Professional Documents
Culture Documents
About JetBlue
American low cost airline Launched on February 2000 Main base is John F Kennedy International Airport As of December 7, 2011 JetBlue serves 71 destinations in 21 states, and twelve countries in the Caribbean, South America and Latin America. Started by following Southwest's approach of offering low-cost travel, but sought to distinguish itself by its amenities, such as in-flight entertainment, TV on every seat and Satellite radio.
You need to go where people want to fly See the future needs and meet the demands Reach the untouched cities Commitment to people We are a new kind of airline with deep pockets, new planes, leather seats with more legroom, great people and innovative thinking Use new airplanes Offer great personal service Fares averaging 65% less than competition All seats would be assigned, all travel would be ticketless, there would be no discount seats, all fares would be one way '
On June 13, 2012, JetBlue ranked 'Highest in Customer Satisfaction Among Low Cost Carriers in North America
*Available Seat Mile = Number of seats available multiplied by the number of miles flown
Strategies
Generic Strategy- Differentiation and Overall Low Cost. Grand Strategy- Growth, Operational excellence. Motto- High quality service to Customers at a low cost. Every move by Jetblue is focused towards their strategies and motto.
Venture Funding
Why buying aircrafts instead of leasing? Go BIG $130 million instead of $30 million. Neeleman considered VC ahead of IPO.
Critical Decisions
Home Base in New York:
Heart of under served markets JFK airport Alliance with New York States Congressional delegation for 75 landing and Take off slots Secure lock on traffic, similar to South west airlines Love field in Dallas Avoided Air Traffic congestion
Boeing Vs Airbus
Decided to own than to lease Contract to purchase 80 Airbus A320s over a period of time
Operations Strategy:
Attempt to build worlds first Paperless airline Started E-ticketing Pilots were provided with Laptops for flight operations, planning and communications Aircraft utilization of 13.5 hrs vs 10 hrs industry average Strived to achieve 30 min turnaround time.
Values
Rhodes wanted best from the industry One of her conditions for joining Core values drove all activities. Mission hot air ; Visionbedrock Two day meeting 20 members
Safety
Passion
Caring
Fun
Integrity
A Non-Union Environment
Airline Industry highly unionized 80% against national average of 15% Not having a union creates a team environment Working together - we wont need union COO positive environment to keep the place union free
My goal is to always say Yes. They say you cant do it. But I say you can if you really listen to what each group wants -Ann Rhoades
Compensation
Customized pay and benefit packages that met or exceeded industry
standard Double pay for those who worked on holidays Profit sharing benefits Always paid $1 more per hour than the highest rate paid in the industry Overall equity in treatment Customization in all types of job performed
Flight Attendants( 1 to 5 years) One year employment contract for college students Job sharing offer Full time flight attendant Customer service and Ramp workers Shift differentials Pilots 20 days off per year, Stock options No central Reservation Centre 500+ reservations agents
Other HR practices
Initial orientation for employees
Productive ,Safe & Customer Oriented
360-degree performance management process Importance of Communication Flight clarification report Tiger teams Power of language Customer- central importance
Post 2000
One of only a few U.S. airlines that made a profit during the sharp downturn following the September 11, 2001, attacks
New Rivals: Delta Air Lines started Song, United Airlines launched Ted Rising fuel costs
2006: Attempts to unionize : IAM (International Association of Machinists) attempted to unionize JetBlue's "ramp service workers,
February 2006, JetBlue announced its first ever quarterly loss: heavy debt load, recession and high fuel prices
February 2007, snowstorm hit the Northeast and Midwest: practice of never cancelling flights: $ 30 million On May 10, 2007, JetBlue announced Barger's appointment as CEO On December 13, 2007, JetBlue and Germanbased Lufthansa announced their intent to sell 19% of JetBlue to Lufthansa On October 22, 2008 JetBlue opened its new primary hub at John F. Kennedy International Airport (JFK), Terminal 5
Member of sky team Code sharing agreements Interline agreements: South African Airways, Virgin
At December 31, 2011 consisted of 2,168 pilots, 2,326 flight attendants, 3,560 airport operations personnel, 509 technicians (whom others refer to as mechanics), 805 reservation agents, and 2,726 management and other personnel. At the end of 2011, JetBlue operated a total of 169 aircraft, including 120 Airbus A320 aircraft and 49 EMBRAER 190 aircraft
Capacity Distribution East Coast Western U.S Northeast Florida Medium haul
2011 2010 2009 32.4 34.5 34.7 32.2 31.4 32.8 3.2 3.3 3.5
Short haul
Caribbean, including Puerto Rico Total
7.5
7.6
7.7
Total 120
100
19 105
0 4
30 60
49 169
4.1 6.1
Fuel remains our most significant operating expense, comprising nearly 40% of the total. Fuel hedge portfolio
2011 Gallons consumed (millions) Total cost (millions) Average price per gallon 525 2010 486 2009 455 $945 $2.08
Maintenance costs will increase as our fleet ages. Business is highly dependent on the New York metropolitan market Reduced aircraft utilization may limit the ability to achieve and maintain profitability Rely heavily on automated systems Liquidity could be adversely impacted if credit card processors were to impose material reserve requirements If we are unable to attract and retain qualified personnel or fail to maintain our company culture, our business could be harmed. Risks of having a limited number of suppliers Subject to competitive risks due to the long term nature of our fleet order book Challenges ahead