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Company overview of airline industry

Airline Industry has been the fastest growing industry in America. It is highly beneficial economically and also for investment purpose. It also helps American tourism services to progress rapidly.

 These days, it is difficult to face challenges with the world economy and number of competitors. But a JetBlue airline is one of those companies who are always ready to face these challenges. JetBlue Airways Corporation is a low-cost airline based in United States having headquarters in Forest Hills of the New York City borough of Queens. Its main base is John F. Kennedy International Airport located in Queens. In 2001, JetBlue began a focus city operation at Long Beach Airport in Long Beach, California, and another at Boston’s Logan International Airport, in 2004. It also has focus city operations at Fort Lauderdale – Hollywood International Airport and Orlando International Airport. The airlines provide services in United States along with flights to the Caribbean, The Bahamas, Bermuda, Colombia, Costa Rica, Jamaica, and Mexico. In other words JetBlue serves 60 destinations in 20 states, Puerto Rico, and eleven countries in the Caribbean and Latin America.

 Regardless of the financial situation in the international and domestic level, JetBlue has a duty upon they need to keep up with satisfaction of their customers. Their goal is to conjoin customer values and fulfilling their expectations like generating reasonable return on shareholder's investments.

 It is difficult to sustain in the bunch of competitors and fastest growing technology and JetBlue industry actually works on that factor... With these situations it is vital and essential for the organization to commence strong successful and logical strategic planning actions which builds a strong foundation to the overall achievement of short and long term feasibility of JetBlue.     

            David Neeleman, Salt Lake City, Utah, USA, is the founder of JetBlue. It was established in 1998. He earlier worked for Morris Air and Southwest airlines. Considering those experiences, Neeleman knew that if he is to run JetBlue a successful airline what he needed was a strong vision. He planned what kind of services should be provided to customers and also introduced low cost air fares.

Dissection

Jet Blue Airways Corporation strives to establish a reputation as a business organization with integrity. The company’s leaders, employees specifically crew members demonstrate mutual respect, honesty and trust for an orderly and harmonious working relationship. The commitment to self-improvement that is imbued in the hearts of Jet Blue Airways’ employees is the road to dedicated service and success in the airline industry. Basically, the company values fun during and after flights such that creating a friendly environment is a common gesture of its crewmembers. Finally, it is the passion of the company’s employees to deliver first class and superior performance at all times.

JetBlue understands that offering the best customer experience means taking care of the people who make that happen ­ the customer care agents who represent the face of the company and its brand. It wanted to accommodate its employee’s preferences ­ whether that means working only 20 hours a week or swapping shifts for a last-minute getaway ­ but also had to balance this constant dynamic change with its business and customer needs. By increasing employee satisfaction, JetBlue knew it would be able to significantly boost customer service, which in turn would drive revenues.

Jet Blue has successfully utilized IT as the functional strategy to streamline most of their tactical operations. While, other airlines have a legacy mainframe systems and every pilot has to fill several documents before getting the flight route, Jet Blue’s pilot owns a laptop and downloads flight route with a single click. Clearly Jet Blue is using Cost Advantage Strategy as the business level strategy and has aligned its IT Strategy to create’ paperless’ operations. By branding themselves in subtle ways (unlimited satellite TV, leather seats, blue muffins etc.), Jet Blue has also gone out of its way to differentiate itself.

The fares charged by JetBlue for a round trip averaged between $98 to $498, which was more than 50 per cent less than those charged by the majors in the industry (For instance, a round trip from New York to Florida cost about $ 500 on the major airlines; JetBlue charged about $ 140 for the same trip with a seven day advance purchase). To support its decision to become a cost leader, JetBlue adopted a number of innovative measures on its flights. JetBlue decided not to serve meals on its flights, no matter what the distance or duration. Neeleman identified food as an area in which major cost cutting was possible. JetBlue succeeded where a number of other airlines failed. The primary reason for this success was that the airline tried to be different. It built its success on low cost and high standards, which attracted and kept passengers, and at the same time helped the airline remain solvent in times when the majors were crumbling to dust.

