There are a few trends that have come into play over the past few years. These different trends range from pricing for the flight to in flight perks. It seems that the perks and other in flight amenities are what may be what makes the difference and will impact any of the airline company’s strategy. Due to major hikes in fuel costs over the past year the airlines have had no other choice but to start passing this expense on to the flyers. The airlines have been trying to come up with competitive ways to differentiate themselves from the competition.
Many of the airlines even charge for you check bags also. According to Ethan Davidoff in his article The Cost Behind Checking Bags most airlines only charge $25 for a bag to be checked but there is Southwest Airlines that allows two bags to be checked before charging. With that said in the above mentioned article one can see that you definitely want to travel light because for more than one bag the prices start to increase all the way up to $600. Although Southwest allows two checked bags there are other airlines that allow one free checked bag and most have a weight limit of 50lbs.
If one were to travel internationally it may be cheaper to just purchase brand new clothes when you land. Not to mention the convenience of not checking any bags or having to wait to pick it up when you land, etc. So not only have airlines starting charging to check bags but many have stopped providing food, unless the flight is over a given amount of time and you are usually paying for that snack. The above mentioned change in airline airfares has certainly affected many airlines’ strategies.
Also as mentioned above it has affected them most specifically in what type of benefits, perks, or amenities that they are willing to offer their flyers. Jet Blue has certainly followed suite and done various things to try to set themselves apart Discuss Jet Blue’s strategic intent. Jet Blue says that their “objective is optimize our fare mix to increase our average fare and, in certain markets, utilize our network to maximize connecting opportunities while continuing to provide our customers with competitive fares” (jetblue. om SEC filings, p. 31). Like any other company they are looking to cut costs without hurting any of the aspects of their company that sets them apart (i. e. customer service, tv, radio). Jet Blue airline seems to have set its strategy to take advantage of the charges that other airlines charge. They have set themselves apart by offering things on their flights that other airlines either don’t have or charge for. Jet Blue allows the first bag to fly free, the second costs $35, and the third costs $75.
Although they do not have wireless broadband yet, unlike some other airlines, they do plan to have it in place 2012, and this is so because all of Jet Blue’s aircrafts are being set up for ViaSat satellite wireless which is new and no other airline has. Jet Blue is testing the service for ViaSat and the FAA for testing to be approved for use on airlines. However on the ground in the terminal it does offer free broadband at most airports (http://www. jetblue. com/flying-on-jetblue/onboard/wifi. asp). A strategy held by Jet Blue like that of any business is to improve its bottom line.
Jet Blue wants not only to be profitable while reducing costs but they want their customers to be happy and have a good flying experience. Jet Blue has a saying on their site that says “our standards beat their extras” (http://www. jetblue. com/flying-on-jetblue/). They aim to provide stellar customer service. As a matter of fact according to ehow. com Jet Blue “was awarded the Conde Nast Traveler ‘Readers’ Choice Award’ for best domestic airline” and “in 2008, it won J. D. Power and Associates’ ‘Highest Customer Satisfaction Among Low Cost Carriers in North America’ award (ehow. com).
More specifically they also state on their website that they have ” ranked ‘Highest in Customer Satisfaction Among Low-Cost Carriers in North America’ by J. D. Power and Associates for five years in a row” (http://www. jetblue. com/about/work/). Jet Blue airlines prides itself on its customer service. As noticed from the previous paragraph they have won awards for their customer service. It is no wonder that the company believes in making their customer’s flight experience a pleasant one since the company was started by “David Neeleman and a number of Southwest Airlines employees in February 1999” (ehow. om). Outstanding customer service is part of their strategy and it is one of their many features that puts them heads above the competition.
Discuss Jet Blue’s financial objectives and whether or not the company has been successful in achieving this objective. Before even getting into the financial objectives of the company just reading the SEC report for 2010 really shows proof that Jet Blue has been an extremely successful company over the past ten years. Since they were incorporated in 1998, flight starting in 2000, they have grown from $38. million in net income in 2001 to net income of $97 million in 2010 (jetblue. com). The aforementioned data shows proof of growth and success in lieu of turbulent financial times with rising fuel costs. Fuel costs dramatically rose over the company’s time in business which could have easily put a company under but they continue to strive. Discuss Jet Blue’s strategic elements of cost, organizational culture, and human resource practices and evaluate whether each element provides the organization with a competitive advantage.
Jet Blue continues to be competitive with their ticket and baggage pricing. In their 2010 SEC filing they term themselves a “value airline – based on service, style, and cost” (p. 4). They go on to discuss in the overview how they feel that they continue to provide “best coach product” and “reasonably priced optional upgrades” (http://investor. jetblue. com, p. 4). As for Jet Blue’s organizational culture their web site specifically says “If you’re looking for a job where your career, your passion, and your sense of fun are all important then you’ve landed at the right place.
At JetBlue we’ve built an award-winning brand based on delivering value, service, style and comfort to our customers — and to our crewmembers. And, by hiring people who share our vision, we’ve created a place where people enjoy coming to work” (http://www. jetblue. com/about/work/). Jet Blue continues remain un-unionized. Discuss Jet Blue’s strategies for 2008 and beyond and evaluate whether or not Jet Blue will be successful implementing these strategies. Part of their strategy in 2008 has been the same as previous and later years, to remain on time with their flights.
They have continued to do well meeting this goal. Jet Blue’s ongoing strategy has been to deliver exceptional customer service and on time direct flights. In 2008 they stated in their SEC filings that they were the “7th largest passenger carrier” and in their 2010 SEC filings they were the “6th largest”. Regardless of any strategies that they planned to implement they were obviously successful. The proof lies in their continued recognition by JD Power & Assoc, their net income increases, and their growth to 6th largest passenger carrier in the US.
While other airlines are folding, being bought out, or merging Jet Blue is continuing to grow. It is no wonder since they offer outstanding customer service as only part of their strategy and it is one of their many features that puts them heads above the competition. Some of their other features that ranks them high with their customers is the fact that they offer 36 tv channels, XM/Sirius radio, and unlimited snacks and beverages to all passengers at no cost. Kudos to a company for keeping its employees (all non-union) and customers happy.
Courtney from Study Moose
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