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JetBlue Airways: Managing Growth – Case Solution

JetBlue Airways: Managing Growth case study looks into the actions of the management of the airline corporation and presents recommendations regarding the plan of action that should be followed through by the airline carrier to attain greater heights.

​Robert S. Huckman and Gary P. Pisano Harvard Business Review ( 609046-PDF-ENG ) October 10, 2008

Case questions answered:

• Conduct financial analysis and develop implications on a firm’s strategy. Specifically, what trends do you see in the expenses of JetBlue? What are the social, political, and economic forces influencing JetBlue’s performance, and what challenges would you foresee in JetBlue’s striving to reposition its brand identity?
• Develop a recommendations(s) strategy. Provide an overview of estimated time and required resources.

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JetBlue Airways: Managing Growth Case Answers

Abstract – jetblue airways: managing growth case study report.

This report aims to examine and analyze the low-cost carrier (LCC) JetBlue Airways’ business. Taking a time frame of the past three years, i.e., 2017-19, this report will examine the financial standings, airline business factors, and marketing strategy of the brand.

Towards the end, it will include recommendations regarding the plan of action that should be followed through by the airline carrier to attain greater heights.

Introduction – JetBlue Airways Corporation

JetBlue Airways Corporation, better known as JetBlue, is the 5th largest airline in the United States. As of 2019, it serves 101 destinations in the US, Central America, Latin America, the Caribbean, and Mexico.

To present the immense popularity and profits the airline carrier has enjoyed, it should draw your attention to the fact that JetBlue was one of the only airlines to remain profitable after the market drop after 9/11.

Other brands began to target their supreme market presence by launching mini-rival carriers. Delta launched Song and Ted, both of which soon dissipated and were reabsorbed. Not only is JetBlue good at what it does, but it remains profitable despite the several free offerings it makes.

In 2005, JetBlue suffered losses of up to $20 million. However, the next year, it cut those losses to $1 million and was even able to show a profitable next quarter.

Airline business factors

SWOT Analysis

Strong Brand Identity

JetBlue Airways has maintained a strong brand identity with its customers by regularly offering them insight via pictures and mini-tales on their Instagram blog ‘Out of the Blue.’ It has been able to engineer a fun, easygoing persona that resonates with its customers (SWOT & PESTLE.com, 2018).

Customer Satisfaction

Though JetBlue is a low-cost airline, it has made every effort to ensure that it does not come across as cheap. It provides several free services, such as free luggage, change fees, & cancellation. Complimentary beverages & snacks are also provided to their customers.

Furthermore, it had proved itself to be a tool for the people as the few days of the calm before Hurricane Irma struck, several flights hiked prices to take advantage of the upcoming disaster. However, JetBlue dropped its prices to as cheap as $99 to aid people in evacuation.

New and Efficient Aircraft

JetBlue’s founder purchased 60 A220-300 aircraft in 2019, allowing the airline to serve thinner routes sans compromise on cost. This led to the addition of 5 new routes pan-US.

JetBlue Airways also said that they would be adding nearly two dozen more flights to existing routes to improve existing network performances and build up key markets.

Less International Destinations

The airline currently serves 101 destinations & all of them focus on the Caribbean & North American destinations. The airline has never leaped to go to Europe because international routes are longer. The argument posed by them is that pursuing it would increase complexity, cost, and additional challenges to current routes.

High Cost of Operation

JetBlue Airways has set ambitious cost targets to emerge as a winner in terms of accommodating climate change without the business suffering. The target cost growth is only 1% or less from 2018-20. By using this tactic, the company aims to save $250-300 million on an annual savings basis by 2020.

However, this target has been difficult to achieve as pilots push the market to increase their pay-raise, maintenance & marketing costs rise, along with the airline’s tactic of reducing capacity to save a larger amount.

Opportunities

New Markets

The CEO has hinted at expansion with “New possibilities with the A321LR option” seen as a part of its recent advertisements. He also believes that there are opportunities around the northern rim of Latin & Central America.

Introduction of New Planes

The brand is open to expanding its services in the European sky. JetBlue Airways will have the option to convert A321 neo orders into long-range A321-LR (long-range) soon.

