Jetblue Essay

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Introduction Despite the recession of American airline industry, JetBlue Airway’s profitability and productivity were still growing sharply after the terrorist attacks of September 2001and the distress of SARS in Asia areas in 2003. Therefore, the management decided to raise funds by initial public offering (IPO) in order to enforce the growth strategy. This article will analysis the advantages and disadvantages of JetBlue’s IPO by SWOT analysis, then, the recommended price will be provided calculated by P/E ratio and DCF methods and the limitations will be demonstrated as well. SWOT analysis of JetBlue: Strengths 1. JetBlue has a professional and experienced leadership team who dare to implement the innovations during the worst period in airline history. * David Neeleman, the owner of the company, invited David Barger who was the vice president of Continental Airlines as the president and COO of JetBlue. John Owen became JetBlue’s CFO after he had been the executive vice president and treasurer of Southwest Airlines. Additional, Neeleman also acquired about $130 million financial support from the venture-capital community. 2. New routes and new aircrafts have been used to expend the volume of the business and enhance the cost control. * JetBlue operates 108 aircrafts to 17 destinations everyday. * New aircrafts, Airbus A320 is a reliable and fuel-efficient flight among airplanes. 3. The low-fare airlines strategy contributes a lot to the success of JetBlue. * JetBlue imitates Southwest Airlines to operate low-fare model that includes high-frequency, short-haul, point-to-point, low-cost service strategies. 4. JetBlue provides advanced and technological services to the customers, aiming to establish a professional brand in airlines industry. Weaknesses 1. JetBlue only focuses on some main cities of America, not expend its services to

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