Jetblue

 Jetblue Article

Ideal Report pertaining to JetBlue Air passage

Harkness Talking to

Innovation through Collaboration

Rosanna Smart Alisher Saydalikhodjayev Sayre Craig April 13, 2007

Table of Items

Executive Synopsis ……………………………………………….. 3 Company Record …………………………………. ……………….. 4 Competitive Analysis ………………………………………………7 Internal Competition …………………………………………………………. 8 Entry ………………………………………………………………………… 9 Substitutes and Suits …………………………………….. eleven Supplier Electricity ………………………………………………………….. doze Buyer Power …………………………………………………............... 13

Financial Evaluation …………………………………………………. 13 SWOT Examination ………………………………………………………23 Ideal Issues and Recommendations ………………….. 25 Referrals ……………………………………………………………30 � � � �

Harkness Consulting

2

 

Executive Synopsis

From� its� initial� flight� in� February� 2000, � JetBlue� emerged� into� the� heavily� competitive� airline� industry� as� the� little� airline� that� can. � While� legacy� carriers� declared� bankruptcy, � JetBlue� trounced its competition by offering low‐cost,  customer‐focused service.  Under the direction of� the energetic David Neeleman,  JetBlue became a major player in the airline industry.  Operating� domestic� flights� on� a� point‐to‐point� program, � JetBlue� primarily� manages� East‐West� and� Northeast‐Southeast� paths. � While� this� route� structure� initially� proved� profitable� for� the� company,  rising costs and heated price competition are currently threatening JetBlue's market� share.  The company's stock price has dropped drastically since reaching a high of over $30 in� 2004. � Currently� priced� at� less� than� half� its� 52‐week� high, � JetBlue� must� take� serious� strategic� action in order to reinvigorate its business. � � After working with low‐fare carrier Southwest,  a touch‐screen airline reservation company,  and� a� small� upstart� airline� in� Canada, � David� Neeleman� transformed� his� brainchild, � JetBlue, � into� reality. � Neeleman� based� his� airline� around� five� core� values: � safety, � caring, � fun, � integrity, � and� passion.  With the pledge to " bring humanity back to air travel, ” Neeleman wanted his business� to follow altruistic‐sounding values in order to make air travel a more pleasant experience for� customers and employees.  However,  at some point in JetBlue's operating history,  the emphasis� on customer satisfaction came at the cost of profits. � � It is very challenging for a company to remain successful in the airline industry.  A company can� achieve� profits� only� by� maintaining� low� costs� in� what� has� become� an� extremely� price� competitive� domestic� industry. � High� internal� rivalry� and� buyer� power� combine� to� drive� ticket� prices� down� to� marginally� profitable� levels. � At� the� same� period, � airlines� are� subject� to� ever‐ increasing fuel and aircraft maintenance costs.  Part of JetBlue's financial struggle in past years� results� from� the� company's� lack� of� a� sustainable� strategy� to� manage� these� expenses. � The� company� originally� had� lower� costs� than� industry� average� due� to� its� young� airplane, � young�

Harkness Consulting

3

aircraft� crew, � and� single‐type� aircraft� fleet. � Nevertheless , � as� their� operating� aircraft� and� crewmembers age,  JetBlue cannot maintain its previous cost advantage. � JetBlue recognizes the need for change.  Under new CEO David Barger,  the airline has recently� entered� into� a� number� of� new� ventures. � Since� 2007, � JetBlue� has� established� an� industry‐first� strategic� partnership� with� Aer� Lingus, � instituted� refundable� fares, � and� sold� a� 19%� stake� in� JetBlue� to� Lufthansa. � With� the� Open� Air� Act� bridging� the� skies� between� Europe� and� the� US, � these� ventures� offer� future� avenues� for� strategic� alliances. � However , � expansion� plans� will� not� solve the fundamental operating problems that JetBlue experiences,  and this is the area where� Harkness Consulting will focus its attention. �  � In� this� report, � Harkness� Consulting�...