The company stated that its agreement with Airbus would result in the addition of 30 more A321s to its fleet over the next seven years.  A further 15 A321neo aircraft will begin to arrive in 2020. A new long-range variant of the A321 could be the first to fly across the Atlantic.

Rising Fuel Prices

The brand recently announced a fare hike due to rising fuel prices and travel demand. Its fees now match those of its competitors, which may bring down its sales as customers are increasingly dissatisfied with the new fares.

Aircraft Deliveries

Additionally, the company has been aggressively amassing more aircraft to its fleet since 2016. This is in preparation for the assumption that JetBlue’s growth curve over the next eight years will be massive. The company has 127 aircraft & 10 engines on order through 2023. Its current fleet has 203 aircraft & these orders point to a ramp-up of its fleet numbers by a stunning 60%.

PESTEL Analysis

Political factors influencing the decisions made by JetBlue Airways are:

• Political stability and the importance of the Regional airline sector.
• Risk of invasion by the military
• Level of corruption in the Services sector.
• Bureaucracy and interference in the Regional Airlines industry by the government.
• Legal framework for contract enforcement
• Intellectual  property  protection
• Trade regulations & tariffs related to Services
• Favored trading partners
• Anti-trust laws related to Regional Airlines
• Pricing regulations
• Taxation rates
• Wage laws on minimum wage and overtime rates
• Labor laws on workweek regulations and benefits of employees
• Services sector industrial safety regulations

These must be taken into consideration by JetBlue Airways…

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The JetBlue Story Harvard Case Solution & Analysis

Home >> Operations Management Case Studies >> The JetBlue Story

Background and Introduction:

JetBlue Airways Corporation started from scratch in 1999 and officially started its business operations in 2000. The company is known to be an airline with low-fare charges along, high quality for customers and the differentiated product. The target market of the company is the large metropolitan areas where the plane fares are high on average. Most of the United States airlines adopts and follows the Hub and Spoke route system, however; JetBlue Airways follows point to point route system.

JetBlue Airways is one of the most successful airlines in the United States. The founder of the company, David Neeleman wants JetBlue Airways to be the one that can provide unique services and offer a treasured flying experience to their customers. The company wants to build long-term relationships with their customers backing order to make them to keep on coming back.

Staying successful and competitive in the airline industry is not an easy task as only two companies are in still operation among the companies that entered in the airline business during 80s. JetBlue took a great start with good human resource and management team. The company also made a good decision regarding resource allocation and budgeting of the company. In addition to that, the company also made timely and wise decisions related to the buying and selling of planes, technological advancements and other business decisions as well. By the end of 2002, the company announced their IPOs that were for the common stock. As of now, the company is engaged in operating more than 180 flights per day.

The goal and vision of JetBlue Airways are to be a leader in the airline industry by providing low-fare airline services to the customers along with maintaining high quality customer service and differentiated product.

Problem identification:

The company has successfully maintained its brand image and differentiated itself as a high customer oriented organization. For further growth and success, the company needs to take some measures to stay competitive in the industry and to attain speedy achievement and growth. It is a fact that staying competitive in the airline business is not an easy task, therefore; competitors of JetBlue Airways like United is working hard to prove it as successful airline. For JetBlue Airways, their vision is not only to be a successful organization but they also want to make a culture that is based on value and commitment to the organization. The company needs to expand in order to grow and make itself more profitable.

Strategic/Competitive

One of the major strengths of the company lies in its technology. The company has made the best use of technology to diminish the costs and expenses of the company as a selling point to their clientele. Further, the company has implemented a ticket less system which eventually reduces the cost of paper. The concept of ticket less system provided expediency and simplicity to the customers as well. The company has finished the concept of the paper ticket as customers do not have to worry about putting their tickets in the bag before leaving for the airport.

In addition to that, the company has found other ways too in order to make reductions in their costs. They give much importance to their workforce, therefore; the employees are happy and content with the company even with low salaries. The company has used the same planes and use point-to-point system for running flights that helps the company to switch pilots and to save the fuel as well as money that in turn decrease the overall cost of the company.

