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Homework Essay

2822 words - 12 pages

Jet Blue Airways – Crafting and Executing Strategy
BUS 599
Dr. Menon
Assignment 1
January 15, 2012

Jet Blue Airways – Crafting and Executing Strategy
Company Background
JetBlue Airways Corporation is an American low-cost airline that was founded by David Neeleman who was born in Brazil during 1959. JetBlue Airways Corporation is headquartered in the New York City borough of Queens and its main base is located at the John F. Kennedy (JFK) International Airport. Prior to its name JetBlue Airways, David Neeleman founded this company under the name “New Air” and several of the employees who once worked for JetBlue Airways also worked for Southwest Airlines prior to ...view middle of the document...

S. Airline carriers, in which the company offered many accommodations in the event that customers experienced any problems on JetBlue’s airline, such as on-ground delays and cancellations. For delays, JetBlue would offer such things as free movies, $15 vouchers for customers who experienced inoperable televisions, $50 vouchers for delays as long as 2 hours and even vouchers paid in the full amount of what the customer paid to travel. The company also gave $1000 to customers who were involuntarily denied boarding. Due to these strategies, Jet Blue was able to reach its 2 millionth passenger during 2001 and added many more destinations to its route, which then triggered the company to operate as a point-to-point carrier. By the year 2007, JetBlue operated 550 or more flights a day and provided services to 53 destinations in several different states (Thompson, A. A., Strickland, A. J., & Gamble, J. E., 2010).
Trends in the U.S. Airline Industry
With efforts to fight our economic downtown and the events that happened during 9/11, many U.S. Airlines today are now faced with many challenges, such as making sure every customer is safe and provided with efficient care, flights are affordable and gas prices are low. However, when looking at operating costs and service quality, one company stood out a little more than others, JetBlue Airways. When comparing JetBlue’s operating costs to other airlines, one is able to see that this company’s costs were significantly lower than others, as well as their fueling costs. When comparing JetBlue’s costs for pilots and copilots to companies such as American Airlines, Continental Airlines and Delta Air Airlines, one is able to see that their costs were significantly lower, coming in at .62 cent. When comparing fuel and oil costs, JetBlue’s costs are around $3 while all other airlines, such as American Airlines and Delta Air, are at $5 and $6. Maintenance costs for JetBlue are at .74 cent, while others, such as America West and American Airlines are reaching $2, making JetBlue’s total operating expenses less than all other airlines.
Loading factors, which are measurements of how much of an airline’s passenger-carrying capacity is utilized, were significantly equal for all U.S. Airlines from the years 2005 to 2008; however, when it came to on-time flights, mishandled baggage and passenger complaints, numbers began to fluctuate once again across the board of U.S. airlines. When it came to on-time flights during the year 2005, JetBlue had one of the lowest ranks for on-time flights, which put America West and Southwest at the top of the list for providing their customers with on-time flights. By the year 2007, JetBlue was still one of the lowest ranked flight carriers of making sure customers were arriving on-time, this time placing Southwest and Frontier at the top of the list. When dealing with mishandled baggage filed by passengers, JetBlue was one of the top contenders for having the least amount...

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