References: http://www.jetblue.com�  http://www.factiva.com� 3 http://www.boeing.com� 4 http://www.faa.gov� 5 http://www.eclipseaviation.com� 6 http://world.honda.com/HondaJet/NBAA2006/video/PressConference/� 7 http://www.popularmechanics.com/science/air_space/4216980.html� 8 http://www.barclaystransport.com/g550.html� 9 Joe Sharkey,  " Major Change Foreseen in Air Travel, ” New York Times,  October 7,  2003. � 10 http://www.airlines.org/economics/fleet/� 11 JPMorgan Aviation and Transportation Conference,  18 March 2008. � 12 " Q4 2007 JetBlue Airways Earnings Conference Call”,  29 January 2008. � 13 Southwest Airlines,  10‐K Filing for 2007. � 14 http://moneycentral.msn.com/investor/invsub/analyst/recomnd.asp?symbol=JBLU� 15 http:// finance. bing. com� 16 http://www.reuters.com�

1 2

Harkness Consulting

29

http://www.reuters.com�  JetBlue Airways 10‐K Filing for 2007. � 19 " Airlines lighten up to cut fuel costs, ” Thomson Financial News,  28 March 2008. � � 20 David Swierenga,  former Air Transport Association of America economist and president of aviation� consulting company AeroEcon.  9 May 2006. � 21 Bureau of Transportation Statistics " Airline Data and Statistics, ” Research and Innovative Technology� Administration,  2007. �

seventeen 18

Harkness Consulting

40


Related

Moral Education - David Purpel Essay

Meaning Education: A thought Whose The Gone Author(s): David Electronic. Purpel Supply: The Clearing House, Vol. 64, No . 5, Values Education (May - Jun., 1991), pp.…...

Essay in Wm Wrigley Jr. Organization Equity Valuation and Research

Wm Wrigley Jr. Company Equity Valuation and Research Valued Nov 1, 2007 Dr . MEM Analysts Alan Inman Jonathan Haralson Indicate Leonard Pete Nash Shane Nowak joe. r.…...

Essay upon Classical Way of Organizational Connection

Classical Method of Organizational Interaction Classical strategy is a technique for the organization it doesn't account the person needs of its employees, doesn't provide any financial reward, with out…...

Marriott Organization History Exploration Paper

Meters E M O L A In D U M TO: FROM: DAY: October twenty three, 2010 SUBJECT MATTER: Marriott Company The purpose…...

Mesopotamia and Egypt DBQ Essay

Mesopotamia and Egypt DBQ AP World Record – Ms. Admire Gabriela Gutierrez Mesopotamia and Egypt Civilizations Mesopotamia was between most of the planet's ancient…...

Project Management Hotel Nzma Essay

Project Supervision HOTEL NZMA ENG. DIETRICH TRUCHSESS L. PH: 021719251 [email protected] com Project Management HOTEL NZMA FACILITIES SUPERVISOR TASK Facilities…...

Aboriginal Lower income Caused by Canada’s Bad Treatment Essay

Initiating Change The first step : Aboriginal Lower income From Canada's Bad Treatment Step 2: Contrary to the popular belief, the Aboriginal persons in Canada…...

The Spectacular Benefits Of Politics And Economical Globalization Dissertation

п»їPaknoosh Izadi Professor Wayne Petrozzi Governmental policies of Human being Needs 106-011 23 March 2014 Evaluating the Benefits of Political and Economical Globalization The thought…...

Toronto’s Serpentine Originals Fights Chinese Knockoffs of Its Made-in-Canada Jewelry Essay

Toronto's Serpentine Originals combats Chinese knockoffs of their made-in-Canada Jewellery -- See even more at: http://www.starbusinessclub.ca/money/torontos-foxy-originals-fights-chinese-knockoffs-of-its-made-in-canada-jewellery/#sthash. wTJYLb0N. dpuf They had a gem of your business thought.…...

West African Dance Composition

You may have read about different types of dances but would you at any time hear of the West Africa dance type? If you haven't then all of…...