Jetblue Airways Case Analysis

962 Words2 Pages
bulb-icon

Recommended: jetblue airlines strategic analysis

Company Profile: JetBlue Airways, Inc. (JetBlue) is a low-cost carrier (LCC) that is based in New York’s John F. Kennedy International Airport. The fonder, David Neelam, developed JetBlue’s business plans in 1998, and established the company in FEB 1999, after raising the required financial resource to create the airline. By FEB 2000 JetBlue started its operations, its first flight being from JFK to Lauderdale airport in Florida. JetBlue currently has a fleet of more than 190 aircrafts, which mainly consists of the Airbus A320s and A321s, as well as the Embraer 190s. All their aircrafts are equipped with leather seats in a single class layout. The JetBlue’s Airbus’s have a capacity of 150 seats, whereas the Embraer has capacity of 100 seats. …show more content…

JetBlue is also seeing some easing pressure created by capacity additions in the Caribbean and Latin America during the back half of 2014. After years of cost creep, JetBlue is finally displaying favorable unit cost trends for 2015 excluding fuel at its estimate flat growth at a 2% rise, which is a welcome change from the roughly 3.8% recorded in 2013 and a 3.2% in 2014. JetBlue’s GAAP net income in the 4th quarter 2014 was USD87 million excluding special items and factoring out the sale of its live TV subsidiary, the company recorded a USD232 million profit in 2014. Including proceeds from the sale, JetBlue’s total profit in 2014 was USD401 million. The airline’s top-line revenue increased by 5.9% in the 4th quarter to USD1.4 billion and nearly 7% for the current year to USD53.8 billion. The 7% growth is quite bit lower than the 19% growth recorded in the current year for 2011. JetBlue’s expenses increased 21% year-on-year in 4th quarter of 2014 to USD1.3 billion and 5.7% for the current year in 2014 to USD5.3 billion. The largest growth was in maintenance, salaries, wages and benefits, which increased 15% and 13%. The airline has slowed its growth in operating expenses considerably since 2011when it recorded a jump of roughly

Show More
Related

  • Caterpillar Case Analysis

    2184 Words  | 5 Pages

    • Looking further down the Income Statement, Caterpillar has experienced a 110% increase in other operating expenses between 2013 to 2015. Going from 2013 to 2014, there was a 66.5% increase, and then between 2014 and 2015, there was another large increase, this time of 26.3%.

    Read More

  • Song Airlines Case

    868 Words  | 2 Pages

    Song airline was a low cost carrier subsidiary of Delta airlines that started in 2003. It was formed to compete with JetBlue and other low cost airlines for the Florida market. The market environment at the time of the case was extremely difficult with the rising costs of fuel, increasing security requirements after 9/11 and customers' expectations of lower fares. It has forced many big players in the airline industry into bankruptcy. The operational costs which include gate fees, ground operational costs etc. were increasing causing even more problems for the airlines. The fares in the Florida route were decreasing while the costs were ever increasing making it difficult to remain operational in that space.

    Read More

  • Southwest Airlines: A Case Analysis

    1537 Words  | 4 Pages

    Having a low cost of operations is one of the contributing factors to Southwest Airlines’ financial success. Such low cost model of the corporation is brought about by an effective strategy. Southwest uses only one type of aircraft – the fuel-efficient Boeing 737. This tactic keeps training and maintenance costs down. Moreover, the no-frills approach to customer service contributed to the low cost of operations for Southwest.

    Read More

  • Jetstar Case Analysis

    1885 Words  | 4 Pages

    As airline industry is a competitive marketplace, the airline companies use new technologies to improve their efficiency and decrease the overhead costs, including ‘advanced aircraft engine technology, IT solutions, and mobile technology’ (Cederholm 2014). The technology changes including technology improvement, new innovation and disruptive technology. The disruptive technology need to meet the characteristics of ‘simplicity, convenience, accessibility and affordability’ (Christensen 1995). The technology changes would bring both opportunities and threats to airline companies. Since Labour cost and fuel costs occupy 50% of most airlines operating cost (Groot 2014). Therefore, if new technologies could be disruptive in the two aspects, there will be important changes to current airline

    Read More

  • IT Governance in Airline Industry Case Study

    1556 Words  | 4 Pages

    Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).

    Read More

  • Boeing/Airbus Case Analysis

    1860 Words  | 4 Pages

    Boeing/Airbus Case Analysis Competition in the Commercial Aircraft Business. With only a few large companies across the globe (Boeing, MD, and Airbus), the commercial aircraft industry essentially exhibits the qualities of an oligopolistic competition with intense rivalry. Here is an analysis of competition in the commercial aircraft business using Porter’s Five Forces. Figure 1: Porter’s Five Forces Applied to Aircraft Industry. Barrier to entry: - High barriers to entry, to a certain extent, help understand the risks involved in operating in the aircraft industry.

    Read More

  • Advantages Of Jet Blue Business Strategy

    1040 Words  | 3 Pages

    Use of technology and automated processes to reduce reservation, ticketing and customer services costs. Paperless cockpits, use of e-manuals, electronic ticketing, owning its own in-flight entertainment provider, automated baggage handling are some of the examples where Jet Blue’s use of technology has lowered operating costs.

