Running Head: JET BLUE AIRLINES & BEYOND
Jet Blue Airlines & Beyond
Rashed Sulaiman Burgess
Business 599 Strategic Management
April 18, 2012
The life’s lessons and advice that David Neeleman experienced earlier in life, shaped him into the man that he is today. He thought about one day being the leader of his own business entity. While working at a grocery store he was advised by his grandfather to “never disappoint customers, satisfied customers would return” (Thompson, Strickland, and Gamble, Crafting & Executing Strategy, 2009). This piece of advice is what ...view middle of the document...
How many times have you witnessed on television special rates to travel to certain places. In wake of a suffering economy airlines are incorporating special rates in their strategies to encourage individuals to want to fly more. Along with a declining economy, the price of oil has increased. As I was riding past the gas station, I noticed how the price of gas is almost $4.00 dollars a gallon. If the price at the pump is that high, you can imagine how much money it takes to fuel a jet or 767. An airline has to recognize this expense when implementing their pricing strategy. In an article written by Bart Jansen he says “The same $100-plus price tag on a barrel of crude oil that’s driving prices at the pump is pushing up the price of jet fuel, prompting airlines to raise ticket prices across their systems twice since the start of the year” (Bart Jansen, High fuel costs raise price of flying too, 2012). They have to increase the prices so that they can absorb these costs. I have noticed that airlines are starting to charge if your bags are over a certain weight, and if you are carrying on opposed to registering your bag. I was charged an extra $50.00 dollars, because my bag was of 25 pounds. Although this is a burden for individuals, it is necessary for airlines, because of the rising cost to operate an airline. Southwest airlines have decided not to charge extra money for extra carry on baggage. This is their strategy to attract more customers. All the airlines have to use a creative pricing strategy in lieu of their costs increasing. This is what creates good competition in the airline industry. In the article written by Jansen, Michael Derchin an airline analyst says “demand has been pretty strong” (Bart Jansen, High fuel costs raise price of flying too, 2012). The name of the game for airlines is creating a high demand and commitment to their particular airline, so they can increase their revenues, and not be consumed by expenses. The power is in the strategy.
Jet Blue Prints
The strategy of Jet Blue is simple; never disappoint customers. By making the customer the focal point, they would be committed to that particular brand or service. This is why David Neeleman created the Customer Bill of Rights, informing the customers of their rights when it comes to flying with Jet Blue. Information such as what happens when there are cancellations, delays, or when a customer cancels their flight. This document makes the customer feel important, and know that they are a priority. David Neeleman wanted to save his customers money when they fly Jet Blue. This airline is what he called “a discount airline” (Thompson, Strickland, Gamble, Crafting & Executing Strategy, 2009). Along with low pricing he wanted customers to fly in comfort, so they designed the inside of their planes to be as comfy as a room inside a person’s home. David Neeleman did not want his customers to lose their tickets, so he introduced electronic ticketing. The text says “JetBlue...