Case Study Jet Blue

3093 Words Apr 1st, 2012 13 Pages
UNIT 1
JetBlue Hits Turbulence CASE STUDY
In February 2000, JetBlue started flying daily to Fort Lauderdale, Florida, and Buffalo, New York, promising top-notch customer service at budget prices. The airline featured new Airbus A320 planes with leather seats, each equipped with a personal TV screen, and average one-way fares of only S99 per passenger.
JetBlue was able to provide this relatively luxurious flying experience by using information systems to automate key processes such as ticket sales (online sales dominate) and baggage handling (electronic tags help track luggage). Jet Blue prided self on its "paperless processes.
“JetBlue’s investment in information technology enabled the airline to turn a profit by running its business at
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JetBlue waited too long to solicit help for the stranded passengers because the airline figured that the planes would be able to take off eventually. Meanwhile, the weather conditions and the delays or cancellations of other flights caused customers to flood JetBlue's reservations system, which could not handle the onslaught. At the same time, many of the airline's pilots and flight crews were also stranded and unable to get to locations where they could pick up the slack for crews that had just worked their maximum hours without rest, but did not actually go anywhere. Moreover, JetBlue did not have a system in place for the rested crews to call in and have their assignments rerouted.
The glut of planes and displaced or tired crews forced JetBlue to cancel more flights the next day, a Thursday. And the cancellations continued day after day for nearly a week, with the Presidents' Day holiday week providing few opportunities for rebooking. On the sixth day, JetBlue cancelled 139 of 600 flights involving 11 other airports.
JetBlue's eventual recovery was of little solace to passengers who were stranded at the airport for days and missed reservations for family vacations. Overall, more than 1,100 flights were cancelled and JetBlue lost $30 million. The airline industry is marked by low profit margins and high fixed costs, which means that even short revenue droughts, such as a four-day

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