MANAGING STRATEGY

Managing Strategy: JetBlue Managing Strategy

Managing Strategy: JetBlue Managing Strategy

Introduction

Jet Blue truly is an amazing airline, which treats all of it's customers as equals, regardless of their status. The flights are probably the most comfortable of all of the airlines with leather seats, more leg room than most passengers are accustomed to on other airlines, great in-flight entertainment, and with people who are the most helpful in the industry(JetBlue Airways, 2004). Jet Blue is one of the few airlines that offer free Direct TV as well as XM satellite radio providing passengers with 100 channels of largely commercial free programming, from all sorts of different styles of music, and talk. From the company's inception, JetBlue's founders were aware that its seemingly contradictory goals-the internal mantra is "high touch, low cost"-were achievable only through aggressive and strategic use of technology. They are aggressive where it makes sense-that's why they have DirecTV in every seat, and why they're ahead of the pack on Web services. At the same time, they standardize where it makes sense, from their PCs right up to the airplanes. As JetBlue continues to conquer the odds, their repeated choice of Airbus aircraft proves that efficiency on all levels, including equipment and operations, is a must for an airline's continuing health. JetBlue demonstrates that with the right people, the right product and the right cost structure, airlines can grow, even in this current, challenging, environment." (Peterson 2004, 201)

Discussion

JetBlue Airways (JetBlue) is a low-cost passenger airline that provides customer service primarily on point-to-point routes. The company primarily operates in the US. It is headquartered in Forest Hills, New York and employs 9,895 people. The company recorded revenues of $3,388 million during the financial year ended December 2008 (FY2008), an increase of 19.2% over 2007. The increase in revenues was due to an increase in passenger revenues which was attributable to a 14% increase in yield due to higher average fare. The operating profit of the company was $109 million during FY2008, a decrease of 35.5% compared to 2007. The net loss was $76 million in FY2008, when compared to a net profit of $18 million in FY2007.

Revenue Analysis

JetBlue Airways (JetBlue) The company recorded revenues of $3,388 million during the financial year ended December 2008 (FY2008), an increase of 19.2% over 2007.

JetBlue generates revenues through two business divisions: passenger (90.2% of the total revenues during FY2008) and other (9.8%).

Revenues by Division

During FY2008, the passenger division recorded revenues of $3,056 million, an increase of 15.9% over FY2007.

The other division recorded revenues of $332 million in FY2008, an increase of 61.2% over FY2007.

SWOT Analysis of JetBlue

Strengths

High aircraft utilization

Well-positioned in New York metropolitan area

Marketing and distribution initiatives

Weaknesses

High indebtedness and fixed obligations

Sluggish profits and margins

Opportunities

Recovery of US airline industry

Low-cost airlines gain altitude in downturn

Threats

Intense competition and price discounting

Consolidation in the airline industry Government regulations.

Industry environment of JetBlue.

In the general environment of domestic airline industry, the discussion can address the political/legal, technological, economic and other ...