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Introduction:

JetBlue was incorporated in Delaware in 1998 and commenced service in 2000 with primary
base of operations at New York’s John F. Kennedy International Airport. The company’s
goal has been to establish itself as a leading low-fare, low-cost passenger air line by offering
its customers high-quality customer service and a differentiated product. The airline focused
on serving “underserved markets” and large metropolitan areas that have high average fares
with a diversified geographic flight schedules that includes both short and long-haul routes.
From its first day of operation, JetBlue differentiated itself from other airlines by:

• 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.
Organizational Profile:

 Name of the Company: JetBlue Airways.


 Founder :David Neeleman
 Date of Incorporation: JetBlue was incorporated in Delaware in 1998.
 Commenced Operations:11th February,2000.
 President and CEO: Robin Hayes.
 Telephone: In United States1-800-JETBLUE (1-800-538-2583)
All other countries:1-801-449-2525
 Industry: Airline.
 Type: Public limited company
 First Capital: Over $100 million.
 Present Asset:$13.013 billion
 Number of Employees:20,000 (Approximately)
 Number of Airbus:229
 Total Customers: Above 1 Million
 Slogan: You Above All, Inspiring Humanity.
 E-mail:dearjetblue@jetblue.com
 Logo:
 Website:www.jetblue.com
Product and services:
Jet blue in 2009 achieved the number-one customer service ranking among low-cost carriers,
according to J. D. Power and Associates. The company offers passengers new aircraft, roomy
leather seats with lots of leg room, 36 channels of free DirecTV, 100 channels of free XM
satellite radio, and for purchase, premium movie channel offerings from multiple major
movie studios. JetBlue’s on board offerings include free and unlimited brand-name snacks
and beverages, and for purchase, premium beverages and specially designed products for
overnight flights.
Goals
Goal has been to establish itself as a leading low-fare, low-cost passenger airline by offering
customers high-quality customer service and differentiated products.

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
Passion-Passion is the enthusiasm we have for what we do and a great customer
experience. Our passion is what keeps customers coming back, and why we do our
part to keep our destinations beautiful for future generations.
Fun-JetBlue is where people like to be. When crewmembers enjoy what they do, our
customers enjoy traveling with us.
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.

Joel Peterson Chairman


Frank Sica Vice Chairman
David Checketts Director
Virginia Gambale Director
Stephan Gemkow Director
Ellen Jewett Director
Gen. (Ret.) Stanley McChrystal Director
Thomas Winkelmann Director

External Environment
General Environment:
Airline profitability is influenced by the state of the economy, international events, industry
capacity, and offerings by other airlines in the forms of bundling and packaging (with hotels,
cruise lines, etc.). The airlines also compete through flight scheduling, availability, fares,
routes served, safety records, on-time arrival, and customer service reputation. Passengers are
increasingly interested low price as well as comfort and amenities of the air craft. Therefore,
airlines are designing more living space into new planes and retrofitting old ones. For
example, Delta Air Lines and American Airlines are rewiring their planes to provide Wi-Fi
access and enhanced in-flight entertainment options, including live TV.
Industry Environment:
According to the Air Transport Association, in 2008, the operating expenses in the industry
increased 4.1 percent to $163.9 billion. Flying operations, the industry’s largest functional
cost center at 37.9 percent, climbed 3.9 percent to $62.1 billion. Fuel drove the major share of
this category as crude oil prices averaged $72.34 per barrel in 2007, up $6.29 from2006, and
the average jet fuel crack spread—the additional amount charged for refining—rose from
$16.69 to $18.59. Consequently, even after factoring in the airlines’ fuel hedging programs,
the average price paid for jet fuel, excluding pipeline tariffs, tank fees, and state and federal
taxes, rose 7.0 percent, from $1.97 per gallon in 2006 to $2.10 per gallon in 2007

 External Factor Analysis (EFE)


An External Factor Evaluation (EFE) Matrix allows strategists to summarize and evaluate
economic, social, cultural, demographic, environmental, political, governmental, legal,
technological, and competitive information.

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.

