Synopsis:

JetBlue is a low-cost domestic airline in the United States following a rather interesting combination of ‘low-cost and differentiation’ as its strategy. From its inception in 1998, the airline grew to become the 11th largest player in the airline industry in a short span of 6 years. It had been the only other airline apart from Southwest airlines, to have been profitable during the aftermath of the September 11, 2001 attacks on World Trade Center, and at a time when the entire airline industry was experiencing losses.

The core of JetBlue’s strategy was low-cost achieved through a smaller and more productive workforce; automated processes; better use of technology; use of brand new single model planes that reduced maintenance costs and training costs at the same time. However, moving into the growth phase, JetBlue was contemplating the introduction of a new model of planes, i.e., EMBRAER, that are smaller than the A320s that they were using. These planes were to be utilized for penetrating mid-size cities and also during off-peak times on existing routes. This had potential implications for its low-cost strategy. Also, the success of JetBlue invited the attention of its competitors. New discount carriers such as ‘Song’ were being launched that closely imitated JetBlue’s differentiated product offering. This posed questions to the viability of both the bases of JetBlue’s competitive advantage. Added to this, was the prospect that JetBlue would come head-to-head with other ‘major airlines’ and ‘discount carriers’ in its quest for expansion into different geographic