The airline industry in US has been challenged and many of firms were bankrupt. However, JetBlue Airways started to expand aggressively and remained profitable by insisting on its low-fare strategy. JetBlue has been published through initial public offering in April 2002, barely two years since established. The initial price range for JetBlue shares was $22 to $24, but facing sizable excess demand, the management increased the range as $25 to $26. After the whole process of IPO including SEC reviewing, road showing, book-building, pricing, tombstone advertisements, JetBlue finally launched in NASDAQ at $27/share as initial pricing, closed at $45 per share on the first day of trading.
Having already filled the market with 747s, Boeing is looking to capitalize on the demand for direct flights and medium capacity requirements. Airbus on the other hand is producing the A380, an aircraft capable of carrying up to 800 people. Airbus is looking to replace the ever growing old Boeing 747s in the market with a higher capacity more fuel efficient plane. Its easy to compare the two aircrafts in terms of size and primary use. 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.
Market Analysis – Southwest Airlines What is the market structure for your good or service selected in Week Two? After almost thirty years of service, Southwest Airlines has emerged as one of the world's premier airlines. The Southwest approach to business and the industry at large have enabled the company to continue to grow at profit in times of true economic downturn. Presently, the market for air carriers is saturated and highly fragmented. Overcapacity has led the major United States airlines to compete with Southwest's low fare pricing strategy.
She transferred from the Greenville, South Carolina plant when it closed in 2006 and had over 10 years of experience with Treadway Tire Company. Ashley had a huge challenge in her new position; she needed to figure out why the Lima plant had a huge foremen turnover rate. After meeting with the plant’s manager, she was informed out of 50 foremen, nearly 50% had left the company in 2007. There was a serious morale issue with foreman and it seemed their discontent was spreading throughout the plant. The high turnover was another large cost for the company which was already dealing with the rising cost of its raw material.
Running Head: Classic Airlines Classic Airlines Marketing 571 Classic Airlines Introduction Classic Airlines is a 25 year old airline company whose recent decline of 19% in their Classic Rewards members due to lack of consumer confidence has senior leadership uneasy. Classic Airlines is proud to be the fifth largest airline in the world with 32,000 employees. Due to rising costs in fuel and labor it has limited the airlines competitiveness in its rewards program. Classic Airlines leadership needs to make a 15% across the board cut while enhancing revenue from its rewards program (University of Phoenix, 2012). Marketing Strategy Relationship marketing is the current marketing strategy Classic Airlines is using.
Background: In April 2002, Jet Blue Airways took the decision to raise additional capital through a public equity offering during a sensitive period in the US airline industry. However, JetBlue strategy- new aircraft, low fares, high quality of customer service- all supported its solid earnings growth over the first two years of its existence. Management is trying to set a price for the new shares. Is the current filing price range of $22 to $24 a share appropriate? Why does JetBlue want to go public too early and during the worst period of the airline industry?
Executive Summary Outlined in this analysis is the underwriting process for Jetblue Airways IPO as well as a description of the steps taking, and lastly the valuations for this IPO based on financial and non-financial information. JetBlue Airways is an innovative and low-fare airline that promised to “bring humanity to air travel back in 1999. Their primary goal was provide high-quality customer service for passengers flying in unique and new aircrafts that had leather seating free Live TV in every seat, pre-assigned seating, reliable performance and simple low fares. In this study we analyzed the value of debt of the firm to help us compare the effects of percent changes of price per share in relation to growth as well as the percent change in price per share in relation to cost of equity. We found that Cost of Equity has a much larger impact on PPS than Growth.
JetBlue Airways JetBlue has successfully implemented an integrated strategy operating a single-type aircraft fleet in a focused segment of the market. The company had success in gaining market share along the existing routes and wanted to expand into medium-sized cities that were being served by legacy carriers’ regional airlines. As JetBlue moved into these markets with shorter flights they realized a need for a more suitable aircraft. Having a smaller jet would make it easier to enter these new markets because of their lower break-even load and it would help to increase passenger loads on their original point-to-point flights. Because of the strategic alliance with Embraer, JetBlue played a significant role in designing the interior of the aircraft to improve passenger comfort, a key component of their differentiation strategy.
A natural first step would be to offer flights on U.S.-based airlines’ international routes and lodging with U.S.-based hotels that operate internationally. 3. Improve the Customer Experience -- Allow customers limited or low-cost flexibility to transfer airline tickets and hotel room reservations as this imposes little hardship on the company outside of processing the transfer. Additionally, the company should offer a cancellation or modification window of 24 hours on any “name your own price” offering,
Running head: JET BLUE CASE STUDY Jet Blue Case Study Strayer University Debra P. Bolger January 27, 2012 BUS 599 Dr. Russell Jet Blue Case Study The United States airline industry includes roughly 600 companies with combined annual revenue of approximately 170 billion dollars (bts.gov). The major companies include American, Delta, and United Continental (bts.gov). There are air operations of express delivery companies such as FedEx and UPS. This industry is highly concentrated with the 10 largest companies accounting for more than 75 percent of industry revenue (bts.gov). The global airline industry generates about $500 billion annually (tbs.gov).