EFE of JetBlue Airways


Factors Weight Rating Weighted
Score
Opportunities
Rapid growth of discount airlines due to 0.06 3 0.18
bankruptcy of rival airlines.
200 million passengers will be carried in 2005 0.08 3 0.24
(more than the year before by4.1%)
Air travel is much safer than other means of 0.05 4 0.2
transportation
Emergence of new federal laws enhancing 0.04 3 0.12
security in airports
Threat
High oil or jet fuel prices 0.08 4 0.32
Union labor contracts, wages, benefits & strikes 0.09 4 0.36
Fierce competition from other rival airlines 0.07 3 0.21
Availability of jet fuel 0.09 3 0.27
Rapid growth of discount airlines 0.05 3 0.15
Emergence of new US federal laws (e.g., change 0.07 2 0.14
in daylight saving time)
Pricing is weak .05 4 0.20
Observe passengers contributing to high fuel 0.06 3 0.18
consumption & negative environmental impact
Rising security rules and obligations 0.08 4 0.32
Rising breakeven load factor 0.06 3 0.18
Total weight 1 Total 3.28
Weighted
Score

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.

Competitive Analysis: Porter’s Five Forces Model


Porter’s Five-Forces Model of competitive analysis is a widely used approach for developing
strategies in many industries. The intensity of competition among firms varies widely across
industries.
Potential development
of substitute products

Bargaining power of Rivalry among Bargaining power of


suppliers: competing firms consumers

Potential entry of new


competitors

Rivalry among competing firms :(Low)

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.

Potential entry of new competitors: (Low)

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.

Potential development of substitute products: (Low)

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.

Bargaining power of suppliers: (High)

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.
Bargaining power of consumers :(High)

There are several options available to customers with what airline they


choose to fly. Since products and services are essentially standard,customers of this indust
ry 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

Competitive Analysis
5
4
3
2 Porter’s Five Forces
1
0
Rivalry among Bargaining Potential entry Bargaining Potential
competing firms power of of new power of development of
suppliers competitors consumers substitute
products

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.
Competitive Profile Matrix
Agenda Weight JetBlue American Southwest United
Market Capitalization 0.10 3 3 4 1
Employs 0.10 4 1 3 2
Quarterly Rev. Growth 0.12 4 2 2 1
Revenue 0.10 4 4 4 4
Gross Margin 0.10 4 3 4 2
Net Income 0.12 3 2 4 1
EPS 0.10 3 1 4 1
P/S 0.08 4 1 4 1
Expense passenger Miles 0.18 4 2 2 2
Total 1.00 3.68 2.12 3.30 1.68
The Competitive Profile Matrix (CPM) identifies a firm’s major competitors and its particular
strengths and weaknesses in relation to a sample firm’s strategic position. The weights and
total weighted scores in both a CPM and an EFE have the same meaning. However, critical
success factors in a CPM include both internal and external issues; therefore, the ratings refer
to strengths and weaknesses, where 4 = major strength, 3 = minor strength, 2 = minor
weakness, and 1 = major weakness. The critical success factors in a CPM are not grouped
into opportunities and threats as they are in an EFE. In a CPM, the ratings and total weighted
scores for rival firms can be compared to the sample firm. This comparative analysis provides
important internal strategic information.

Competitive Profile Matrix

Competitive Profile Matrix


4
3 Competitive Profile Matrix
2
1
0
JetBlue American Southwest 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.

Internal Environment
Corporate Structure:

Chairman

Board of Directors Chief Adviser

Mangling Director and CEO

Executive Vice President/

Senior Vice President

Vice President

Senior Asst. Vice President

Asst. Vice President


Corporate Culture:
Employees of JetBlue Airways share certain common values that help to create a JetBlue corporate
culture.

 Fast customer service.


 Search for professional excellence.
 Openness to new ideas and new methods to encourage creativity.
 Proper decision making.
 Flexibility and prompt response.
 A sense of professional ethics.

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.

 Finance:

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 3 rd 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.

Value Chain analysis


JetBlue analysis is presented below.

How does JetBlue create value for the customer?


Value chain activity
Primary:
     Inbound logistics Web-based booking instead of booking through ticketing agents gives
greater control on managing seat sales.  Customers won’t get bumped.

     Operations Paperless cockpit, no meals served, no paper tickets--all reduce time
and costs.  Single aircraft type keeps training costs low and manpower
utilization high.

     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.

     Technology Investments in technology from the beginning of the airline.  Process
development. initiatives such as automated baggage handling, web-based ticketing,
paperless cockpit etc.,
    Human resource Non-unionized workforce, reward systems such as stock-option plans,
management profit sharing, innovative recruitment policies and culture promoting
camaraderie…employees called ‘crewmembers’.

    General Administration Top management with expertise in airline business, ability to
coordinate and integrate activities across the value system, and highly
visible to inculcate organizational culture,reputation and values.

