Essay Jetblue Airways: Managing Growth

2192 Words Mar 21st, 2013 9 Pages
Jet Blue Airways; Managing Growth

1. Jet Blue´s Business- level strategy; value and cost drivers Jet Blue uses to create and maintain ist competitive position
Founded by the discount airline veteran David Neeleman in 2000, JetBlue Airways has quickly become one of the largest discount airlines in the United States. Starting primarily by serving the East Coast, the airline has since expanded throughout the country and entered the international market. The reasons for its early success are numerous: JetBlue entered the market with one of the largest levels of liquidity of any start-up airline; it met the needs of customers’ whose primary concerns are price and route; and it successfully defined its brand and differentiated itself
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3. Strategy/ structure needed to support the A320 versus the E190; reconcilable differences?; opportunities for synergy
The new developed strategy of Jet Blue was to acquire enough E190 aircrafts to serve medium- sized cities to provide a steady flow of passengers to fill the seats on the longer-haul routes of their A320 aircrafts. A big advantage of this system was that it also worked the other way around. Jet Blue turned out to have an enormous advantage in comparison to the regional airlines, because the E190 had more seats than the traditional RJ. They could use the best option for efficiently serving medium-sized markets while offering passengers more comfort, because they did not had to face limitations on the size of the planes as RJ did. Therefore, Jet Blue has to overcome some essential problems caused by significant differences between these two aircrafts. On the one hand, the E 190 is operated at 12 per cent greater costs than the A320, therefore 34 per cent less costs than for a typical RJ. The E 190 was a great innovation because it could target a wider range of profitable destinations with a greater seating capacity to feed into A320 flights. This results in higher loads and improved economics for Jet Blue. The breakeven load for the E190 of 75-80 per cent was much lower than for the A320, which made is easier to introduce service into new markets. One of the problems is that it takes up to 40 to 50 airplanes

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