This strategic analysis of JetBlue Airways summarizes the company's current position and future goals. Currently, JetBlue has a fleet of 138 aircraft serving 54 destinations, focusing on the East Coast of the U.S. It ranks highly for customer satisfaction but has a moderate market share of 3.12% overall. JetBlue aims to grow its fleet and network while retaining its culture and low-cost model. However, its industry faces challenges from factors like terrorism, fuel costs, and economic downturns. JetBlue differentiates itself through innovative technology and a "dual strategy" of low fares with some additional services.

1. Strategic Analysis of JetBlue Airways
Kshitij M.Shrivastava

2. Who are we?
• Jet Blue Airways is a low-cost passenger airline
which provides high quality traveling
experience through innovative technology and
personal service.

3. Where are we now?
• Fleet - Airbus A320:105, Embraer:33
• Avg. fleet age: 3.4 years
• Destinations serviced: 54
• Ranks 1st in terms of ‘Customer satisfaction’
• Ranks 10th in terms of ‘No.of passengers’
• Strong Culture & Values (Cost culture & HR policies)
• Strong capital base (Fleet size & geographical reach)
• Innovative use of technology (E-ticket, Inflight entertainment)

4. Market share
(Overall Airline Industry)
Industry Rank = 10th, Market share= 3.12%

5. Market share
(Low-cost segment)
Rank = 5th, in low-cost segment

6. Values & Culture
Values
• Safety, Caring, Integrity, Fun and Passion
Company Culture
• ‘5-values’ Rule
• Values are foundation for the culture
• Hiring policy to ensure ‘Strategic-fit’
• Above par salary & benefits

7. Services offered (‘Frills’ in addition to Low airfare)
Leather cushioned seats

8. Where do we want to go?
• Fleet - Airbus A320:177, Embraer:101 (by 2012)
• Vision: ‘Bring humanity back to air travel and to
make flying more enjoyable.’
• Increase geographical reach
• Manage revenue and operation targets
• Retain Organizational culture & ‘small company’
feel

9. PEST Analysis (Environmental Scan)
(+) Enabling factors POLITICAL
(-) Disabling factors •Deregulation (+)
•Bankruptcy laws (+)
•International travel restrictions (-)
ECONOMIC
TECHNOLOGY •Rising Aviation Fuel cost (-)
•ICT – Information & Communication (-) •Economic downturn (-)
e.g.- Internet, Mobiles (+) •Sub-prime crisis (-)
•Aircraft technology (+) •High insurance & other costs (-)
•Air-traffic management system enabled •Globalization and outsourcing (+)
low TAT (+) •Tourism & Education sectors (+)
SOCIAL
•Security issuers and terrorism (-)
•Diseases such as Anthrax (-)

10. Summary
Of External Analysis: Environment
• Factors such as Tourism & Global trade create new
opportunities for Airlines industry but Terrorism and
Financial crisis signal challenging times ahead.

11. Porter’s 5 forces analysis
Overall attractiveness of the Airlines industry ‘Moderate to Low’.
•Ease of Govt. regulation on
Aviation Threat from New Entrants
•Low entry-barriers HIGH
•Lack of brand-loyalty in customers
•Capital availability
• Limited no. of suppliers
•High switch-over cost
•No substitutes
Threat from
Threat from Buyers Threat from Competitors
Suppliers MEDIUM
MEDIUM to HIGH HIGH
to HIGH
•Large number of players
•Presence of substitutes •Falling margins intensifies price competitions
•Low brand loyalty •High exit-barriers
•Low switching cost
Threat from Substitutes
Medium (overall)
HIGH (for short distances)
• Alternate modes of transportation LOW (for long distances)
• Technological innovations e.g.- Video Conf.

12. Target Markets
PTM
• Low-cost travelers (1 time travelers, ‘surface transport’ travelers.) strategy’
st ‘Dual
‘Cool, convenient, cost-effective.’
STM
• Business travelers to NY, Washington, etc.
‘Travel quickly, safely & comfortably.’
‘Frills’ in addition to ‘Low airfare’ is in accordance with the ‘Dual strategy’.

13. Competitive analysis
Competitors in ‘Low-cost’ category Primary competitors
• Southwest, US Air, AirTran, ExpressJet
Competitors in ‘Full-service’ category
• Continental, Delta, United Airlines, Northwest,
American Airlines
Other competitors
• Roadways, Rail and Sea transport
• Internet based services like Video conference

14. Strategy Map # 1
High
Airlines distinguished based on Airfare and
level of ‘frills’. Jet Blue is a Low airfare medium frill airline
Airfare
Low High
No Frills Frills Full Service

15. Strategy Map # 2
High
Jet Blue services least number of destination.
However it has a very penetration on the East coast.
Airfare
Low High
Number of destinations

16. Strategy Map # 3
High
As a part of its ‘Dual strategy’, Jet Blue offers innovative services along with low airfares.
This distinguishes JetBlue from other low-cost airlines.
Airfare
Low High
Service innovation (Use of technology)

17. Sources
• http://www.wikinvest.com/stock/JetBlue_Airways_(JBLU)#Efficient_Aircraft_Utiliza
tion
• http://www.users.ipfw.edu/todorovz/ teaching/Strategy/Case22_JetBlue.pdf –
• www.mcafee.cc/Classes/BEM106/ Papers/UTexas/2002/jetblue.pdf
• http://www.gbr.pepperdine.edu/064/airlines.html
• CNN Survey: http://money.cnn.com/2006/06/29/news/companies/airlines/
• 890300_Value_Chain_ProfitabilitySummaryReport
• USubramanian Session 8 Value Chain
• www.agile_airlines.com
• Www.wikipedia.com
• www.jetblue.com
• www.southwest.com

18. Thank you!