JetBlue Airways

SG- 2

Adrian Ova Triandi 29320160

Aloysia Agnes Edita 29320057
Andreas Audi Kemal Setiawan 29320112
Mifta Zanaria 29320052
Muhammad Faris 29320034
Muhammad Haekal 29320201
Ramadytio Fadhli Prayogio 29320141

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 Table of Content
❖ Background
➢ The Founding of JetBlue Airways (David Neeleman)
➢ Unique activities done in Jetblue, regarding HC or
culture
❖ Questions:
➢ Since JetBlue will expand, they will increase
employees. Is the culture of JetBlue still relevant
with the current expansion of JetBlue?
➢ How can the CEO deal with those expansion, in
regard of HC?

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1
Background
 “You don’t have to spend a

“ jillion dollars on advertising to

get your word out. What
matter is that customers have
a good experience with your
product at every single point
of contract.
- David Neeleman -
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 David Neeleman
▸ The founder of JetBlue Airlines, start in the airline
business since 1984.
▸ Partnered with June and Mitch Morris to run Morris
Air.
▸ In 1993, Morris Air is sold to Southwest Airlines, and
Neeleman joined Southwest as an executive vice
president.

Neeleman aggressive, restless personality doesn’t fit with Southwest Airlines culture, leading him
resigned from Southwest Airlines.
In 1998 after the non-compete agreement ran out, Neeleman decided to develop a new start-up airline
that would improve passenger experience with technology and friendly service.
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Neeleman New
Approach

New planes, Great Friendly

Low-fare airline,
leather seats employees and service and Bring humanity back
with deep
with more innovative hassle-free to air travel
pockets
legroom thinking technology

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 Venture
Capital Funding
▸ From previous industry experience, Neeleman
believed that a start-up needed to be well capitalized
▸ Airlines business is a capital-intensive business, but
without a lot of capital available as airlines business
need to be set up properly from the beginning.

Michael Lazarus of Weston Presidio once again became Neeleman’s lead investor
with an equity stake of $30 million. Lazarus enthusiasm was based on the success of
Morris Air. Chase Capital invested $20 million, and George Soros invested $40
million. With three other party invested $10 million each, and Neeleman’s own equity
stake of $10 million, the first round of venture capital funding to reach the target of
$130 million was completed. 7
 Building the
Top Management Team
Thomas Kelly, executive vice president and general counsel
Dave Barger, president and chief operating officer
John Owens, chief financial officer
Ann Rhoades, executive vice president of human resources
“It was a chance to create something new, unencumbered and fun” is the reason why these talented
people, with established reputations is attracted to the JetBlue venture. JetBlue top management
team was in many respects a virtual team.
With each member lived in different locations, this geographical dispersion reflected the diverse
lifestyles and preferences of JetBlue’s top management team. Not only that, JetBlue’s corporate
offices were geographical split. Senior management meeting conducted weekly via telephone
conference call, and face-to-face alternatively in New York City and Salt Lake City.
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 Leveraging Human Resources
Success during the start-up phase does not guarantee of continuing high performance as
the airline scaled up. The management team at JetBlue was sensitive to the risks that lay
ahead. Based on the discussion of the top management team, including Neeleman
himself, below is the uniqueness of JetBlue compared to other airlines.

CUSTOMIZED
OTHER HR
VALUES EMPLOYMENT
PRACTICES
PACKAGES

SELECTING
NON-UNION
THE RIGHT
ENVIRONMENT
PEOPLE

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VALUES

SAFETY INTEGRITY PASSION

CARING FUN

Rhoades wanted to take the best of all the other airlines and apply these lessons in
building JetBlue.
Values represent the foundation for the development of human resource policies and
practices and management styles.
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 NON-UNION ENVIRONMENT
The airline industry is one of the most organized industries in America - 80% of
employees are organized, about 15% of nationwide.
JetBlue insisted on operating without a union. Rhoades thought that without a union, it
would foster kinship, and unions are against Rhoades' dream.

