...Problems at Jet Blue XBIS/219 Jet Blue was the answer to the airline industries problems. It was a private company that provided an option to larger airlines that were very impersonal. During Jet Blue’s introduction to the world, a small managerial issue was left out, how does Jet Blue handle the same problems that the larger airlines have? Early success let Jet Blue believe that they were untouchable and immune to the problems of the larger airlines; however, not planning for problems, does not mean they won’t show up. Jet Blue did everything “right” to make sure that they were better than the larger airlines, but management only looked at how they could be better and did not focus on the standard problems that both themselves and the larger airlines face. Had the management looked forward toward possibilities of problems instead of trying to be better, they would have seen that all airlines face the same issues hen it comes to weather. Technology is in place to handle any problems that are related to weather and had Jet Blue management looked at every situation they may have faced and put technology in place to help handle it, then Jet Blue would not have had such a problem. Looking at any situation after the fact is always going to be easy to access the situation. I would have tried to find which situations would cause us the most problems, before they happened. I understand that offering amenities and smaller planes does make jet Blue better, but when air flights...
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...To: Professor Russ Ray From: Usman Mustafa Date: 9/05/2012 Re: Jet Blue Airways Case Attached Please find JetBlue airways case and their IPO prices Calculation table. The purpose of this memorandum is to discuss the initial public offering and the pricing of IPO of JetBlue Airways by using the selected multiples of comparable airlines. It also includes some advantages and disadvantages of a firm from going public. The multiples used to set IPO price were prices per share, earning per share, cash flow per share, total assets per share, and revenue per share of five comparable airlines. When looking to take a company public, investors first examine other comparable companies’ stock prices. The five Comparable airlines companies we chose are: Air Tran, Alaska Air, America West, Midwest, and Southwest Airline. The Prices for Jet Blue Airways are based on the selected multiples calculated with JetBlue’s financial statement, shares outstanding, and the two important multiples that are price per share and cash flow per share. 1. What are the advantages and disadvantages to a firm from going public? list at least three of each. Advantages: A. Going public will result in increased capital for the issuer. A public offering places a value on company's stock and insiders who retain stock may be able to sell their shares or use them as collateral. B. A company's debt-to-equity ratio improves after an initial public offering, which...
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...Strategic Management January 9, 2012 Discus the trends in the U.S. airline industry and how these trends might impact a company’s strategy. Change is the only thing that is constant. The airline industry has been through many changes in the past ten years. The September 11 event of 2001 sparked many changes. Security has been strictly enforced and fuel prices are at an all-time high. Many air-line companies have implemented baggage fees to help recover from the rising fuel prices and etc. There are some recent trends that have helped the air-line industry and also affected the air-line industry. With booming cellular data usage on the rise, many companies have turned to mobile apps. Smart phone applications are convenient for customers and the companies are taking advantage of the availability of these mobile devices. It is instant access and information in the palms of their hands. Airlines are increasing their reliance on technology to streamline passenger experience at check in and at the gate. Despite unfounded security concerns, paperless boarding passes have been adopted by some airlines and are being tested by others. A bar code is sent to the phone and then scanned by a barcode reader at security and during boarding. The TSA actually prefers the electronic bar codes, because they are much harder to counterfeit than printable boarding passes. One of the most recent trends that will impact the air-line industry is the European emissions regulations. Everyone...
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...Preguntas: 1. Realice un análisis del ambiente general para Jet Blue y para la industria de la aviación comercial. JetBlue es una aerolínea de vuelos a bajo costo en los Estados Unidos después de una combinación muy interesante de "bajo costo y la diferenciación" como su estrategia. Desde su creación en 1998, la aerolínea creció hasta convertirse en uno de los jugadores más grandes en el sector del transporte aéreo. El núcleo de la estrategia a bajo costo de JetBlue fue logrado a través de una fuerza de trabajo más pequeña y más productivos, los procesos automatizados; un mejor uso de la tecnología, el uso de nuevos modelos de aviones individuales que reducen los costos de mantenimiento. En el entorno general de la industria de aerolíneas, la discusión puede hacer frente a los factores políticos / legales, tecnológicos, económicos y de otro tipo. En cuanto a factores legales, la desregulación de la industria aérea en 1978 ofreció la oportunidad a varios competidores para entrar en el mercado. Permitió que surgieran nuevos segmentos de mercado como el de los servicios de punto a punto a bajo costo. Por lo tanto, cambió el panorama de la industria. La aparición de la tecnología(Internet) y otros avances tecnológicos han tenido un impacto en la forma en que las compañías aéreas llevan a cabo sus negocios. Por ejemplo, el Internet redujo la dependencia a agencias de ventas. La mayoría de las aerolíneas venden sus boletos a través de su pagina de internet. El servicio al cliente...
