jetblue airways corporation-2005
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Incorporated in Delaware in 1998
Low fare, low cost airline
Offering high quality customer serviceand differentiated products
Focus on serving underserved markets
Operated a fleet of 77 Airbus A320 316 flights a day
32 destinations in 13 states
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1st & only US airline to launch with $100million capital
1st & only aircraft to offer 24 channels of live
TV free 1st US airline to introduce paperless cockpit
technology
Only US airline to be 100% ticketless
1st US airline to install bulletproof cockpitdoors
1st & only airline to install security cameras inpassenger cabins
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Competitors: Southwest, American,
Delta, AirTran, ATA, Frontier. Labour union issues
High fuel prices
Excessive security measures
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Rising obesity levels
Major expenses were labour wages &benefits
Rising breakeven load factor
Luggage mishandling
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To Gain Competitive Advantage
United announced 500 miles to passengers Northwest invested in airport technology
US Airways & United Airlines significantly cutworkers wages & benefits as well as they
started outsourcing more work & to reducepensions.
Merging of America West Airlines & USAirways.
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Marketing
E- Commerce
Financial Conditions
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JetBlue`s differentiating factors :
Large start up capital - $ 100 million
More reliable and efficient planes Comfortable accommodation
Live satellite TV option
Hiring best people and giving them exceptionaltraining
Customer focus and friendly services
Relies most on word-of-mouth for advertising
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Generated 75.4% of its revenue through its
website in 2004
Cost effective and builds brand loyalty
Offers True Blue FlightGratitude an onlineprogram
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Fuel price and availability were majorconcerns in managing price fluctuation
So, it utilizes the 3rd party fuel management
service
All numbers in $ thousands
31-Dec-04 31-Dec-03 31-Dec-02
Total revenue 1,265,972 998,351 635,191
Gross Profit 467,190 431,933 355,884
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Year ended December 31
2004 2003 2002
Gallons consumed in
thousands
241,087 173,157 105,515
Total cost in
thousands
255,366 147,316 762,271
Average price per
gallon
1.06 0.85 0.72
Percentage ofoperating expenses 22.1 17.8 14.4
JetBlue Fuel Cost
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Expanding by offering more flights intonew hubs.
Continue to be a low fare, low costcarrier
Avoiding delays
Employing more number of people. Plans to station spare jets.
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Should JetBlue continue by being a lowfare, low cost carrier?
How long do you feel such a strategy willwork before others and new rivals enterthe market by offering better service andfares?
Many bargain airlines are offering
cheaper trips to Europe. Should this be aconsideration for JetBlue?
Which Airline do you feel would be bestfor JetBlue to acquire?
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Strategic Management by Devit
www.google.com
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