Jetblue: Starting From Scratch, Essay Example

Jet blue is an airline in the US that was established in1999 by David Neelman. The main objective and vision of Neelman was to start an airline company that was customer service oriented. The capital was gathered from investors totaling to 130 million dollars, which he used to purchase the A320 jets that were equipped with satellite TV. Moss (113) says that he did not start by strategizing on intensive marketing but rather sought to accumulate enough capital as possible so as to able to provide the greatest passenger comfort as possible. He targeted to achieve all this at very low cost as airlines companies are capital intensive. His target was to utilize technology to achieve this goal of providing the best customer experience while traveling by his services. He straggled out to enhance the spirit of customer focus in the whole of his organization (Moss 38-39). In 2007 it partnered with LiveTV, Yahoo and Research in Motion so as to provide in-flight instant messaging services and email. ‘Mission of bringing humanity back to air travel’ was the company’s Mission and Vision statement. This is seen in the way in which they instill the values of integrity, safety, care, fun and passion in their services to customers.

The company started off with a highly experienced management team that was dedicated to upholding the company’s values and plenty enough capital. Everyone in the senior management team brought his or her expertise on how they would together startup a company from scratch and ride through its successes. It successfully rode on the strengths and opportunities of highly experienced leadership team, wage compensation and benefits above the industry level, customized employee compensation packages, and fun and caring working environment.

However, there is a number of key success factors in which the company needs to continue building on them for those of which it hasn’t achieved or not perfected. The key success factors include: attracting customers, managing its fleet, its people and its finances.

Attracting customers ventures more into how attractive the airlines services are and how effective are the airline’s promotional expenditures. Attractiveness aspect can be settled by how the airline is going to put in place the most convenient infrastructure and to what length will it take itself along the line of offering good services. It can also be settled by how attractive the ticket price is. This means that a relatively lower ticket price would attract most travelers. Which has all along been the dream and strategy of the Jet Blue airline’s CEO David Neelman since its establishment. Apart from venturing into promotional effectiveness, Neelman had the dream of providing the best travel services at very low cost (Wynbrandt 81). The company needs to uphold placing their prices lower relative to the quality of services provided and the market prices.

An airline needs to be good at managing its fleet for a better chance to succeed in the long-run. This entails how well an airline uses its airplanes as a group; the utilization of airplane in hours per day. The load factor can be used to determine this aspect. An airline company such as Jet Blue has also to keen on checking out on the load factor.

A success to an airline can also entail how well the company manages the people in its organization. This can be watched from the productivity and morale of its workers. Productivity can be taken to imply the airline capacity per employee; the manner in which employees work in a team to effectively transport passengers to their destinations. The morale can be taken to imply the commitment of employees to provision of good services to the customers. Neelman tried his best to create all this in his company by establishing customized employee compensation packages and wage benefits above the industry level as pointed out by (Wynbrandt 130-132). It was the best thing he did to improve his employee’s morale.

The last key success factor is financial management. This could entail considering the balance between unit revenue and unit cost. Unit margins between the air lines can also be one factor to be considered. In financial management, the air lines need to consider the funding for growth. This is an important factor to materialize long term success. Organizations need to plan effectively on their growth over time. For an airline like Jet Blue, this can be in terms of increasing its areas of flight or destinations and opening of new hubs. Increasing the required infrastructure and trying to venture more into the modern technology in its operations and achievement of its objectives. In order to remain attractive to its equity investors, the airline needs to grow its equity over time. Jet Blue also needs to analyze its business environment or market, understand the competing firm’s success model in the same industry, their success factors and establishing how and where to expand. Neeleman had done this by his experience in the Southwest airlines (Wynbrandt 49-50). His experiences merged with his dream made him to come up with the best strategies to achieve his goals.

As shown by the track record of this company, it would be the best company to invest in. Starting from scratch up to its success levels was an attractive phenomenon. Watching it from the committed senior management and the ever focused CEO to customer service provides all the good postulations of future growth and high profits. The experience of most of its employees from Southwest Airlines gives the company an upper hand into success. Features like the in-flight entertainment such as being the first company to establish TV one each and every seat and a Satellite radio are all signs that for over ten years of operation, the airlines has stabilized in the market and that it commands a large share of the market. The mission and vision statement attracts every private investor to be associated with the company.  Being among the few airlines that made profits after the September 11^th 2001 attacks, Jet Blue stocks have became one of the most popular stocks since its IPO 2002 on the NASDAQ stock exchange (Wynbrandt 167). Jody, Hoffer (109) points out that the company proves in all aspects to have a great potential to take it to the greatest levels of success. This would therefore warrant my investment.

Works Cited

James, Wynbrandt. Flying High: How Jet Blue Founder and CEO David Neeleman Beats the Competition… Even in the World’s Most Turbulent Industry. New York:    Wiley, 2006

Jody, Hoffer G. JetBlue Airways: Starting from scratch (Unknown Binding). New York: Harvard Business School Publishers, 2001

Wes, Moss. Starting From scratch: Secrets from 22 Ordinary People Who Made the Entrepreneurial Leap (Hardcover). New York: Kaplan Publishing, 2008