Jetblue

Jetblue

Introduction

David Neeleman founded the company in February 1999 under the name “NewAir”. In September of that year, the airline has been granted 75 routes in the International Airport John F. Kennedy, and the formal authorization of the United States was received in February 2000, starting operations on February 11.

JetBlue's founders had originally intended to call “taxi” and therefore wear yellow to associate the new airline to the city of New York. The idea was rejected for several reasons: the negative connotation of the taxis in New York, the ambiguity of the word taxi with regard to air traffic control, and threats from investor JP Morgan to withdraw $20 million of the $ 128 million total funding Initial airline, unless you change the name. The airline's founders also saw use as your base of operations to the city of Trenton, New Jersey, but this idea did not prosper. On March 26th of 2009 announced trip to San Jose the capital of Costa Rica. In mid-2009, JetBlue began daily flights on the route linking the cities of Orlando (Florida, USA) and Bogota (Colombia) (Datamonitor, 2010).

Industry Global Outlook

The International Airlines industry is expected to face increased competition over the next five years. Companies that have survived to see the recession subside have experienced a recovery in demand from passengers, but prices have not recovered as quickly. Inbound tourists will continue to provide the largest source of revenue for the industry, with world GDP growth having picked up in 2010 and 2011. Therefore, travel to the United States is expected to rise (Salmela & Spil, 2002).

Oil prices will continue to increase over the five years to 2016, creating some upward pressure on airfares and threatening industry profitability. Nevertheless, competition from many global airlines will put downward pressure on airfare, benefiting the customer, while reducing revenue opportunities for airlines. Profit will also be challenged by the rising costs of capping and trading greenhouse gas emissions. In 2012, industry revenue is expected to increase 4.6% to £54.7 billion (Lee & Bai, 2003).

Industry Analysis

Technology and the Environment

Over the five years to 2016, the introduction of new technology into the industry will boost profit and revenue. The Airbus A380 has commenced services and will allow airlines to carry more passengers on routes with high demand. The Boeing 787 Dreamliner will increase aircraft fuel efficiency and provide a greater number of nonstop routes that may have previously required a refueling stop. In turn, increased fuel efficiency will drive future technology developments, particularly given the high price and volatility of oil prices. Fuel costs account for about 40.0% of revenue and have the ability to make or break an airline in any given year. Advances will occur in air-traffic-control technology as well, with digital satellite-based technology gaining momentum because of pressure mounting on the Federal Aviation Administration to update the existing infrastructure. The US Air Transport Association has made a concerted effort to advocate for these reforms (Robson, 2005, 45-50) (Cadotte & Bruce, 2003).

Internal Competition

Competition between airlines has resulted in ...