The low-cost operations themselves are interrelated to other activities such as technology development, better human resource management etc. Therefore, JetBlue should be able to develop an interlocking system of mutually reinforcing competencies that would make it simultaneously valuable, rare, inimitable and non-substitutable, thereby providing a competitive advantage.

Ratios

Current ratio 0.88 Formula: Current Assets divided by current liabilities

$1,100/$1,256 = 0.88

Your current ratio helps you determine if you have enough working capital to meet your short term financial obligations. A general rule of thumb is to have a current ratio of 2.0. Although this will vary by business and industry, a number above two may indicate a poor use of capital. A current ratio under two may indicate an inability to pay current financial obligations with a measure of safety.

Quick ratio 0.88 Formula: Current assets minus inventory divided by liabilities

($1,100-$0)/$1,256 = 0.88

Also known as the 'Acid Test', your Quick Ratio helps gauge your immediate ability to pay your financial obligations. Quick Ratios below 0.50 indicate a risk of running out of working capital and a risk of not meeting your current obligations. While industries and businesses vary widely, 0.50 to 1.0 are generally considered acceptable Quick Ratios.

Return on assets 8.56% Formula: Net income before taxes/Total assets

$476/$5,558 = 8.56%

This ratio helps show how assets are being used to generate profits. One of the most common financial measures, it can be an effective tool to compare the profitability of two companies. If your return on assets is lower than a competitor, it may be an indication that they have found a more efficient means to operate through financing, technology, quality control or inventory management.

Recommendations :

JetBlue opened its doors for operations in 2000 as the highest funded startup airline in US aviation history, and when they went public in 2002 they sold more shares than ever expected and by the end of the first day of trading they had gone up $20. JetBlue was founded on the core competencies of keeping costs low and turning planes around quickly, and they saw a rapid growth as the technology boom swept the United States. But as with many large corporations during this time period, faced with the waning economy and higher fuel costs, JetBlue suffered major losses in 2005, 2006, and 2008, to the tune of $97 million. Losses like this can be detrimental, therefore JetBlue was forced to sell some of their aircrafts and increase the amount of aircrafts that they leased, but these are only temporary fixes, in order to fix this problem JetBlue must isolate the factors affecting it.

The first major problem is that JetBlue has grown too fast; therefore they now lack the infrastructure to handle major traffic or problems. The issue is that JetBlue strictly fixed problems instead of stepping back, assessing the situation and the future, and then creating solutions to potential problems. Although JetBlue had pioneered the electronic ticketing system, they failed to look ahead and develop this ticketing system so it could be used through both their website and through kiosks in the airport. In-line with this, once a major problem caused unexpected delays, JetBlue was unable to handle the volume of calls, the only option available to reach JetBlue representatives, to reschedule these thousands of flights, which when compounded resulted in the cancellation of almost 40% of their flights during this time period, a much higher percentage than any other airline company. Therefore it is recommended that JetBlue developed a complete strategic plan for growth. This plan is to include the implementation of a completely...

I suggest they are ideas to enhance the earnings and profits of Jet Blue:

Nowadays the most key success factors in the airline industry are Safety, Caring, integrity, Fun and Passion. As these factors consider the main success factors in addition to other factors like the low expenses of Airline companies which alternately achieves considerable revenues for the Airline companies. But, the most effective ones are Caring, Safety, integrity, fun and passion. And I guess that JetBlue tried hard

The new management put two plans one is the main and too another to be the ancillary plan. The main plan should match with

The main strategy of JetBlue Company. The ancillary plan is to deal best with the recent conditions.

The company should try to do the possibility to save money for customers so that the competitor in the Airline industry. Should not make involve with the customers in additional expenses which may form a heavy load on them.

Trying as possible to make partnerships with the other companies to face any difficult challenges in the future. However the new management should search in way of making the best condition of its assists and to try to reevaluate to gain ancillary revenues.

JetBlue Company should try to improve its services in all its lines and try not to put ancillary customer expenses on its services. Try to attract more shareholders and increase its markets all over the world.

The JetBlue Offering more improved services to the business sector because this is very important sector which has much journeys on all the airline companies the JetBlue Paying attention to the capacity and cut costs and trying to have modern aircrafts to improve company services.

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