Why does JetBlue want to go public too early and during the worst period of the airline industry? Management: JetBlue, the low-fare airline has a skilled management team. David Neeleman, the CEO, has extensive experience with airlines start-ups: managed low-fare flights developed the e-ticketing system when working with a couple of other airlines including Southwest Airlines. JetBlue has a modeled its business similarly to Southwest which is very profitable. It has also developed a strong brand based on a high quality of customer service and low-fare air tickets.
All this boiled down to a low cost air travel that was able to compete with ground transportation services. During May of 2011 Southwest Airlines purchased all of AirTrans outstanding common stock increasing Southwest’s fleet by 140 aircraft and the ability to spread
Who are some of the major competitors? Southwest competes against many low-cost carriers or low-cost subsidiaries of larger carriers. Southwest's main low-cost carrier competitors are AirTran and JetBlue Airways. Its other competitors include American Airline, United and Delta. Because of its efficient cost-saving strategies, Southwest's 37-year streak of profitability is unmatched in the airline industry.
These facilities and software systems enabled both companies to reach a 99% arrive-on-time rate in their famous overnight/morning deliveries. However, this became an advantage for Airborne. The top management of Airborne understood clearly that they could not be everything to all the people. As a result, the company has positioned themselves differently from the big two, and to put more attention in its afternoon/second-day deliveries. This strategy has helped Airborne to reduce a large sum of costs because the afternoon/second-day deliveries could be transported using trucks, subsequently to save two-thirds the costs of owning and operating an aircraft capacity.
It is, in essence, the compact fuel efficient car of the airplane world in Alaska. It has big widows on both sides to look out of, so one can admire the scenery. The Boeing 737 aircraft is the also referred to as a simple yet reliable airplane. The Boeing “Overview” reports that “The Boeing 737 is the best-selling commercial
Their service strategy is based on short-haul, point-to-point direct flights that are accomplished with amazingly short turnaround times. With their strategy, Southwest has a strong majority of the market share in the point-to-point market. Southwest’s goal is to make air travel affordable to all, both the time-sensitive business traveler and the price-sensitive leisure traveler. They are able to offer their low ticket fare because of good management-labor relations, fast turnaround time at the gate, faster speed of operations offered with smaller airports, and lower maintenance costs due to flying only one model of airplane. The strong leadership, strategy and culture that were built and are supported by Herb Kelleher, the former CEO of Southwest, support all these items that keep ticket fares low.
The A380 is a high capacity aircraft capable of transoceanic flights, while the 787 has relatively the same traveling distance, but a maximum passenger count of 280. Both aircrafts have at least a 15% reduction in operating costs per seat in comparison to their older counterparts. The real comparison comes into usability of each aircraft; The A380 requires major airport modifications at boarding gates to allow for its enormous size, also requiring larger taxiways and more runway for takeoff and landing. These limitations allow for this aircraft to be used only at major hub airports. The 747 is able to travel to all regional airports with ease, as its size is much smaller than the A380.
bmibaby pays a lot of attention to the way they design their product and services manifested in their flight schedule. The construction of flying programmes is of high value. The company satisfies both, business and leisure customers and achieves this by operating their aircrafts from 7am to 8pm. The management gets as much value as possible from their aircraft assets. In terms of utilization, the costs of ownership are identical if aircrafts are operated one hour or 12 hours a day.
JetBlue is a low-cost domestic airline in the United States that utilizes a combination of low-cost and value-added differentiation as its market strategy. From its launch in February 2000 to the time of the case, the airline grew to become the 11th largest player in the airline industry in a short span of 4 years. Moving into the growth phase, JetBlue transitions from launch mode to an established product stage where it needs to focus on growth of scale. Executive leadership has determined that JetBlue must increase its existing route network by adding service to mid-sized markets. Vincent Stabile, Vice President of People for JetBlue Airways has a challenge: How must the organization understand the current organizational structure’s successes and evolve these learnings to support this growth?
JetBlue believed that its web-based booking, rather than booking through ticketing agents, the company would be able to gain greater control on managing seat sales which in turn avoids customers being bumped. JetBlue also uses paperless cockpit, no meals served on any of its flights, and paperless ticket, which all reduce time and costs. They also use a single aircraft type, which in the long run keeps training costs low, and manpower utilization at a high. Another way that JetBlue utilizes it resources is by using the new A320s, which are larger and more fuel-efficient. JetBlue also has less congested airports, which helps to speed flight departures and get their passengers to their destinations in a faster manner.