JetBlue Airways Case Study

JetBlue is a low-cost passenger airline which founded in Delaware in 1998.  The airline also has very low-fares and began its service in 2000. Its primary base for operations is in New York where is based in John F. Kennedy airport. The airline mainly operates domestically only and by the 2002 the flights per day had increased to 108 flights. Moreover its stock prices at the time were operating below $20. In 2005 when it was celebrating its five-year anniversary things had turned for the better, the revenue generated at the time had risen to over one billion dollars and the stock prices having been split twice by this time hitting a high of $26.50.

By 2005 in an expansion plan, the airline acquired some 7 A320S and Embraer E190s respectively. This was to be added to the already existing 77 Airbus A320. By doing this the airline was working on an expansion plan on its activities to 316 flights per day going to several destinations in 13 states. The aim was that by the end of the year they would start some non-stop flights on a daily basis from area like Newark which is on New Jersey to other destinations which included Orlando, Tampa and Fort Myers in Florida.

The airline since inception has made some tremendous feats which can be applauded, this include it being the first U.S. start-up airline which launched with more than $100 million in capital, the first and only airline to offer 24 channels of live satellite television and broadcasting of the Olympics. The airline also introduced the paperless cockpit along with ticket-less service. In security the airline has installed bulletproof cockpit doors on its fleet with cameras in passenger cabins for the safety of the crew and customers

Competition advantage


The airline being of low-cost but offering high-quality service makes it an attractive prospect for any passenger. JetBlue has always invested in in-flight entertainment as it planned to increase Direct Television services to over 100 channels. This along with the leather seats and in-seat digital entertainment that includes the armrest remote that has channel and volume controls makes it very attractive. The company has a bold promotion quote of "everyone must go" that led to fares being as low as $29 to some destinations. These services make it a unique prospect in comparison to other airlines due to the comfort the passengers will experience along with the fact that their fleet is all new which makes them more reliable and efficient. Furthermore the focus on customer friendly service where the customers input is listened to and their flight made as joyful as possible is a point to note. In addition the airline focuses in hiring only the best people who have undergone rigorous training and ensured they equip them with the necessary tools to ensure the employees are motivated for service efficiency.

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Strategies in Place

Despite the airline continuously marketing itself, it has concentrated on the word of mouth advertising. This coupled with new strategies like corporate sales booking to attract business travelers and this being promoted and efficiency in time keeping in relation to arrival and departure. The use of E commerce has boosted its earning through the bookings made online as it saves resources as seen in 2004 where its website generated 75% of its revenue with the rest coming from agents. The brand loyalty that it has built has seen customer's continually coming back leading to programs like free round trips to any destination if 100 points are attained within 12 consecutive months. This is reflected in 2004 when this program achieved 88,000 who qualified with 20,000 redeeming them. Furthermore the partnership with American Express card holders to convert their points into the reward scheme encourages more customers to come back.

The airline has to deal with the high fuel costs. Hence the JetBlue has entered into a third-party agreement which involves fuel hedging which protects it from fluctuation of the prices. After the September 11 2001 attacks the security at airports was beefed up meaning the extra cost was burdened to the airline. Despite the profit in future they will have to think of expanding and getting new hubs to counter the delays. The need for future and new strategy like expansion to Europe may need to be considered due to the changing travelling trends.

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