Jet Blue Case Analysis

1316 Words Aug 10th, 2012 6 Pages
Jet Blue Case
Part 1 Analysis:
Financial Analysis- JetBlue, despite the hard times facing the airline industry, is doing well in comparison to its competitors. It is a much smaller company earning as much as $18 million less than its competitors in operating revenues (American had the most at 20,657 million and JetBlue had 1,701 million). However, with that being said, it is the only leading airline to show an operating profit besides Southwest. Does this mean JetBlue was successful? Along with all of its competitors, with the exception of Southwest, it had a negative net income and negative earnings per share. However, its losses are much less than its competitors. Its gross profit margin was .028, while its competitors such
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Companies that produce airplanes make a transaction-specific product, without the airlines to purchase their planes, they planes have significantly less value. There are enough suppliers bidding for an airline’s business that they must price planes competitively. Suppliers are also unlikely to vertically integrate forward due to the high costs involved. 5. Threat of Buyers- The threat of buyers is significant. Buyers of airline tickets are likely to demand the lowest possible prices for the highest possible value. If a buyer doesn’t find what it wants with one airline it can so easily just go to another airline and find what he or she wants.
General Environment The economic climate is not good for the airline industry making the industry unappealing. With unemployment high, there is less disposable income and consumers are carefully watching every dollar they spend. The 9/11 event has also had a large negative impact on the airline industry driving down sales because of the fear of consumers to fly. Demographic trends have also affected the airline industry. The baby boomer population is now older with more disposable income and the Hispanic population has also grown gaining 29% in disposable income. While this increase in disposable income is beneficial, it requires more employees to be bilingual to handle the increase in the Hispanic population. Also, technology has changed with the addition of kiosks and the ability to book tickets online. This

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