Jet Blue vs Southwest
Pooja Rathan
Marilyn R. Kaplan, Ph.D.
Strategic Management
6 March 2013
Comparative Analysis: JetBlue VS Southwest
This case is a report that compares the financials of two well-known firms in the airline industry, JetBlue and Southwest. JetBlue Airways Corp was established in the year 1998 with a vision of being a leading cost efficient passenger airline with competitive, low rates. The company has been working toward a goal of growing sustainably while also maintaining efficient liquidity. The second firm in this case report, Southwest Airlines Company is a much older airline, which was founded as a commuter airline in 1971. Both companies operate on point-to-point services, and have aimed for competitive and cheap rates. However, due to increase in competition in recent years in the airline industry, both firms have had to rethink and revise their respective strategies. Southwest has recently drifted a little from its original conservative strategy by acquiring common stock of other airways. Similarly, its competitor JetBlue has opted to move away from its plan of low-cost, and in the last couple of years had begun to increase the charge for additional amenities, while also selling its common stock to other airlines, thus not sticking to its initial scheme of growing individually. In this case report, I am going to draw a comparison between these two reputed companies by reviewing their financial statements to establish the creditworthiness of each of them.
To begin, we take into account the income statement of both the firms. It is important to keep in mind that income statement is a reflection of the company’s profitability, because its shows the revenue and expenses earned by the company during that specific time interval as well as its profits and losses. With records of the last two years in mind, we can see that Southwest is a bigger earner by far because while it earned revenue of $32,746 million while JetBlue only managed $9,486 million.
Marilyn R. Kaplan, Ph.D.
Strategic Management
6 March 2013
Comparative Analysis: JetBlue VS Southwest
This case is a report that compares the financials of two well-known firms in the airline industry, JetBlue and Southwest. JetBlue Airways Corp was established in the year 1998 with a vision of being a leading cost efficient passenger airline with competitive, low rates. The company has been working toward a goal of growing sustainably while also maintaining efficient liquidity. The second firm in this case report, Southwest Airlines Company is a much older airline, which was founded as a commuter airline in 1971. Both companies operate on point-to-point services, and have aimed for competitive and cheap rates. However, due to increase in competition in recent years in the airline industry, both firms have had to rethink and revise their respective strategies. Southwest has recently drifted a little from its original conservative strategy by acquiring common stock of other airways. Similarly, its competitor JetBlue has opted to move away from its plan of low-cost, and in the last couple of years had begun to increase the charge for additional amenities, while also selling its common stock to other airlines, thus not sticking to its initial scheme of growing individually. In this case report, I am going to draw a comparison between these two reputed companies by reviewing their financial statements to establish the creditworthiness of each of them.
To begin, we take into account the income statement of both the firms. It is important to keep in mind that income statement is a reflection of the company’s profitability, because its shows the revenue and expenses earned by the company during that specific time interval as well as its profits and losses. With records of the last two years in mind, we can see that Southwest is a bigger earner by far because while it earned revenue of $32,746 million while JetBlue only managed $9,486 million.
Cited: "JETBLUE AIRWAYS CORPORATION (NASDAQ:JBLU ) | Ratios and Returns." JBLU. N.p., n.d. Web. 02 Mar. 2013. N.p., n.d. Web. <http://bi.galegroup.com.libproxy.utdallas.edu/essentials/company/962767?u=txshracd2602>. N.p., n.d. Web. <http://ycharts.com/companies/JBLU/valuation>. Saloner, Garth, Andrea Shepard, and Joel M. Podolny. Strategic Management. New York: John Wiley, 2001. Print. Southwest Airlines Investor Relations - Quarterly Financial Statements. N.p., n.d. Web. 04 Mar. 2013. Wynbrandt, James. Flying High: How JetBlue Founder and CEO David Neeleman Beats the Competition--even in the World 's Most Turbulent Industry. Hoboken, NJ: Wiley, 2004. Print.