Part 1 – Issues faced by Jet Blue
Some of the significant issues Jet Blue faced on February 14, 2007 were due to an unexpected ice storm that grounded over 39% of the scheduled flights over a course of three days. Because Jet Blue’s services are intangible, it was hard for the company to make up for the flight cancellations. Also, the services that Jet Blue offers such as flights are perishable. Therefore, all profits from cancelled flights were lost. Another issue faced by Jet Blue was the communication gap between the employees, upper management, and customers. Customers showed up with the expectation of boarding a plane and arriving at their final destinations without any major delays. They believed this because of the “Jet Blue Experience” that promised them the “best customer service in the business” (Zeithaml, Bitner, & Gremler, 2013). However, Jet Blue was unable to provide the customers with what was promised because of factors that were out of their hands, the weather.
Another issue faced by Jet Blue’s Valentine’s Day crisis was that they did not provide adequate services to stay within their customer’s zone of tolerance. This can be attributed to the amount of time that some passengers spent on the plane which in some cases was over ten hours. While on the plane the passengers were only fed snacks and given drinks that the airline provided them with and what they had on board. Some passengers complain of the poor air quality while on the plane, comparing their experience to being held hostage. Customer expectations were not reached on any level when they expected outstanding customer service. 1B.
Jet Blue faced many issues due to the storm but the main issue was service failure. Jet Blue passengers did not gain what they expected from the experience. Jet Blue did not have measures in place to start service recovery efforts as soon as the incident happened. They should have been more prepared in terms of wait times, flight cancellations, food and beverage shortages, and entertainment options. There were many Irates or customers willing to express the negative aspects of their experience. Jet Blue could do nothing but apologize and try to make up for the huge service failure. Also, Jet Blue did not have an interactive complaint solicitation plan in place. It is difficult for passengers to voice their opinions and frustrations on board a plane. Therefore, Jet Blue should have been proactive in getting the customer complaints taken care of immediately. 1C.
As with most services there is no way of inventory management when it comes to airlines. However, Jet Blue did not take their customers or employees into consideration when they were left stranded in a plane for hours. There were not enough quality food, they didn’t have alternate ways to entertain the passengers, and they did not find a way to occupy the time of the waiting passengers. First, Jet Blue does have control over the amount of food and beverages they have on board. They could have had back up food on board such as MREs (Meals Ready to Eat). Jet Blue also did not take into consideration the anxiety associated with undefined wait times. The psychological costs associated with this wait-time anxiety should have been taken into consideration when the crew members realized that they would be stranded in the plane for more than a few hours. They were not able to manage their service promises well enough to maintain a high level of customer service. Part 2 – Recommendations for Jet Blue
The first recommendation that is offered to Jet Blue is to try to close the communication gap as fast as possible when faced with situations like the Valentine’s Day storm. This would entail having adaptability and showing great responsiveness. The sooner Jet Blue is able to cope with the situation at hand, the sooner they can start a recovery plan. Jet Blue could have shown adaptability by providing the passengers...
JetBlue Case Study
1. A need is a state of felt deprivation that includes basic physical needs for food, clothing, warmth, and safety; social needs for belonging and affection; and individual needs for knowledge and self-expression. Marketers did not create these needs; they are a basic part of the human makeup (Kotler and Armstrong, page 6). A want is the form human needs take as they are shaped by culture and individual personality. Wants are shaped by one’s society and are described in terms of objects that will satisfy those needs (Kotler and Armstrong, page 6). A demand is human wants that are backed by buying power (Kotler and Armstrong, page 6). JetBlue customers demonstrate the physical need for snacks and beverages by showing the company that they enjoy the free snacks and beverages that are being offered by the company. The customers may want the brand name snacks and beverages and the demand is demonstrated by the customer having the buying power to purchase Dunkin Donuts coffee, Terra Clue Chips and Chocobilly cookies. JetBlue customers also demonstrate the need to be comfortable while flying by wanting extra leg room and more space. The demand is demonstrated by the customer having the buying power to pay an extra $10 dollars to reserve one of JetBlue’s “Even More Legroom” seats, which offers more space and a flatter recline position. Another example JetBlue customers demonstrate is the need to be entertained while on a flight...
