Jetblue Case Study

Question 1

David Neeleman’s original strategic vision was to start an airline company with the following characteristics:

* Low fares – cheap affordable flights throughout the United States;

* An atmosphere that resembles a small cozy den in people’s homes; and

* Passengers would have gourmet snacks, sit in leather seats and watch television.

Jet Blue strategic vision should be revised but still incorporate some of his original concepts. This change is needed since Needleman’s vision was based on a small-scale airline. This industry has gone through considerable amount of hardship – namely as a result of the cost of fuel escalating. The change in vision is needed to turn the company around. It is possible to keep some of the vision alive; such as, an atmosphere that individuals would find cozy – only if the cost do not outweigh the revenue brought in.

Question 2

In 2008 JetBlue developed and began to follow 6 new strategies:

* Re-evaluate the ways the company was using its assets;

* Reduce capacity and cut costs;

* Raise fares and grow in select markets;

* Offer improved services for corporations and business travelers;

* Form strategic partnerships; and

* Increase ancillary revenue.

JetBlue has constructed a new terminal at JFK airport, which helped them to improve its on-time departure and arrival averages at the nation’s busiest airport. Furthermore, JetBlue sold 19 per cent of its equity stake to German carrier Lufthansa which will increase JetBlue’s revenues and allow JetBlue customers to book share flights on Lufthansa to Germany. Since, Lufthansa wants to compete with British Airways, on the lucrative London to New York routes, its partnership with JetBlue has allowed its sister carrier British Midland (BMI) to access gates at JFK after the JetBlue’s Terminal 5 construction.

Later, in 2008 JetBlue planned to reduce capacity and cut costs by agreeing to sell 9 used Airbus...