Case Study Jet Blue Airways

Topics: JetBlue Airways, Delta Air Lines, John F. Kennedy International Airport Pages: 12 (4314 words) Published: August 9, 2013
Case Study JetBlue Delighting Customers through Happy Jetting

Introduction to JetBlue Airways
JetBlue Airways Corporation (NASDAQ: JBLU), often recognized as "jetBlue", is an American low-cost airline. The company is headquartered in the Long Island City neighborhood of the New York City borough of Queens. JetBlue maintains a corporate office in Cottonwood Heights, Utah. JetBlue is a non-union airline. Its main base is John F. Kennedy International Airport, also in Queens. As of December 7, 2011 JetBlue serves 71 destinations in 21 states, and twelve countries in the Caribbean, South America and Latin America. The airline mainly serves destinations in the United States, along with flights to the: •Caribbean

The Bahamas
Bermuda
Barbados
Colombia
Costa Rica
Dominican Republic
Jamaica, Mexico
Puerto Rico

Founding of JetBlue Airways
A JetBlue Airbus A320, "Whole Lotta Blue" (N594JB) at Salt Lake City International Airport. JetBlue was incorporated in Delaware in August 1998. David Neeleman founded the company in February 1999, under the name "NewAir." Several of JetBlue's executives, including Neeleman, are former Southwest Airlines employees. JetBlue started by following Southwest's approach of offering low-cost travel, but sought to distinguish itself by its amenities, such as in-flight entertainment, TV on every seat and Satellite radio. In Neeleman's words, JetBlue looks "to bring humanity back to air travel." In September 1999, the airline was awarded 75 initial take off/landing slots at John F. Kennedy International Airport, and received formal U.S. authorization in February 2000. It started operations on February 11, 2000, with service to Buffalo and Ft. Lauderdale. JetBlue's founders had set out to call the airline "Taxi" and therefore have a yellow livery to associate the airline with New York. The idea was dropped, however, for several reasons: the negative connotation behind New York City taxis; the ambiguity of the word taxi with regard to air traffic control; and threats from investor JP Morgan to pull its share ($20 million of the total $128 million) of the airline's initial funding unless the name was changed. 2000s

JetBlue was one of only a few U.S. airlines that made a profit during the sharp downturn in airline travel following the September 11, 2001 attacks. The airline sector responded to JetBlue's market presence by starting mini-rival carriers: Delta Air Lines started Song, and United Airlines launched another rival called Ted. Song has since been disbanded and was reabsorbed by Delta Air Lines, and United has discontinued Ted as a separate brand. JetBlue Founder David Neeleman in 2006

In October 2005, JetBlue announced that its quarterly profit had plunged from US$8.1 million to $2.7 million largely due to rising fuel costs. Operational issues, fuel prices, and low fares, JetBlue's hallmark, were bringing its financial performance down. In addition, with higher costs related to the airline's numerous amenities, JetBlue was becoming less competitive. Regardless, the airline continued to plan for growth. It was announced that 36 new aircraft were scheduled for delivery in the year 2006. For many years, analysts had predicted that JetBlue's growth rate would become unsustainable. Despite this, the airline continued to add planes and routes to the fleet at a brisk pace. In addition in 2006, the IAM (International Association of Machinists) attempted to unionize JetBlue's "ramp service workers," in a move that was described by JetBlue's COO Dave Barger as "pretty hypocritical," as the IAM opposed JetBlue's creation when it was founded as New Air in 1998. The union organizing petition was dismissed by the National Mediation Board because fewer than 35 percent of eligible employees supported an election. In February 2006, JetBlue announced its first ever quarterly loss. For 4th quarter 2005, the airline lost $42.4 million, enough to make them unprofitable for the entire...
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