History of the Company

Incorporated in 1998 in Delaware, commenced service

in 2000 - primary base of operations at JFK in New
York.
2002 - Operated 108 flights per day -- 52 daily flights
between JFK and FL -- 26 daily flights between JFK and
upstate NY -- 18 daily flights between JFK and the
western US.
History of the Company

2002 - Stock trading just below $20

2004 - Revenues of $1.22 billion.
July 2005 - 52 week high was $26.40.
 Mission Statement
Jet Blues mission is to be the leading low-fare, low-cost
passenger airline offering high quality customer service to
underserved markets and customer who are looking for
the best value in their flight. We have the newest most
advanced planes that are reliable, fuel efficient, utilizes
paperless cockpit technology, live in-flight satellite TV and
security cameras. Our philosophy is to give customers the
best price value for their ticket, offering things our
competitors dont offer. At JetBlue we feel that hiring
educated employees that are highly motivated and well
trained will provide a better experience to the customers.
We feel that our high-value, high quality service philosophy
will lead the way to our becoming the number one in the
industry.
Vision Statement

At JetBlue our goal is to provide the best, most

affordable flight experience of any air carrier while
providing superior service.
JetBlues Goals

The companys goal has been to establish

itself as a leading low-fare, low-cost
passenger airline by offering customers high-
quality customer service and differentiated
products.
They focus on serving underserved markets
and large metropolitan areas that have high
average fares with a diversified geographical
flight schedule that includes both short and
long haul routes.
Issues at Hand

Rising Fuel Costs

Labor Unions
Lots of competition
Not-well-known airline.
Cutting costs while increasing revenues and profits.
Rankings

#6 in Worlds Top Low Cost Carriers by Net Profit, 2004

#4 in Worlds Top Low Cost Carriers by Load Factor,
2005
#4 in Most Profitable Airlines, 2004 ($47.5 million)
#3 in Most Admired U.S. Airlines, 2006
External Audit

Opportunities:
Increasing demand for air travel.
Untapped international market.
All other airlines that have much higher fares.
Other airlines who have been hurting since 9-11 and
heading for Chapter 11.
Increasing use of the Internet.
Potential use of luggage-tracking technology.
External Audit

Threats:
Many airlines including JetBlue face union labor
contracts.
Unions can strike whenever no agreements are
made.
Fuel costs are high and are a HUGE part of
airline expenses.
Breakeven load factor is rising.
Higher security required at airports is causing
higher fees on tickets and more customer
dissatisfaction.
Competitive Profile Matrix
External Factor Evaluation
Matrix
Balance Sheet
Income Statement
Internal Audit

Strengths:
Low fares compared to other airlines.
Superior customer service.
Low labor wages that save them money.
More efficient and reliable planes.
Only airline to offer live TV in-flight.
High commitment to hiring better employees.
Through their current workings, they are able to
build good brand loyalty.
Internal Audit

Weaknesses:
Low fares could mean less money being made,
less profits.
Much higher average airborne time and higher
% of diverted flights.
Smaller and more unheard of than any airline.
Fuel consumption, as a % of expenses, is rising
rapidly.
Very low percentage of full-time employees.
Extra bells and whistles could cost company $$.
Internal Factor Evaluation
Matrix
Financial Ratios

Current Ratio --> 1.06

Quick Ratio --> 1.08
Accounts Rec. Turnover --> 33.08
Debt to Equity --> 2.04
GPM --> 0.37
Return on Assets --> 0.02
EPS --> 45.55
LT Debt to Equity --> 0.65
Interest Earned --> 2.53
SWOT Matrix
SWOT Matrix
SPACE Matrix
SPACE Matrix
 Quantitative Strategic Planning
Matrix
Alternative Strategies

Fly Internationally
Extend flights to major hubs in Europe to start off, then
as that takes off, offer flights to Asia, Australia, etc.
This is an example of Market Development
Cost: $100,000,000 for 3 planes, fuel for a year
and maintenance costs.
Alternative Strategies

Increase Advertising and Expand to Other Media

JetBlue could advertise on TV, Radio, and Online to
boost revenues and popularity of the airline.
This is an example of Market Penetration.
Cost: About $4,000,000.
Alternative Strategies

Build Partnership Travel Website.

Build a website where users can look up information
about different travel destinations, find hotels,
restaurants, hot spots, etc, and book a flight through
JetBlue all while comparing prices from other
airlines.
This is an example of Related Diversification.
Cost: About $30,000 to start off, then about
$60,000 per year to maintain (for a small
site).
 Recommendations for
JetBlue

JetBlue should implement these strategies in three

stages.
-Introductory Phase Implement new advertising
campaigns to get JetBlues name known.
- Middle Phase Start the travel website to help
attract new people to JetBlue, get them to fly, and
build a reputation.
- End Phase Start flying internationally. Once
customers know JetBlue and JetBlue gains a
reputation for high quality and low prices, people
will want to fly them no matter where they go.
 References

http://www.aa.com/content/images/amrcorp/amrcorp2004ar.pdf
http://www.aa.com/content/images/amrcorp/amrcorp2004ar.pdf
http://www.tampaairport.com/about/facts/activity_reports/2005/marketshar
e_jan2005.pdf
http://library.corporate-
ir.net/library/13/131/131045/items/211507/200410k.pdf
Recommendations for
JetBlue