strategic-management

Much of JetBlue’s business model of low faces came right out of Southwest
Airlines’ playbook. This is no surprise since JetBlue founder, David Neeleman, was fired
by Southwest in 1999.
In 2006, JetBlue published its first corporate sustainability report, the “1st Annual
Environmental and Social Report 2006,” addressing its environmental efforts concerning
greenhouse gas emissions, conservation efforts, and social responsibility initiatives. In
regard to community services, the company also is committed and has aligned itself with
not-for-profit organizations that focus on children, education, communities, and the environment.
The company also encourages its crew members to help make a difference by
enriching the lives of the individuals and communities they serve.
Like Southwest, JetBlue prides itself on providing superior customer service.
In 2007, JetBlue introduced the JetBlue Airways Customer Bill of Rights, which
provides compensation to customers who experience avoidable inconveniences (and
some unavoidable circumstances). The Bill of Rights commits JetBlue to perform at
high service standards by holding it accountable if it does not. The company is the first
and currently the only major airline to provide such a fundamental benefit for its
customers.
In 2008, JetBlue introduced refundable fares and new payment options for customers,
and it also launched jetblue.com en español, a Spanish version of their Web site,
http://hola.jetblue.com/enes/. JetBlue was also able to maintain cost per available seat
mile, excluding fuel, of 5.94 cents, which is among the lowest reported by all other major
U.S. airlines. By scheduling and operating aircraft efficiently, JetBlue has high aircraft utilization
as it spreads fixed costs over many flights and available seat miles. For the year
ended December 31, 2008, their aircraft operated an average of 12.1 hours per day, which
is the highest among all major U.S. airlines. Exhibit 1 shows the JetBlue organizational
chart.
For years, JetBlue and Southwest avoided head-to-head competition, but in 2009 the
companies began battling each other in the same airports, such as New York, Baltimore,
Washington, D.C., and most recently Boston. These two lost-cost carriers use to cross each
other only in a few cities.
Marketing
JetBlue offers a variety of in-flight entertainment such as DirecTV with 36 channels of free
programming. Thus far, no other airline offers such live satellite TV option for free. The
company is planning to increase the number of channels from 36 to 100+ channels. The
aircraft are equipped with an in-seat digital entertainment system. Each individual seat has
a monitor with armrest remote with channel and volume controls.
JetBlue is well positioned in the New York metropolitan areas, which is one of the
largest travel markets. In 2008, JetBlue completed a state-of-the-art terminal in its main
EXHIBIT 1 Organizational Chart (2008)
Russell Chew
President & COO
Edward Barnes
CFO, CAO,
Executive VP
CASE 3 • JETBLUE AIRWAYS CORPORATION — 2009 27
David Barger
CEO
James Hnat
Head of Legal
Dept Ex. VP of
Corp. Affairs Sec.
& Gen. Counsel
Rob Maruster
Sr. VP of
Customer Service