jetblue airways corporation-2005

8/8/2019 Jetblue Airways Corporation-2005

1/18


2/18

Incorporated in Delaware in 1998

Low fare, low cost airline

Offering high quality customer serviceand differentiated products

Focus on serving underserved markets

Operated a fleet of 77 Airbus A320 316 flights a day

32 destinations in 13 states


3/18


4/18


5/18

1st & only US airline to launch with $100million capital

1st & only aircraft to offer 24 channels of live

TV free 1st US airline to introduce paperless cockpit

technology

Only US airline to be 100% ticketless

1st US airline to install bulletproof cockpitdoors

1st & only airline to install security cameras inpassenger cabins


6/18


7/18

Competitors: Southwest, American,

Delta, AirTran, ATA, Frontier. Labour union issues

High fuel prices

Excessive security measures


8/18

Rising obesity levels

Major expenses were labour wages &benefits

Rising breakeven load factor

Luggage mishandling


9/18

To Gain Competitive Advantage

United announced 500 miles to passengers Northwest invested in airport technology

US Airways & United Airlines significantly cutworkers wages & benefits as well as they

started outsourcing more work & to reducepensions.

Merging of America West Airlines & USAirways.


10/18

Marketing

E- Commerce

Financial Conditions


11/18

JetBlue`s differentiating factors :

Large start up capital - $ 100 million

More reliable and efficient planes Comfortable accommodation

Live satellite TV option

Hiring best people and giving them exceptionaltraining

Customer focus and friendly services

Relies most on word-of-mouth for advertising


12/18

Generated 75.4% of its revenue through its

website in 2004

Cost effective and builds brand loyalty

Offers True Blue FlightGratitude an onlineprogram


13/18

Fuel price and availability were majorconcerns in managing price fluctuation

So, it utilizes the 3rd party fuel management

service

All numbers in $ thousands

31-Dec-04 31-Dec-03 31-Dec-02

Total revenue 1,265,972 998,351 635,191

Gross Profit 467,190 431,933 355,884


14/18

Year ended December 31

2004 2003 2002

Gallons consumed in

thousands

241,087 173,157 105,515

Total cost in

thousands

255,366 147,316 762,271

Average price per

gallon

1.06 0.85 0.72

Percentage ofoperating expenses 22.1 17.8 14.4

JetBlue Fuel Cost


15/18

Expanding by offering more flights intonew hubs.

Continue to be a low fare, low costcarrier

Avoiding delays

Employing more number of people. Plans to station spare jets.


16/18

Should JetBlue continue by being a lowfare, low cost carrier?

How long do you feel such a strategy willwork before others and new rivals enterthe market by offering better service andfares?

Many bargain airlines are offering

cheaper trips to Europe. Should this be aconsideration for JetBlue?

Which Airline do you feel would be bestfor JetBlue to acquire?


17/18

Strategic Management by Devit

www.google.com


18/18

jetblue airways corporation-2005

Documents