Jetblue Airways

JetBlue Airways: A Cadre of New Managers Takes Control

BUS590 – Assignment #1

Dr. Kim Anthony

January 16, 2011

1. Discuss the trends in the U.S. airline industry and how these trends might impact a company’s strategy.

The US airline industry is started to see improvement in demand for air travel in the beginning of 2010 after being affected by the economic downturn. Business travel, which is directly affected by the economic environment, plunged to an all-time low in 2009 as many corporations slashed travel budgets. (Zack’s, 2010). In addition to business travel, leisure travel was also affected and showed a decline as compared to previous years. JetBlue was able to face this challenge by continuing to offer low fares that were especially attractive to business travelers. By creating John F. Kennedy International Airport (JFK) as their central hub, JetBlue was able to provide low fares and in conjunction with Senator Schumer help stimulate the stagnant economy in upper New York State with the hopes of encouraging outside employers to open up new businesses. This strategy was very promising at the beginning; however there was nothing that could overcome the effects of economic recession. Regardless of the positive forecasts for the airline industry, experts say the airlines have a long way to go before they can expect revenue and passenger traffic numbers to return to pre-recession levels. (Martín, 2010).

2. Discuss Jet Blue’s strategic intent.

JetBlue’s founder, David Neeleman, created the company to “bring humanity back to air travel”. (Thompson, 2010, p. C-51). They are the eighth largest passenger carrier in the United States and have received several awards for their performance, even as recent as 2010 for the best customer service. One of the strategies Neeleman put in place was to create an organization that was able to combine the low fares of a discount airline with the comforts of home – hence JetBlue. His main focus was...