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...mergers, and elimination of meals are cost-cutting initiatives which drive trends at it relates to airline passengers. The airline industry, among other commerce industries has shown pockets of recovery after some painful years. According to ATA, the industry trade organization for major U.S airlines, this year there were eight months on consecutive revenue growth. Passenger travel skyrocketing to 17 percent in comparison to last year. (Thompson, Strickland, & Gamble, 2010, p. 62). These trends severely impact a company’s strategic vision and must be considered when implementing business objectives with the end goal of strengthening the business. Moving toward success requires in-depth analysis of industry trends. Discuss Jet Blue’s strategic intent. As America’s first and only airline to develop its own Customer Bill of Rights, JetBlue...
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...The rational for introducing a performance scorecard falls within two extremes (1). At one end, some firms may see scorecards as simply a “framework for grouping existing measures into categories, and displaying the measures graphically (1)” which permits senior management to track items of interest and gauge operational performances. On the other end, a scorecard can be used as a “robust organization-wide strategic planning, management and communications system” which among other things “align the work people do with organization vision and strategy (1)”. In the case of Citibank, although the rational for the scorecard may lean towards the strategic planning end, the manner in which it was developed and the manner in which it is ultimately being used currently, as a bonus determinant, falls much more in the end of gauging operational performance. In order to ensure that the scorecard is also useful to Citibank as a strategic planning tool, it is important that the senior managers not only use the results to improve their management techniques but also to identify areas of weakness of the organization. Citibank’s approach in California was geared towards providing “relationship banking coupled with a high level of customer service (2)”. They recognized that there was a strong correlation between customer satisfaction and the profitability for the bank due to the fact that the customer’s expectations and demand for high quality services increased simultaneously with their...
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...S. airline industry and how these trends might impact a company’s strategy. The airline industry exists in a competitive market. In recent years there have been more lows than highs due to the economy, oil prices, post 9/11, and mergers. The terrorist attacks on September 11, 2001 led to a decrease in passenger traffic, bankruptcy, and lay-offs, which resulted in a major decrease in production, and a rise in labor costs. Prior to September 11, many airlines were already in bad shape, and were in the process of restructuring. Layoffs loomed on the horizon and on September 15, Continental announced it would cut 12,000 jobs. United and American followed with 20,000, Northwest 10,000, U.S. Airway, 11,000, and Delta 13,000. (Ward, 2002) Jet Blue and Southwest airlines were the only airlines that refused to cut jobs. “Before 9/11, the airline industry as a whole earned a profit five straight years from 1996 to 2000.” (Ackman, 2004) Things are starting to look up for the industry with airlines reporting their biggest earnings in a decade. (Martin, 2011) In 2008, crude oil prices rose to a record $140.00 dollars per barrel. (Thompson, Strickland, & Gamble page C-68) This caused many airlines to offset higher fuel costs by charging consumers additional fees. These fees included fuel surcharges, charging for first checked bag, and charging for pillows, blankets, and headsets. Airlines also cut costs by lowering wages, grounding aircraft, and doing away with meals during inflight...
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...JET BLUE XBIX/219 Problems at JetBlue David Neeleman CEO was the founder and creator of JetBlue’s Airlines. His philosophy was to bring back humanity to the airline industry with a combination of innovation and technology. CEO Neeleman felt that customers were supposed to have the accessibility to high quality airline service at affordable prices. It has been said that his vision was Great in theory, but not very realistic. While for some time prices were able to remain affordable, but the quality of service at JetBlue failed tremendously when an ice storm hit the eastern cost on Valentine’s Day in 2007. All of the other airline competitors had cancelled flights where JetBlue thought that we would be able to fulfill all of their fight, but once they didn’t realize they would need to cancel flights until the weather got worse which in the end cause for thousands of stranded passengers in terminals and hundreds sitting around for hours on airplanes sitting as long as 10 + hours on the tarmack. What Jet Blue needed to was take an intense look at how the company managed its IT to help ensure that such severe incidents such as this doesn’t happen again. When David Neeleman was interviewed by the New York Times, he stated he had pilots emailing him stating “I am available, what do I do?” To insure that things such as this don’t happen again Jet Blue needs to upgrade their online, customer service for center reservation system to handle its...
