Set To Fly High: 3 Reasons To Buy This Low-Cost Airline

830 Words2 Pages
bulb-icon

Recommended: Jetblue airlines strategic analysis

While the airline industry has improved significantly over recent years, JetBlue (JBLU) has been one of those troubled carriers that appear to be jumping from one crisis to another and then another. It has dealt with hurricanes, soaring costs, delays and, more recently, flight cancellations. Consequently, the company fell short of its targets in the last two years. However, the airline is in a much better shape at present and is expected to report solid earnings in 2014 and beyond. Simplifying business while growing network On Mar. 13, JetBlue announced the sale of its wholly owned subsidiary LiveTV to Thales Group for $400 million, almost five times what it paid in 2002. LiveTV is the leading provider of in-seat entertainment for Jetblue and other commercial airlines. Partnering ViaSat, it introduced Ka-band satellite-driven onboard connectivity, a gaming-changing technological advancement. With passengers inclined to stay connected and interact with both social media and professional networks while travel, JetBlue unequivocally has a certain edge over others in terms of in-flight entertainment. The sale highlights JetBlue’s intent of keeping things simple while focusing on its core-business. Regardless of the sale, JetBlue retains access to LiveTV’s technology. In addition, the airline has a strong network that is growing with time. This is mainly because of its presence in key markets, particularly in Boston and New York, that positions it favorably in the industry and, in turn, allows it to draw agreements with other airlines. As a matter of fact, it is the largest domestic carrier at New York’s JFK Airport and a top carrier in Boston. Therefore, partnering with Jetblue is an advantageous proposition for many internationa... ... middle of paper ... ...nt sale of the LiveTV will allow it to further reduce its debt burden while continuing to invest in aircraft for its growth plan. With improving cash flows and more reasonable debt load, the airline will be in a strong position to start paying a dividend to its shareholders towards the end of this year. Alternatively, it could also choose to resume its share repurchase program. Bottom line With as many as 32 partnership agreements, mostly with international carriers, JetBlue is virtually a global airline. The company has reduced its risks and made moves to bring more predictability to its costs in order to boost it revenues. It is also transitioning to a more cost-efficient fleet of aircrafts, which would further hold its costs down. With a strengthening balance sheet, it should be able to return cash to shareholders while still investing in its future growth.

Show More
Related

  • Qantas Airlines Business Report

    1669 Words  | 4 Pages

    • Qantas had to make an increased profit and pay a dividend to its shareholders which increased over the years of management

    Read More

  • JetBlue

    1701 Words  | 4 Pages

    The Airline Industry is a fascinating market. It has been one of the few industries to reach astounding milestones. For example, over 200 airlines have gone out of business since deregulation occurred in 1978. Currently, more than 50% of the airlines in the industry are operating under Chapter 11 regulations. Since 9/11, four of the six large carriers have filed for and are currently under bankruptcy court protection. Since 9/11 the industry has lost over $30 billion dollars, and this loss continues to increase. Despite the fact that the airline industry is in a state of despair, JetBlue has become the golden example, a glimpse of what the industry could be.

    Read More

  • Spirit Airlines: An Unorthodox Airline

    618 Words  | 2 Pages

    Spirit addresses “price” by attempting to get the lowest possible fair for their potential customers. They have instituted their “unbundling” strategy that essentially removes all the conveniences that other airlines afford. Fees for checked bags, fees for flight changes, and no complementary in-flight beverages are just a few of the cost-trimming techniques employed. This strategy allows Spirit to come up with impossibly low fares. It also conforms to customers who just want to get from point A to point B without paying extra for services they don’t use. This strategy, coupled with an in-your-face “promotion” ploy, has made Spirit Airlines “the most profitable airline in the U.S.” (Nicas, 2012).

    Read More

  • A Quantitative and Qualitative Look at Southwest Airlines and British Airways

    4260 Words  | 9 Pages

    In today's competitive marketplace, all firms are seeking ways to improve their overall performance. One such method of improvement, recently adopted by many firms, is benchmarking. Benchmarking is a technique used to evaluate internal business processes. "In this analysis, managers determine the firm's critical processes and outputs, baseline those processes, then compare the performance of each process against a standard outside the industry" (Bounds, Yorks, Adams, & Ranney 1994). To effectively improve a business process to world-class quality, managers must find a firm that is recognized as a global leader, not just the industry standard. Successful benchmarking requires tailor-made solutions, not just blind copying of another organization. Measurement and interpretation of data collected is the key to creating business process solutions.

    Read More

  • Southwest Airlines: A Case Analysis

    1537 Words  | 4 Pages

    It is evident that the greatest strength that Southwest Airlines has is its financial stability. As known in the US airline industry, Southwest is one of those airlines who are consistently earning profits despite the problems the industry is facing. With such stability, the corporation is able to make decisions and adjust policies, which other heavily burdened airlines may not be able to imitate.

