Case Study Jetblue Airways

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C A S E 20 JetBlue Airways:
GROWING PAINS By S. S. George and Shirisha Regani
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1 Table of content (Moved to final report)
2 Introduction (Aurélien)
2.1 Case summary (Moved to final report)
2.1.1 Main issue (Moved to final report)
2.1.2 Case analysis (Moved to final report)
3 Internal analysis
3.1 Mission, vision, strategy, and competences (Moved to final report)
3.1.1 Mission (Moved to final report)
3.1.2 Vision (Moved to final report)
3.1.3 Business strategy (Eugene) (Moved to final report)
3.1.4 Competences (Moved to final report)
3.2 Marketing strategy
3.2.1 Product
3.2.2 Price
3.2.3 Promotion
3.2.4 Place
3.2.5 People
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The company is headquartered in the Long Island City neighborhood of the New York City. Its main base is at John F. Kennedy International Airport.
The airline mainly serves destinations in the United States, along with flights to the Caribbean, The Bahamas, Bermuda, Barbados, Colombia, Costa Rica, the Dominican Republic, Grenada, Jamaica, Mexico, Peru and Puerto Rico.

As of July 2015, JetBlue serves 91 destinations in the U.S., the Caribbean, South America and Latin America.
This company faced many challenges that led it find out a unique positioning where it competed with other low-cost carriers (e.g. Southwest, Frontier) as well as major carriers (e.g. Delta, United and American).

A. Case Summary (Executive Summary).

1. Main issue (Summary statement of the problem) :

JetBlue Airways was a fairly new airline that was going up against such airlines like Southwest, AirTran, and Delta. Started in 1999, JetBlue Airway was able to turn profits fairly quickly; in 2001 the company had profits of $38.5 million (George & Regani, 2008, 20-4). From there on it seemed that the company would continue to be profitable especially with expansions in the works, moving into areas that competitors ignored, ordering more planes, expanding to the west coast, and building a new terminal at JFK. However, due to various external and internal factors the company once again posted losses
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High profitability leads to high retained earnings and drastic improvement on both return on assets (ROA) as well as return on equity (ROE).

However, JETBLUE AIRWAYS has weak liquidity. Currently, the current ratio shows a lack of ability to cover short-term cash needs, yet the company's liquidity has not increased from the same period last year, indicating lack of improvement in cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 26.82% from the same quarter last year. The company has grown to a bigger size.

Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future and the company’s general financial condition generally become more healthy due to drastic improvement of profit margin from FY14 to FY15.

4. Internal Factors Analysis (IFAS)

Internal Factors
Weight
Rating
Weighted score
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