Strategy the Airline Industry -- Case Study
- Length: 5 pages
- Sources: 4
- Subject: Transportation
- Type: Case Study
- Paper: #786853
Excerpt from Case Study :
g. Lufthansa); partners with Blackberry and Yahoo for in flight conveniences.
Early aggressive additions to fleet and service did, as analysts predicted, negatively impact the company.
Company will need to carefully evaluate routes, new service, new equipment, and new technology in order to maintain growth potential.
Fairly stable and industry respected; replaced CEO in May 2007.
Needed a new managerial focus after 2004.
Optimistic, keep tight rein on overly aggressive expansion.
Jet Blue University, compensates better than most airlines, rewards loyalty for service
Unsuccessful attempt at unionizing
Ensure mission is translated to consumers; empower local employees to make better decisions so clients are not left sitting on tarmac.
Huge and rapid growth spurt in early 21st century
Became a model for other carriers; major carriers copied model and took away share
Continued energy and fiscal focus on consumers and next generation of airline ideas.
Focus on consumer; what can be different about Jet Blue, but still cover costs?
May have cut too many services in 2002-4; now charges for leg room.
Strategic partnerships with entertainment and other organizations to promote the business aggressively.
Jet Blue seemed undaunted by the losses in 2006. Instead of hanging its head, though, Jet Blue pulled out not one, but two strategic profitability plans. This not only included some tough decisions about routes and equipment, but a rethinking of the entire flight experience. Since fuel was the highest expenditure, Jet Blue decided to remove some seats -- lighten the load, provide more legroom for passengers (at a fee, of course), reduce crew size, and save on fuel. David Barger, the new CEO said that he "will focus on developing Jet Blue's long-term vision and strategy, and how we can continue to be a preferred product in a commodity business" (Jet Blue Press Release - Names Dave Barger President and CEO, 2007).
Realizing that the airline market is both highly competitive and fickle, the company is doing some extremely innovating things with marketing and strategic partnerships. For instance, selling 19% of the company to Lufthansa now opens up the longer range European routes; partnering with Hollywood and "The Simpsons" allows for a huge name recognition strategy, partnering with Yahoo! And Research in Motion (Blackberry) opens up the door for more business travelers; and increasing destinations to the Carribean allows for a greater share of the tourist market (Fisk, 2009).
As a company, Jet Blue is not that old. It has experienced, however, some rather major and rapid changes over time. In an era of numerous "no-frills" carriers, Jet Blue continues to differentiate itself from others in the market by offering reserved seating, little meal service depending on the distance of the flight, a television in every seat, and a more traditional hub-and-spoke route structure that combines both long and short-term flights. As it continues to find new destinations for its client base, it may continue to grow, never requiring Saturday stays, or all the complexities of the major airlines. Jet Blue remains poised for the future, with its target market continuing to be, "people who aren't going to travel, people who are disgusted with their current choices, people who would drive, or people who wouldn't got at all" (Gittell, 2003, 225).
Air Transportation Safety and System Stabilization Act, Public Law 107-42. (2001, September 22). Retrieved October 2010, from Office of Transportation - U.S. Government: http://ostpxweb.ost.dot.gov/aviation/Data/stabilizationact.pdf
Jet Blue Press Release - Names Dave Barger President and CEO. (2007, May 10). Retrieved October 2010, from JetBlue.com: http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-newsArticle&ID=998672&highlight=))
Air Travel Report: Dip in Delays, Spike in Complaints. (2010, October 12). Retrieved October 2010, from CNN Travel: http://www.cnn.com/2010/TRAVEL/10/12/air.travel.consumer.report
Jet Blue Shareholder Information. (2010, October 12). Retrieved October 2010, from Jet Blue: http://investor.jetblue.com/phoenix.zhtml?c=131045&p=irol-irhome
Fisk, P. (2009). Marketing Genius. New York: Wiley.
Gittell, J. (2003). The Soutwest Airlines Way. New York: McGraw Hill Professional.
Globe Newswire. (2010, June). Flying: It's Why JetBlue Created Jetting. Retrieved October 2010, from NASDAQ OMX Global Newswire: http://www.globenewswire.com/newsroom/news.html?d=142150
Mill and Morriston. (2002). The Tourism System. DuBuque, IA: Kendall Hunt.
Wynbrandt, J. (2004). Flying High- How Jet Blue Founder and CEO David Neelean Beats the Competition. New York: Wiley.