Aircarft Economic

Topics: Airline, Low-cost carrier, Aircraft Pages: 8 (2212 words) Published: December 3, 2012
Part 1: Introduction

JetBlue Airways is one of the best low cost airlines operating domestically in United States of America (USA). It offers low fare flight ticket with good quality services, namely the point-to-point service for short and long haul route, free in-flight entertainment with leather seats and free refreshment on board. JetBlue has won the customer service distinctions by travel publications such as the Zagat Airline Survey and Conde Nast Traveler. (Professor McAfee, 2002) Operating over 60 destinations in 20 states, Puerto Rico and 11 countries in the Caribbean and Latin America (Team A8 et al), JetBlue has now owned over 170 aircrafts to lead the network has brought the company to a point where they need to maximize their fleet utilization. One of the factors that are affecting airlines businesses is the Aircraft Maintenance Strategy by focusing on keeping the maintenance costs at minimum. Thus, it is appropriate for the company to assess their company’s maintenance strategy in order to run smoothly; two major subjects that need to be taken into account in assessing the strategy are the fleet and the customers. Aircraft Maintenance Strategy is the combination between service, price, output or cost in isolation for the airline company. From the previous articles and journals on JetBlue, it can be concluded that the main maintenance cost drivers that will affect the operation are: i.Fuel Cost - flight hours and flight cycle and also routes ii.Labour Cost - material and labour cost

iii.Fleet Age - fleet composition and size
iv.Fixed and Variable Maintenance - commonality between airframes and engine

Part 3: JetBlue Maintenance Strategy

The maintenance strategy for JetBlue is affected by few maintenance cost drivers. Each of these provides different impact to the company. 3.1 Maintenance Cost Driver

There is four maintenance cost drive that will affect JetBlue maintenance strategy: 1.Fleet Types and Age
2.Fuel Flying Operation Cost
3.Maintenance Labour Cost
4.Fixed Maintenance and Variable Maintenance Cost
3.1.1 Fleet Types and Age

Currently JetBlue have been using Airbus A320-232 and Embraer ERJ 190-AR as their main aircraft. (, 2012) This is one of the biggest impacts to the cost driver. The benefit of the two types of aircrafts is the multiple operations where it can offer point-to-point services on both short and long haul routes, which will reduce the fuel cost. Embraer being a smaller type of aircraft can be operated in the short haul route and for the route that has low number of passengers. This is more efficient for aircraft’s operation scheduling. This situation can be compared to Air Asia Airline that only operates on single type of aircraft for both short and long haul destinations. In result, this will cause them losses if the destination planned only has fewer passengers. Furthermore, the aircraft maintenance costs and repair of small aircrafts will be low where JetBlue does not require big hangar with variety of equipment and tools because both of their aircraft are narrowed-body aircraft. Even though JetBlue Airways is a low cost airline, it offers different flying experience that it is comparable to a legacy airline. For example, Malaysia Airline is a legacy airline that operates multiple types of wide body and narrowed body aircrafts. With only two types of aircraft, JetBlue cuts it cost on spare parts inventory because they only require small spare parts storage area or store. In contrast with Malaysia Airline, JetBlue only spend for the spare parts for the two types of aircraft that they own whereas Malaysia Airline requires a high amount of inventory to cater variety types of aircrafts. Although JetBlue has only two types of aircrafts in comparison to other airlines, JetBlue had saved a lot on engineers’ training costs. For instance, a licensed aircraft engineer needs to attend a course on every aircraft to receive...
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