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JetBlue Airways: Managing growth

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Laure MDC

on 1 October 2014

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Transcript of JetBlue Airways: Managing growth

JetBlue Airways: Managing growth
JetBlue's initial Strategy
JetBlue's planes key drivers of profitability
Was adding the E190 to the fleet a good decision?
The principal objective was to conquer the middle size market
How should JetBlue slow down the growth of its fleet?
A low-cost company
Low fares
An alternative model
to the
hub-and-spoke system
A single type
of plane
Not a traditional
low-cost company
A succeeding
growth company
Adding the E190 to the fleet was, first of all a great change.
Allows entering a new market
Freedom of design to improve passenger confort
The E190 can target a wider range of destinations
The E190 can target people that would not consider JetBlue otherwise, and can feed the A320 flights at the same time.
New designs were constraining for passengers
Changes in flight organization were to be made
The employees (pilots and staff) did not react well to the new device
Adding the E190 was thus a good decision
From a Financial point of view
Medium and long-haul flights (3100 miles)

High fuel efficiency

Reliable plane

Possibility to outsource maintenance

13,4 hours of use per day
Less flight attendants

New plane : opportunity to design the interior

Cost of acquisition : 30-40 million

Smaller breakeaven

10-11 hours of use per day

where is average ROI in the plane industry is around 4%
ROI= 5,19%

UNSUSTAINABLE GROWTH: which "product" should be cut?
Operational focus:
What was forecast
Cross-fertilization of flights

"focus cities"
Acquisition of 12 A320 and 10 E190
We chose 2 indicators
Net Income per Available Seat Mile (ASM)

Financial indicators argue in favor of A320's
growth capacity reduction

What about other arguments?
In Conclusion...
Full transcript