JetBlue Company Background Organizational Mission Vision Value

JetBlue

Company Background

Organizational mission

Vision

Value statements

Environmental scan

Review of strategies and a recommendation for the best strategy for the organization

Implementation plan

Functional tactics

Action items

Milestones and Deadline

Resource allocation

Key success factors

Budget and forecasted financials

Break-even chart

Risk management plan

Contingency plans for identified risks

JetBlue is one of the leading airline carriers in the United States. The airline company has long been at the forefront of ensuring that passengers are exposed to quality service and products. Since the advent of the company in 1998 there has been a marked increase in the growth of the airline. This growth has caused the company to carefully evaluate all aspects of the business and carefully develop strategies that aim at meeting the needs and the goals of the company. To this end an implementation plan was developed to assist the company has it continues to grow and expand.

The implementation plan is designed to ensure that Jet Blues mission of bringing humanity back to flying can be realized. The plan suggests the development of training programs that will give thorough training as it relates to customer service and the passengers Bill of Rights. In addition the company must properly handle risks including accidents and the economic climate. If the company properly implements the plan the company can realize a profit in only three short years.

Company Background

JetBlue was founded in 1998 by David Neeleman. The headquarters for the company is in Forest Hills, New York. At the current time

"JetBlue Airways Corporation provides passenger air transportation services in the United States. As of December 31, 2010, it operated 650 daily flights to 63 destinations in 21 states, Puerto Rico, and Mexico; and 10 countries in the Caribbean and Latin America through a fleet of 115 Airbus A320 aircrafts and 45 EMBRAER 190 aircrafts. The company, through its subsidiary, LiveTV, LLC, provides in-flight entertainment, voice communication, and data connectivity systems and services for commercial and general aviation aircraft, including live in-seat satellite television, digital satellite radio, wireless aircraft data link service, and cabin surveillance systems. ("Company Profile")."

The company also has 9,626 employees throughout the country. As of December 2010 JetBlue was the sixth largest carrier in the United States. JetBlue is firmly committed to providing value for the customer through service, style, and cost. Additionally the company has garnered a great deal of attention as a result of its award-winning customer service and competitive fares (Annual Report, 2010).

As it pertains to the company's corporate governance, JetBlue is governed by a board of directors that is carefully screened. The board of directors is composed of both employees and independent directors. Additionally the board of directors

"The Corporate Governance and Nominating Committee identifies candidates for director through a variety of means, including suggestions from the Committee and the Board and suggestions from Company officers, employees and others. The Committee may retain a search firm to identify director candidates for Board positions. In addition, the Committee considers nominees for director suggested by stockholders. Submissions that are received whose candidates meet the criteria for director nominees approved by the JetBlue Board will be forwarded to the Chairman of the Governance and Nominating Committee for further review and consideration (JetBlue Airways Corporation Governance Guidelines)."

Mission and Vision

According to the company's annual report for 2010 the mission and vision of the company is to bring humanity back to air travel. To this end the company has developed elements that are designed to assist JetBlue in meeting these goals. The elements include the following:

1 High Quality Service and Product- when customers are aboard JetBlue they will receive treatment that is second to none because employees are taught to treat customers with respect and customer service is highly regarded. Additionally each seat now has additional leg room that exceeds the leg room available in other carriers (Annual Report, 2010). Over the years the company has made tremendous strides and desires to ensure that all of the seats are comfortable. In fact all of the seats are leather and many have wider cabins than other planes. Customers also have access to DirecTV and satellite radio. There are also a plethora of movies that can be viewed by passengers. Customers are also given free brand name snacks and drinks. The company has also created products that are designed for overnight flights. The company is also devoted to guaranteeing that consumers understand when and where there will be flight delays and how long those delays are likely to last. The company also strives to ensure that customers know their rights in accordance with the Bill of Rights which was developed in 2007. JetBlue also has a policy that forbids them from overbooking flights (Annual Report, 2010).

