JETBLUE AIRWAYS ANALYSIS Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

JETBLUE AIRWAYS ANALYSIS Case Solution

. General Situation of the Organization

JetBlue Airline is one of the leading airline companies in the United States which operates on the basis of the low cost principle. The low cost model of the company translates it into the cheaper airfares for the customers of the company. Since the inception of the company in the year 1998, it had become the sixth company within a time period of 6 years only. JetBlue is the only company along with Southwest Airlines which has been able to keep its books positive after the terrorist attacks of 9/11, whereas all the other companies in the industry were reporting significant losses.

In the year 2007, the company had undergone major decisions when the airline industry was undergoing operational crisis and the fuel costs were increasing significantly. The company which was modelled as a low cost airline had made a significant move which was considered as antithetical to its current LCC model. Another smaller aircraft called as Embraer 190 had also been added to the fleet of JetBlue Airways. This huge decision has been considered in the case and the impact on the business model and operations strategy needs to be considered in the light of this decision. The current situation of the company hinges not only on the discussion of the airline efficiency issues faced by the company but also on the competitive priorities and operational focus of JetBlue Airways. This report attempts to perform a detailed strategic analysis, financial analysis and operation analysis for JetBlue Airways Company.

2. External evaluation – PESTEL

The external evaluation for JetBlue Airways based on the case study is performed as follows:

Political

After the terrorist attack on 9/11, the airline industry has been facing many troubles. The yield of the domestic airline has dropped by around 20% and this had remained below the pre-attack levels until the start of the year 2005. The Valentine Day crisis had pressurized the management of the company to introduce the Customer Bill of Right. The other industry airline companies are also now considering the operating principle of not cancelling the flights. Overall, the airline industry has been changed significantly in the recent years as a result of the over capacity, fare wars, deregulation and terrorist attacks.

Economic

The demand for soft earnings had been faced by JetBlue Airways after 2006. The rise in the inflation rate is expected with an increase of 4.5% in developing countries and an increase of 2.7% in developed countries of the world. There has also been an unabated rise in the costs of the fuel. As the fuel costs increased, the growth rate of the management slowed. The customers also had more choices as, the medium sized cities were being served by E190 of JetBlue Airways. The baby boomers are also now retiring by thousands and as a result of this, the airline industry is experiencing a shortage of the skilled pilots. There is also not enough number of instructors to train the new pilots.

Social

The fares offered by JetBlue Airways are 65% less than most of the legacy competitors in the industry which has increased the entertainment level also. The domestic flights within the industry are now prohibited from taking off their flights in ice pellet conditions by Federal Aviation Administration. Therefore, as a result of the bad services of some of the Airline Companies, such as the Valentine Day Crisis of JetBlue Airways, Neelman has been forced to introduce the Customer Bill of Rights. Prior to this crisis, JetBlue Airways had been placed on fourth spot Business Week in the list of the top performing companies.....................

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JETBLUE AIRWAYS ANALYSIS Harvard Case Solution & Analysis