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...JetBlue Airways Bus630 Managerial Accounting Lawanda M. Bishop Professor Gregory Goussak 10/12/2012 1. JetBlue’s strategy for success in the marketplace is to stimulate demand with lower fares, emphasize low operating costs that stimulate market demand while operating efficiencies and costs. It also strives to benefit from economies of scale from its future expansion. By offering low rates, product leadership and customer value, their demand will increase, offering travelers with a low-cost alternative. JetBlue have one of the largest load factors in the United States. By relying on customer intimacy, operational excellence, and product leadership customer value proposition, allows JetBlue to become successful in their strategies. The four key elements to JetBlue’s strategy is how they stimulate the demand with lower fares, how they emphasize low operation costs, how they offer point to point flights to consumers who are under served or live in over price large markets. Due to its strategies, JetBlue has been able to grow largely as a company and become one of the leading airlines which focuses on customer satisfaction at a low operating cost. (Zuckerman, 2008) 2. Many organizations face day to day threats that are beyond their control and these risks can threaten any company’s ability to satisfy their stockholders . JetBlue operates in an extremely competitive industry and some of the threats JetBlue may...
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...JetBlue Airways: Growing Pains A case report prepared for MG 495 Business Policy Spring II 2014 Paige Pence Jamie Neidholdt Tyler Slayton Ja-ir Gooden Jacob Miller May 4, 2014 JETBLUE AIRWAYS: GROWING PAINS I. Introduction A. Executive Summary 1. Summary statement of the problem: JetBlue Airways was a fairly new airline that was going up against such airlines like Southwest, AirTran, and Delta. Started in 1999, JetBlue Airway was able to turn profits fairly quickly; in 2001 the company had profits of $38.5 million (George & Regani, 2008, 20-4). From there on it seemed that the company would continue to be profitable especially with expansions in the works; moving into areas that competitors ignored, ordering more planes, expanding to the west coast, and building a new terminal at JFK. However, due to various external and internal factors the company once again posted losses in 2005 and 2006. 2. Summary statement of the recommended solution: The problem is that JetBlue is expanding too fast and too soon to keep up. The company needs to slow their growth so that the company can keep up with the pace. Furthermore, the company needs to continue to do what the company does best; superior customer service, low fares, short-to-medium routes instead of offering what the competitors are doing. This is lessening JetBlue’s differentiation from other companies creating just another option for customers. Finally, JetBlue needs to continue to make cuts...
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...JetBlue Airways Air travel is a large and expanding industry. It facilitates economic growth, world trade, international investment, tourism, and is critical to globalization. Over the past ten years, air travel has grown by approximately seven percent per year. However, the airline industry suffered its largest downturn between 2008 and 2009, due to the economic downturn. Airlines carried 767,627,651 passengers in 2009, down from 809,447,811 passengers in 2008. Airlines have been forced to accommodate the economic recession by cutting flights, rescheduling existing routes, and looking for new revenue streams. As the economic recession revives itself, the demand for flights has begun to increase with 787,182,312 passengers flying in 2010; a significant upturn from the previous couple of years. Business travel has grown as companies increase their international presence in terms of their investments, supply and production chains and their customers. The rapid growth of global trade markets in goods and services and international investment have all contributed to growth in business travel. The domestic travel industry in the United States is typically a low cost, low fare environment. Most of the major airlines have undergone cost restructuring. Some airlines have sought the protection of Chapter 11 bankruptcy to restructure and reduce costs and then emerged as strong low-cost competitors. The majority have entered into cross-border alliances to improve profitability...
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...#3 Jet Blue Airways A Cadre of New Managers Takes Control Strategic Management BUS 599 051*VA016*1122*001 Dr. Russell Handlon January 15, 2012 Case 3: Jet Blue Airways Question 1 Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy. The trends in the United States airline industry is high prices on gas, oil, maintenance, risks of terrorism, and less travelers flying rather its for personal or business. When these things happen it costs the airlines to make some changing by charging customers for checking their luggage, food, pillows, blankets, and leisure entertainment in order to meet the high spending cost of the airline business. Some airlines had to change their flight schedule to meet the needs of the customers during high peak time in popular vacation spots or other locations customers like to fly too by charges them lower fares. Some airlines have is shortage of pilots because the school of flying does not have enough instructors to train new pilots (Thompson, Strickland, & Gamble, 2010). Question 2 Discuss Jet Blue’s strategic intent. The founder of JetBlue Airway is David Neeleman, he wants to “bring humanity back to air travel.” Mr. Neeleman announced JetBlue’s “Passenger Bill of Right” is a policy for United States airline companies regarding vouchers, refunds in case of delays, cancellations, and other inconveniences (Thompson, Strickland, & Gamble, 2010). JetBlue Airways exists to provide...
