Crafting and Executing Strategy
Jet Blue Airways case study
In 2008 businesses began to cut back on employee travel, and consumers tried to save money and used stay-cations instead of vacations, during a summer the U.S. economy slowed and oil prices rose; jet fuel prices went through the roof as a result. to offset the higher fuel costs, airlines began increasing revenues by means such as: fuel surcharges, charges for the first checked bag, charging for blankets, pillows, and headphones, and finally lowering wages and grounding airplanes. Some airlines didn’t survive, some decided to form a merger to try to buoy the rising costs. Beyond cost, there was the prospect of increasing competition, shortages in pilots, flying schools lacked instructors, and labor costs. Some companies as a result of the impact of these new changes employed a new tactic of their own: large airlines would steal pilots from smaller companies, luring them with better pay and benefits.
JetBlue’s strategy was to be a company that would combine the low fares of a discount airline carrier with the comforts similar to a den in people’s homes. Passengers could save money while they ate gourmet snacks, sat in leather seats, and watched television. The goal overall, was to bring humanity back to air travel. 3. Discuss Jet Blue’s financial objectives and whether or not the company has been successful in achieving these objectives.
JetBlue was a discount airline carrier, offering passengers low fares, point to point systems, and maintained quick turnaround times at airports. Its operating costs were low, especially in comparison to other major airlines. The company’s turnaround time was 20-30 minutes, because they did not serve meals, meaning they did not have to wait for catering services; flight attendants stowed carry-on bags in overhead bins, and everyone on staff helped to throw away the trash after each flight.
The company’s organizational culture was a strong one, and it...
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