Internal Factor Evaluation (IFE)


Factors Weight Rating Weighted
score

Strength

Deployment of technology in terms of paperless tickets (i.e., e-commerce) 0.08 4 0.32

Attention to security in terms of bullet-proof in cockpit cabin and cameras 0.09 4 0.36
inpassenger cabins

JetBlue fleet maintains a new fleet of aircrafts 0.06 4 0.24

JetBlue offer in-flight entertainment 0.06 3 0.18

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

Availability of customer service management 0.07 3 0.21

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 has a high market capitalization ($1.35B)compared to industry 0.02 2 0.04


($536.6M)

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

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.

Total weight 1 Total 3.18


whted
score

A summary step in conducting an internal strategic-management audit is to construct an


Internal Factor Evaluation (IFE) Matrix. This strategy-formulation tool summarizes and
evaluates the major strengths and weaknesses in the functional areas of a business, and it also
provides a basis for identifying and evaluating relationships among those areas.Assign a 1-to-
4 rating to each factor to indicate whether that factor represents a major weakness (rating =
1), a minor weakness (rating = 2), a minor strength (rating = 3),or a major strength (rating =
4)Note that strengths must receive a 3 or 4 rating and weaknesses must receive a 1or 2 rating.
Ratings are thus company-based, whereas the weights in step 2 are industry-based. Multiply
each factor’s weight by its rating to determine a weighted score for each variable. Sum the
weighted scores for each variable to determine the total weighted score for the organization.
Regardless of how many factors are included in an IFE Matrix, the total weighted score can
range from a low of 1.0 to a high of 4.0, with the average score being 2.5. Total weighted
scores well below 2.5 characterize organizations that are weak internally, whereas scores
significantly above 2.5 indicate a strong internal position.

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.
Basic Financial Ratios
Financial ratios are computed from an organization’s income statement and balance sheet.
Computing financial ratios is like taking a picture because the results reflect a situation at just
one point in time. Comparing ratios over time and to industry averages is more likely to result
in meaningful statistics that can be used to identify and evaluate strengths and weaknesses.
But industry average is not very easy to found .Its need 100 years or more historical data t
make industry average..Also industry average is not available for all ratios in online. So here
we decide to compare between two years.(2007 to 2008).

(All amount is in Million)

Current Ratio

Current Ration = Current Assets / Current liabilities

2007 1116/1256 0.889times


2008 962/1081 0.890times
Quick Ratio

Quick Ratio = (Current Assets- Inventories)/Current liabilities

2007 1116 – 26 / 1256 0.868 times


2008 968 – 80 / 1081 0.821 times
Debt-to-Total-Assets Ratio

Debt-to-Total-Assets Ratio=Total debt/Total assets

2007 .815 / 5598 .0001


2008 .791 / 6023 .0001
Debt-to-Equity Ratio

Debt-to-Equity Ratio=Total debt/Total stockholders’ equity

2007 0.815 / 1036 .0007


2008 0.791 / 1261 .0006
Total Assets Turnover

Total Assets Turnover= Sales/Total assets

2007 121 / 5598 0.0216


2008 151/ 6023 .0251
Operating Profit Margin

Operating Profit Margin= Earnings before interest and taxes (EBIT)/Sales

2007 41 / 121 0.3389


2008 76 / 151 0.5033
Net Profit Margin

Net Profit Margin= Net income/Sales

2007 18 / 121 14.88%


2008 -76 / 151 -50.33%

Return on Total Assets (ROA)

Return on Total Assets (ROA)= Net income/Total assets

2007 18 / 5598 .32%


2008 -76 / 6023 -1.26%

Return on Equity (ROE)

Return on Stockholders’ Equity (ROE)= Net income/Total stockholders’equity

2007 18 / 1036 1.737%


2008 -76 / 1261 -6.027%

Earnings Per Share (EPS)

Earnings Per Share (EPS)= Net income/Number of shares of common stock outstanding

2007 18 / 181.59344 9.91%


2008 -76 / 271.763139 -.27.97%

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.

Below we are giving some competition statistics.

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
Conclusion:
As we are doing this case in the year 2009,in that time Airline industry facing a sudden big
problem. That is, the fear of a swine flu outbreak shocked the airline industry and airline
stocks dropped by almost 16 percent. JetBlue’s stock slipped by 7 percent to $4.91. A bad
outbreak could be disastrous for this industry because most airlines already are suffering from
high unemployment, slow economic growth, and significant drops in business and leisure
travel.
But by calculating overall factors as- IFE ,EFE ,Porters five factors ,VCA we the position of
JetBlue Airways is good in Market .But in Ratio analysis we that Ther net income ,profit
margin is not in good condition .Its maybe because of that swine flu effect. In that time
Airlie’s industry is experiencing a very situation.