Analysis of JetBlue Airways

Analysis of JetBlue Airways

JetBlue Airways was launched in 2000 with a commitment to “bring humanity back to air travel” (Neeleman, 2004). The airline flies Airbus A320s configured with a single class of 156 seats. All passengers are seated in leather seats with DirecTV live satellite television at the seat, and the airline also features low prices. JetBlue serves the continental United States, Dominican Republic, Puerto Rico and the Bahamas. The airline often flies into second-tier airports such as Long Beach and Ontario, California instead of Los Angeles, and Oakland instead of San Francisco. JetBlue is based in New York.

The airline industry is highly competitive but has been experiencing difficulty since the September 11, 2001 attacks. Revenues in the industry were down to $80.9 billion in 2001, a 13.5 percent decline from record high revenues of $93.6 billion in 2000. At the same time, the industry as a whole posted record losses of $7.7 billion for 2001. Major airlines, including American and United, continue to struggle: United Airlines·the second largest airline in the world·filed for bankruptcy protection at the end of 2002 (“Air Transportation,” 2004).

JetBlue’s certainly competes against these large carriers, but while America, United and Delta have laid off tens of thousands of workers since 2001, JetBlue has thrived. While not nearly as large as these carriers, JetBlue has found a niche by focusing on value-oriented customers who are interested in quality flying·including live television and leather seats·while paying low fares. JetBlue competes successfully with Southwest Airlines, which is considerably larger in terms of routes and revenues than JetBlue, but which offers a model of a successful low-fare airline with revenues of $5.5 billion in 2001 (“Air Transportation,” 2004).

JetBlue originally targeted the leisure traveler interested in low-fares when it launched on the East Coast in 2000. The company pursued routes in …

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