Jet Blue Airways Case Study

Eric Porter Jet Blue Airways Case Study B283 Case Analysis Introduction: David was once a partner for Southwest Airline. He was even the runner up to be the president of the company. But due to his aggressive nature in his desire for innovation he was voted out of the company. He decided to take what he had learned from Southwest Airlines and merge it with his ideas to create his own airline. It would take lots of capital, but he knew that he wanted to use technology to drastically increase customer convenience and safety. “Based on his earlier industry experience, Neeleman had several ideas about how to start a new airline that would capitalize on technology and make the customer experience better than existing offerings.” Problem Analysis: -Major problems and challenges facing employees and organization: David knew all to well the hurdles in starting an airline business; under capitalization being the mother of them all. With all his plans and ideas for new technology it would take even more capital to start than ever. What does help with some of his new ideas are his innovation to require fewer employees. One of his ideas that lead to him being fired from South West was that he wanted to replace sales ticket booths with sole online purchasing. This would eliminate the need for people to sell tickets while simultaneously increasing efficiency. In the war on financing, David also encounters the issue with food. Customers tend to complain about airplane food, so he simply decided to scrap it all together. This concept showed a lot of focus on David’s part. He decided that if he couldn’t make it a strength for his business then he wouldn’t bother with it at all. Almost every business has this sort of problem and it can be a make or brake their business. It shows whether their management team, be it one guy or dozens, realizes what is the real goal of their business. An airline is not a restaurant, so why focus on food. An automotive shop could offer to furnish customer’s vehicles with fancy doo-dads, but if their main goal is to make cars safe and reliable, they need to focus on the big picture. -What do “I” think the business is doing right and what do “I” think they need to change: David Neeleman had a vision for his company: “We believe that all travelers should have access to high quality airline service at affordable fares.” The next step with this vision is trying to share it. A company can’t run smoothly if there is ambiguity. David needed to define what “high quality” meant to him, as well as “affordable fares”. Regarding “high quality”, David made it very clear that their first step was to buy all their planes brand new, NO exceptions. Being well rounded in the business world is crucial for survival. After spending time working in a plane leasing business David knew all to well the strings attached with that business and also knew he didn’t want to be at their mercy. By purchasing their own, brand new, planes they could design them and fit them with top of the line things, from TV’s, increased leg room, to leather seats. Recommendations: As one of the most successful airline businesses to arise it is hard to really point out any recommendations. I totally understand why David doesn’t like flying. Waiting in lines are never enjoyable for anyone. However, I would recommend that more than just peanuts and sodas be available. Conclusion: David was a great planner. He used his five year non-competitive time to refine his ideas and to sort out his problems instead of vacationing. Innovation was huge and what made Jet Blue so successful so quickly was the foresight in steps to take. From capitalizing, to purchasing, to building, etc. etc. Everything was done in a process that allowed for minimal waste of finances.