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JetBlue Airways
Prepared for
• Starting the business with a lot of money the only carrier with over $100 million startup capital
• Flying new planes that are more reliable and certainly more efficient. Seats are covered in
leather with individual monitors for viewing programs from DirecTV.
• Hiring the best people by screening the employees rigorously, offering exceptional training
• Focusing on service by listening to customers and ensuring their flight is joyful and friendly.
Much of JetBlue’s business model of low faces came right out of Southwest Airlines’ playbook.
This is no surprise since JetBlue founder, David Neeleman, was fired by Southwest in 1999. In
2006, JetBlue published its first corporate sustainability report, the “1st Annual Environmental
and Social Report 2006,”In 2007, JetBlue introduced the JetBlue Airways Customer Bill of
Rights, which provides compensation to customers who experience avoidable inconveniences
(and some unavoidable circumstances).In 2008, JetBlue introduced refundable fares and new
payment options for customers, and it also launched jetblue.com en español, a Spanish version of
their Web site,http://hola.jetblue.com/enes/. JetBlue was also able to maintain cost per available
seat mile, excluding fuel, of 5.94 cents, which is among the lowest reported by all other major
U.S. airlines. For the year ended December 31, 2008, their aircraft operated an average of 12.1
hours per day, which is the highest among all major U.S. airlines. For years, JetBlue and
Southwest avoided head-to-head competition, but in 2009 the companies began battling each
other in the same airports, such as New York, Baltimore, Washington, D.C., and most recently
Boston.
Vision
JetBlue’s vision is to be the best regional air carrier by providing low-fare, low-cost, enjoyable
and safe flight experiences to our passengers.
Mission
Jet Blue’s mission is to be the leading low-fare, low-cost passenger airline offering high quality
customer service to underserved markets and customers who are looking for the best value in
their flight. We have the newest most advanced planes that are reliable, safe, fuel efficient,
utilizing advanced technologies, and unique in multimedia entertainments. Our philosophy is to
give customers the best price value for their ticket and maintaining distinctive services. At
JetBlue we hire highly motivated employees and train them to reach a high level of competency
to provide better experiences to customers. We believe that our high-value, high quality service
philosophy will lead the way to becoming the number one in the industry.
Core Values
Inspiring humanity is not a platitude or mission that we take lightly. It’s a natural extension of
our founding principles. When our founders created our five core values – Safety, Caring,
Integrity, Passion and Fun, they understood that it would define everything we do at JetBlue. In
the 16 years since, those same values have kept us on track, and because of them our
crewmembers inspire humanity among our customers and stakeholders every day.
Safety –Safety comes first. it’s every crew member job to ensure safety for all.
Caring-Caring is how a small company gets big without losing its soul. The JetBlue
experience is about caring. It is delivered by crew members and we look after each other
so that we can care for our customers and communities.
Integrity-Integrity means doing the right thing – all the time. The only way to do business
is by communicating openly and honestly. This way, we earn trust from each other and
our customers
Corporate Governance:
Corporate governance is the system by which companies are directed and controlled. It involves
regulatory and market mechanisms, and the roles and relationships between a company’s
management, its board, its shareholders and other stakeholders, and the goals for which the
corporation is governed.
Board of Directors:
Robin Hayes, 49. Mr. Hayes became JetBlue's Chief Executive Officer, President and a member
of the Board of Directors in February 2015.
Assign a rating between 1 and 4 to each key external factor to indicate how effectively the firm’s
current strategies respond to the factor, where 4 = the response is superior, 3 = the response is
above average, 2 = the response is average, and 1 = the response is poor. Ratings are based on
effectiveness of the firm’s strategies. Ratings are thus company-based, whereas the weights in
Step 2 are industry-based. It is important to note that both threats and opportunities can receive a
1, 2, 3, or 4.
