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Jet Blue Airways Essay

6182 words - 25 pages

Team A Consulting has targeted JetBlue Airways as a new client. JetBlue is a leader in the low-cost commercial airline industry with a proven record of accomplishment, increasing revenue every year they have been operating. Their financial success can be attributed to many factors including non-union labor, one type of aircraft in their fleet (reducing inventory costs), paperless cockpit, paperless tickets, and satellite radio and television at all the seats. All of these help keep costs down, attract new customers, and the savings passed onto the customer. JetBlue has been the recipient of many awards throughout the years. See Appendix A for a complete list of awards from 2005. To kick off their sixth year anniversary in 2006, JetBlue is sponsoring an online instant win game for their "Bigblueweek" celebration. Prizes include a new Acura, Direct TV packages, and free travel. JetBlue is an upstart airline that operates in what remains one of the toughest industries imaginable and faces significant challenges. In addition to specific company information, Team A Consulting will discuss economic challenges facing Jet Blue, and how these challenges can be overcome. Team A will illustrate Economic indicators used for forecasting purposes as well as devise a list of recommendations.Executive SummaryLocationJetBlue's General offices are located in Forest Hills, New York. The Customer Call Center is located in Salt Lake City, Utah. JetBlue's operations are primarily web-based with all 1,100-customer service representatives working from their homes.RevenueSince JetBlue's inception in 1999, the airline has enjoyed a continuing increase inrevenue. JetBlue reported revenue for 2004 is (in millions) $1,265,972, which is up considerably from $104,618 (in millions) in 2000.Financial ConditionWhile the domestic airline industry has continued to suffer financial losses through 2004, JetBlue has remained profitable. Their net income is $47.5 million and $103.9 million at the years end for 2003 and 2004. They also generated operating margins of 8.9% and 16.9% in those two years, which are higher than most other major U.S. airlines. Success has been attained during a time of record fuel prices; however, there is continued focus on customer satisfaction and the ability to contain the operating costs. As found in JetBlue's Online Annual Report (2004):Our load factor (the percentage of aircraft seating capacity actually utilized) of 83.2% during 2004 was higher than that reported by any of the other major U.S. airlines, whose weighted average load factor was 75.9% during 2004. In 2004, we demonstrated our commitment to customer service by attaining the highest completion factor, the highest on-time performance, and the lowest incidence of mishandled bags amongst all major U.S. Airlines.Jet Blue is traded on the NASDQ under trader ticker JBLU. According to Yahoo Finance (2006), as of February 9, 2006, the current stock price of JetBlue Airways is $10.78. A table...

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