Another major strength of the company is the prime focus on continuous innovation. Recently the company has installed cameras in their planes and other facilities like direct TV, comfortable leather seats and internet are the ways to satisfy customers.

Weaknesses:

One of the major weaknesses of the company is the inadequate number of routes accessible to the customers. However, routes are not a major problem, but the number of places offered to fly for the customers is a major problem. JetBlue Airways does not provide many routes, therefore; customers have to switch to other competitors in order to reach many destinations. Further, the company has been criticized for its frequent changes in the flier program as well.

Despite the fact that most individuals recognize JetBlue Airways, the organization is still not as large as it needs to be. In the light of this, the airline has some difficulty in getting entryway openings at huge runways. They likewise don't fly all around yet, so their target business is more diminutive than other airlines transporters. One of the greater shortcomings is that some individuals just consider that JetBlue Airways is a shabby start-up airline.

Opportunities:

Opportunities are the chances which a company may acquire to gain competitive advantage. As discussed above, it is difficult for the airline companies to stay competitive in the airline industry, therefore; JetBlue Airways can take it as an opportunity and grab their customers. By doing this, the company will be able to achieve recognition for its brand towards more.................................

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This case tells the story of JetBlue Airways since its inception in 2000 until 2004. The case provides detailed information on the business model, JetBlue and the causes of success. It can be used during maintenance operations or strategy. "Hide by Elliott N. Weiss, Marlene Friesen Source: Darden School of Business 15 pages. Publication Date: November 23, 2004. Prod. #: UV3543-PDF-ENG

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JetBlue Case Analysis

JetBlue Airways Corporation, stylized as jetBlue, is an American low-cost airline headquartered in New York City. A major air carrier and the sixth-largest airline in the United States, JetBlue is headquartered in the Long Island City neighborhood of the New York City borough of Queens, with its main base at John F. Kennedy International Airport. It also maintains corporate offices in Cottonwood Heights, Utah and Orlando, Florida. JetBlue is not a member of any of the three major airline alliances, but, it has codeshare agreements with 21 airlines, including member airlines of oneworld, SkyTeam, Star Alliance, and unaffiliated airlines.

As of May 2018, JetBlue serves 102 destinations (the latest addition being Steamboat Springs, Colorado) in the U.S., Mexico, the Caribbean, Central America and South America.

Jetblue Case Study Analysis

Jetblue Swot Analysis

Jetblue Pestle Analysis

Jetblue case study examples, jetblue airways corporation.

What is JetBlue‘s strategy for success in the marketplace? JetBlue is geared towards the provision of low cost and low fare for its services. It does this through the provision of differentiated products and customer service which is of very high quality. JetBlue strives to provide consumers with low fares that stimulates market demand and […]

JetBlue Airways

JetBlue Airways is a low-cost domestic airline in the United States. Their headquarters is situated at Foresthill in New York City. In addition, its main base is Queens also in John F. Kennedy International Airport.In the year 1998 JetBlue was ranked the eleventh largest airline in the industry, and was the other airline apart from […]

Jetblue Case Analysis

JetBlue Case Analysis Executive Summary JetBlue airline was founded by David Neeleman who is a Brazilian born entrepreneur. His goal was to single handedly create a unique airline that was innovative for the current market. The low fare airline was designed for customers who needed to travel at affordable prices, and which would essentially create […]

Case Study – Jetblue Airlines

February 20, 2013 JetBlue Airways Corporation Case Study Report Situation Analysis History JetBlue Airways Corporation was created my David Neeleman. His vision was to create an inexpensive, easy way to travel by airplane. He was quoted saying he wants to “bring humanity back to air travel. ” David Neeleman was already a seasoned entrepreneur. Two […]

JetBlue Management Case Study

David Melanin’s vision is to create a new kind of airline; one that would leverage genealogy for safety, efficiency and a commitment to their customers. Melanin was convinced that his commitment to innovation in management, policies, and technology would keep the planes full and moving. Stable’s goal is to give customers exactly what they want […]

Jetblue Case Study

Aside from Southwest Airlines, Getable was the only company who had been blew to keep its books positive while the united States had undergone a terrorist attack and all other companies were reporting loses. Song airline was a low cost carrier subsidiary of Delta airlines that started in 2003. It was formed to compete with […]

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28 August 2018 | Case study

JetBlue case study: Driving a rise in satisfaction levels by putting the customer first

The customer.

