Jet Blue Case Analysis

The key external factors like the growth in the economy, disposable income, and fuel prices have negatively affected JetBlue. It was compelled to change its strategy several times and in 2011 had an income of $86 million down from $97 million in 2010. The growing consumer interest in leisure travel has positively affected JetBlue. The success of JetBlue has been attributed to growing consumer interest in leisure travel.

Airlines usually buy new jets under long-term fixed price contracts. This effectively shifts the financial risk to the aircraft manufacturer as they have no certainty of the future, thus giving

American airline industry is steadily growing at an extremely strong rate. This growth comes with a number economic and social advantage. This contributes a great deal to the international inventory. The US airline industry is a major economic aspect in both the outcome on other related industries like tourism and manufacturing of aircraft and its own terms of operation. The airline industry is receiving massive media attention unlike other industries through participating and making of government policies. As Hoffman and Bateson (2011) show the major competitors include Southwest Airlines, Delta Airline, and United Airline.

Another national employment law significant to JetBlue following employee compliance issues, is the 1990 Act of Americans with Disabilities, which prohibits the discrimination against qualified individuals with disabilities. It includes all their employment practices, job application procedures, hiring, advancement, training, firing, compensation, as well as other employment terms, conditions, and privileges of employment. (Rubric A. National Employment Law #3)

Fuel cost, airport user and air navigation fees, foreign exchange, Aeroplan, Star Alliance, key suppliers, regional carriers, economic and geopolitical conditions, competition.

JetBlue Airways Corporation (JetBlue) was founded in 1998 in Delaware by David Neeleman, a former Southwest executive. The airline began operations in 2000 based out of JFK International Airport (JFK) in New York. JetBlue currently has over 12,900 employees and has been repeatedly ranked as number one in customer service among low-cost carriers by J.D. Power & Associates. As of December 31, 2010 the company operates over 650 flights daily, servicing 63 destinations in 21 states, including Puerto Rico, and eleven countries in the Caribbean and Latin America. The JetBlue’s goal from inception was to distinguish itself as a low-fare, low-cost passenger airline, offering high-quality customer service and a differentiated product.

From a 5 year outlook they have had a low of $3.48 November 25th, 2011 not yet 4 years later, they peaked at $26.91 September 18th, 2015. This is a fantastic growth of 773.3% over 4 years. IE, if you invested on November 25th, 2011 and kept your money with JetBlue, you would have multiplied that initial investment by 7.733 times.

The terrorist attacks are only one of the causes of crisis in the industry because there are several issues that threaten the industry. One that was mentioned earlier gas prices. Labor disputes are a factor as well. You may say that the airline industry has hit an extremely bad era. The changes that these airlines are being driven to make will be very different from the way it used to be. As most people know, the government has had much in bailing out business and the transformation that some have undergone and the airline industry is no exception. The government has a major influence on the restructuring of the industry and the air transportation system in general.

The airline industry is very sensitive to the state of the economy. People will choose to spend their discretionary income elsewhere when times are tough and will most likely not pay top dollar if they must fly.

Jet Blue is a shinning star in the gloomy airline industry. Jet Blue has been showing great earnings and growth since its incorporation in 2000. Jet Blue uses innovative strategies to further their success in a market, which has been showing nothing but losses across the board.

JetBlue is a low cost US airline. The firm was founded by former Southwest Airlines employee, David Neeleman, and incorporated in 1998 in Delaware. The firm was not originally known as JetBlue, the initial name was NewAir. The plans for the new airline were announced by Neeleman in February 1999, and in April an order worth $4 billion was given to Airbus for up to 75 new A320 aircraft, at the same time leases were arranged for 8 aircraft. The firm gained exemptions for 75 take off and landing slots at JFK Airport in September, takes delivery of the first aircraft in December, and officially starts flights on 11 February 2000 (JetBlue, 2012). The first was being between JFK and

Airlines must operate within a low-margin, high-fixed-cost environment, making profitability particularly sensitive to decreases in volume, either from environmental factors (e.g., the September 11,2001 attacks) or from competition. Moreover, the airline business is labor-intensive. Labor costs as a percentage of revenues ranges from a low of about 25 percent for the low-fare airlines to almost 50

JetBlue Airways airline was established by David Neeleman as a low-fare airline with high-quality customer service. His goal was to create an airline that was innovative for the current market. Their main focus was to provide service to areas that were underserved as well as to large cities with overpriced fares. He aimed to establish a strong brand that differentiated itself from its competitors by being a safe, reliable and low cost-airline. Neeleman managed to achieve this partially by hiring friendly, helpful, team-oriented, and customer-focused people. JetBlue is capable of offering low-cost flights due to their low operating costs. In order to achieve the cost advantage, they initially operated a single-type aircraft, the Airbus

The Airlines Industry was originally initiated in USA as a fastest and luxury mean of travel in the 30s¡¯. With the tremendous development on technological, we have numerous airlines in the world. Yet, just like any industry, there are always winners and losers in the long run. This paper is use to analyze the factors from an economics perspective that drive the industry prospect and their threats in the recent years.

The ticket pricing structure is in total chaos. The government and lenders are enabling bankrupt, financially unstable airlines to continue operations by extending loans to keep them flying. One result is a glut of empty seats in the market. Additional seats are flooding the market with start up airlines and supply is outweighing demand. While these bankrupt airlines continue to fly they reorganize under bankruptcy protection and lower costs through cuts in worker benefits. Major carriers have made several recent attempts to raise ticket prices only to rescind them after customers flocked to low-fare carriers offering the same ticket for as little as one dollar less. Customer loyalty is a thing of the past.