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jetBLUE Presentation

Global Strategy & Policy Presentation
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on 24 March 2014

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Transcript of jetBLUE Presentation

Quick Company Overview
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
E-Commerce and E-Check-Ins
Social Media
Fly-Fi (In-Air Connectivity)
Aircraft Improvements
Alternative Fuels
Financial Ratios
Technological
Industry Analysis
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
Power of Suppliers: 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
Power of Buyers: High
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
Executives and Board of Directors
Social Responsibility
-Supporting education, communities
and children
-Corporate focus on sustainable
development and environmental issues
Corporate Governance
David Barger
CIO since May 2007
Destinations
Bypass Attack Strategy
Implementation
Video Reenactment
March 2012 Pilot Disturbance:
Small issue with JetBlue pilot Clayton Frederick Osbon
Thank You!
Questions?

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

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

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

Strategic Posture
JetBlue focuses on providing customer satisfaction
Expecting every employee to be equally responsible for it’s success
Mission: safety, caring, integrity, passion and fun
Financial Growth
High Barriers to Entry
Capital Requirements
Access to Distribution Channels
Government Policy

Threat of New Entrants: Low
Ground and Sea transportation
Technological advancements in communications

Threat of Substitute Product or Service: Medium
Government Policy
Air Transport Association (ATA)
Federal Aviation Administration (FAA)

Relative Power of other Stakeholders: High
JetBlue Critical Case Issues
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

Strategic Alternative #1: Improve JetBlue’s CRM
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

Strategic Alternative #2, Create Risk Management Force
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

Strategic Alternative #3, Refresh Aircraft Fleet
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

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

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
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

... Continue
... Continue
SWOT Analysis
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

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%.)
Full transcript