JetBlue Case Study Example | Topics and Well Written Essays - 1000 words

JetBlue - Case line of business ExampleTrends within the US airline industry much(prenominal) as crude oil set and passenger fees, post 9/11 and pilot shortages bedevil substantial effects on the surgical process and strategies of airline companies. Prices of crude oil have increased considerably in last few years, which has had a substantial effect on the pricing of passenger fees. For instance, in 2008, crude oil prices rose to a record $140 per barrel and this price swell caused airlines to labor to offset fuel costs. Many companies were coerce to implement new passenger fees to cater for the surge in fuel prices. However, while fuel prices be currently low, airlines continue to increase revenue by passing costs to its customers. Shortages of pilots have besides hale companies to adjust their strategies. As baby boomers retire, the airline industry suffers a shortage of pilots. Prior to becoming captains, pilots have to gain sufficient flight hours. The International Air Transport Association asserts that airlines need nearly 3,000 superfluous pilots each year, which is far more than training schools provide (Thompson et al., 2010). Post 9/11 aviation shelter also influences airlines strategies. After the 9/11 terror attack, Congress implemented the Aviation and Transportation aegis Act (ATS). This led to the creation of the Transportation Security Administration (TSA) and established that federal employees should be in charge of airport security at all airlines (Kaplan, 2006). This forced airlines to institute numerous layers of security. JetBlues strategic intent David Nelleman founded JetBlue with the view to bring humanity to air travel. The aim was to offer lowly discounted comfort and benefit to customers. The companys philosophy was to delay flights instead of cancelling them entirely. The firm was the first airline to publish a bill of rights for its passengers. This document outlines its policies with regard to the airlines customers. I t launched electronic ticketing to enhance convenience and offered additional go such as in-seat television, as well as PayPal payments for tickets. In order to enhance its customer and shareholder value, the airline established rapid and strategic harvest-feast initiatives. In 2000, the firm made a kinda chancy decision by starting services in overbold Yorks JFK Airport, which was already quite a congested. JetBlue took advantage of the lighter 8 to 9am flight window to offer appealing flights to young and wealthy New Yorkers and those travelling to the city. In 2008, JetBlue launched Terminal 5 at JFK to offer customers more efficacy and convenience, while also saving them up to $50 million in fuel, vouchers and labor. Between 2003 and 2008, the airline launched service to numerous destinations such as Portland, Fort Lauderdale, and San Diego among others. By the end of 2007, JetBlue had expanded its operations to more than 53 destinations (Thompson et al., 2010). However, t his impressive growth did not immediately trickle down to add shareholder value. JetBlues financial objectives While JetBlue showed huge promise, its stock values dropped by 50% in a span of five years determination December 2007. This is because between 2003 and 2007, the companys operating expenditure increased by 222%. This is primarily because of run fuel (532% rise) and interest expenditures (658% rise). Rather than handling the interest expendit