Jetblue Case Analysis

Topics: Southwest Airlines, Low-cost carrier, Airline Pages: 12 (4169 words) Published: November 6, 2011
JetBlue Case Analysis

Executive Summary

JetBlue airline was founded by David Neeleman who is a Brazilian born entrepreneur. His goal was to single handedly create a unique airline that was innovative for the current market. The low fare airline was designed for customers who needed to travel at affordable prices, and which would essentially create a new strand of business. Named JetBlue, Neeleman’s airline originally traveled to various cities around the United States, but has recently entered the international market by offering flights that reach countries such as Puerto Rico and the Dominican Republic. Since it is a customer oriented company, JetBlue makes ordinary flights into an extraordinary experience for its customers. With improved in-flight entertainment to electronic ticketing, JetBlue has grown to become a fast and affordable airline.

However, over the years, JetBlue has experienced financial problems due to the fuel prices increase, as well as an image issue regarding the ice storm in 2007. Even though JetBlue is known to be an innovative airline, their debacles have caused a downturn in the company’s finances, as well as operations. In recent years, Lufthansa, the German airline, has purchased a significant share of JetBlue which helps the company provide more stability. In addition, JetBlue has had to change strategies and CEO's along the way, in order to remain a competitive carrier in today’s airline industry.

Using the information provided by the case study "JetBlue Airways: A Cadre of New Managers Takes Control," this case study analysis will provide a detailed overview of all the positive and negative aspects of JetBlue airline. Furthermore, it will review the strategic vision and implementations of JetBlue, the airline industry, JetBlue’s financial performance, and future recommendations for the company’s strategy.

Strategic Vision and Implementation
When David Neeleman started JetBlue, his idea “was to start a company that combined the low fares of a discount airline carrier with the comforts of a small cozy den in people’s homes."[1] His vision entailed customers (both business and leisure) to have cheap and affordable flights all over the United States and abroad on newer aircrafts which are not only comfortable, but are furnished with modern entertainment selections. In addition, he created a customer focused business model, in which customer service is to be of number one importance. One of the moving influences behind Neeleman’s vision was an incident on a flight where his fabric seat was soaked with urine. Neeleman chose leather seats not only because they are easier to clean, but also because they are considered more comfortable than fabric seats, and are visually pleasing to customers.

Under a new executive leadership, JetBlue’s strategic vision should only be adjusted to further enrich the fundamental vision, and to integrate new technologies and opportunities which will assist growth and profitability. As part of restructuring, David Neeleman resigned after the Valentine’s Day incident in 2007, for the reason that his company failed to provide on its values of superior customer service. When the change of management was introduced, their original goal was to help reconstruct JetBlue’s tainted reputation, and to cultivate innovative strategies which would prevent incidents such as the one in 2007 from occurring another time. It is believed that JetBlue’s vision is sound and with the exclusion of fore mentioned incident, the company would not have been compelled to change management. Nevertheless in view of that incident, it is recommended that incorporating new technologies, best practices and providing comprehensive cross-training to all employees will allow the company to remain competitive throughout the years.

Key Strategic Elements and Execution

In 2008, JetBlue developed six new strategies to obtain a larger market share while reevaluating operational...
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