.CASE1- AIRLINE - JetBlue Airways Corporation (JBLU) — 2009In April 2009, the fear of a swine flu outbreak shocked the airline industry and airline stocksdropped by almost 16 percent. JetBlue’s stock slipped by 7 percent to $4.91. A bad outbreakcould be disastrous for this industry because most airlines already are suffering from highunemployment, slow economic growth, and significant drops in business and leisure travel.The stake is particularly high for JetBlue, which is on track to generate free cash flow this yearfor the first time in its nine years of flying. A low-fare, low-cost passenger airline headquarteredin Forest Hills, New York, JetBlue expects its 2009 full year revenue and profit to rise slightly. Itis ranked as the number-ten U.S. airline by traffic. Southwest Airlines, based in Dallas, Texas, is JetBlue employs over 11,000 crew members and recently achieved the number-one customerservice ranking among low-cost carriers, according to J. D. Power and Associates. The companyoffers passengers new aircraft, roomy leather seats with lots of leg room, 36 channels of freeDirecTV, 100 channels of free XM satellite radio, and for purchase, premium movie channelofferings from multiple major movie studios. JetBlue’s onboard offerings include free andunlimited brand-name snacks and beverages, and for purchase, premium beverages and speciallydesigned products for overnight flights.As of mid-August 2009, JetBlue operates 650 flights per day, serving 56 cities in 19 states,Puerto Rico, Mexico, and five countries in the Caribbean and Latin America. JetBlue in mid-2009 began international flights to Montego Bay (Jamaica), Cancun (Mexico), Barbados, SaintLucia, Kingston (Jamaica), and Santa Domingo (Dominican Republic).HistoryJetBlue was incorporated in Delaware in 1998 and commenced service in 2000 with primarybase of operations at New York’s John F. Kennedy International Airport. The company’s goal hasbeen to establish itself as a leading low-fare, low-cost passenger airline by offering its customershigh-quality customer service and a differentiated product. The airline focused on serving“underserved markets” and large metropolitan areas that have high average fares with a
Jetblue Case Study Essay
1736 WordsDec 3rd, 20097 Pages
JetBlue Airways is a low-cost passenger airline that provides customer service primarily on point-to-point routes. JetBlue offers its customers a quality product with young, fuel-efficient aircraft, leather seats, free in-flight-- (24-Channel live television via satellite Direct TV, Thompson et al. p C-53)--entertainment at every seat, pre-assigned seating and reliable performance. JetBlue. . As of Dec 31 2008, serves 52 destinations in 19 states, Puerto Rico, Mexico, and five countries in the Caribbean and Latin America. JetBlues fully owned corporate subsidiary, LiveTV, LLC, or LiveTV provides in-flight entertainment systems for commercial aircraft, including live in-seat satellite television, digital satellite radio,…show more content…
Problems and Issues that Management Needs to Address Makeshift Solutions My Timeframe Recommendations in Industry:
Some of the Pressing Issues Facing Management Included
1. How to raise JetBlue’s Spiraling Stock Price From $12.99 Feb 13, 2007, to $3.97 May 30, 2008 per share to $3.14 July 11, 2008 to its Current October22,2009 $5.38 to prevent takeover target
2. How to account for rising Fuel Costs.
3. How Prevent a possible Bankruptcy: and failing airlines. Or Takeover
4. Consolidation and Merging surged by rising operating costs and fees. Reaction Solutions: Raise Airfares
5. High Cost Of Doing Business through Energy Conservation: Employee Salaries and Oil prices affecting cost of Jet Fuel& Ticket prices Reaction Solution: Hedge on GAS; Buy fuel efficient Planes
6. Increase Competition from New Entrants: Newair and Tours and Virgin America to make a all saturated market moreso
7. How to replace aging baby-boomer Airline Pilots going into retirement.
8. Specific Operational Discrepancies that affect Jet Blue
A. How to avoid Bumped passengers: operational margin: filling customer seats
B. How to increase On-time arrival: Delays and cancellations
C. How to avoid Lost baggage: no computerized system to record and track lost bags.
D. How to improve Customer Service 9. Profitability and Growth: cutting cost by lowering wages, and grounding aircraft