Jet Blue Airways Analysis

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JetBlue Airways Corporation has been a rapidly growing discount airline and biggest success story in the industry by using its strong customer service considerations and low fares to build a solid, growing customer base. David Neeleman, CEO and director began JetBlue in 1999 and flying since 2000 after his previous airline company-Morris Air was brought by Herb Kelleher, the Southwest Airline founder. He signed a 5-year non-compete agreement not to launch another airline. Kelleher hired Neeleman at Southwest but was not happy with the structured environment he did not control and was fired (Essentials of Entrepreneurship p78). JetBlue's strategy is developed around its core competencies. The company has benefited by being able to start with a clean slate. It has a last-mover advantage and its information technology infrastructure and use has given JetBlue a sustainable competitive advantage. Starting with a clean slate gave Neeleman and President, COO David Barger the advantage of handpicking a management and supportive staff that reflected their vision. JetBlue's management has numerous years of airline industry experience. The team members have catered to customers, they've been customers, and they have extensive backgrounds on what it takes to be successful in the industry. In the early planning process, 20 members of JetBlue's management staff met for two days and settled on five core values: safety, caring, integrity, fun and passion. These five values result in a superior customer and crewmember experience (Motley Fool). JetBlue is different from other discount airlines. While Southwest and JetBlue use the same type of jet (Boeing 737 for Southwest and Airbus A320 for JetBlue), Jet Blue planes accommodate 162 passengers versus Southwest holds 135 passengers. The use of this plane allows the maintenance costs to stay low. This low maintenance cost is lower than any other carrier in the industry. JetBlue also focuses on longer flights (Essentials). Neeleman decided to upholster every seat in leather, which costs $15,000 more per plane. The leather surfaces are easier to maintain and last much longer (Essentials). Another advantage is its workforce is nonunion. Neeleman is not against unionization but he would prefer to avoid them. He feels if management and employees trust one another and if people feel they are compensated fairly, he believes that there's no need for a third party.

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