2. Focus on Operating Costs. For the most part, JetBlue has experienced a cost structure that has permitted the company to offer customer fares that are lower than other companies in the industry (Annual Report, 2010). As such JetBlue has reaped a great deal of benefit by focusing on having low operating costs and the company continues to focus on providing low operating costs when compared to the quality of service and the quality of products that the company offers (Annual Report, 2010). Having law operating costs is evident in the year ending in December of 2010 when JetBlue reported that its cost per available seat mile was 6.71 cents, this is one of the lowest per seat mile costs of any carrier in the United States (Annual Report, 2010). Jetblue also explains that there are four main factors that allow for the lower costs. These factors include

• High aircraft utilization. JetBlue is committed to both operating and scheduling its aircraft in a manner that is efficient and in so doing they are able to keep operating costs low because this enables the company to spread fixed costs over a more significant number of flights (Annual Report, 2010). The company reports that "For the year ended December 31, 2010, our aircraft operated an average of 11.6 hours per day, which we believe is the highest among all major U.S. airlines. Our airport operations allow us to schedule our aircraft with minimum ground time (Annual Report, 2010)."

• Low distribution costs. JetBlue has Historically low distribution costs as a result of several factors including electronic tickets which reduce costs associated with purchasing paper, postage, employee time and back-office processing (Annual Report, 2010). In addition most of JetBlues sales are made through their official website which reduced distribution costs (Annual Report, 2010).

• Productive workforce. JetBlue's employees are extremely efficient. This efficiency exists as a result of "flexible and productive work rules, effective use of part-time employees and the use of technology to automate tasks. For example, most of our reservation agents work from their homes, providing better scheduling flexibility and allowing employees to customize their schedules. We are continually looking for ways to make our workforce more efficient through the use of technology without compromising our commitment to customer service (Annual Report, 2010)."

• New and efficient aircraft. JetBlue is committed to maintaining its fleet of aircraft. The company currently has two types of aircraft, the Airbus A320 and the EMBRAER 190(Annual Report, 2010). These aircraft only have an average age of 5.4 years. This is important because younger aircraft are less likely to suffer from mechanical problems or have serious maintenance issues which leads to lower costs. In addition JetBlue has the youngest fleet of all the carriers in the United States. JetBlue is committed to using these newer aircraft because the technology that they posses are superior to those of other aircraft. The company offers "the world's largest fleet of Airbus A320 aircraft, and have the best dispatch reliability in North America of all Airbus A320 aircraft operators. Operating only two types of aircraft, both of which are newer aircraft types, results in cost savings over our competitors (who generally operate more aircraft types) as maintenance processes are simplified, spare parts inventory requirements are reduced, scheduling is simplified and training costs are lower (Annual Report, 2010)."

3. Brand Strength. The company has worked hard to strengthen its brand it has succeeded in many ways. This brand strength is what differentiates JetBlue from other companies in the industry. The company has also been able to strengthen its brand because it places a great deal of emphasis on customer awareness. The Annual report further explains that

"In 2010, we were voted "Top Low Cost Airline for Customer Satisfaction" by J.D. Power and Associates for the sixth consecutive year. We also earned distinctions for the third straight year as the "Best Large Domestic Airline (economy class)" and "Best Inflight Entertainment (domestic flights)" in the 2010 Zagat Airline Survey. Additionally, the JetBlue Experience won us "Best Cabin Ambiance" at the 2010 Passenger Choice Awards of the Airline Passenger Experience Association. According to Satmetrix, we were also recognized as the leader in the 2010 Net Promoter Industry Benchmarks for customer loyalty in the airline category (Annual Report, 2011)."

4. Strength of Our People. JetBlue takes a great deal of pride in its people and works diligently to keep its employees happy. The company has worked tirelessly to build a corporate culture that is service oriented and built around the company's values. Additionally the success of the company is greatly dependent upon its ability to retain, hire and develop its employees to assist passengers in a manner that is friendly and helpful to customers. The culture of JetBlue is "reinforced through an extensive orientation program for our new employees which emphasizes the importance of customer service, productivity and cost control (Annual Report, 2010)." There is also a great deal of training provided to employees. This training is designed to ensure that customers are treated in a manner that is consistent and reflect the values of the company. The training also places a great deal of emphasis on safety (Annual Report, 2010). The company also places a great deal of emphasis on allowing employees to voice their opinions as it pertains to making improvements. JetBlue recognizes that some of the issues that employees face with their interactions with customers make their opinions valuable and important (Annual Report, 2010).

