Jetblue Internal Analysis Essay

Internal Analysis:

The question of Value?

Since it’s an LCC, JetBlue’s operational choices should aim to reduce costs or increase the customer willingness of its customers to pa. It can be shown most of JetBlue’s operational choices have the effect of reducing its costs. For example, by flying only one type of airliner. JetBlue is able to reduce the cost of training its maintenance staff, reduce its spare parts inventory, and reduce the time its planes are being repaired. By flying focusing on long haul flights. JetBlue reduces on plane ground time of each plane, the time it is not generating revenue and costing the company. Moreover, JetBlue made a choice to avoid flight cancelations and thus reducing all cost or lost revenue associated with

On one hand, the introduction of shorter hauls between big and medium cities introduced more cost saving opportunities through higher utilization of on ground services and increased plane efficiency through potential higher enplanement due to the wider network offered through connections.

However, the choice of using a different plane for the new routes reduced cost advantage of standardized processes, especially since the unique plane required JetBlue to build the plane service capability themselves and it also limited the options to outsource any the operations. In addition, the new plane adds to the complexity of inflight processes and procedures which increases the cost of training. All of this adds to the overall cost and can potentially present a challenge for JetBlue to maintain low cost offering.

The question of

JetBlue does not have a differential access to low cost inputs to its process that is not accessible to other airlines. In addition, the LCC model have been developed long time ago and Airlines like southwest have mastered it over the years. Generally, the operational choices are based on attributes and capabilities that are not difficult to imitate. These choices, are neither path dependent not casually ambiguous nor socially complex and thus not costly to imitate by competitors.

The only exception comes from some policy choices that makes it costly imitation them. In targeting regional flights where policies favor JetBlue that limit imitation to only newer airlines that are not subject to those policies, but this can be a temporary advantage as policies can be adjusted to counter this advantage.

Question of organization?

Have made some organizational choices that are consistent with its operational choices such as hiring part time and distance working customer service agents to keep costs down. Similarly, pilots of the short haul E190 flights had lower compensation than those flying A320. This makes since since it cuts down on the higher cost per available seat per mile of the short haul