Aviation/Business Analysis of Jet Blue term paper 41910

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Introduction

Jet Blue Airline is a pattern which leads towards success. It is particularly based on a simple strategy of low cost, higher quality and customer satisfaction. The company also has another strategy to live your life and let the others live. However, after the attack of September 11, 2001, the company Jet Blue went through a lot of crisis in the industry of airline of about past few months. They launched their services on 1999 which was very successful by generating over forty one million dollars profit in 2001. It also defeated the attempt of bankruptcy which caused more problem for it self than to Jet Blue Airline.

Jet Blue is built to focus on the strategy of low price, hassle free ticketing and pure customer services. This company began with an object to terminate many of the elaborated commercial air travel and adjust a new criterion for customer services. Therefore, the company over flourished with these goals and expectations of the people rose to invest their money with this company with a thought of a handsome profit in return. This airline company was established on December 4, 1999 and generated a profit of about forty one million dollars in 2001, but the plan to build this new airline was announced on February, 1999. Jet Blue, in it's early years, accomplished on it's purpose by creating a successful relation with their customers and inspiring them as well to make a long-term relation with the consumers and in addition, by building up their brand name through advertising and good relationship with the public with out breaking laws. This Airline serves in about fifty three cities and five hundred and fifty flights on daily basis without an over night stay. Jet Blue Airlines has invested approximately about thirty one million dollars on media which apparently comes in the category of low expenditures as it was spent on the first three years of a new airline. Still the percentage of the sales per seat was the best in United States and built an enormous amount of customer’s loyalty in 2003 and had about 1.9 cost of a unit labor on per available seat mile (ASM). Jet Blue propose hassle free pricing system like the highest rate for one way ride is about two hundred and twenty nine dollars, such one way rides have no restrictions while traveling and cannot be refunded afterwards. For the reservation, tickets should be bought at time but it can be altered with a fee of twenty five dollar. The Airline also provides an online and call center services to purchase tickets in other words all tickets are bought on electronic way. In this way the company preserve's the time spent on paper work, employee time and office processing. (Tim Leberecht). However, everything does not result in the same way as planned. On September 19, 2003, Jet Blue Airlines admitted that it had offered records of their five million customers publicly to a private department of defense (DoD) namely Torch Concept for the purpose of an antiterrorism study. These records consisted of customer information such as their social security number etc. This act directly profaned the private policy of Jet Blue Airways and federal privacy laws as well. In order to develop Jet Blue’s privacy practices in a better way, a technique was employed which is known as goal-mining. Various policies were stated into goals keeping in mind the objective to understand the privacy and policies of an organization (Annie I. Anton, Qingfeng He and David L. Baumer). Jet Blue Airline has relished in its early prosperity, but it also faced various risk including rising fuel cost. This forced them to change the structure of the airline by chopping off its Airbus fleet Expansion. High rates of fuel are managed with a second quarter of the company’s profit which means that the company will still lose money for the whole full. Jet Blue is also planning to sell out their two to five airbus jets to over come their profit also adding to deliver 12 planned A320 from 2007 to 2009 which will result an increased capacity in 2007 of about twenty to twenty two percent. Jet Blue has also faced a lot of ups and downs after the terrorist attack on September 11, 2001. After this attack, fuel prices went up which affected the gas customers in Airline industry and because of this billions of dollars were lost due to high rates in fuel prices. Jet Blue Airway has accomplished in lower cost and fine quality platform, it has a strategy that can be adjudged as ‘caught in the mid’. It is done by offering single class service by a single type of aircraft and electronic reservation system for the tickets. In this way efficiency is increased even more for the operations. Handling a single type of aircraft has a lot of benefits including lower cost maintenance, less spear parts, proper schedule and lower cost training which reduces the air craft cost. A positive facility of Jet Blue Airline is that they have more flights plus many of their flights are non stop as well. Such none stop flights are also for long trips, they offer an average of thirty nine or more non stop flights on daily basis. The Jet Blue is the first international airline which offers’s flights in major lower areas with low fares. The Airline has proved that it can arouse the demands in market with the strategy of low fares. Policy of this company is to propose travelers with low price ease and even for the travelers of small business. Most of the people find flying an obnoxious experience, this is because of an unpleasant environment of an air craft such as fabric of the seat, low nourishment or it can be poor air quality but Jet Blue offers a very different experience not only for high class people but for the people of lower areas as well. It also focuses on to balance and to satisfy external demand plus the management of internal processes and people. (Professor McAfee, April 9, 2002). After the incident of September 11, 2001, a lot of airline companies went into bankruptcy because of the employee’s arguments and high maintenance of the old air crafts due to this there was a major decline in air travel grew even more by becoming a $2.3 billion company. Discount was the only reason behind it, traveling in a brand new air crafts with a television consisting about 36 channels built on the back of each seat. Jet Blue Airline paid around eight one million dollars to company for the television idea which proved successful. Saving helped there to grow their company even more such as offering expensive comforts in lounge and first class seating with full meal. Infact, employees of Jet Blue are very co operative by taking lower salaries and they even declined their bonuses which were supposed to be paid after 2005. However, not every company is perfect; Jet Blue Airlines suffered two down years, the reason behind this was an ice storm which occurred at February 2007 due to this storm, and customers had to sit for hours across the country. Another reason for this set back occurred in 2005, this happened because of an instant expansion and a hurricane which caused fuel spike but it failed to dodge against. This cost the company of about more than twenty million dollars loss.