Values

Jet Blue boast five values that govern the operation of the company, these values are as follows:

Safety- this is the first value that the company adheres to. It is the most important of all the values the company holds dear.

Caring- JetBlue is committed to understanding a respect and the company believes that this value actually makes the JetBlue experience a reality.

Integrity-this concept is associated with always doing the right thing. This value governs all of JetBlue's functions.

Fun this value guarantees that the work environment will be friendly. JetBlue believes that when employees are happy at work customers will also be happy.

Passion the company is passionately committed to providing passengers with low cost fares without jeopardizing quality of safety (Culture)

Environmental scan

Strengths

Brand recognition

Customer loyalty/service

Low Cost Differentiation

Weaknesses

Limited destinations

Smaller fleet than competitors

Opportunities

Expansion of the number of destinations offered

Addition of internet access to Entertainment package

Threats

The current economic environment/Gas Prices

Growth of other Low cost carriers

Review of Strategies and Recommendations

It is recommended that JetBlue implement a strategic plan that would focus on the following areas of improvement:

Providing additional flight routes- at the current time the company most operates domestically and does not have routes to all destinations.

Providing longer flight routes- longer routes would allow passengers to travel without layovers.

Reducing dependency on fuel costs for savings- this is consistent with the overall strategy of the company to reduce operating costs.

Improving revenue per passenger- The current rate is satisfactory but could be improved.

Improving load factors- load factors effect profitability which is the reason that improvement is needed.

Improving labor productivity-productive people make an organization operate more efficiently as such JetBlue should attempt to improve the productivity of its employees.

Seeking out a better combination of ancillary fees- These fees need to be properly managed so that they can result in the maximum benefit for JetBlue

Implementation Plan

Objectives

The goals or objectives of the strategic plan are in line with JetBlue Airway's mission which states "to bring humanity back to air travel" (About us). Additionally, the company has continuously worked to achieve the goal of being "Americas' Favorite Airline," for their employees (or crewmembers), customers, investors, and shareholders. JetBlue feels that reaching this goal will be predicated on the ability to provide superior customer service while maintaining a solid financial core ("JetBlue Annual Report")." Keeping these factors in mind, the objectives of the strategic plan are as follow:

Work in tandem with the passenger's Bill of Rights to provide safe and comfortable air travel for passengers.

Increase the efficiency and value of customer service by 30% over one year by putting more emphasis on convenience, a friendly environment and the ability to resolve customer issues.

Increase revenues by 15% over the following two years by using innovative pricing that will help keep fees and costs to a minimum, which will also help to provide a competitive advantage for JetBlue.

Improve the relationships within the company that will allow for improved communication.

Functional tactics

To successfully achieve the above mentioned goals, there must be a conscious effort to take immediate action using the following methods:

All employees must complete new training programs that focus on improving customer satisfaction. These programs are essential because providing superior excellent customer service is a daunting task. As a result, employees must possess the ability and resources required to effectively handle the different personalities and complexities associated with people who come from different walks of life (Stoller, 2010).

The passengers' bill of rights must be read and understood by all employees. The comprehension of these laws will assist the crew and all other employees to be aware how customers need to be treated as stated by the law.

The examination and implementation of the strategies will allow JetBlue to remain as a low cost airline while they increase their revenue. Simply stated this means that the company will continue to monitor the costs of competitors along with the services they provide and ensure that the customer of JetBlue receive better value for their money.

Additionally, there must be a general understanding by all employees that the company has a priority of keeping a solidified relationship with its customers. It should be the responsibility of all employees that they understand what role they play as it relates to assisting the company in implementing and executing the new strategic plan.

Action items

It has been established that JetBlue's mission is to bring humanity back into the airline industry. With this in mind, the company has created five key value statements: Safety, Caring, Integrity, Fun, and Passion. JetBlue goes on to explain that

"We work hard at carefully selecting, training and maintaining a productive workforce of caring, passionate, fun and friendly people who want to provide our Customers with the best flying experience possible. We assist our Crewmembers by offering them flexible work hours, initial paid training, free uniforms (unheard of in the industry) and benefits that begin on the date they start work. We also provide training for our pilots, flight attendants, technicians, Customer service agents, dispatchers and reservation agents which emphasizes the importance of safety" (Our people).