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.../Dª. Juan Dario Hernandez, 2015-02-10 JODY HOFFER GITTEL JetBlue Airways: Empezando desde el principio ¿Dónde ha escuchado usted esto antes? Estamos empezando una aerolínea de bajo coste. Ofreceremos billetes con tarifas bajas e iremos a las grandes ciudades.1 - Analista financiero Si usted quiere ser un millonario invierta mil millones de dólares y lance una nueva aerolínea.2 - Richard Branson, Fundador, Virgin Atlantic Airways No pierda de vista JetBlue. Podría demostrar ser una operación exitosa.3 - Herb Seller, Co-founder, CEO, Southwest Airlines Ann Rhoades levantó su mirada de la pila de papeles que tenía frente a ella y miró detenidamente por la ventana. Contempló con orgullo cómo un avión de JetBlue despegaba del aeropuerto Kennedy. Por la hora de salida, sabía que éste iba a Buffalo. Hizo una pausa para reflexionar lo que sin duda había sido un año excitante para la empresa de nueva creación. El servicio de JetBlue había crecido de 9 salidas diarias, al lanzamiento en febrero de 2000 a más de 50 por día en los últimos 11 meses. La flota había crecido de 2 aviones a 10 con la llegada de un nuevo Airbus A320 cada cinco semanas (ver Anexo 1 para el crecimiento durante el primer año). El plan comercial requirió agregar 10 aviones nuevos cada año hasta finales de 2003, llevando la flota a 40. Rhoades, vicepresidente ejecutiva de RRHH, había estado extremadamente ocupada – haciendo crecer el equipo de JetBlue de 10 personas iniciales a casi 1000. Ella sabía que continuaría...
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...JetBlue Airways: Managing Growth Chathura Wathuge 103739845 75-498-02 Problem Airline industry is a highly unpredictable industry with much complexity. The main problem JetBlue is facing is how to manage its growth with the unpredictable nature of the industry and high expenses in the industry. Another issue is how to handle the complications that arise from the introduction of the new E190 planes. The CEO, David Barger must decide on the best way to slow down the capacity growth of the airlines, so that the company won't grow itself to death. External Environment Industry The airline industry is a part of the overall transportation industry and it encompasses of low-cost carriers (LCC) and legacy carriers. JetBlue mainly compete in the category of low-cost carriers and it conducts both domestic and regional operations. It is a very competitive industry to enter or exit because of the expensive nature of the industry. A firm that tries to enter the industry will have to make substantial capital investments in order to compete in the industry Key Success Factors * Cost leadership - Cost leadership in this industry is vital. By obtaining cost leadership, an airline is able to offer its customers lower rates. * Customer service - Offering an excellent customer service is crucial in the airline industry. This also includes trying to accommodate all customer needs and wants, in relation to his/her travel requirements. * Employee relations - A firm's human...
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...To get a proper range for JetBlue‟s offering price we will look at market multiples for the Low-Cost Airline Industry and come up with a number that makes sense, once we compare those other financials to JetBlue‟s. Below is a chart describing some of JetBlue‟s competitors and the multiples that they carried at the end of 2001. We’ve calculated what their price should be based upon these multiples and can now apply the same technique for JetBlue. Based upon the information above we can figure out what the average PE Multiple is for the five companies similar to JetBlue, which comes out to be 24.53. According to Exhibit 3 in the case write-up, JetBlue has a Diluted EPS of $1.14. Multiplying those two together would give us a Price/Share of $27.97. If we were to go off of the Pro Forma EPS ($1.30/share) the equity price would be even higher at $31.89. This is obviously a very large range, but sometimes it is best not to use static prices based upon just the current year. The case also gives forward looking ratios for these companies as well. As shown below we have gone ahead and calculated what they look like moving forward. Thus, much like before using the average EBIT multiple and PE multiple for these five companies, we can extrapolate figures for JetBlue as well and come up with an equity price of $37.71 and $13.67 respectively. Taking all five of these figures into consideration and averaging them out gives us a price of $27.81. Given th...
