Business Strategy Of The Airline Jetblue

Abstract

The aim of this paper to review the business strategy of the airline JetBlue. The main strengths of the company, for example, customer value driven, employee-oriented, and its ability to Develop and implement effective strategies and purposeful, active participation in the rapidly expanding basic domestic and international market. Recently, their current focus on creating shareholder Values and conservative financial management has led to high liquidity to the company Profits during the recession of 2009 and as a result of positive cash flow for the first time. JetBlue is

Sound and successful strategy in weak economy makes it likely that companies will continue

Succeed.

Analysis of JetBlue Airways

JetBlue Airways ceremonial first flight was launched in 2000. Since then, the company a billion dollar company has become. The purpose of this report to review the business strategy of JetBlue and the chance to survive. Trends in the United States airline industry trends and the impact on United States airline industry strategies impact the performance and strategies airlines.As result, JetBlue has tried to survive. The following process will be discussed in more detail:

(1) crude oil price volatility leads to costs for the production of passenger revenue,

(2) shortage of pilots increased labor costs, and

(3) post 9 / 11 airline security, increased operating costs.

Crude oil prices and passenger fees. In 2008, the price of crude oil has risen to a record $ 140 per barrel (Thompson, Strickland and Gamble, 2010). The dramatic price increases resulting from airlines struggle to offset fuel costs. Many of the passengers began to implement new fees, including adding fuel, baggage check fees, fees for heavy bags, the cost for drinks and snacks, and even the fee for the use of blankets and pillows. Now, gas prices dropped. However, airlines continue to pass along costs to travelers to increase their income. Obviously, the costs start at first in response to fuel prices continue producing income part of the airline strategy is. Shortage of pilots. As thousands of baby boomers retire, the airline industry is experiencing A pilot shortage. Before becoming the captain, pilots must fly enough hours to earn. However, flight School coaches do enough pilots to train enough new display. According to the International Air Transportation Association, estimated 3000 more pilots needed every year of school education can Present (Thompson et al, 2010). In response, the airline industry as rising labor costs as they increase the pilot’s rights in order to attract pilots.

Post 9 / 11 aviation security. “Shortly after the 9 / 11 terrorist attacks, Congress passed the Aviation and Transportation Security Act (PDF), which the Transportation Security Administration (TSA) and mandated that federal employees in charge of airport security Display is(Kaplan, 2006). “This verdict caused airlines to adopt several layers of security. TSA screening procedures more accurately run for passengers and their baggage, including the need for passengers to remove their shoes and limit liquids carried on the aircraft, passengers and the need to remove their computers for X-ray inspection. beyond passenger screening, TSA developed Secure Flight program for prescreening passengers and Registered Traveler program with background information and biometric for voluntarily repeated ad (Kaplan, 2006). In addition, several measures New to prevent hijackings was also adopted, including fortified cockpit doors, armed pilots, and armed undercover agents on passenger flights. These actions had the financial impact on airline industry. Since 9 / 11, 6 billion dollars has been years in the aviation security spending to prevent similar attacks (Schneier, 2008). JetBlue strategy helped the company overcome these obstacles.

JetBlue is a strategic intent

Is the founder of JetBlue, David Nelleman, JetBlue with the concept of bringing humanity to air travel has begun. The goal was a low discount airline carriers that provide comfort and services to our customers. For example, the company philosophy was to delay the flight and not to cancel them. In addition, the first airline JetBlue Passenger Bill of Rights published the document disclosed their policies to travelers. JetBlue was the first to offer electronic tickets, which is suitable for customers. The company also such additional seating and television Paypal payment tickets offered. To further increase shareholder and customer value, JetBlue launched a strategic growth and rapid expansion plans. In 2000, JetBlue risky decision to launch the service in New York has accumulated, JFK Airport, between 8 and 9a was lighter. The use of these hidden opportunities to win to request that the flight of young, affluent New Yorkers, as well, the trip to New York City. In late 2008, JetBlue Terminal 5 opening in JRK to give customers more comfort and efficiency while saving them $ 50 million of work, and fuel vouchers. Meanwhile, between 2003 and 2008, JetBlue began service to many destinations, including San Diego, Fort Lauderdale, Portland, and more. December 2007, the company serves over 53 destinations to the growing (etal Thompson, 2010). This dramatic growth had not led to shareholder value immediately, however.Evaluation of the cost is competitive advantage.JetBlue reduce operating costs of its competitors. According to Thompson, Strickland and Gamble (2010), JetBlue is the total operating costs 12.17 per revenue passenger mile in 2008 was for $ 18.18 vs. U.S. Airways, $ 18.18 for Continental, Delta for $ 20.95, $ 13.85 For the South West, United for $ 19.13 and $ 21.45 for America airlines. Its aircraft, including Airbus A320, which tended toward newer competitors and thus reduce maintenance costs and any penalties related to maintenance. Companies with increasing flight time to minimize turnaround time. Reservation agents work at home and thus save money as a traditional call center has been compared. The move paid off a big competitive advantage in the form of low operating costs that the airline had to find another.