Furthermore, Jet Blue gives priority to a balanced budget for their customers, as it is ensure observance of laws and rules for cost cutting, even cutting off the seats from the air crafts to lessen the number of the staff need onboard and apply consistent increase in fares maximum ten dollars. The growth of lowered totaled up to approximately twice in 2006 as a trend will be continued until the profit is all balanced. Jet Blue is still planning to double their air crafts by 2011. The Airline has also clamed with the logic of discount carrier by building up an international airport namely John F. Kennedy International Airport situated in New York City. The successful arrangements have proved that the airline building is of eight hundred and seventy five million dollars. The terminal area has been also expanded for the air crafts. They are also moving steadily towards partnerships internationally with the strategy for the passengers to reach their destination. Jet Blue Airlines has announced recently an agreement with Aer Lingus. (Portfolio).

Conclusion

Jet Blue has involved with an airline industry and offer’s its consumers with alternative differences. Their strategy is focused on lower cost for the tickets, pleasant journey and also ensures that the costumer’s reach to their designated destination even if it’s located in lower markets. The Airline has also improved in various ways such as in technology, large start up capital, new reliable air planes and providing a comfortable accommodation. However, Jet Blue has also faced a lot of ups and downs, both internally and externally ways as well. It is believed that the Jet Blue’s strategy will continue towards profit and going forward. Jet Blue Airline has proved that it can fulfill the demands in the market and also has strength to recover its profit while serving with the strategy of low cost and higher quality service. As Jet Blue grew it has won customer’s loyalty and also got associated with other flying carriers. In all, Jet Blue has inscribed in the business world where the consumers are starving to buy an affordable service where many thousands of people have found their way. It will always maintain its structure of low costs which means low fares for traveling, fine quality of their services including television on the back of the seat and expensive comforts in the lounge. Jet Blue’s brand loyalty remains in the market for many years.

References

Professor McAfee. April 9, 2002. Strategy Final: Is Jet Blue’s Strategy Conducive to Sustaining Profitability? http://64.233.183.104/search?q=cache:9YoujXeS4XcJ:www.mcafee.cc/Classes/BEM106/Papers/UTexas/2002/jetblue+external+threats+cost+of+fuel+jet+blue+airlines&hl=en&ct=clnk&cd=9&gl=pk

Annie I. Anton, Qingfeng He and David L. Baumer The Complexity Underlying Jet Blue’s Privacy Policy Violation.

http://64.233.183.104/search?q=cache:MB-skeVJLWgJ:theprivacyplace.org/wp-content/uploads/2007/07/tr_2003_21+external+opportunities+and+threats+for+jet+blue+airlines&hl=en&ct=clnk&cd=10&gl=pk

Ted Reed. April 4, 2006. Fuel Costs Drag on Jet Blue. http://www.thestreet.com/stocks/transportation/10281254.html

Portfolio Jet Blue Airways Corporation (JBLU).

http://www.portfolio.com/resources/company-profiles/6403

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