    Read More

  • The Jet Age: The Jet Age And The Airline Industry

    1036 Words  | 3 Pages

    Since the Jet Age, airlines have been entering and existing the airline industry. Some have been in business since the very beginning. For example, United airlines was founded almost twenty-five years before the jet age took off, and due to an incredible amount of money that the airline had by being one of the first airlines predating the Jet Age, was able to buy new jets and assert itself as one of THE giants of air travel by the late 1950’s. But the introduction of new technology paved the way for issues regarding externalities, and production of these new technologies. ("Assessing the external environment - Responding to a changing external business environment - United Airlines | United Airlines case studies and information | The Times 100", n.d., p. 1) The beginning of the Jet Age offered an intense opportunity for new firms to open or expand, producing new products from jet engines to structural parts, from radar technology, to reclining seats. According to research done by the Air Transportation Action Group, “It has been estimated the airline industry supports a grand total of 29 million jobs” (Hanlon, 2007, p. 1). This statistic proves how dependent the world is on the airline industry, for jobs and travel, as well as r...

    Read More

  • Case Analysis On Southwest Airlines

    859 Words  | 2 Pages

    There are few things that are impressive about Southwest Airlines first one is how they treat the employees. For Southwest Airlines employees are first and customers are second. If the employees are treated well that will bring in happy customers. Next is that Southwest is not only with their low prices but is able to create a competitive advantage by offering a fun and humorous experience when flying. Finally another impressive fact is when Herb Kelleher’s retire from CEO position yet remained a Southwest employee till July 2014. Even after the retirement he was still active with the Southwest Airlines that reflected his enthusiasm and dedication for the

    Read More

  • Resurfing From The Crisis: Malaysian Airlines Case Study

    1769 Words  | 4 Pages

    In the year 2005, Malaysia Airlines reported a loss of RM1.3 billion. Revenue for the financial period was up by 10.3% or RM826.9 million, compared to the same period for 2004, driven by a 10.2% growth in passenger traffic. International passenger revenue increased by RM457.6 million or 8.4%, to RM5.9 billion, while cargo revenue decreased by RM64.1 million or 4.2%, to RM1.5 billion. Costs increased by 28.8% or RM2.3 billion, amounting to a total of RM 10.3 billion, primarily due to escalating fuel prices. Other cost increases included staff costs, handling and landing fees, aircraft maintenance and overhaul charges, Widespread Assets Unbundling (WAU) charges and leases. (Malaysia Airlines ,wikipedia)

    Read More

  • Boeing Management Planning

    1388 Words  | 3 Pages

    While Boeing has spent many resources planning what to build, Boeing is now faced with the problems of how to meet customer demands for the new aircraft. Boeing Corporation is at an all-time high for sales. "For the first time, its commercial-airplane unit earned more than its defense side. " (Masters, 2007) "Boeing's backlog of orders increased 47% to a record 208 Billion, more than seven times the units 2006 revenues. "

    Read More

  • Jet Airways

    1939 Words  | 4 Pages

    Jet Airways was found in 1st April 1992 by Mr. Naresh Goyal and they started their operation after one year may 5th 1993, Jet began international operations from Chennai to Colombo in March 2004. The company was listed on the Bombay Stock Exchange

    Read More

  • Jet Blue Marketing Mix

    714 Words  | 2 Pages

    With regard to product, JetBlue is cornering the marketplace with its productivity, in-flight features, and customer service. Due to the fact that the company only purchases new planes of a single type, maintenance downtime is reduced and it is able to keep its planes in the air. In fact, JetBlue maintains the highest in-air average in the industry. Additionally, JetBlue employs an "operational recovery tool" technology that allows planners to minimize flight cancellations and delays. On board, JetBlue prides itself on treating all customers as equals and providing more comfort than other airlines.

    Read More

  • Jet Blue Case Study

    1470 Words  | 3 Pages

    The first initiative that they were able to gain in competitive advantage was the reduction of costs. They have been able to use an online system where consumers can reserve tickets avoiding which avoids using travel agents. Having this systems reduces costs for the company as well because they do not have to hire nearly as many as employees. Along with buying tickets, JetBlue has been able to use other systems to reduce costs which helps them with the maintenance of their planes and organizing information that involves every aspect of their business ranging from their planes to their employees and consumers. The second initiative that JetBlue uses is the creating of new services. By creating their new online services and systems they are able to gain competitive advantage because it allows easier and less expensive accessibility to their services. Not only have they created new services but they are able to differentiate these services from their competitors because of the easiness and quality of the services that they do provide. They not only focus on making their services the best but also the highest level of customer service that they can offer which other airlines struggle to do. Other competitors have realized that JetBlue is beating them in many aspects in the business that they have needed to adjust what they are doing to catch up. Even with the jumps in technology use with the other companies, JetBlue has still been able to enhance their services to continue to gain competitive

    Read More

  • Market Segmentation Of Airline Industry

    718 Words  | 2 Pages

    The target market of JetBlue airlines is customers who along with low cost seek services. The services provided by JetBlue included in-flight entertainment, TV on every seat, satellite radio, extra leg room, free unlimited snacks, and leather seats. The target market of JetBlue is also the leisure traveler, the low cost ticket seeking traveler, and the cost conscious business traveler. JetBlue has actually, posed a threat to the other low cost airlines like the Southwest Airlines.

    Read More

More about Jetblue Airways Case Analysis

Open Document