JetBlue’s financial objectives & success

JetBlue to reach some showed a lot of promise, 50% in value in five years ending December 2007 declined. Closer examination of the financial performance JetBlue showed that, while revenues 185% between 2003 and 2007 grew its operating costs 222% over the same period has increased. The revenue loss for the supply of jet fuel (532% increase) and interest costs (658% increase) was attributed. Instead of handling the cost advantage, JetBlue took a conservative financial strategy in which the liquid is kept high compared to other big airlines (Thompson et al, 2010). The balance of cash and securities was removed was reclassified from current assets to long-term investments. However, JetBlue managed to obtain new equity capital and credit needed to keep the company afloat despite the obstacles.

Organizational culture.

JetBlue organizational structure based on five stages has been made. First, the value set for the company. Then, hiring managers select employees that mirror the value of the company. Next, the company ensured that the expectations of the company over to listen to staff and customers are. Finally, the company created Project Excellence to drive. Values were established by JetBlue safety, caring, integrity, fun, and passion. For example, the George Foreman grill to JFK terminal allows employees to have fun was pulled. Only hire employees who mirror those values, companies can hire managers to encourage creativity in the hiring process to weed out those that will not fit. Activation process by making it part of the work done, JetBlue develop a strong corporate culture.

Human resources practices.

JetBlue company with strong focus on people. The anticipated shortage of them run airline pilot Gate University, working with universities to identify exceptional candidates and run training programs. Their lack of confidence in leadership development training led by JetBlue offering addressed. They Airline Training Center at Orlando International Airport Development. Make workers pay for basic salary lower than their competitors, they offer health coverage, profit sharing, 401k and pension plans. They also avoid unemployment through attrition and voluntary packages. This focus on the needs of their employees, developing talent and creating a talent pool that were essential competitive advantages is very difficult to imitate was.

JetBlue’s strategies for 2008 & beyond and likelihood of success.

In 2008, JetBlue implementation of new strategies to re-evaluate the way their assets, was used to reduce capacity, cut costs, raise fares, growth in select markets, providing services for business travel, form strategic partnerships , and increase revenue side. JetBlue formed an alliance with Lufthansa to enable the company to use its terminals at JFK and signed a contract with Continental to offer LiveTV (Thompson et al, 2010). JetBlue capacity with no aircraft sales and reduce costs of delays in the delivery of 21 new aircraft (Thompson reduced

Et al, 2010). Their plane cut rates, service in some cities to suspend, and cancel plans to reduce service costs. After selecting Orlando to become the target market,

They then raised the price – but less than the fare rivals. In addition, they provided incentives to corporate travelers, the agreement with Expedia for leisure travelers and enter

Travelocity Business customers, and Aer Lingus expand their recruitment on an international level. To generate revenue, JetBlue created new costs, including fees for second bags and choose seats. Even with this strategy, airline financial performance shows that they are falling short of expectations during the first six months of 2008 (Thompson et al, 2010).

However, in 2009 was successful for JetBlue. The company reported one of the few to four quarters of consecutive profitability this year (JetBlue, 2010) was. Improvement over the $ 140,000,000 compared to 2008 – net income of $ 58,000,000 with operating margins of 8.5% was generated. They are also one of the strongest liquidity positions in the airline industry than the United States is our income. In addition, JetBlue created a positive free cash flow for the first time in history. According to JetBlue 2009 Annual Report, the results show the benefits of Order Growth Strategy JetBlue, its focus on managing capital expenditures, to justify the capacity, to maximize revenue and control costs. Given that the company succeeded in challenging times, it is likely that strategies and cash-rich companies will be lifetime positions in long term

Conclusion

The purpose of this report to review the business strategy is JetBlue. Trends in the United States airline industry influence crude oil prices, shortage of pilots and 9 / 11 airline security measures. In general, the process, along with a weak economy, caused airlines struggle to survive. JetBlue is humans by focusing on bringing low-fare air travel remains. They offer value, customer service, and unique additional customers are concentrated. Employee training and corporate culture strong benefit. Business benefits from measures to reduce costs and form partnerships are beneficial. Currently, JetBlue financial reports showed that the company outperforming its competitors in the manufacturing recession is very likely the company managed more than.