Jet Blue Case Study

Topics: JetBlue Airways, Low-cost carrier, David Neeleman Pages: 4 (1192 words) Published: November 19, 2010
1. The decision maker in the Jet Blue case was former CEO David Neeleman. He was the person who started Jet Blue and formed it to become a low cost airline provider, providing luxury and comfort and destinations to various cities at a low affordable cost. He understood how to cut cost and keep operating expenses low, and as a result Jet Blue had rapid expansion and flew to 53 destinations in 21 states, including Mexico, Puerto Rico, and the Caribbean. Up until 2007, when David Barger took over, Neeleman made Jet Blue prosperous and consistently made strategic moves in order to produce the best outcome in the areas of maintenance, total operating expenses, and benefits. Even as a response to the ice storm in 2007 where passengers were grounded at an expense that cost Jet Blue 30 million, Neeleman quickly instituted the Passenger Bill of Rights, and began setting systems in place that could hold more reservation agents in such crisis times.

2. In my opinion, Jet Blue’s top five issues are: rising fuel cost, too many luxuries to customers, lack of proper training, lost baggage, and customer complaints.

Rising Fuel Cost: The rising fuel cost grew by 532% from 2003 to 2007 and consumed about 33% of Jet Blue’s operating cost. Rising fuel cost has an effect on other areas (directly and indirectly); increasing fuel costs had led to rising ticket prices for consumers as well as surcharges for bags in order to board flights. Their stockholders were not getting their value from out of the company. The company’s stock did not fare as well, partly due to rising fuel, over a five year span.

Too Many Luxuries To Consumers: Jet Blue offered too many luxuries that were over the top. It offered satellite radio, movie channels, in flight yoga cards, private massages, manicures, hair styling, children play areas, and big screen TV’s. Jet Blue, in my opinion, paid too much attention to individual customers’ wants that were unnecessary to include on flights. They were...
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