital requirement
• Cost of training
• Adaption to technology

Rivalry Among Existing Competitors: High

• Extremely competitive industry
• 130 Carriers in the US
• Cost-Leadership Strategy
• JetBlue's Market share has decreased by 2.2 since 2010

Destinations

Power of Suppliers: High

Power of Buyers: High

• Aircraft Manufacturers

-Highly Concentrated Industry

• Airports

-Monopolistic power

• Fuel

-Largest operating cost (26.6%)

-Every increase in fuel increases operating costs by

170million USD for the US Airline Industry

• Travel Agencies

-Highly Fragmented Industry (15,000 Agencies in the US)

-Rarely utilized by consumers and airlines

• Ticket Holders

-101 Billion US passengers enplaned in 2009

-High bargaining power

• Loyalty Programs

Bypass Attack Strategy

Implementation

Threat of New Entrants: Low

Threat of Substitute Product or Service: Medium

To implement a new corporate strategy that improves communication and expands the corporation geographically.

Activities

• 1. Create operational backup plans and improve communication in unexpected situations
• 2. Determine which geographical locations to expand
• 3. Cost planning for expansion
• 4. Promote new expansion locations
• 5. Begin expansion in new locations

Ground and Sea transportation

Technological advancements in communications

High Barriers to Entry

Capital Requirements

Access to Distribution Channels

Government Policy

Corporate Governance

• Executives and Board of Directors
• Social Responsibility

-Supporting education, communities

and children

-Corporate focus on sustainable

development and environmental issues

David Barger

CIO since May 2007

Video Reenactment

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• March 2012 Pilot Disturbance:
• Small issue with JetBlue pilot Clayton Frederick Osbon

Relative Power of other Stakeholders: High

Conflict of Interest

• Position: Vice President/ Chief Safety Officer

• Reports to: James Hnat, JetBlue's Executive Vice President of Corporate Affairs

• Conflict: former FAA employee have to wait a full two years before working for any company they once had oversight on, new rule issued 2011

• Possibilities: Mr. Allen still has lots of contacts and if JetBlue ever gets into a sticky situation it is possible Mr. Allen could get them out of it

John Allen

• Government Policy
• Air Transport Association (ATA)
• Federal Aviation Administration (FAA)

Evaluation and Control

• Growth and expansion in many ways other than just physical expansion, to improve sales. (CI#4)

• After operational management implementation, JetBlue should continuously evaluate its new strategies. (CI#2)

• Implement a questionnaire to management to evaluate their operational strategies to ensure communication is improving. (CI#2)

• Market JetBlue’s new destinations and innovated technology in order to increase growth and customer satisfaction. (CI #4 & 3)

• To keep majority control of the company, JetBlue doesn’t allow any one company/stakeholder to own more than 31% of their stock. (Lufthansa holds the highest number of shares, held at 31%.)