Jetblue Airways: Can It Survive in a Turbulent Industry Essay

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1. JetBlue’s Mission
David Neeleman found JetBlue in 1999 with the mission “to bring humanity back to air travel". This goal is achieved by creating a company that offers comfortable, friendly travel at low fares and by this to differentiate themselves from the mass.
JetBlue has always identified itself as a customer service company first, focused on providing customers a unique experience on every flight and with every interaction with JetBlue. (Annual report, 2005)

2. Brief STEP (social, technological, economic political) analysis
S. There are several social and cultural factors influencing the airline industry: the globalization, mergers between airlines, weather, September 11, 2001, wars with other nations.
September 11 …show more content…

This results in unused capacity and stronger competition. Therefore it might be difficult for the smaller companies to survive.
Another factor that influence the industry are the interest rate changes that have an impact over the cost of operations.
P. Airlines are subject to extensive regulatory and legal requirements issued by The Department of Transportation and The Federal Aviation Administration. The industry has to comply with laws and regulations not only domestically but also internationally which requires significant spending. After 9/11, many new security measures have been put into practice, resulting in expenditures for equipment, training the personnel, federal and airport charges, security taxes and etc.

3. Brief analysis of Porter's Five Forces as they pertain to JetBlue
Competitive rivalry: Airline industry can be characterized as imperfect oligopoly. There are several big airlines that dominate in long-distance flights and several smaller airlines compete for short-distance flights. The competition and price sensitive buyers lower the returns airlines receive. This market situation is favorable for a company like JetBlue, which differentiated itself by comfort at low price, but this can be easily duplicated by other companies.
Bargaining power of customers: In airline industry the bargaining power of the customers is low to medium, because the buyers are not concentrated; there is no threat of backward integration.

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