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JetBlue Airlines Case Study

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by

Shahista Salam

on 27 January 2015

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Transcript of JetBlue Airlines Case Study

SWOT Analysis
JetBlue Airlines Case Study
Five Forces Model
1. Bargaining power of the Buyer - High
JetBlue offers standard products, other options are always available
Incentives: "True Blue" maintains customer loyalty
2. Threat from substitute - High
There are numerous other airlines, people traveling short distances may resort to car, boat, train, etc.
3. Bargaining power of suppliers - High
Only two suppliers: Airbus & Boeing
Fuel suppliers are more in control of costs
Five Forces Cont.
4. Threats of new entrance - Fairly low
Cost is high for emerging airlines
It is difficult to compete with larger airlines
Reputation, brand name, and image is important
5. Competitive rivalry - High
Delta, United, and American Airlines serve as major competition
Depending on economic cycles, competitors will try to overtake
Strategies Used
JetBlue’s focus to a target market industry is within the low cost industry of airway transportation in regional areas
Strive to assure their costs would stay low and use only Airbus A320 planes as opposed to the more popular brand of Boeing (reducing costs in training and utilizing personal management)
"Paperless Pilots"
Issues and Challenges
Problematic Flight: February 14, 2007
Passengers ended up stranded for 11 hours
Communication systems were not fully compatible to deal with the situation
Purchasing Embraer 190 aircraft proved expenses, hinder profitability
Did not prioritize bag scan systems

History and Background
JetBlue Airways was created by an entrepreneur in Utah, David Neelman, whose purpose in creating the airline was to “bring humanity back to air travel”.
70 destinations in 22 states, Puerto Rico, Mexico and 12 countries in the Caribbean and Latin America. Majority of the JetBlue airline flights have an origin or destination in New York or one of its other focus cities: Boston, Fort Lauderdale, Los Angeles, Orlando or San Juan, Puerto Rico.
The company has five officers they are Joel Peterson, Robin Hayes, David Barger, Frank Sica, Mark Powers, and David Barger is the current CEO of JetBlue Airlines
Strengths:
One of the highest recipient’s for customer satisfaction amongst low-carriers for nearly 8 years
Aircrafts are new and efficient
Trusted airline even after the 9/11 attacks, and serves as a low-cost airline for more than 70 destinations
Weaknesses:
Does not cater to international flights and there are higher costs linked to the airline’s several facilities that make the company less competitive

Opportunities:
America is the single largest market in the world always leaving room for further expansion for the airlines; there is also a huge scope to expand to the Asian market

Threats:
Most of the major airlines have undergone cost reduction to reduce airfare and there is always additional protocol needed for security measures for future probability terrorism attacks

Course of Action Recommended
Compensation to customers
Customer ill of rights
More appropriate notification of flights
Reduction of Capital Expenditures
Fleet growth expansion in the future
Opinion
Importance of customer loyalty
JetBlue and dedication to mission statement
Anticipate market and execute it
Strategic management plan
Cost-effectiveness and its priority
Full transcript