Regardless of the number of key opportunities and threats included in an EFE Matrix, the highest
possible total weighted score for an organization is 4.0 and the lowest possible total weighted
score is 1.0. The average total weighted score is 2.5. A total weighted score of 4.0 indicates that
an organization is responding in an outstanding way to existing opportunities and threats in its
industry.
Comment: As we know the highest possible total weighted score for an organization is 4.0 and
the lowest possible total weighted score is 1.0. The average total weighted score is 2.5. A total
weighted score of 4.0 indicates that an organization is responding in an outstanding way to
existing opportunities and threats in its industry.
Here we see that the total weighted score is 3.28.If score 4 means outstanding performance than
we can say 3.28 is a good score to obtain.
Potential development
of substitute products
The intensity of rivalry among competitors in the industry is Low .This is due to their
strategy they give their high class facilities with a very low cost. The main competitor of jet
blue is Southwest Airways. In 2009 Southwest and JetBlue announced a same route with a
very near price. Southwest ticket price $49 and JetBlue ticket price $39.But the other
companies like American Airlines, Delta Airlines etc offer different range ticket price.
In this economy, it would be nearly impossible to find funding with the excessive risk, lower
buyer confidence, and debt to asset ratio of the airline industry. Major competitors of JetBlue
are already decreasing flights and merging with one another in order to consolidate debt and
stay in business since fixed costs are extremely high.
The cabins have only one class of seats which combined an overall first class experience.
There has little or no threat to closing as the airline industry offers entry with little or no
appeal.
The key inputs in the airline industry are the jet fuel and the aircraft suppliers. The airplane
manufacturing industry is dominated by Boeing and an JetBlue’s Airbus supplying the
majority of airplanes for the me large airline companies. For this reason, the suppliers have
most of the bargaining powering leverage and increasing prices when costs rise.
There are several options available to customers with what airline they
choose to fly. Since products and services are essentially standard,customers of this industry
are price conscious under their belief that all airline companies will get them to their
destination but would prefer to fly with the one that can get them there cheaper. With
websites such as www.cheaptickets.com universal booking and ticketing on-line, it’s easily
accessible for customers to research the best price
Comment:
By observing the overall Factors we see that the condition is good because in Five factors
they have 3 low threat and 2 high threat. In 2009 JetBlue operates 650 flights per day with
80% fulfill seat where as their very close competitor Southwest airways operates500 flights
with 60% to 75% fulfill seat. So by this we can understand that our observation is correct.
2 American
0 Southwest
JetBlue American Southwest United United
Comment:
The highest possible total weighted score for an organization is 4.0 and the lowest possible total
weighted score is 1.0. The average total weighted score is 2.5. And here jet blue score 3.68, and
it’s the highest score in this tables we can say company is in very good condition. The lowest
score is 2.12 that is the American airlines.
Chairman
Company Secretary
Vice President
Senior Officer
Officer
Junior Officer
Corporate Resources:
All departments are responsible to increase the organizations activities and performance. The
departments are Marketing, Finance, Human Resource and Information System (IS).
Marketing:
JetBlue marketing is committed to the success of its customers utilizing the latest online
marketing technology and the best of traditional advertising. On April 8, 2008, JetBlue
introduced a new "Happy Jetting" brand campaign. The marketing campaign, developed
in partnership with JWT New York, emphasizes competitive fares, service and
complimentary onboard amenities such as free satellite television and radio, snacks, and
leather seat It served customers in a wide variety of system over a period of almost 17
years. JetBlue offers a variety of in-flight entertainment such as DirecTV with 36
channels of free programming. Thus far, no other airline offers such live satellite TV
option for free. The company is planning to increase the number of channels from 36 to
100+ channels. The aircraft are equipped with an in-seat digital entertainment system.
Each individual seat has a monitor with armrest remote with channel and volume
controls. It bring experience, maturity, ethics, history and the newest technology to the
company to serve all their customer’s needs.
