2. Contents Airline Industry Porter’s Five Forces Analysis Origin of JetBlue Airlines Mission Statement of JetBlue Product Life cycle Market Positioning of JetBlue Innovative Strategies Used by JetBlue SWOT Analysis of JetBlue Recommendations
3. Airline Industry Deregulation of the U.S. Airline industry in 1978 Dominated by the largest Airlines(American, Continental, Delta, United) There are currently 18 passenger Airlines Since 2001, most of the Airlines have experienced considerable financial restructurings in bankruptcies, mergers and consolidations
4. Porter’s Five Forces Analysis Bargaining Power of Buyer High Threat from Substitute – High Bargaining Power of Suppliers – High Threat of New Entrance – Low Competitive Rivalry – High
5. Bargaining Power of the Buyers High because of : Standard product and services Customers have several options to choose Airline No switching cost – customer need a reason to stay Customer can compare easily other alternatives using the internet Customer loyalty : flying round trip across the US two times will earn you a free reward
6. Bargaining Power of the Suppliers High because of : Airplane Suppliers: Only two (Airbus & Boeing)- No bargaining Power Fuel Suppliers: JetBlue has prescheduled flights and require certain amount of fuel. Fuel is one of the most important cost factor.
7. Threat from Substitute High because of : Numerous other Airlines Switching costs among other airlines are low High existing barriers – bankruptcy laws allow loss maker to continue operating Other means of Transportations (Amtrak, Grayhound)
8. Threat of New Entrance Low because of : 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 Dominated by Large Airlines
9. Competitive rivalry High because of : Numerous competitors like Delta, United and American In times of low growth of industry, fierce price competition The industry is extremely sensitive to economic cycles
10. JetBlue Airline Official name : JetBlue Airways Corporation Headquarters : Forest Hills (New York), USA
11. Origin of JetBlue Airlines The founder: David Neeleman Focus area: New York, Florida and California Initial capital : $160 million Operations beginning: on February 11,2000 First flight : between JFK International Airport, NY and Fort Lauderdale, FL Initial public offering announcement :April 11, 2002 Currently :Serving 46 destinations with over 400 flights daily
12. Mission Bring Humanity Back to Air Travel Exists to provide Superior services at low Cost Core Values: Safety Caring Integrity Fun Passion
13. Product Lifecycle Jet Blue is a very young company It has moved from the introductory stage Continue to add New flights destinations, Aircrafts, Market Share, and Employment
14. Market Positioning Price High United Airlines American Airlines Quality Low Delta JetBlue Southwest Air Tran Frontier Low
16. Innovative strategies used by JetBlue No Meal Service Each Seat has 6.8 inch TV (36 DIRECTV Channels) Leather Seats Two Types of Airplane (A320 and the Embraer190) Use of Fuel Efficient Airplanes Focus on Core Routes Point to Point Flights Electronic Ticketing
17. Innovative strategies used by JetBlue Use of Secondary Airports like Long Beach Use Paperless cockpit (flight deck) Customer-focused Approach Free snacks (Dunkin Donuts, Terra Blue Chips) Create fun ( discounted weekend fun fare)
18. SWOT Analysis of JetBlue Strategic Strengths Largest Airline at JFK Airport in New York City Leather Seats throughout all Jet Blue Aircraft Low Operating Cost Strong Brand Efficient Employee Consumer Satisfaction Effective Use of Technology Advertisement http://www.jetblue.com/wherewejet/
19. SWOT Analysis of JetBlue Weakness Relative New Company Single Fleet (No Boeing in Fleet) Concentration on Middle Class Shifting Customer’s Need
20. SWOT Analysis of JetBlue Opportunities Route & fleet Expansion Creation of Airlines Alliances Technological Improvements in Airplane Design, Operation and Maintenance Deregulation of International Air Travel
21. SWOT Analysis of JetBlue Threats September 11 Attack/Accidents Security Issues Increase in Fuel Price Strong Competition Global Economic Crisis
22. Recommendations These are some recommendations for JetBlue: It should pursue a Cost Leadership Strategy It should Focus on Airlines Alliances Improve Fuel Hedge Opportunities
