JetBlue Final 2

Part I: Issue Identification In May 2007, David Barger, President and CEO of JetBlue Airways, expressed the great need to slow down the airline’s growth in response to increasing fuel costs and the consequences stemmed from the Valentine’s Day crisis. As an LCC, JetBlue had to decrease its growth rate by reducing deliveries of E190 and A320 due to its weak financial position and the market’s softening demand. Considering the performance of JetBlue after the addition of E190 to its fleet, JetBlue overestimated its capacity of handling this large scale of expansion. The new CEO, David Barger was now facing with JetBlue’s key issue that he should reconsider the distribution of E190 and A320, and building long-term managing strategies for sustainable development. Besides, with a big movement of launching E190 in 2005, some small but critical problems loomed: Compensation of pilots, satisfaction of customers and employees, challenges for staff to adopt unexpected changes, complexity resulting from the integration of E190 and A320. Without experience of operating two types of aircrafts and combining them, as well as without sufficient capital, large scale of purchases of the new aircraft would definitely lead to operational failure. It was the key principle for JetBlue, which made a difference from other airline companies, that fight cancellations should be avoided at all costs. Unfortunately, this principle was challenged by the unexpected bad weather on the Valentine’s Day of 2007. The potential issue of operating system finally gave rise to serious flight cancellations, which reminded JetBlue of fixing its operations.

Part II: Internal & External Analysis In this part, the internal and external issues of JetBlue will be analyzed through VRINE model and Fives forces model

The internal analysis - VRINE Model Valuable- the JetBlue recognized demand of new market as a source of growth in medium-sized cities, therefore, their decision to which the