JetBlue Airlines

[Success Story]
Efforts by:-
Meenakshi Bisht
Tushank Neeraj
October 1, 2009
Garg
 Agenda
1. JetBlue Story
2. JetBlue Innovative Strategies
3. JetBlue SWOT Analysis
4. JetBlue PEST Analysis
5. JetBlue Market Positioning
6. JetBlue Porter’s five forces
7. JetBlue Mission Statement
8. Recommendations
 JetBlue story
• JetBlue is the brainchild of David Neeleman
• Concentrating on New york, Florida and California
• Started with an initial capital of $160 million
• Operations began on February 11,2000
• The inaugural flight was between New York’s JFK
International airport and Fort Lauderdale
• April 11, 2002 announcement of initial public offering
• Serving 46 destinations with over 400 flights daily
Innovative strategies used
by JetBlue
• Not to serve meals
• Providing personal television
• Leather seats instead of cloths
• Did not use old & cheap planes
• Use more fuel-efficient and less maintenance
cost
Airbus
• Did not fly too many routes
• Choose point-to-point flight
 Continue……
• Use secondary airport which did not handle too much
traffic
• Reduce the Turnaround time
• Use electronic ticketing
• Paperless cockpit
• Customer-oriented approach
• Picking the right people
• Create fun
 SWOT Analysis
• Strength
 Low Operating cost
 Strong brand
 Efficient employee
 Single fleet
 Consumer satisfaction
 Effective use of technology
 Advertisement
• Weakness
 Relative new company
 Single fleet
 Concentration on middle class
 Shifting customer’s need
• Opportunity
 Industry
 Route & fleet expansion
 Creation of Airlines Alliances
 Technological Improvements in Airplane design,
operation and maintenance
 Deregulation of international air travel
• Threat
 September 11th attack/Accidents
 Security
 Increase in fuel price
 Strong Competition
 Global crisis
 New regulations by FAA
 union
 Market Positioning

Price
High

United Airlines

American Airlines

Low Quality
Delta

JetBlue
Southwest
AirTran
Frontier

Low

Position Map
 PEST ANALYSIS
• Political issue
 September11, terrorists attack
 Political stability
 Competitive Airline industry
 Regulatory factors
 PEST ANALYSIS

• Economic issue
 Improved purchasing power
 Rise in Inflation
 Rise in oil prices
 PEST ANALYSIS
• Social issue
 Greater customer awareness
 Increased entertainment level
 Security level of customers
 Bad services & lost baggage
 PEST ANALYSIS
• Technological issue
 Beginning of e-ticketing
 Automated systems (cockpits)
 Advertisements (newly introduced animated)
Porter’s five force analysis
• Bargaining Power of Buyer – High
• Threat from Substitute – High
• Bargaining Power of Suppliers – High
• Threat of New Entrance – Low
• Competitive Rivalry – High
• Bargaining power of Buyer - High
 Standard product and services
 Several options available to customers with what
airline they choose to fly.
 No switching cost – customer need a reason to stay
 Customer can research easily using the internet
 Customer incentives such as True blue which allow
customers to earn rewards, book flight in an
easier/faster manner, and stay on top of the
upcoming event/sales
 Customer loyalty : flying round trip across the US
two times will earn you a free reward
• Threat from substitute – High
Threat is high : numerous other airlines
Switching costs among other airlines are low
Switching costs among other transportation option
are high for everything but short distance (Train,
boat, car etc)
High existing barriers – bankruptcy laws allow loss
maker to continue operating
• Bargaining power of suppliers – High
Only two suppliers – Airbus & Boeing
Little/No chance to bargain with suppliers
Fuel suppliers have a considerable amount of
power because they control how much money is
spent on the fuel used to fly the planes.
 The volume of fuel supplied to the airlines is
extremely important because JetBlue has
prescheduled flights that require a certain
amount of fuel. 
• Threat of new entrance - Low
Deregulation made it possible for new entrance
Very high cost or capital required for entry
Low profit margin
Difficult to differentiate product & services
Brand image and loyalty is important
New airlines must be seen as safe and reliable
Hundreds of gone defunct trying to compete against
the large airlines
• Competitive rivalry – High
Numerous competitors like Delta, United and
American
In times of low or moderate industry growth,
the competition gets fiercer as each one tries to
nab customers from the other in order to keep
their capacity utilizations at acceptable levels
The industry is extremely sensitive to economic
cycles
 Mission

• Bring Humanity Back to Air Travel

• Jet blue airways exists to provide superior services at low

cost in every aspects of our customer’s air travel experience

• Core Values
Safety
Caring
Integrity
Fun
Passion
 Recommendations

• JetBlue needs to pursue a Cost Leadership Strategy

• Improve Fuel Hedge opportunities
• Initiate international Alliance
• Introduce point to point service in west coast markets
Thank You