Jet Blue Case Study

Jet Blue Case Study

Jet Blue has an opportunity to remain cutting edge in the airline industry by continuing to be low-cost and expanding carrier. A great market for Jet Blue to expand to would be towards the Caribbean’s. As well as possibly lobbying Washington to lift travel sanctions in Cuba, which at one point was a major vacation getaway for Americans. This opportunity fits into Jet Blues current business model of short distance flights at a lower cost than the competition.

Jet Blue is a shinning star in the gloomy airline industry. Jet Blue has been showing great earnings and growth since its incorporation in 2000. Jet Blue uses innovative strategies to further their success in a market, which has been showing nothing but losses across the board. They captured a significant market share by using specific market niches unused by others. Now that Jet Blue has been so successful, the only way they can remain profitable is by continuing to be innovative and expanding their market share to other sectors of the industry.

Jet Blue has reached a point in their business cycle where growth must continue in order for earnings to stay above par. Jet Blue has an advantage to pursue and explore new strategies. Jet Blues core business model is to provide low-cost air travel to short distances with quality service.

The way this young start-up company has been so successful is thanks to “brain child” David Neeleman and his cost cutting strategies. David Neeleman set Jet Blue up to be a company, which provides affordable air travel to customer typically flying short-distance flights. David Neeleman wanted there to be a simple communication between departments yet professional business model for all employees to follow. From his prior experience he figured out less costly operational strategies which helped Jet Blue become a major player in the airline industry. Along with reducing the amount of middlemen customers have to deal with, added to his reduced expense structure which in turn proved to be cost effective.

David Neeleman originally worked for South West Airlines and helped increase there business, but wanted to venture out on his own. Neelemen experienced set backs because his prior employer made him sign a no compete contract for five years. During those five years Neeleman was able to complete a solid business plan, which would use South West Airlines business model but with better marketing strategies

Jet Blue was built on a strong foundation with experienced and knowledgeable people making decisions. Neeleman felt that certain key employees needed to be put in place to have this organization grow the way it has. So a solid team was put in place and the machine has been oiled. In order for Jet Blue to have obtained such a significant market they needed unique marketing. Jet Blue approached and targeted specific markets which they serviced with certain marketing incentives.

Jet Blue set up its main head quarters in New York’s JFK which is one of the biggest airports in the world. This was a strategic plan due to the lack of domestic flights going in and out of JFK, that minimized there competition which allowed them to continue on a path which led them to there success. Through targeting specific markets and concentrating their efforts on those markets they gained a loyal customer base which through word of mouth helped grow Jet Blue into a reliable company with an image as if its been doing business just as long as there competitors.

Jet Blue has introduced personal televisions and more leg room to the flying experience which gives another luxurious yet cheap option that detours customers from their competition. Neeleman found many cost cutting options, which added to the balance sheets. Such measures were to eliminate the meals which customers were accustomed to. This was a risky move but in turn proved to be more cost efficient and did not take away from the quality of the flying experience.

In order for Jet Blue to take advantage of untouched markets such as Cuba, they would need to lobby Washington which may be unlikely chance but will add to there balance sheets. Though this opportunity is far fetched, there next step would be to expand there locations to some more exotic locations near the Caribbean’s. The Islands are the next logical step because it fits perfectly into Jet Blues business model of sort distance flights at a low-cost.

This market has already proved to be a solid vantage point for Jet Blue to expand to.

When Jet Blue Airways in June launched direct service between New York JFK International Airport and Santo Domingo and Santiago, two of the largest cities in the Dominican Republic and far from traditional tourist destinations, it was clear that New York's one million-plus