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.
JetBlue’s mission was to profoundly known as the leading low-fare low-cost airline. This could only be accomplished by offering customer’s high-quality efficient service and a differentiated product to stimulate the current markets demand while continuing to focus on cost-containment. What business risks does JetBlue face that may threaten its ability to satisfy stockholder expectations? What are some examples of control activities that the company could use to reduce these risks? Organizational risks are specific factors (unique to every organization) that arise within all businesses; potential risks that may threaten JetBlue’s ability to satisfy stockholder expectations are jet fuel prices, retaining sufficient staff and exceeding projected operating costs.
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.
JetBlue's core strategy is to “provides high-quality customer service at low fares primarily on point-to-point routes" (“JetBlue”, 2005). Offering alternative choices to customers such as point-to-point routes to areas that are not catered to by most airlines as well as large metropolitan areas that have had” high average fares” is another part of their strategy. Differentiating their product and service is another part of the plan. Items like new aircraft, leather seats, free LiveTV at every seat and pre-assigned seating are just a few things that make JetBlue different (“JetBlue”, 2005). I would say that JetBlue would fall under both customer intimacy and product leadership customer value proposition.
Needleman’s impact on JetBlue is understandable having a vision he implemented his dream and started the award winning airlines, which spreaded to international ports. Through time like most airlines JetBlue encountered set backs, but after refining and implementing its new strategies, JetBlue has become a business whose industry is a leader in low-cost air travel. 1. Discuss the
If the CEO and Chief Financial Officer (CFO) would use the holistic marketing approach the airline would benefit with the change. Both the CEO and CFO are ignoring good marketing and customer relations. By ignoring both of these principals Classic Airlines revenue is suffering. With holistic marketing everything matters. If the CEO and CFO adopt this principal Classic Airlines will thrive in the future (Kotler & Keller,
Overcapacity has led the major United States airlines to compete with Southwest's low fare pricing strategy. However, due to the company's brand image of efficient and effective low fare service, Southwest has been able to ward off its competitors (e.g. Delta, United, and American Airlines) and maintain its position of market share leader in the United States. As the industry becomes increasingly commoditized and US demand slows, it is time for Southwest to consider global options so that it ensures its presence in the future, while maintaining profitability. Who are some of the major competitors?
Boeing VS Airbus A380 Business Interior Both Boeing and Airbus share some similar business practices and marketing techniques, but that’s where it stops, the rivalry and competition between the two companies has always proved to be beneficial to clients. Between the two companies, you are able to find the perfect aircraft for your needs. But between Boeing and Airbus, who provides the best marketing to clients, and most important, who has the better product. Boeing 787 Mockup Interior Boeing is staying away from the large capacity aircraft designs and is looking to producing the B787 Dreamliner which will be a quick and fuel efficient. Having already filled the market with 747s, Boeing is looking to capitalize on the demand for direct flights and medium capacity requirements.
These cost savings are achieved through a few fundamental principles that underlie the low cost airline model, these being high aircraft utilisation achieved through clever timetabling and fast turnarounds, high load factors, and ruthless cost control. The final part of the study evaluates whether, in my opinion, the low cost airline industry is sustainable in the UK and after careful consideration of
Southwest Airlines – 2008 Case Study Executive Summary Millions of people fly everyday. Southwest airlines provide low-fare travel among 58 cities in the United States. Although the airline industry suffered greatly in the aftermath of September 11, Southwest was able to continue to hold strong. Southwest airline continues to maintain steady sales as much of the industry was affected by changes in laws/regulations and competition entering the market. In the following report there is a brief introduction to Southwest Airlines and their strategy and then what, if anything, they need to do or not do to remain at the top and competitive in the airline industry.