Jetblue

JetBlue Airways

Hannah Banks

Business 630: Managerial Accounting

Instructor Dr. Gregory Goussak

April 14, 2010

The passenger airline industry in the United States has traditionally been dominated by major U.S. airlines with annual revenues of over $1 billion, however, JetBlue Airways has made its mark and is one of the major low-cost airlines known worldwide that provides high-quality customer service at low fares. At the end of 2004, JetBlue was the 10th largest passenger carrier in the United States based on revenue passenger miles. JetBlue currently serves 30 destinations in 12 states, Puerto Rico, the Dominican Republic and the Bahamas (JetBlue Airway’s Form 10-K/A, 2004).

Strategy for Success

In order for JetBlue Airways to attract customers and distinguish themselves from their competition they must have a plan for success (Noreen, Brewer & Garrison, 2011). As a customer value proposition and business strategy, JetBlue Airways focuses mainly on operational excellence while also utilizing customer intimacy. JetBlue is committed to keeping unit costs low at 6.03 cents lower than any other major U.S. airline. By offering an alternative rate to the competition, they believe demand will increase. They also maintain high aircraft utilization, operate a single aircraft type with a single class of service and use advanced technologies to improve efficiencies (JetBlue Airway’s Form 10-K/A, 2004). JetBlue also intends to grow by adding onto existing routes, connecting new city pairs among destinations currently served and entering into new markets. By adding additional routes and point to point travel enables JetBlue customers a more enjoyable and convenient experience with the elimination of flight delays and lost baggage. JetBlue also attracts customers and differentiates themselves by offering leather seating, free Live TV, free XM Satellite radio, free DIRECTV at every seat and 34 inches of legroom between seats. “We place a very high...