Jetblue Airlines Summary of Case
Barger, previously president and COO of JetBlue, was named the airline’s CEO.
JetBlue’s board promoted Barger to the CEO role in the wake of a highly publicized operational crisis in February that led to the cancellation of over 1,100 JetBlue flights and adversely affected the travel plans of thousands of passengers. Though numerous interviews and meetings during the past day allowed Barger to outline his vision for the airline, he realized that he needed to move quickly in implementing that vision to maintain the confidence of customers, employees, and shareholders.
Just a few miles outside Barger’s window was John Fitzgerald Kennedy (JFK) Airport, where
JetBlue began operations as a low-cost carrier (LCC) in 2000 and, by the beginning of 2007, held a 30% share of domestic departures.
Looking beyond the construction site for JetBlue’s new Terminal 5—an $800 million state-of-the-art facility that was scheduled to open in the fall of 2008 and would offer 26 gates and a wide range of passenger amenities—
In late 2005, JetBlue added the E190 to its fleet, which was then composed exclusively of 85 A320s.
This decision was a break with the traditional practice of many LCCs of limiting their fleets to one type of aircraft to streamline operations and reduce costs. JetBlue was in the simultaneously advantageous and risky position of being the launch customer for the E190.
By the end of 2006, JetBlue had 23 E190s in its fleet of 119 planes.
By late 2006 JetBlue, like other airlines, faced softening demand and higher costs due to increasing fuel prices. Barger played a large role in the airline’s decision at the end of 2006 to slow its rate of growth by reducing its purchase commitments for new planes.
In light of the operational challenges faced by JetBlue in February 2007, as well as the unabated rise in fuel costs (Exhibit 1), Barger realized that the airline would need to take further steps to slow its rate of growth. Though convinced
JetBlue’s board promoted Barger to the CEO role in the wake of a highly publicized operational crisis in February that led to the cancellation of over 1,100 JetBlue flights and adversely affected the travel plans of thousands of passengers. Though numerous interviews and meetings during the past day allowed Barger to outline his vision for the airline, he realized that he needed to move quickly in implementing that vision to maintain the confidence of customers, employees, and shareholders.
Just a few miles outside Barger’s window was John Fitzgerald Kennedy (JFK) Airport, where
JetBlue began operations as a low-cost carrier (LCC) in 2000 and, by the beginning of 2007, held a 30% share of domestic departures.
Looking beyond the construction site for JetBlue’s new Terminal 5—an $800 million state-of-the-art facility that was scheduled to open in the fall of 2008 and would offer 26 gates and a wide range of passenger amenities—
In late 2005, JetBlue added the E190 to its fleet, which was then composed exclusively of 85 A320s.
This decision was a break with the traditional practice of many LCCs of limiting their fleets to one type of aircraft to streamline operations and reduce costs. JetBlue was in the simultaneously advantageous and risky position of being the launch customer for the E190.
By the end of 2006, JetBlue had 23 E190s in its fleet of 119 planes.
By late 2006 JetBlue, like other airlines, faced softening demand and higher costs due to increasing fuel prices. Barger played a large role in the airline’s decision at the end of 2006 to slow its rate of growth by reducing its purchase commitments for new planes.
In light of the operational challenges faced by JetBlue in February 2007, as well as the unabated rise in fuel costs (Exhibit 1), Barger realized that the airline would need to take further steps to slow its rate of growth. Though convinced