JetBlue is a low fare airline, mainly based at John F Kennedy Airport in New York, USA with corporate offices in New York, Utah and Florida. It commenced operations in 2000 and now serves over 100 destinations in the USA, Central America, South America and the Caribbean.

The airline transported more than 40 million passengers in 2017 and operates a fleet of almost 250 aircraft.

JetBlue was founded on the understanding that the customer would always be put first – a novel concept in an industry not always recognised for customer service. As the company has grown, a constant area of focus has been on ensuring that customers are effectively communicated with, particularly when unexpected travel disruptions occur.

An overview

The airline had previously taken steps to automate its management of schedule changes, with 78% of schedule change notifications cleared in minutes since adopting an innovative solution by 15below using the Queue Manager tool. Now it looked to expand its capabilities to stay connected with customers at every stage of their journeys; to inform and delight them and to lay the foundations for a smooth and stress-free experience.

Challenges and objectives

Challenges faced by JetBlue:

• Disruption communications were not automated or tailored to meet customers’ needs and ease their journeys
• Customers who missed a connecting flight when travelling on a multi-leg journey with JetBlue and a partner airline faced challenges making adjustments to their itineraries
• Travellers flying to/from Cuba required specific documents, resulting in pain points at the airport

To resolve the challenges it faced, JetBlue opted to set the following objectives:

• Overhaul the notification experience to generate an increase in Net Promoter Score
• Streamline the process for rebooking and issuing a new itinerary to customers who miss a connecting flight
• Working to provide customers travelling to Cuba with the required documents prior to departure

The solution

JetBlue has worked with 15below for a number of years, building a notifications strategy designed to ensure the customer is put first throughout their journey. Keeping customers informed from booking to travel day and beyond was key to this objective, so JetBlue and 15below worked together to devise an automated system guaranteed to ensure the timely provision of relevant details, advice and offers.

15below supported JetBlue in delivering optimum customer service in the following ways:

• Automating timely communications to relay news of changes to the flight itinerary, provide options and follow-up if the customer did not respond
• Communicating relevant details including terminal changes, baggage reminders, special services, peak travel reminders, gate information and more to make navigating the airport as stress-free as possible
• Offering apologies to customers affected by a delay or cancellation and a credit towards future travel

The results

JetBlue has seen improvements in customer experience scores and satisfaction levels.

The objectives have been met in the following ways:

• Positive, proactive communications during disruption periods were found to result in a rise in customer satisfaction. JetBlue’s Net Promoter Score increased by more than 100 points to +29.8 due to improved communications through email and crew member announcements at the airport
• A new communications team was set up in the airline’s Customer Experience Operations Centre. It sends all disruption notifications through the 15below platform so that customers have relevant information – including terminal details, baggage allowances and special services – on hand and do not need to queue to speak to a call centre operator or member of ground staff
• New templates created with 15below allow voice notifications to be sent to customers who have missed a connection directing them to specific crew members at their support centres who are specifically trained to assist
• An automated email notification was devised for customers travelling to Cuba allowing them to fill in documents prior to departure
• An apology email with attached credit was created and sent to disrupted customers before they land at their destination

“We have worked with 15below for many years and it has proved to be a fantastic partner for our business. 15below’s platform allows us to communicate with our customers in a variety of ways exactly when they need to hear from us and has led to improved communication with our customers, especially when unexpected travel disruptions occur.” Lori Fox, Manager Customer Experience Operations Centre, JetBlue

How can we help you?

More than 50 airlines, rail operators and travel companies already use 15below’s industry-leading range of advanced passenger communications. We help companies stay connected with their passengers at every stage of their journey. Our aim is always the same: To help customers get the right information to the right people at the right time.

Get in touch for a personalised product tour.

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