Jet Blue Case Analysis
Embry Riddle Aeronautical University
Entrepreneurship and Leadership
Dr. Stuart Childers
July 11, 2014
Jet Blue Case Analysis
When JetBlue Airways was created it was built on innovation, technology and the belief that outstanding service at an affordable price was the key to success. The founder of JetBlue, David Neeleman, knew that success could only be achieved by building a team that was fully committed to a set of values. The center of those values are the people who make up JetBlue. When building people centric organizations “…the most important element is caring. I want JetBlue to care about our people from end to end.” (Gittell ...view middle of the document...
Another idea that improved efficiency and significantly controlled costs was the selection of fleet aircraft. After conducting cost benefit analysis it was an easy decision for JetBlue to buy versus lease aircraft. After researching and comparing the types of aircraft, JetBlue decided to purchase 80 new Airbus A320. The brilliant decision made by Mr. Neeleman to purchase all the same type of new aircraft kept fleet logistics costs well below the industry average.
JetBlue’s integration of technology during the airline startup enabled huge cost savings and improved productivity and efficiency. One such initiative was the use of laptop computers. Each pilot was issued a laptop that enabled them to store technical orders and publications required for flight, as well as flight planning, scheduling, and communications software. The result was a savings of time and resources. Maintenance records were also digitalized turning the company paperless. The result was a highly efficient and technological advanced airline that kept operating costs significantly below the industry average.
INNOVATION UPDATES. As JetBlue has matured events along the way have required the company to initiate improvements. In February 2007 winter storms blanketed the most of the country. JetBlue was forced to cancel more than a thousand flights, leaving thousands of passengers stranded on airplanes or in the airports. The cancellations not only hurt the airlines reputation as one of the most customer friendly airlines, but it also significantly hurt investors. In the ensuing months, JetBlue’s stock plunged 20%. (Zappone, 2007, p. 1) JetBlue admitted the storms had caught the company unprepared. Passengers were kept on planes for eight hours and crews that could have operated flights were prevented from assisting by a lack of coordination. Changes were needed to restore customer confidence. The company publically apologized and promised travel vouchers for displaced passengers. JetBlue established an industry leading “Customer Bill of Rights” to ease the pain of future travel disruptions and to restore customer confidence. JetBlue had grown so fast that many of the systems to alleviate pressure from flight disruptions were not in place. A few of additional changes initiated by JetBlue to help ease the stress of travel disruptions were additional training for administrative staff to assist airport operations, improved check-in and web site software. Additionally, JetBlue established a call in system made it easier for customers to change reservations thereby relieving some of the pressure during times of projected weather delays.
Already stated in the analysis is the lower maintenance operating costs enjoyed by JetBlue. The two reasons for this is that the fleet of A320s was purchased new and because all the maintenance is on one type of aircraft versus many different types. Eventually, as the fleet begins to age, costs will begin to increase...