Jet Blue Case Study

In: Business and Management

Submitted By xirivera
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JetBlue Case Study

What does it take to make money in this industry? 

- High load factor per Available Seat Mile (ASM)
- High fuel usage
- Low fuel cost
- Labor utilization
- On-time arrivals
- Maximize Revenue per ASM
- Reduce Cost per ASM
- Minimize DOT (complaints)
- Minimize Bags lost
- # customer JVD
- Be in the top JD Power or other customer surveys/reviews
- Maintain a excellent Airline safety record: # of flights/safe landings
- Be profitable
- Maintain a high Stock Price
- Maximize Airplane Utilization (hrs)
- Consistently providing high service standards at in a cost-effective manner.

What is jetBlue’s strategy? 

- JetBlue is positioned to capture business from small and medium-sized businesses as well as leisure travelers
- “We’re a new kind of low-fare airline, with deep pockets, new planes, leather seats with more legroom, great people and innovative thinking. With our friendly service and hassle-free technology, we’re going to bring humanity back to air travel.”
- “The strategy was to use new airplanes, offer great personal service, create a state-of-the-art revenue management system, and a single class of service with fares averaging 65% less than the competition”

- Differentiation by: o being adequately capitalized from the onset o owning new aircraft and not leasing o tailoring customized employment packages to employees vis-a-vis a standardization approach o “improve the passenger experience with technology, and would use technology to increase employee and aircraft productivity even beyond the record levels achieved by Southwest.”

- Focus by: o “leveraging technology and people to deliver a low-cost high service experience” o attracting top talent that wanted to “do it right from the start” o basing its hub in an “enormous population center, with 19 million people living within a 60-mile radius.…...

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...and probability in the VLOOKUP function in order to come up with the number of days between breakdowns. On average, I found a total of 2.5 days interval between breakdowns. This information is found in columns C through E. Lost Revenue To generate the amount of revenue lost, I again used the RANDOM function, I then used those numbers in the following equation: six times r plus two, where I substituted r with the number generated using the RANDOM function. Depending on the number in column E I would repeat this equation. This information is found in columns F through K. Putting it all Together To come up with the total of how much it would cost, I then took the values in column k and multiplied them by .10 considering that’s how much JET Copies were planning to selling the copies for. After doing this multiplication, I summed up the values and found that a total of $26.65 would be lost for the week. To Buy or Not To Buy Seeing how the estimate amount of money lost is $26.65 a week, the company would only lose $1,365.54(26.65*52) a year. Due to the fact that the machine cost $8,000 I would recommend the company not buy the smaller copy machine as a back. In the end if they purchase the smaller machine it would be a waste...

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