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Running head: RECOMMENDATIONS FOR JETBLUE AIRWAYS Recommendations for JetBlue Airways May 25, 2009 Recommendations for JetBlue Airways JetBlue Airways is one of the most popular American low-cost airlines. The company was founded in 1999 and is headquartered in Forest Hills, New York City, USA. JetBlue fleet includes 148 aircraft, flying to 59 destinations in 12 countries. In 2006, JetBlue Airways has announced its first loss, however, it returned to profitability by 2007. Despite relatively successful operation in the market, the management of the company is concerned about the companys growth rate, especially in current unstable economic condition. The essay examines JetBlue Airways business operation and provides recommendations concerning new businesses the company can enter, entry strategies that could be used, and answer the question whether the company should divest any of its existing businesses.
Taking into account companys current business operations, it can be recommended to reexamine its current strategies so to improve capacity management, optimize revenue, develop new cost reduction strategies and retain Jet Blues commitment to deliver its customers high quality service by entering new markets and flying to new destinations. JetBlue can consider offering its customers direct booking options via call centers and internet (this would allow the customers to reduce price, as no sales commissions will be involved). JetBlue Airways can also reexamine its aircraft to use uniform aircraft types (it currently operates 110 Airbus A 320 and 38 Embraer E- 190) and to take into consideration load and high seating density factors while reexamining its business strategy. High seating density factor is quite important, as it can reduce the cost per seat by approximately 15 - 16 % (Ben-Yosef).
Along with serving regular airline food, JetBlue offers its customers a wide range of tasty snacks and drinks, including but not limited to Terra snacks, cold drinks, Dunkin Donuts hit drinks, specialty beverages and mixers (About JetBlue Airway). The company might consider reducing its product line as it will allow to reduce the cost of the ticket (Pricing Strategy and JetBlue). In addition, JetBlue Airways should consider using secondary airports as it will allow the company to cut turnaround times and additional charges. Taking into consideration current economic slowdown, the company can consider entering new domestic destinations using its traditional entry strategy (Street Smarts: Learning From JetBlue). Jet Blues traditional entry strategy will be quite effective, as by providing high-quality, low-fare yet no-frills airline service JetBlue will have more chances to survive in a highly competitive domestic market (Does JetBlue Have the Right Strategy? ). By adopting this model, the company is likely to conquer the new markets in case it will manage to provide a better service at a significantly lower price compared to its competitors.
It can be also recommended to increase frequencies of flights, as higher frequencies will make JetBlue Airways more attractive both to normal and business passengers (especially to businessmen, as these make a significant proportion of the customers for low-cost airlines). In addition, the company may take advantage of the fierce competition between the giants in the airline industry, such as Boeing and Airbus. As JetBlue will have to purchase new aircraft, it will also derive benefit from the relatively low maintenance costs (as, compared to the elder aircraft used by its competitors, the maintenance costs of the new aircraft are very low). Also, the company can focus customers attention on relatively old aircraft of its competitors, as a potential safety risk.
In such a way, the initial low maintenance costs combined with a lower new aircraft acquisition cost at a favorable for JetBlue terms will obviously provide the company a competitive production cost (Ben-Yosef). In case implemented correctly, this entry strategy can be very successful even during current economic downturn. Also, the company should reconsider its schedule for pilots to place more focus on safety and to prove JetBlue treats its pilots as human subjects. According to the recent news, JetBlue Airways wanted to prove that its pilots can work longer and had them work 10 - 11 hours instead of the legal eight hour shifts (Pilot-Fatigue Test Lands JetBlue In Hot Water). JetBlue Airways should, without any doubt, to stop this malicious practice as pilot fatigue increases the chance of error, thus posing significant risk both to the passengers and to the pilots.
Although it is quite difficult to obtain reliable data concerning Jet Blues profitability in long-haul flights, it still can be recommended to reduce the number of such flights and to focus more to medium and short routes. The company should reexamine its business strategy and along with renegotiating its debt and lease obligations and labor contracts, JetBlue should reexamine and redesign its hub operations and fleet and network structures. In conclusion it may be said that JetBlue has solid chances to overcome economic downturn. By reexamining its current strategies and implementing recommendations stated here, equipped with smaller and new jet aircraft, JetBlue will obviously retain its competitive advantage and will be better positioned compared to the giants in airline industry. Works Cited About JetBlue Airway. 25 May 2009 < web >. Ben-Yosef, E.
The evolution of the US airline industry. Springer, 2005. Does JetBlue Have the Right Strategy? 25 May 2009 < web >. Pilot-Fatigue Test Lands JetBlue In Hot Water. 21 October 2008. 25 May 2009 < web >. Pricing Strategy and JetBlue. 25 May 2009 < web >.
Street Smarts: Learning From JetBlue. 25 May 2009 < web >.
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Research essay sample on Running Head Recommendations For Jetblue Airways
