JetBlue Airways is a new airline company in the United States that is noted for its low-fare and efficient service. The company was founded by David Neeleman in 1999 and is now one of the major airlines that operate in the United States (Gittell, & O'Reilly, 2001, p.1). One of the key factors of JetBlue Airway’s success is its aggressiveness towards expansion. The company, for instance, added 10 new planes every year as part of its expansion plan as well as adding new routes and domestic markets. Accordingly, the company wishes to achieve rapid growth “while building a value-based, high commitment organizational culture” (Gittell, & O'Reilly, 2001, p.1). Another key factor for JetBlue Airway’s success is its differentiation or innovative strategies that set the company apart from its competitors. One particular strategy employed by the company, for instance, is to “combine common sense with innovation and technology” in order to attract customers to air travel (Gittell, & O'Reilly, 2001, p.2). The company aims to become the first paperless airline by accomplishing all consumer flight related activities and maintenance activities using the computer technology. In addition to its aggressiveness and innovation, the company’s commitment to exceptional customer service while providing affordable travel fare can also be considered as one of the key factors for its success (Gittell, & O'Reilly, 2001, p.2). It should be noted that JetBlue Airways is not the first of its kind to offer low-fare air travel. In fact, the first airline company to develop a low-fare airline industry model is the Southwest Airlines. Also known as ‘peanut airlines’ because of their focus on cost cutting strategies and exceptionally low travel cost as compared to traditional airline companies, it could not be denied that JetBlue Airline’s business model is closely based on Southwest’s low-fare scheme . And just like Southwest, JetBlue has also benefited from the success of this business model. JetBlue Airline, however, would like to make a name for itself and to differentiate its operations from its competitors, especially from Southwest Airlines.
The company’s aggressive expansion may not be an indicator that it is a profitable company. There are airlines, for instance, who started aggressively, but ended losing money as in the case of RyanAir when the company initially started. So if ever a decision is made whether it is best to invest in JetBlue Airlines, the most important indicator of profitability would be the company’s financial records. But basing on the company’s performance and management alone, then investing in JetBlue is quite appealing. The company’s strategic expansion, for instance, can help the company establish financial stability. As observed in the case study, the company’s protected landing slots at key airports can provide a “secure revenue base to help finance expansion” Gittell, & O'Reilly, 2001, p.7). The company also operates on new ad reliable Airbus units, which significantly decreases the risk of losses due to delays on maintenance issues. The company’s human resource strategy is also commendable and offers a picture of an internally stable company. JetBlue, for instance, is unique in the sense that it has a strong line-up of management executives whose experience and expertise can help steer the company avoid the pitfalls experienced by other airlines. Furthermore, it has a winning combination of Southwest Airlines’ low-fare business model and a management strategy comparable to Walmart wherein management is making its best effort to avoid the company from being unionized (Gittell, & O'Reilly, 2001, p.10). The company also offers competitive compensation packages, which helps motivate employees to become committed towards the company’s goals. Considering these factors, it can be deduced that investing in JetBlue Airlines is a good idea.
Gittell, J.H., & O'Reilly, C. (2001). JetBlue Airways: Starting from Scratch. Harvard Business School, 1 - 20.
Miller, C. (2013, June). Ryanair and Easyjet: The history of the peanut airlines. Retrieved February 2016, from http://www.bbc.com/: http://www.bbc.com/news/business-22888304
Ryanair. (2014). HISTORY OF RYANAIR. Retrieved February 2016, from http://corporate.ryanair.com/: http://corporate.ryanair.com/about-us/history-of-ryanair/