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...Abstract We will be discussing some of the thoughts and issues that can be pin pointed to the service shut down of JetBlue Airlines. We will also look at a few different scenarios as to what could have been done differently to avoid such a catastrophe. We will look at things such as management's position in the technology department’s lack of planning. Jet Blue My thoughts as to what contributed to the shutdown of JetBlue were lack of management planning and technology shortfalls. JetBlue had a lot of things going for them as far as being a fairly new airline with a massive volume of passengers. They were very affordable and got you where you needed to go in a timely fashion. One of the issues that affect the jet blue was their lack of Internet options that they offered. The Internet is a vital aspect of any airport they communicate with passengers to let them know about cancellations, delays, rules and regulations, what you can and cannot travel with or any other important information. I am not sure if JetBlue did not want to spend the additional money to have their system upgrade it to be used with the Internet so that passengers could reschedule their flight but this turned out to be a apprehensive will mistake. For the amount of passengers that traveled with them daily the phone lines should have been able to accommodate a lot more people representatives and customers. They also made a mistake when they came to not having a tracking system for cost luggage. I am not...
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...been very successful with similar airlines such as Southwest. Even though they were all top talent throughout the industry, all of the members were more interested in creating something new and fun. ii. This could potentially be a problem down the road because if they enjoy creating something new so much maybe they would leave Jet Blue to go start the next big startup airline. I believe they are equipped with the talent to run a successful airline but keeping the talent actively engaged and keeping them interested will be a problem after the airline gets up and running b. Has it developed norms that are appropriate for starting a successful airline and running it successfully over time, respectively? i. It developed the norms of starting a successful airline when they went out and raised $130 million for the start up and also instilled the 30 minute turnaround. On top of that they wanted to run an airline that had a morale that was both fun for crew members and for customers. ii. The norms will lead to being able to run the airline successfully over time. This is precisely what Southwest had done and I feel that Jet Blue was trying to mimic a lot of Southwest’s ways to create this airline. As we have discussed in class if you can keep employees happy typically the company is successful as well. c. What biases might the executive team be subject to, based on its composition and...
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...Article Review Airlines have become an important form of transportation since the prices of airlines have gone down. People are traveling more with JetBlue, Southwest, Air Tran (low-cost carriers) than US Airways, Continental, Delta (network airlines). As mentioned in Planning Airport Access in an Era of Low-Cost Airlines an article from Journal of the American Planning Association (JAPA) 2006 written by Richard de Neufville; air transportation industry is changing fundamentally. Richard de Neufville is a professor of engineering systems and environmental engineering at Massachusetts Institute of technology. He has consulted on airport related projects in many cites which led him to write this article. Neufville presented the elementary good business practice which is planning for airport access that focuses on the companies that have resources and avoid taking long term obligations for clients that have neither money now nor good future. Big airlines such as Delta and US airways are funding the construction of luxurious airports in major cities, but not taking into consideration the business they are losing to low-cost airlines. United States competitors (low cost airlines) accounted for only 8% of the market in 1995 and a decade later these competitors now control the future of air travel in the United States. Research shows that 50% of the U.S. revenue passenger-miles were flown on either the low cost airlines or on network airlines for the fare rate. The average cost...
