JetBlue Airways: A Cadre of New Managers Takes Control

1. Discuss the trends in the U.S. airline industry and how these trends might impact
a company's strategy
The trend in US airline industry is to use price discrimination and differential pricing to
increase the revenue of the airlines. For this there are computerized programs that help
increase the revenues of the airlines. Further, the current trend among airlines is to reduce
operating costs. Full-service airlines have a high level of fixed costs but low-cost airlines
seek to reduce costs. The current trend in airlines industry is to lease aircraft and avoid
entering into long term contracts so that the financing remains modest. Finally, the
current trend of alliance among airlines especially that of code sharing or selling the
tickets of another airlines. Overall the airlines industry is very competitive, turbulent and
volatile.

2. Discuss Jet Blue's strategic intent

The strategic intent of JetBlue Airways is improve its profitability, revenue optimization,
improved capacity management, cost reduction, and delivering high quality service.
Since its IPO, JetBlue Airways posted its first loss in 2005. There is a difficulty in the
strategic intent of JetBlue Airways. It is a low-cost airlines but it also insists on never
canceling a flight and providing entertainment abroad the airlines. The result is a
positioning that in the middle. This has led to several challenges.

The basic strategy of JetBlue Airways remains identifying and eliminating al unnecessary
expenses and focusing on providing high quality services. JetBlue Airways does not
serve food, it provides point-to-point flight, and quick turnarounds. The advertising calls
JetBlue Airways a fun airline.

3. Discuss Jet Blue's financial objectives and whether or not the company has been
successful in achieving this objective

The financial objectives of JetBlue Airways were to become more profitable. In my

opinion, JetBlue Airways has been able to increase its revenues and become more
profitable. During 2009 its net income was $58.0 million and its revenue was $3.3 billion.

4. Discuss Jet Blue's strategic elements of cost, organizational culture, and human
resource practices and evaluate whether each elements provides the organization
with a competitive advantage

The human resource practices of JetBlue Airways have helped it maintain its low cost
structure. During 1998 there was an attempt to organize a union but union organization
was avoided because only 35% of the employees supported the formation of a union.
Employees are involved in decision making. For instance employees suggest names for
new planes. The winners are given trips to foreign countries.
It has reduced costs on operations by eliminating irrelevant costs. It has improved
organizational culture by empowering the front line employees. The crew members are
involved in every project that JetBlue Airways takes up, it aligns working team with
crewmembers so that there is integration. JetBlue Airways focuses on online departure
and this requires close coordination among dispatchers that monitor weather and make
flight plans, crew schedulers, maintenance controllers and SOC managers that coordinate
aircraft swap for the flight when schedule plane is delayed.

Each element provides competitive advantage to JetBlue Airways. It is able to price its
tickets competitively and is able to start its flights on time.

5. Discuss Jet Blue's strategies for 2008 and beyond and evaluate whether or not Jet
Blue will be successful implementing these strategies.

JetBlue Airways has the strategy to emerge as the no-frills low cost airlines with a
difference. The difference lies in punctuality and facilities like entertainment. JetBlue
Airways intends to communicate its goals to its employees, develop soft skills and
technical skills of its crew members, improving customer focus, identifying new ways to
change, and develop guidelines that can be followed.

The JetBlue Airways strategy will be to maintain cost leadership and to focus on those
customers that value on-time flights and seamless services. JetBlue Airways will be
successful in implementing these strategies because it will be able to maintain its low-
cost high quality service which is valued by customers. Even in a troubled economy, it
will continue to be profitable.

References:

www.jetblue.com/ www.jetblue.com/UBF/flights/flights.asp www.mapsofworld.com

� ... � Low Cost Airlines - www.icmrindia.org/.../Business
%20Strategy1/BSTR045.htm www.wikinvest.com/stock/JetBlue_Airways_(JBLU)
www.forbes.com � Business - www.faqs.org/.../David-Neeleman-CEO-of-JetBlue-
Airways-on-people-+-strategy-=-growth.html www.mikebolden.com/topics/jetblue-
airways