Strong financial status is the reason for any organizational development. Behind labor, the
second largest operating expense for airlines is fuel. JetBlue enters into crude oil option contracts
and swap agreements to partially protect itself against significant increases in fuel prices. To
develop the financial condition the full support provided by the board of directors and sincere
dedication of the banks officials. The total asset is $5,598 million in 2007 and $6,023 million
BDT was in 2008. The operating profit of BRAC Bank in the year of 2007 is $169 million and in
2008 is $109 million.
Human Resource:
In 2009 JetBlue has 11,00 employee in their organization and at present they have 20,000 present
Human Resource Department of JetBlue is considered as a popular HRD system of Us Airlie
industry. The Hunan Resource Department of JetBlue airways are an effective tool to influence
employees; as a result this Airways position is top 3rd in the ways of market capitalization in US.
Information Technology
Jetblue airways always use the modern technology. They are the first company who use satellite
tv in such a low flight cost. The percentage of JetBlue’s total sales booked on their Web site
averaged 77 percent forth year ended December 31, 2008. In 2008, their bookings through global
distribution systems, or GDSs, and online travel agencies, or OTAs, became their second largest
distribution channel, accounting for 13 percent of our sales.
Outbound logistics New A320s are larger and more fuel-efficient. Less congested
airports help quicker and on-time flight departures.
Marketing and Sales Web-based ticketing as a distribution channel. Market segment
properly identified i.e., business travelers flying point-to-point.
Effective pricing.
Service Constant communication with customer to keep them informed of
changes or inconveniences. Customers are refunded sometimes when
there are inconveniences. CEO travels regularly to get customer
feedback first-hand. Investments in training for service orientation.
Secondary:
Procurement Well-conceived aircraft procurement plan to support growth.
Strength
Attention to security in terms of bullet-proof in cockpit cabin and cameras 0.09 4 0.36
inpassenger cabins
JetBlue hires the best crew in terms of skills and employees 0.08 3 0.24
Jet Blue has a very well clear strategy in terms of leadership 0.09 4 0.36
JetBlue offers exceptional training physical resources to company employees 0.08 4 0.32
JetBlue has the lowest labor wages compared to other rival airlines($3.13 with 0.05 4 0.2
each seat flown)
JetBlue has a loyalty program, named True-blue, which rewards program 0.03 3 0.09
members
JetBlue maintains a higher revenue ($3.39B) compared to industry ($1.24B) 0.03 2 0.06
JetBlue maintained a higher P/E ratio (59.21) compared to industry (14.16) 0.03 3 0.09
JetBlue reported high EBITDA (304.00m) compared to industry (90.07m) 0.03 2 0.06
JetBlue maintained a high gross margin (36.12%) compared to industry 0.03 3 0.09
(23.08%)and other rival airlines
JetBlue has a higher quarterly revenue growth (29.5%) compared to 0.03 2 0.06
industry(20.4%) and other rival airlines
“Analysis on various Factors of JetBlue Airways” | 17
Weakness
JetBlue reported a high PEG ratio (3.90) compared to industry (0.93) 0.04 1 0.04
JetBlue reported low net income -76.00m where as industry leader (luv) has 0.05 2 0.1
178.00m.
Comment:
As we know the highest possible total weighted score for an organization is 4.0 and the lowest
possible total weighted score is 1.0. The average total weighted score is 2.5. A total weighted
score of 4.0 indicates that an organization is responding in an outstanding way to existing
opportunities and threats in its industry.
Here we see that the total weighted score is 3.18.If score 4 means outstanding performance than
we can say 3.18 is a good score to obtain.
Current Ratio
Earnings Per Share (EPS)= Net income/Number of shares of common stock outstanding
Comments:
Coma ring ratios to 2007 to 2008 we see that in 2008 every ratios are going lower. There revenue
,Net income is not up to the mark.
Competition
Competition is stronger than ever in many medium- to long-haul connecting markets, where
major carriers compete for passengers over their respective hub-and-spoke networks. The
domestic airline industry generally is characterized as having low profit margins, high fixed
costs, and significant price competition. Below in table compare some direct competitors