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...Thông tin chung 2 2. Tổng quan 2 3. Đội tàu bay của JetBlue Airways 3 II. LỊCH SỬ HÌNH THÀNH VÀ QUÁ TRÌNH PHÁT TRIỂN 4 1. Lịch sử hình thành 4 2. Quá trình phát triển 6 3. Thành tựu đạt được 9 a. Quy mô kinh doanh 9 b. Thị phần và tốc độ tăng trưởng 9 c. Đội ngũ nhân viên 10 d. Các giải thưởng 11 III. VIỄN CẢNH, SỨ MỆNH 13 1. Viễn cảnh 13 a. Tư tưởng cốt lõi 13 b. Hình dung tương lai 15 2. Sứ mệnh 16 a. Định nghĩa kinh doanh 16 b. Giá trị 16 c. Mục tiêu 18 I. GIỚI THIỆU CÔNG TY 1. Thông tin chung * Tên công ty : JetBlue Airways Corporation. * Lĩnh vực kinh doanh: Vận tải hàng không. * Người điều hành: * Chủ tịch và Giám đốc điều hành độc lập: David Barger * Giám đốc điều hành: Joel Peterson * Người sáng lập: David Neeleman. * Năm thành lập: 1999. * Trụ sở chính: 118-29 Forest Hills Buiding – Queens – New York – USA 11375 * Mã chứng khoán: JBLU * Website : www.jetblue.com 2. Tổng quan JetBlue Airways Corporation là một hãng hàng không giá rẻ hàng đầu của Mỹ, đặt địa điểm bay chính thức tại sân bay Quốc tế Jonh F.Kennedy. Hãng được thành lập vào năm 1999 bởi ông David Neeleman tại New York – Mỹ. Hiện nay, JetBlue đang đứng vị trí thứ 6 trong tổng thị phần hàng không nội địa của Mỹ với 4,8% thị phần và được công nhận là hãng hàng không nội địa tốt nhất tại khu vực Bắc Mỹ. JetBlue chuyên cung cấp các chuyến bay trực tiếp hoạt động chủ...
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...JETBLUE AIRWAYS 2 JetBlue Airways What is JetBlue’s strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value proposition? What evidence supports your conclusion? The strategy for JetBlue’s success in the marketplace is described in the company’s 10-K/A filling. Their goal is to ³establish JetBlue as a leading low-fare, low-cost passenger airline by offering customer’s high-quality customer service and a differentiated product.´ (JetBlue,2005) By doing this, they are trying to ³stimulate market demand while maintaining a continuous focus on cost-containment and operation efficiencies.´ (JetBlue, 2005) Based on the filing, JetBlue relies on product leadership customer value proposition. The four key elements to their strategy are: Stimulate demand with low fares Emphasize low operation costs Offer point to point flights to underserved and/or overpriced large markets Differentiate our product and service (JetBlue, 2005) Due to the strategies, JetBlue has been able to grow largely as a company and become one of the leading airlines which focus on customer satisfaction at a low operating cost. JETBLUE AIRWAYS 3 What business risks does JetBlue face that may threaten the company’s ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? (Hint: Focus on pages 17-23 of the 10-K/A.) As in...
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...Analysis of JetBlue Airways JetBlue Airways is a young airline that is very successful and is also growing rapidly. In this analysis, the human resource strategies, policies, and practices will be reviewed and analyzed with suggestions as to how human resources practices and equal opportunity employment law relates to JetBlue and how these practices and laws can be beneficial to all of the organization's human resources areas but also how they can be beneficial to JetBlue as an organization with a bright future. Hiring Practices JetBlue already has impressive hiring practices because they focus on finding the right people with great attitudes. However, there are three national equal employment laws that have been identified that will impact JetBlue's hiring practices. The first law identified is the Age Discrimination Act of 1967 which prohibits "employers from discriminating against individuals who were 40 to 65 years old" (Mondy, 2012). In making sure not to discount hiring people over the age of 40 whether they have previous airline experience or not can benefit JetBlue as an organization because many workers that are over the age of 40 have a great work ethic along with great customer service skills as noted by CVS executive, Stephen Wing (Mondy, 2012). This also creates diversity in the workplace which only enhances the organization. The second law identified is Title VII of the Civil Rights Act of 1964 that was amended in 1972. Title VII prohibits an employer...
