MI021 Section 4 Team 8

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MI021 Section 4 Team 8 Jenna Erdle
Brett Goverman Katherine Kim Mike
Liccardo Ben Marks
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• Above all else, Jet Blue Airways is dedicated
  to bringing humanity back to air travel. We
  strive to make every part of your experience as
  simple and as pleasant as possible.
• -JetBlue.com

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JetBlue Airways

• Low fare commercial airline
• Founded in 2000 by David Neeleman
• Headquarters Forest Hills, NY
• Operate mainly on the Eastern Seaboard with
  various coast to coast flights
• Stock Symbol JBLU (NASDAQ)
• Key Competitors Southwest, Delta, AirTran

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Financial Status

• Traded on NASDAQ JBLU
• 2007 positive net income of 18 million
• Rise in oil prices higher costs
• So far in 2008, stock is down 16.44
• 2008 First Quarter 8 million loss
• Despite losses, JetBlue continues to outperform
  the industry

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Financial Status
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Business Model

• Low Fares
• High Quality Customer Service
• Maximize Efficiency
• Primarily Eastern oriented but have coast to
  coast flights
• Ranked second in Airline quality rankings in 2007
  only behind AirTran

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Business Model

• Low Cost per Available Seat Mile (CASM)
• Good Employee Relationship
• Non-unionized labor force
• High job retention

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Information Technology

• VOIP technology to create the airline industrys
  first virtual call center
• Online baggage checking
• Free WiFi at terminal in JFK

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Information Technology

• DirectTV on all flights
• XM Satellite Radio standard on all flights

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Information Technology

• BetaBlue
• JetBlue partnered with Yahoo and Research in
  Motion to equip planes with WiFi receiving
  technology

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Information Technology

• Cabin Surveillance
• CEO Neeleman issued an apology via Youtube
• My JetBlue Experience Online Blog
• Wiki in training program

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David Neeleman

• Founder and Chairman, former CEO
• 1984 Founded Morris Air
• Sold to Southwest Airlines for 130 million
• Introduced Electronic Ticketing
• Former employee of Southwest Airlines

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David Neeleman

• Founded JetBlue in 2000
• Weekly boards JetBlue flights to gather customer
  feedback
• Ranked sixth among Americas 25 Most Fascinating
  Entrepreneurs by Inc.com in 2006

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Competitive Advantage

• Brand
• Switching Cost
• Distribution Channels
• Imitation Resistant Value Chain

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Brand

• Brand built through a combination of Low Fares
  and Customer Service
• Introduced the Customer Bill of Rights after
  grounded flights due to a February 2007 snowstorm

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Switching Costs

• True Blue Flight Gratitude Program
• Frequent flier program
• PayPal
• Customers can book flight reservations through
  PayPal which securely stores each customers
  information

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Distribution Channels

• Signed deal with expedia.com in May 2007
• 6 of total revenue comes through sales on
  expedia.com

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Imitation Resistant Value Chain

• Difficult for established major airlines to
  compete with low prices of Jet Blue
• Beware of new upstarts
• Jet Blue must be careful not to invade
  established major airlines markets
• predatory pricing

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Potential Problems

• Increasing regulations by the FAA
• Airline industry is very cyclical
• Rising Oil prices 100 per barrel
• Scaling back expansionary efforts
• As current fleet ages, maintenance costs will rise

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