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 CUSTOMIZED EMPLOYMENT PACKAGE
▸ Rhoades developed a customized human resources management approach that tailored jobs, pay, and
benefit packages to the distinct needs of different employee groups.

▸ Rhoades believed that many flight attendants considered their jobs as relatively short term (one to five
years)

▸ Three distinct job options for flight attendants :

1. 1 year employment contracts designed for college student.
2. Job-sharing offered to two people who wanted to shared a job.
3. A standard full-time flight attendant position but with a pay scale designed to appeal to those who
wanted to work more hours per month than industry norms.
▸ Customer service and ramp workers were paid 1 dollar more per hour than the highest rate at their
airport they were worked + shift differentials

▸ Pilots were paid the industry average for similar sized carriers and were entitled 20 days per year.

▸ Jetblue did not have a central reservation center

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 SELECTING THE RIGHT PEOPLE
▸ Taking the five values as a guide,JetBlue used a targeted selection process to identify
employees who were most likely to fit.
▸ The five values were systematically translated into specific desirable and undesirable behaviors
and questions were then asked with respect to applicants past behavior
▸ Applicants were asked to recall incidents in a previous job in which they exhibited a particular
behavior, to describe how they arrived at the decision, to take the action, and to describe the
consequences of the actions
▸ In pilot recruitment, JetBlue not only looked for a high comfort level with computers but also
paid careful attention to cultural fit. This practice had paid off because happy pilots were a great
source for recruiting their friends from competing airlines.
▸ The hiring process wasn’t perfect and about 20 people were let go in the first year.

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 OTHER HR ACTIVITIES
▸ Three things that all employees had to do if want to be successful with JetBlue :
1. They had to show up and be productive
2. They had to be safe (no alcohol and drugs)
3. They had to be customer oriented
linked the “three things” with the company’s values and the behaviors that were expected
▸ Rhodes introduced a 360-degree performance management process (called a “320- degree”
process to reflect their use of A320 aircraft). The dimensions rated in this process reflected the
five core values.
▸ Communication with front-line employees was also achieved through the formation of Tiger
Teams to solve problems that emerged in any area of the company.
▸ JetBlue managers were also sensitive to the power of language. All employees were referred to
as “crew members” and supervisors as “coaches.”

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2 QUESTIONS
 Since JetBlue will expand, they will increase employees.
2.1 Is the culture of JetBlue still relevant with the current
expansion of JetBlue?
The culture of JetBlue which built on values such as
Safety, Caring, Integrity, Fun, and passion are what make them known as
cool, convenient, and cost-effective airline.
The culture which was built around the core values of a company should
remain relevant regardless of how the company will grow in the future.
However there will be challenges in hiring new employees and maintaining
current culture. Especially keeping a non-union environment in an industry
where 80% of its employees are unionized.

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 How can the CEO deal with those expansion,
2.2
in regard of HC?
Concerning Human Capital, there are several ways the CEO can handle the expansion, namely:

● Instill company values in all employees

The company describes the relationships and values with employees that are emphasized in the blue
book or crew member handbook that is given to all employees so that they don't forget the company's
vision and mission.
● New and better Human Capital policies lead to the growth of the company.
By selecting the Right People, Tailored Work Packages, and other HR Practices companies can
increase their human resources' effectiveness that can help the company grow.
● Flat and open learning.
The company teaches employees to be able to take the good of others and learn from their mistakes
so that they can continue to provide the best performance in carrying out their duties.
● A non-union environment to create a better work environment.
The company creates a non-union environment in several ways: no trial period, positive team
environment, employee satisfaction and customize work packages.
● Multiple satisfaction: Employee satisfaction is just as important as customer satisfaction.
Fulfilling employee satisfaction is also very important for the company because if employees are
satisfied with what they get from the company, they will be able to improve their performance, which
can benefit the company.

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THANK YOU

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