Part 1 Analysis:
JetBlue, despite the hard times facing the airline industry, is doing well in comparison to its competitors. It is a much smaller company earning as much as $18 million less than its competitors in operating revenues (American had the most at 20,657 million and JetBlue had 1,701 million). However, with that being said, it is the only leading airline to show an operating profit besides Southwest. Does this mean JetBlue was successful? Along with all of its competitors, with the exception of Southwest, it had a negative net income and negative earnings per share. However, its losses are much less than its competitors. Its gross profit margin was .028, while its competitors such as Delta at -.12 and American at -.17 showing that while it may not look like a success in the larger picture; it is at a competitive advantage, with the exception of Southwest.
JetBlue has a competitive advantage over its competitors. It entered into the market offering prices that were low. In addition, it offered luxuries such as leather seats and satellite televisions on the back of all the seats on the plane. These luxuries were not offered by competitors at the low prices that JetBlue was offering, not even Southwest, and offered value for consumers that were rare. While these services can be imitated, it would be very costly to do so. Airlines would not only have to...
...Jetblue Case Analysis
Jetblue set out to provide its customers with a great airlines experience. Neeleman’s goal was to provide customers with “the types of amenities reserved for the pricier carriers, including wider seats ……and 24 channels of in-flight television” ( Case study pg 400) One of Jetblue and Neeleman’s biggest challenges was to keep offering all these amenities while still competing with the big carriers by keeping their prices 50 to 60 percent lower on the same routes. As they grew and hired more employees they found it harder to maintain the same level of customer service across the board. Also other carriers began to compete with them in the lowprice arena. These bigger airlines had more planes and employees to they were better able to respond to the storm that blanketed New York in 2007. This storm proved to ruin many of Jetblues customer experiences due to the delays and cancellations. Jetblue gave all of their customers refunds and free flights in response to the delays. They were also feeling the effects of the storm longer than their bigger competition since they were understaffed because of pilots being stuck in other states.
When the storm hit some flights set on the tarmac for up to ten hours still chancing to be able to leave during the storm. Jetblue could have cancelled these flights earlier and kept customers from having to endure sitting on planes for extended periods of time. If Jetblue had done this then they...
...1. The decision maker in the JetBluecase was former CEO David Neeleman. He was the person who started JetBlue and formed it to become a low cost airline provider, providing luxury and comfort and destinations to various cities at a low affordable cost. He understood how to cut cost and keep operating expenses low, and as a result JetBlue had rapid expansion and flew to 53 destinations in 21 states, including Mexico, Puerto Rico, and the Caribbean. Up until 2007, when David Barger took over, Neeleman made JetBlue prosperous and consistently made strategic moves in order to produce the best outcome in the areas of maintenance, total operating expenses, and benefits. Even as a response to the ice storm in 2007 where passengers were grounded at an expense that cost JetBlue 30 million, Neeleman quickly instituted the Passenger Bill of Rights, and began setting systems in place that could hold more reservation agents in such crisis times.
2. In my opinion, Jet Blue’s top five issues are: rising fuel cost, too many luxuries to customers, lack of proper training, lost baggage, and customer complaints.
Rising Fuel Cost: The rising fuel cost grew by 532% from 2003 to 2007 and consumed about 33% of Jet Blue’s operating cost. Rising fuel cost has an effect on other areas (directly and...
To be the best method of traveling
• JetBlue Airways is the low cost Airline of America.
• Strong people on top management, several JetBlue executives are former employees of Southwest Airlines.
• It follows the low cost strategy of Southwest Airlines but differentiate itself by facilitating customer with entertainment stuff.
• Strong Brand widely known among the people of US.
• Live TV at every seat with 100 channels.
• Low cost operations
• JetBlue continually hiring talented and experience people and also retaining them.
• JetBlue was named the number one U.S. domestic airline by Coned Nast Traveler magazine’s “Readers’ Choice Awards” for the sixth year in a row.