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...Case Study 1: JetBlue Airways IPO Valuation 08 Fall AFF5300 Case Studies in Finance- March 2013 Executive summary This report examines the decision of JetBlue management to price the initial public offering (IPO) of JetBlue Stock on the April 2002, a few months after the terrorist attack in September, 2001. First, the paper provided a brief introduction to JetBlue Airways and its industry. This paper revealed JetBlue’s innovative strategy and the associated strong financial performance over its initial two year. It followed by, a discussion on the advantages and disadvantages of going public (IPO) for JetBlue. The paper later provided an insight analysis of the company comparison multiples valuations (EBIT and PE multiples valuations) and the discounted cash flows to value JetBlue’s share price. It reached a conclusion that JetBlue Airways IPO should be in a range of $25 to $26 per share. By: Tam Huynh (24675512) Contents 1.0 Introduction 2 2.0 The Airline Industry and JetBlue 2 3.0 JetBlue’s Going Public 2 3.1 The Advantages of going public 3 3.2 The Disadvantage 3 4.0 JetBlue’s Valuation 3 4.1 The comparable Companies Analysis 3 4.1.1 P/E Multiple 3 4.1.2 EBIT Multiple 4 4.2 Discounted Cash Flow Analysis 5 4.2.1 Weighted Average Cost of Capital 5 4.2.2 Discounted Cash Flow Share Price Valuation 5 5.0 Recommendations and Conclusions 5 References 7 1.0 Introduction The terrorist attacks of September 2011 had a severe...
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...leasing the aircraft verses buying them out right to save on cost. Right now, the level of mergers with airlines have increased due to the operating cost getting so high and to decrease the competition. With merging airlines together this means that many of the cost will have to be shared such as the cost of tickers and baggage fees. Customers can see the difference when they take a flight. There is a cost for everything from headphone to drinks. Airlines are cutting back on meals. Most flights only offer drinks and snacks such as cookies or crackers. “The inculcation of this set of core values within the jetBlue organization is best summarized as delivery of “the jetBlue experience”. The depth of delivery of the jetBlue experience is best measured by the level of customer satisfaction. The J.D. Powers and Associates 2007 North American Airline Satisfaction Study ranks jetBlue the highest airline in customer satisfaction, both among low-cost and traditional carriers. The study ranks, in order of importance: cost and fees; flight crew; in-flight services; aircraft; boarding/deplaning/baggage; and check-in”. Westlake (2007). Discuss Jet Blue's strategic intent prior to 2008. The strategic intent prior to 2008 was to increases the revenue and profits and to make the passengers feel comfortable and important. “Given the stress that came with the 9/11 attacks, Jet Blue’s founder David Nelleman knew that its patrons would be...
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...its clients. Aside from that, Jet Blue Airways Corporation also reaches out to the public by being active into community service. Essentially, Jet Blue is committed to enriching the lives of children and supporting the communities they serve through their core values of caring, fun and passion. In connection, one of the best community services offered by the company is giving books to children of not wealthy parents in one of the cities in the United States. The unwritten mission statement of Jet Blue Airways Corporation is reflected in its core values and principles created and set by the company. In lieu of mission statement, Jet Blue Airways Corporation is presenting a strategic set of core values. These core values include safety, caring attitude, integrity, fun and passion. The company commits to safety as the first priority in all business operations. In order to do so, the company adheres to rules and regulations implemented by regulatory agencies whenever is needed. Maintaining high standards in a consistent manner is the primary goal of the company when it comes to safety matters. Thus, the company never compromises safety of its crewmembers and customers during and after flights. The company also takes social responsibility for the benefit of the people in general and strives to be a role model in the business community. The company cares for its employees and the customers in one-way or another. In addition, Jet Blue Airways Corporation...
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...------------------------------------------------- MARKETING ------------------------------------------------- CASE ANALYSIS JETBLUE * SYNOPSIS This case illustrates the success that JetBlue Airline has achieved since founded in 1999, though it had trouble in 2007 during Valentine´s day and a few more, it managed to overcome the issue and become one of the most known companies for excellent customer service. The author mentions that JetBlue truly cares about the customer because JetBlue doesn´t sell just airplane tickets and its customers neither seek for airplanes tickets when buying at JetBlue. They buy the whole experience in which each detail included in the service made the customer feel special with things such as ´´legroom seats´´, plenty of food and drinks and a zone for entertainment which seeks to satisfy the client while they wait for their flight even though if its delayed among other tangible elements that the company offers. All the actions of JetBlue are encouraged to reflect their slogan “Happy Jetting”. Furthermore, another topic highlight in the case is the culture that the company professes, the way they treat each other, “the human side of the equation”. An example of this is the opportunity to workers to do their job from home. Employees are so satisfied with the company that they care for it, which reflects in how they do their job and their attitude towards clients. As the CEO communicated, “everything can be copied, except the culture”. All this combination...
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