    Read More

  • Southwest Airlines Case Study Solution

    707 Words  | 2 Pages

    Before to select the proper alternative, three alternatives were analysed and evaluated under four decisions criteria: customer experience, cost, growth rate / market penetration and ease to implementation (See Exhibit 2: Factor Analysis). Between all the alternatives, it was suggested that Southwest Airlines enters to New York City by bidding the slots and gates at the LGA (See Exhibit 3: Alternatives Analysis). This alternative sustains the challenge of changing the customer experience which means adding more flights from and to the East; furthermore, entering to new markets will reinforce “the power of the network” through LGA. At the same time, this decision will allow signing more code-sharing agreements with other airlines flying to international destinations and offer new products and services to LUV customers as loyalty rewards, in-flight internet, onboard duty-free purchases, etc.; as a result of this, it will increase passenger’s insights and experiences by flying with Southwest Airlines. Nevertheless, there is potential risk by selecting this alternative, in the recent years the energy prices has had a huge increase affecting costs, fares and even capacity needed, however Southwest Airlines has been able to hedge fuel for decad...

    Read More

  • Delta Airlines Executive Summary

    587 Words  | 2 Pages

    It has stayed relevant to the market through its propelled philosophy of relationships to generate profits in the business. Since its establishment in Monroe, Louisiana the once tiny airline has stretched to greater heights serving in 6 continents. It has also established a distinguishable name among its competitors with a reputation of leading customer services. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand in to new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. This alternatives are meant to act as a strategic guidance to the company in order to enhance growth. The strategic recommendation provided will improve and enable the business to cope with the competitors while the implementation of the strategy section will outline the way to go about achieving these alternatives in the business setting. Lastly, we put up a discussion on the evaluation procedures and necessary controls for the

    Read More

  • Advantages Of Jet Blue Business Strategy

    1040 Words  | 3 Pages

    Use of technology and automated processes to reduce reservation, ticketing and customer services costs. Paperless cockpits, use of e-manuals, electronic ticketing, owning its own in-flight entertainment provider, automated baggage handling are some of the examples where Jet Blue’s use of technology has lowered operating costs.

    Read More

  • Southwest Airlines: Business Creativity and Innovation

    2000 Words  | 4 Pages

    Gittell, J. H. (2003). The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. New York: McGraw-Hill.

    Read More

  • Swot Analysis Of Jet Airways

    3055 Words  | 7 Pages

    Jet Airways indicates a negative growth in the BCG Matrix. Amongst its competition, Jet Airways owns a lesser market share. It is therefore recommended that Jet follows the strategy proposed for each category.

    Read More

  • Jet Airways

    1939 Words  | 4 Pages

    To apply and the all ‘ rules of game‘of an business we taking an aviation company known as “Jet Airways” before we get into, here are some intro points about this company.

    Read More

  • Jet Blue Marketing Mix

    714 Words  | 2 Pages

    With regard to product, JetBlue is cornering the marketplace with its productivity, in-flight features, and customer service. Due to the fact that the company only purchases new planes of a single type, maintenance downtime is reduced and it is able to keep its planes in the air. In fact, JetBlue maintains the highest in-air average in the industry. Additionally, JetBlue employs an "operational recovery tool" technology that allows planners to minimize flight cancellations and delays. On board, JetBlue prides itself on treating all customers as equals and providing more comfort than other airlines.

    Read More

  • Jet Blue Case Study

    1470 Words  | 3 Pages

    The first initiative that they were able to gain in competitive advantage was the reduction of costs. They have been able to use an online system where consumers can reserve tickets avoiding which avoids using travel agents. Having this systems reduces costs for the company as well because they do not have to hire nearly as many as employees. Along with buying tickets, JetBlue has been able to use other systems to reduce costs which helps them with the maintenance of their planes and organizing information that involves every aspect of their business ranging from their planes to their employees and consumers. The second initiative that JetBlue uses is the creating of new services. By creating their new online services and systems they are able to gain competitive advantage because it allows easier and less expensive accessibility to their services. Not only have they created new services but they are able to differentiate these services from their competitors because of the easiness and quality of the services that they do provide. They not only focus on making their services the best but also the highest level of customer service that they can offer which other airlines struggle to do. Other competitors have realized that JetBlue is beating them in many aspects in the business that they have needed to adjust what they are doing to catch up. Even with the jumps in technology use with the other companies, JetBlue has still been able to enhance their services to continue to gain competitive

    Read More

  • Market Segmentation Of Airline Industry

    718 Words  | 2 Pages

    The target market of JetBlue airlines is customers who along with low cost seek services. The services provided by JetBlue included in-flight entertainment, TV on every seat, satellite radio, extra leg room, free unlimited snacks, and leather seats. The target market of JetBlue is also the leisure traveler, the low cost ticket seeking traveler, and the cost conscious business traveler. JetBlue has actually, posed a threat to the other low cost airlines like the Southwest Airlines.

    Read More

  • Boeing 777

    1325 Words  | 3 Pages

    As Boeing’s CEO, Frank Shrontz promised to increase earnings and return on equity. Boeing had a history of making money when its competitors did not, but Mr. Shrontz wanted higher returns. The airline industry was characterized by large cash outflows for R&D and manufacturing and long payback periods over long life cycles for each new airframe design. Companies had to have deep pockets to keep the operation going while waiting for a return on their investments. If Mr. Shrontz could increase the return on equity for Boeing, it would increase the likelihood of Boeing’s continued success well into the future.

    Read More

More about Set To Fly High: 3 Reasons To Buy This Low-Cost Airline

Open Document