• JetBlue has not yet tried to lift money by selling snacks during flights
• It was established in year 1999 relatively new airline company that the reason it still not have complete market hold on 50 states.
• In year 2005 it had faced Aircrafts problems which reduced the profits.
• Airline is operating in 12 countries.
• The airline industry growth is not up to the mark but still JetBlue profits are on higher side.
• Increase the number of flights.
• Penetrate in US market.
• Majority of international markets are untapped.
• The incident of 9/11 increases the security threat for airline industry.
• Recession in US may lower the revenues.
• The price of fuel is unpredictable.
...Individual Case Analysis
JetBlue Headquarters, Forest Hills, New York.
JetBlue Airways, an American low-cost airline, headquartered in Forest Hills, New York started flying out of John F. Kennedy Airport in February of 2000.JetBlue started by following Southwest’s approach of offering low-cost travel, setting themselves apart from their competitor’s through the amenities they offer like in-flight entertainment, flat-screen TV’s on each seat, live digital satellite radio for all passengers, one-way tickets and no weekend stay over requirements to receive their cheaper fares.
The case of JetBlue illustrates JetBlue’s plan to succeed, and be among the few airlines that have had longevity. Dave Neeleman was the founder of Morris Air, which was later purchased by Southwest Airlines in the mid 1990s. Neeleman models the operation of JetBlue after Southwest Airlines, in doing so JetBlue only operates one type of airline, the Airbus A 320, as a result they will only need to train and FAA certifies their crew of pilots, flight attendants and mechanics on only that kind of plane. JetBlue also operates from smaller airports instead of the busy international airports, in an effort to save on landing fees there’s also a lot less traffic, so airlines are easier to turn. JetBlue is also able to save on flight cost due to the fact that they operate newer airlines that require less maintenance, and a nonunionized...
...JetBlue Airways Case 20
On February 11, 2000, JetBlue Airways launched its first ceremonial flight from New York City to Buffalo, NY, making John F. Kennedy International Airport its official hub. David Neeleman founded JetBlue after raising $130 million from investors and also contributing $5 million of his own money. Neeleman’s idea was to start a company that would combine the low fares of a discount airline carrier with the comforts of a small cozy den in people’s homes. By April, 2002, the airline company had flown over five million passengers, sold public stock at a starting price of $27 a share and acquired LiveTV, LLC, its provider of in-flight satellite entertainment systems. Despite its early promise and strong organizational culture, JetBlue failed to deliver value to its stockholders over a five year period ending in 2006. Because of this, JetBlue was forced to improve their business strategy and make changes that would save their organization from going under.
When JetBlue began its operations in 2000, they realized that it would be nearly impossible to compete with Southwest as the leader of low cost providers. JetBlue also realized that it was crucial to distinguish themselves from other major competitors such as US Airways, American and Continental because they could not compete at their price level because of a lack of name recognition and the loyal customer base advantage that these companies already had. These factors led...
...JetBlue Airways: Case Study
1. Draw up a SWOT analysis and describe JetBlue’s Strategy.
* Low cost airline fares and operations
* Experienced management
* Creating demand in under-served markets
* Customer service oriented (i.e. leather seats with more legroom, in-flight entertainment, better refreshments than competition)
* Political backing and support
* Competitive pay and benefits increasing employee retention
* Sustaining low cost fares and operations with a down economy
* Unpredictability of the market
* Political backing and support
* Does not run service to all major airports
* Increased destinations (inside and outside the U.S.)
* Growth and increased profitability
* Make competition irrelevant
* International growth
* Airport security causing travelers to use other means
* Unpredictable fuel prices
* Competitors using JetBlue strategies to provide similar service
* New competition
* Recession / Depression
* Unsustainable growth rate
* Weather / Natural disasters
2. What are the dangers of rapid growth? Or not growing fast enough?
* Overburdening employees which creates excessive turnover
* Not enough overhead to meet consumer demand
* Product quality and service decreases
* Competitors learning from your business mistakes...