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...The domestic airline industry is a difficult industry to compete and operate in; it is characterized by high capital requirements, high barriers to entry, low or no growth, rising costs, high competition, and strict government regulation. In addition to rising fuel costs, which happens to be a major issue, events such as the economic recession, swine flu outbreak, and 9/11 attacks have negatively effected or still continue to negatively effect domestic airline travel. To survive and reduce losses within the industry, some airlines still in business are merging to cut costs and adding baggage fees. However, low-cost carriers such as JetBlue and Southwest have emerged as winners and continue to achieve profits in a troubled industry. JetBlue has managed to stay competitive by offering points of differentiation in its service and aligning its low-cost strategy with its operations. JetBlue offers pre-assigned leather seats, free entertainment options such DIRECTV and SiriusXM radio, low fares, a better loyalty program, single class service, more nonstop flights, and a consumer friendly website. It maintains lower costs by operating two models of aircraft, employing non-unionized employees, and serving under-served markets. With its points of difference and ability to deliver high customer satisfaction, JetBlue has been able to differentiate itself from the competition. The airline is able to provide low fares and high quality service while also offering additional options at no...
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...Lost bags at baggage claim, delayed flights, crowded airports and worse overbooked flights; this is all part of the traveling experience, especially when it comes to airlines. No matter which airline it is they all tend to be the same. One airline is out to change that, through lower prices and even better, a focus on you the customer. That company is JetBlue led by its visionary Founder and CEO David Neeleman. Neeleman believes so strongly in delivering customer value to his passengers that he often rides flights to hear personal direct feedback from passengers as it is happening, and he also likes to be paged whenever a flight is delayed or something in the JetBlue business is not properly executed according to the JetBlue standards (Johnson, & Weinstein, 2004 pg 315 – 316). Neeleman has set forth three guiding principles that are known as the “Golden Rules” and govern the business of JetBlue and its employees. Those principles are: flawless executions at every customer contact point, making matters right with the customers if the execution is not flawless and treating employees well (Johnson, & Weinstein, 2004 pg 317). Neeleman who was formerly a founder of another airline and longtime leadership member of rival Southwest feels that combining efficiency, technology, and a focus on customer value will continue to drive customer loyalty around what has become one of the, if not the single, strongest brands in the Airline industry. Neeleman and JetBlue have set out with...
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...Question I 1. Types of information system used [4] In this study case, JetBlue uses the Transaction Processing system, which is a computerized system that performs and records the daily routine transactions necessary to conduct the business. 2. Business function of information system [8] JetBlue has the ability to provide a luxurious flying experience with leather seats, each equipped with personal TV screens, while at a budget price. Some airlines have to invest heavily in the quality of service that they offer, both on the ground and in the air. Ticket-less travel, new interactive entertainment systems, and more comfortable seating are just some of the product enhancements being introduced to attract and retain customers. JetBlue is now ahead of the game due to the initiative that it took and by using the information systems to automate key processes, such as ticket sales, and baggage handling. By using the Transaction Processing system, JetBlue was able to create “paperless processes”. Question II 1. Description of JetBlue’s business model [4] JetBlue airline is lauded for its lean operating structure. The company lived up to “paperless processing” by directing its customers to do most of their transaction online, and only dealing with employees when there is an issue. They offer low fares and point-to-point rather than a network service, and are focused on second-tier airports rather than going head to head against established hub. 2. Uses of information systems...
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...I. Executive Summary Founded in 1998, JetBlue’s goal was to bring humanity back to air travel. Originally started as a low-cost carrier, JetBlue still continues to compete in its existing market of point-to-point travel. With $130 million startup costs, industry’s best talents, and a brilliant CEO, JetBlue was able to have the first flight on February 11, 2000. In an attempt to cut costs even further, David Neeleman, CEO, supplied JetBlue with new aircraft which was purchased rather than rented. JetBlue tried to build its reputation by offering the best amenities. Some of the amenities offered leather seats and seat-back TVs. According to the 2007 JetBlue Annual Report, the firm continues to find innovative ways to enhance their services. For example, in 2007 they introduced complimentary in-flight e-mail and text messaging services. Also JetBlue offers live television, satellite radio, and other amenities since their first year of service. JetBlue’s core values include: SAFETY – of crewmembers and customers CARING – for crewmembers and customers INTEGRITY – demonstrate honesty, trust, and mutual respect FUN – sense of humor and ability to laugh at self PASSION – crave and deliver superior performance JetBlue exists to provide superior service in every aspect of our customer’s air travel experience. According to our research, we have specified that the main issue for JetBlue in the aviation industry is competition. Since every firm in the...
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