JetBlue Airways (JetBlue) had started operations in February 2000, as a low-fare, low-cost, high frills, point-to-point domestic airline, flying between New York City and Ft. Lauderdale, Florida. By 2004, its fleet size had increased to 57 Airbus A320s and served about 22 cities in 11 US including Puerto Rico. JetBlue flew both short and long haul flights2 and carried approximately nine million passengers in 2003 (one million in 2000) through its 246 daily flights. While the US airline industry had collectively lost $5.3 billion in 2003, JetBlue reported net income of $103 million,3 Even though the US airline industry had not fully recovered from the aftermath of the terrorist attacks in 2001, founder and CEO David Neeleman (Neeleman) had charted out an aggressive growth plan for his company. By 2010, he expected to increase the fleet size to 2904 aircraft and employ about 25,000 people (In 2003, employee strength was about 6,000). In addition to offering flights between major cities, Neeleman had also planned to serve the smaller regional cities and to that effect, he had ordered 100 Embraer 190 aircraft (100 seats). Neeleman’s broad plan was to add one aircraft every three weeks in 2004 and about one in every ten days the following year.
While founding JetBlue, Neeleman’s aim was “to bring humanity back to air travel and make flying more enjoyable.” To differentiate the start-up, he acquired a fleet of brand new Airbus A320s equipped with leather seats and provided 24 channels of Live Satellite TV at every seat for free. Instead of providing meals, the airline served “all you can eat” gourmet snacks like blue terra chips and muffins. JetBlue offered advance purchase fares that were 30%—40% lower and walk up fares that were 60%—70% lower than those of the major carriers. It became the first carrier to introduce the concept of a “paperless cockpit” and made flight booking 100% ticketless. Along with the low fares and emphasis on... [continues]
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