JetBlue Airways Company Strategies | Free Essay Example

JetBlue Airways Company Strategies

Words: 1195
Topic: Business & Economics
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David Neeleman’s original strategic vision for JetBlue was to “bring humanity back to air travel.” This was through the provision of low price air travel service that is affordable to all combined with comfort, value, and quality of onboard services. His ideas mostly were from professional and personal experiences.

With new senior leadership at JetBlue Airways, there was a need to go back to the drawing board and revise the original strategic vision by developing and including new policies to enable it to continue competing in the industry. These new policies were crucial in restoring its tarnished name, especially in emergency and crisis management cases such as “The 2007 Valentine’s Day ice storm”. Furthermore, these policies would help strengthen the company.

In 2008, JetBlue had in key strategic elements place, which included reevaluating the ways the company was using its assets. One of its keys assets, JFK terminal as would enable its partners such as Lufthansa to use it as a quasi-hub by virtue of owning 19% shares in JetBlue. LiveTV was another key asset of JetBlue and therefore plans were engaged to fully utilize it for maximum gain, and in January 2008, JetBlue signed a contract with Continental for LiveTV provision.

Secondly, JetBlue disposed of nine of its old Airbuses as capacity reduction and cost cut mitigation, resulting in a $100 million profit. By delaying the acquisition of 21 new planes, JetBlue postponed their payments and saved on operating expenses that would have incurred if it had them.

Reducing aircraft utilization rate from 13 hours to 12.5 hours a day saved the company a lot on repair, maintenance, and fuel consumption. JetBlue blue also cut cost by canceling flights between Los Angels International Airport, Boston, and New Zealand as cost of fueling its A320s for the transcontinental flight had sharply shot up.

The third strategy employed by JetBlue executive management was growing in selective markets and slowly increasing fares. The management was to point out strategic and potential markets. JetBlue was approved to start Orlando’s only flight service to South America after it had earlier announced Orlando as its seventh “focus City.”

This would put the company in a better position to compete favorably in the markets. Also by increasing traveling charges it would be in a position to continually meet the rising cost of operation, increase fuel costs and at the same time continue providing quality services.

Fourthly, JetBlue started eyeing the corporation and business travelers. It improved services offered, with some offers including refundable fares. It also had complimentary travel certificate for every 40 customers booked to the event destination and specific meeting discounts for meeting planners.

Entering into strategic partnerships with other airline companies was another move by JetBlue. Aer Lingus and Massachusetts-based Cape Air were some of the strategic partners. JetBlue enabled its customers to make a single reservation through Aer Lingus between Ireland and 40 destinations in America via JetBlue’s hub in JFK.

Lastly JetBlue increased it ancillary revenues which included $10 call-centre charge on phone booked flight or at the airports, charges on extra food item paid via handheld devices operated by the flight attendants, charges on customers to reserve extra legroom, $1 sell of upgraded versions of headphones and $20 service check fee for the second bag. These ancillary revenues measures by JetBlue were put in place to cater for rising fuel cost and increased service quality.

One of the ways which JetBlue chose to attract its customers was by offering quality services at competitively lower charges. So why would one go for the same service for a higher fee? JetBlue did attract its customers by the facts that they were able to print boarding passes for customers at the airport’s check-in kiosks. This was really helpful to people who were fond of forgetting their tickets like Neeleman himself.

Neeleman vast experience in customer service played a very big role in attracting customers to JetBlue. He had the 24-channel LiveTV offered for no charges, and this attracted customers, especially the leisure travelers.

The use of new and standard Airbus also plays a role in attracting customers as they are assured of safety and hiccup-free journeys while the company saves on repair and maintenance costs. JetBlue offers value in a wide range. Comfortable conditions, 24 channel LiveTV, and on board services offered in JetBlue Airbus cannot be described in another way other than real value for money.

JetBlue’s Functional area strategies are consistent with its overall approach. By choosing to go into partnership with other airline companies such as Lufthansa and Aera Lingus, JetBlue strengthens itself, especially where it is experiencing difficulties in penetrating the markets and where there are major competitors. This is a highly recommendable strategic move as it is geared to empowerment in the long term.

From a personal point of view, such partnerships should be engaged in market areas that have been ventured into but prove to be more competitive other than suspending full service. Secondly, optional ancillary revenue opportunities go hand-in-hand with laid strategies. As much as JetBlue is offering value for money, the customer caters for any extra comfort or service to assist in the service provisions.

Though encouraged, these ancillary revenues should be known to the customers as optional; else they termed as hidden charges. Crisis and disaster management move is another functional strategy put in place to ensure proficiency. After the tough lessons from “The 2007 Valentine’s day ice storm,” recommendable policies were drafted to combat the future crisis.

Expansion of the Navitaire system and upgrading of JetBlue’s Website helped to deal with unexpected cancellation and rebooking during the crisis was such a praised move. Announcement of customer’s bill of rights was another plan by JetBlue Company to deal with the crisis as it gives its customers advance notice of any change and in case of on-board ground delays.

The customers are also entitled to voucher good for future travel on Jetblue in such cases. This customer’s bill of rights makes they feel all is not lost as they can redeem the rights later, and it is a professional way of apologizing.

The quality service strategy is fundamental factors that saw the rapid expansion of JetBlue and has continued to be a procedure in achieving its goal. For example, services such as private massage, manicures, and hair styling were additional advantages to JetBlue since some customer would be in a hurry to remember.

The table below is a brief analysis of JetBlue’s rapid expansion between 2000 and 2007.

2000 2001 2002 2003 2004 2005 2006 2007
Number of cities served 12 18 20 21 30 3 49 53
Number of departures 10, 265 26,334 44,144 66,920 90,532 112,09 159,152 196,594
Number of aircrafts 10 21 36 53 69 92 119 134
Number of full-time employees 1,028 1,983 3,572 4,892 6,413 8,326 9,265 9,909
Percentage of sales through website 28.7% 44.1% 63% 73% 77.4% 77.5% 79.1% 75%

Another recommendable approach by JetBlue Company was use of information technology to provide its service. JetBlue was one of the companies that issued tickets electronically, booked flight via internet, managed revenue electronically and tracking of flights via the in-seat television installed in its planes.