Jet Airways

Identifying Key Issues/challenges:

Management of rising cost of fuel :

JetBlue’s financial performance from 2003 through 2007 has changed with increases in fuel costs. Fuel has overtaken labour as the biggest operating expense in the airline industry (Access Intelligence, 2008). The impact of the rise in jet fuel costs as a component of JetBlue’s operating expenses can be evidenced in the slump in performance and financial loss in 2005 When fuel prices were abnormally high it affects the industry’s profitability and each air carrier responded differently. Some carriers decided to charge for things that used to be free such as checked and carry-on baggage, meals, seat assignments.

Sustain or slow rate of growth with national and global economy:

One of the main issues JetBlue is facing how to slow its rate of growth because of rising fuel prices, and lower demand. In order to solve this issue, JetBlue already did the following:

* They have decided to cut back A320 purchases from 17 to 12 airplanes in 2007 and 2008. They also cut back on purchases for the E190 from 18 to 10 airplanes in 2007 and 2008. It is projected that this will decrease the rate of growth from 18-20% to 14-17% (Huckman, Pisano).

* After the crisis, they issued the Customer Bill of Rights in order to regain confidence from its customers.

* Also after the crisis, JetBlue off-shored its operating procedures.

But even with these actions, JetBlue needs to further decrease its rate of growth. The question is how much should JetBlue cut back on airplane purchases and to what capacity for each of the models. Moreover, the big picture is what is David Barger’s vision for the company, and how will he implement that vision.

Capacity planning:

Capacity planning is a current issue for JetBlue. Current and future-period changes to purchasing orders of new planes must be addressed. The issue is critical because each plane costs tens of millions of dollars or about 3% of annual...