Industry Research

1. Barger was named as CEO from COO and President in 2007. When he got promoted, the company was in crisis. He had the plan and vision to maintain the confidence of customer, employees, and shareholders. Jet blue, in 2000, began their LOW COST carrier and by 2007 held a 30% share of domestic departure. Also, in fall 2008 they are planning to open 26 gates and wide range of passenger amenities. In 2005, JetBlue added E190 to their 85 of A320s in their fleet. By end of 2006, they had 119 planes of 190s. In late 2006, the rate of fuel was increasing so barger had to slow down the decision to buy further planes. As the fuel prices were increasing, barger had an idea to slow the rate of growth, and he was confused how to distribute these reduction across E190s and E320s because both were performing well (EXHIBIT 1)

2. LCCs and Airline Industry: Legacy carriers (united and American airlines) because of their long histories, and also they got large hubs where thousands of passengers were shuttled every day to connecting flights. Delta air also applied it that helped to maintained the low cost and centralize the transfer of passengers during long journey. However, it also proved challenging. Southwest (1980-2006) strategy to take customers directly to the cities that were often less than 500 miles apart, and used secondary airports in major metropolitan areas. EXHIBIT 2: Provides the difference of profit margin among airlines. After 9/11 attacks, in October 2006, 5 major airlines filed bankruptcy.

3. JET BLUE SHORT HISTORY: Jetblue started in 2000 with 14 planes, and made a good status in 2004 by making above $1 B annual revenue. In 2005, JetBlue became ninth-largest passenger carrier in USA. By 2011, company planned to have 290 planes in service. Intially, since 1988 Jetblue was only comprised with A320. Jetblue offered 65% lower than legacy competitors with good quality features. Key operating principle was flight cancellation should be avoided at all cost....