Jet Blue airline operations and business model

JetBlue's main competitors can be considered Southwest in the United States, together with Ryanair and Easyjet in Europe and AirAsia in Asia. However, we need to mention from the very beginning that the international issues we need to address are at most continental or regional.

Indeed, the most important low-cost flyers have split the influence zones between them, with Easyjet being the market leader in Europe and covering exclusively this zone and AirAsia doing the same in Asia. As for JetBlue, it covers the Untied States, as well as smaller states in the Caribbean, such as the Dominican Republic and Puerto Rico. In my opinion, I don't think that JetBlue can become, in the short run, a significant competitor on the international market, mainly because it does not presently have the necessary infrastructure and logistics that are needed for a global player.

Legal Issues

The legal issues we need to discuss refer to privacy policy violations. As I will be discussing when talking about ethical issues, using private information on passengers in order to differentiate pricing is something that we may debate whether it is ethical or not. It isn't, however, illegal.

On the other hand, on September 19, 2003, "JetBlue Airways publicly acknowledged it had provided the travel records of five million JetBlue customers to Torch Concepts, a private DoD (Department of Defense) contractor for an antiterrorism study to track high-risk passengers or suspected terrorists"

The legal issue concerned here was quite important and referred to two different aspects. First of all, it did not abide by the JetBlue's Online Privacy Policy and made its passengers' data, including financial data and social securities numbers, available to another company for a study. Its privacy policy states: "the financial and personal information collected on this site is not shared with any third parties"

. This was obviously not what happened.

Second of all, and even more dramatic than the prior situation, some of the data were actually published in a study that circulated freely over the Internet. We should not mention the effect this could have had, especially in these times when we are dealing with the most sophisticated forms of identity theft and computer fraud.

Third of all, we may even notice several malfunctions in the contract between JetBlue and Open Skies Inc., the company that powers JetBlue's ticketing system. In this sense, the contract does not clearly stipulate what Open Skies Inc.'s obligations are in terms of privacy protection.

Ethical Issues

There are several things to consider when referring to ethical issues concerning JetBlue and all revolve around its low pricing strategy. In my opinion, we should discuss the effect that the low prices JetBlue practices has on the government and competitors, as well as the overall airline and service industry, as well as negative consequences on the services provided to the company's customers, due to the need of meeting the proposed price levels.

If we start with the latter, the first thing to be noted is the discrepancy between the prices that are advertised and the prices you actually end up paying. Indeed, we all see the advertising spelling $10 or $15 to London or to Paris. However, it is often the case that this price tag is only applied for the first couple of tickets that are sold. Consequently, following a rigorous, electronic scheduler that includes time of departure and arrival, the company gradually increases the price of tickets, simply because, economically speaking, the offer is decreasing.

On the other hand, there is a large amount of surcharges the client is forced to pay, surcharges that are never listed in the original price offer. These include "airport and security charges ( ... ) or surcharges for telephone bookings and credit card bookings"

, but also silly idea, such as extra taxes for the handicapped or double price for obese people.

Another important ethical issue, which I have previously mentioned when referring to the legal issues, was related to the large amount of information that JetBlue stores in order to offer tailored tickets for each customer. In this sense, someone who is a businessman will probably pay more than someone who is a student. The ethical boundary where this exercise becomes unethical is quite thin and perhaps can be easily forgotten.

If we refer to the ethical impact on the external business environment, namely the federal government and the competitors, the first unethical thing we may notice about JetBlue is the fact that it is forcing its competitors to lower their prices as well, in order to remain competitive. The problem, however, is that such price cuts are generally made by reducing the quality of the services provided and not by reducing overall costs, many of these fixed. Even if JetBlue and similar companies support the idea that price cuts can be performed by making the business mechanism more efficient, this is false: JetBlue itself renounced several parts of what service on the airline is all about.

On the other hand, lower prices means lower taxes and lower governmental spending on projects that are of interest for the society, spending on educational or health projects

. In this sense, we need to note that the pricing decision a company such as JetBlue makes have strong impact on everybody else as well.

Strategy plan with respect to online selling

In my opinion, the main strategic objective of any company, here included JetBlue, is to obtain a competitive advantage over the other firms. In our particular case, we need to find the proper means by which e-business can prove an advantage for JetBlue in the long run.

The most important thing to be kept in mind is the relationship with the customers

. By nature, it is more difficult in the case of e-commerce to have a direct relationship with your clients, because we are referring here to invisible transactions, where the provider and client do not meet face-to-face.

Customer retention and customer satisfaction can be done here by direct marketing, for example. The company has a database with the clients that have been using JetBlue, including their personal data. Every special holiday or on the respective individual's birthday, the company can send an email with a congratulations message. As long as it does not transform into annoying spam, regular information and updates on the services the company provides are more than welcome.