Jet Blue Vincent

One can call Jet Blue an airline with a vision, and in terms of pricing, the only airline that it can be compared with is Southwest Airlines. The founder of this airline had the confidence to take on the entrenched airlines and he had only one desire to prepare and that was to create a low-cost, high-service airline that passengers wanted to fly in. One of the aims of this airline was to fly in areas where the service was poor, and that is part of the reason why he came to New York as there was no low cost airline there. This has permitted the airline to grow very fast, and make profits. It is also planning to add another 14 cities in its service range and these include Boston, Denver and Salt Lake City during the next two years. (SMM's best of Sales and Marketing)

Let us now look at the history of the airline as has been declared by them to the federal authorities. That states they commenced their service in February 2000 and the established primary base of operations was at New York's John F. Kennedy International Airport or JFK. The services were started in the West Coast at their West Coast base of operations in Long Beach Municipal Airport, and it is an airport serving the Los Angeles area. They have grown to a large airline with 180 flights every day as on February 14th, 2003. This includes 80 daily flights between JFK and Florida, 22 daily flights between JFK and other parts of New York State, and 32 daily flights between JFK and the western part of USA. They have flown ten million passengers from the start till that date of February, and were then the 11th largest among the passenger carriers, when the consideration is on the basis of passenger miles flown for the year ending 31st December 2002. (FORM 10-K)

From the beginning it has been a profitable airline and while the rest of the industry suffered losses in 2002 and 2001, the airline claims to have earned profits of $54.9 million and $38.5 million in the respective years. The declared net income of profit for the shareholders for 2002 is shown as $48.9 million and for 2001 as $21.6 million and a loss of $35.4 million is reported for 2000. Thus, the earning for the shareholders over the three years is $35.1 million. Their operating margin in 2002 was a good figure of 16.5% and that is higher than most airlines in U.S. As per the reports submitted by those airlines. This is in spite of the fact that they charge a low fare, the yields as defined by the amount paid by a passenger to travel one mile, was lower than all except one major airline. Yet, there were large number of passengers attracted by the offer of low fare with quality service and this gave them a very high load factor. This is the number of seats utilized for seating paying passengers during a flight. This was 83% during 2002 and higher than all major airlines in the U.S., where the load factors on the domestic flights ranged from 59.5% to 73.8% and the average was at 70.2%. (FORM 10-K)

Now let us see how they claim to have done it. The first step that they mention is customer service and this takes place when untoward weather or mechanical problems come up. This is openly informed to the customers and mentioned with all honesty. To satisfy the customers, there is no over-booking of flights. According to their study of customer service, they know that the Jet Blue customer service is preferred to that of other airlines and this is the reason why the service of Jet Blue is chosen. The business of an airline is flying passengers and this service is the product. So this may be considered as their attention to the p for product of marketing. (FORM 10-K) The aspect of service has been a fact of life at Jet Blue and the airline has made calls to passengers traveling by a 6:00 AM flight not to come early to the airport at 3:00 AM, just to tell them that the flight is late. Once there was a case where the pilot made a call airport dispatch and get in touch with a hospital to reassure a passenger whose daughter was in labor. In one occasion, the plane was held back on the ground, and the passengers were stuck inside the plane, but the pilot took out his own cell...

On Jan 21st of 2001, a flight of Jet Blue was coming into the JFK airport, but it skidded of the runway and passed through its landing. (Jet Blue Skies)
This surprised many passengers who were coming in from Ontario, California, and though there were no injuries or damages, the reputation of the airline was damaged among quite a few of the passengers, especially among the lot who were traveling the airline for the first time. To get them over the shock, the step taken by Jet Blue was unusual - it gave free round trip tickets to all passengers who were on the flight. The planes used by the airline are a little different from others and it provides a few more inches of space in between the rows of leather seats that it has, and it has 24 channels of free and live TV at every seat. This makes it incur about $1 per seat, per flight, and that has to be made up by the airline. This is done by avoiding serving food on any of the flights that go across the country and a distance of some 2,500 miles. The airline of course informs the passengers about this when they are boarding the flight. (Jet Blue Skies)

The airline has carried on the same path for providing better passenger amenities even after the incidents on September 11th, 2001. They provided additional safety measures and reinforced all doors to the cockpit with bullet resistant and multiple titanium deadbolt locks which can be opened from within the cockpit. In addition they started on the installation of four security cameras on each aircraft. These provide a live feed to the cockpit crew of the happenings with in the cabin of the aircraft. When the aircraft is on the ground, the pictures taken by these cameras are sent to their central operations at JFK. The quality of service has won the airline the Market Development Award in February 2002 from the Air Transport World. This is because of their convention breaking approach to airline travel business. (FORM 10-K)

The most important point to note here is the dynamism of the company in making these changes and the action was taken by Neeleman within hours of the events of September 11th. He asked the aircraft suppliers, Airbus for prototype doors that could be fitted on the aircraft. The reason for making the changes was simple to him, and he wanted to do it because it was the correct action to take. This speed of taking the correct action to maintain the desired image of the company is important, for even according to Neeleman, the dreamer of Jet Blue; it will be felt that the company can move quickly and knows what has to be done to put the company in the correct position. Some of the companies wait till the regulatory authorities issue the necessary orders, but the changes were made before any orders were issued. The company took advantage of its being small and being able to necessary action in a small period of time, instead of the long time that it would take a large company. And the famous saying in marketing should always be remembered "We are number 2, we try harder." (How Will Your Company Adapt)

This sort of action can push it to the number 1 position. Neeleman made it his own personal business to go ahead and install the bullet-proof doors on all aircraft. It is expected that such a rule will be issued by the Federal Aviation Administration for all aircraft, but the leader cannot wait for the mandate. The airline is dynamic and not tied down by time, scale, scope of operations or such other problems. It is capable of reacting to situations in a sensitive, nimble and quick action in the present time when the things happen very fast and the changes in society occur due to major catastrophe. (How Will Your Company Adapt)

Unlike the major airlines, Jet Blue was to be an efficient airline right from the beginning. They have 300 full time persons taking reservations and they work from home and this reduces the costs. Almost 40% of the tickets of Jet Blue are sold on the Internet, and this again reduces costs. It purchased the air craft through a deal with Airbus Industries instead of the more commonly use…