Scribd
Upload
32 views

Case Study

Uploaded by

Conelyn Llorin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
32 views

Case Study

Uploaded by

Conelyn Llorin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Read Case Study below and answer question 3 and 4.

CASE STUDY:

The first you notice when getting on board is the new-car smell. “ No
wonder”, says the flight attendant, hearing your remark. She points to a
metal plaque on the doorway rim that says the AirbusA320 was delivered
one month ago. Other notable features are the free cable on your personal
video screen, and the leather seats. Flight attendants are trained on how to
give service with a retro flair. All attendants have to learn how to strut
proudly, as if there were an imaginary string between their chin and belly
button.

Just as discontent with airlines was mounting in 200, JetBlue Airlines


came into being with a new attitude, new planes, and a new concept of
service. What perfect takeoff timing for a carrier that is trying to bring
pleasure and even style back to flying. JetBlue is low-price and all-coach, like
Southwest Airlines, yet hip and sassy, like Virgin Atlantic. In the air, JetBlue
offers hyper efficiency and candor about delays.

JetBlue has been achieving an impressive profit picture. In June 2001,


the company became the most ambitious start-up in U.S. aviation history
when it ordered 320 jetlinersto accompany 68 planes on the way and 15 in
service. By 2006, JetBlue had taken delivery of its hundredth aircraft.

Credit CEO David Neeleman, who founded the firm at age41, for
piloting JetBlue past the early disaster that typically befall fledgling carriers.
For starters, Neeleman raised $160 million from investors- almost triple what
other new airline entrants have managed to obtain. The hefty sum is
insurance against any unforeseen cash crunch.

Consumers are usually concerned about the safety issue with “new”
airlines that fly 25-year-old planes. JetBlue flies only factory-fresh, state of-
the-art A320s. Neeleman has fitted each with 162 seats- versus the A320’s
180-seat maximum. Flyers are ecstatic about the so-called JetBlue
experience. It begins with pricing, which is competitive and doesn’t torture
consumers with requirements like Saturday-night stays. JetBlue is attracting
business travelers , the industry’s most valuable passengers and the source
of up to 50 percent of its profits. Neeleman believes that airlines have to
make a personal connection with their passengers in order to survive.

A JetBlue spokeperson said, “ We see our customers as the same ones


who can afford more but shop at Target because their stuff is hip but
ecpensive. “That kind of thinking drove decisions like JetBlue’s choice of
leather seats instead of less expensive cloth. “ it’s a nicer look, a better
feel.” Says Neeleman, in full salesman mode.

Neeleman obsesses over keeping employees happy, and with good


reason. Airline watches say JetBlue’s ability to stay union-free is critical to its
survival as a low-cost carrier. The industry’s labor-relations record is weak.
“But if there is anyone who realizes the importance of treating their
employees right. It’s the management team as JetBlue ,” says airline analyst
Holly Hegeman . All employees, even the CEO pitch in for cleanup duty. After
they land the plane, the pilot exit the cockpit to help pick up the debris.

Neeleman is obsessed with controlling costs. Flying only one type of


aircraft holds down training and maintenance expenses. With all workers
chipping in to help clean the jets even before they have landed, turnaround
times average just 35 minutes, as fast as industry leader Southwest. Despite
the emphasis on cost control, JetBlue has some cost other airlines have
avoided. For example, it has configured its planes with emergency
equipment such as life rafts and beacon for flying over water, thus allowing
its flight to swing out over the ocean to avoid congestion on crowded east
Coast routes.

On September21, 2005 JetBlue Flight 292 in Los Angeles narrowly


escaped a crash when its front landing gear stuck sideways, so the plane had
to land while metal scraped the runway instead of the wheels rolling in their
intended manner. The Day after the mishap Neeleman, released a statement
acknowledging the problem, and thanking everyone concerned for their
assistance and emotional support, Neeleman’s public statement included
these words:

The crew of flight 292 has asked use to communicate their


appreciation to the 140 customers on board for their cooperation, and they
are also grateful for the messages of support sent to JetBlue by thousands of
people. The crew looks forward to returning to their families and love ones,
and to normal lives as quickly as possible.

Neeleman notes that despite heavy competition, JetBlue’s profit


margins are the highest in the industry, He attributes part of the company’s
success to selecting the right people, which is especially important because
an airline is a people business. “ We have a saying at JetBlue that you’re
either serving a customer or serving someone who is serving a customer.”
An example of the selection process at JetBlue was an applicant pilot
who was furious about being rejected. The pilot telephoned Neeleman and
explained that he had 15,000 hours of flying experience. Neeleman then
spoke to the interviewer, who said that she asked the pilot, “ You’ve flown for
15,000 hours, tell us one thing that you’ve done besides just sitting there
and flying the airplane.” He couldn’t come up with a single example, He
retorted, “ What do you mean by that? I’m a pilot, and that’s what I do.” The
interviewer explained that the pilot was not somebody. JetBlue, Neeleman
emphasizes the quality of supervisors. The company has one supervisor for
every 80 employees. Neeleman tells the supervisors. “ You can know 80
people. You can know who they’re married to, you can know who their kids
are, and what there challenges are.’ In this way JetBlue employees know
there is a personal touch to the company.

Neeleman expresses his business philosophy on the company Web site


in these words ‘ Although we have many changes on the horizon, one thing
that won’t change is the customer service you can expect at JetBlue. Every
single JetBlue crewmember is dedicated to making sure your flight on JetBlue
is the very best you’ll evertake.”

JetBlue has an embarrassing problem that began with a Valentine’s


Day ice storm at the John F. Kennedy International Airport in New York City.
The problem ballooned into 1,000 canceled fights and hundreds of
passengers trapped for hours in idled planes that soon became unsanitary.
Neeleman apologized to the public followed up by a “customer´bill of rights
that promise vouchers to passengers whose flights are delayed or canceled
by problems that JetBlue could have rectified. The value of the vouchers
ranges form $25 to the full price of the airline ticket.

Five months after the JFK embarrassment, Neeleman resigned as CEO,


but remained on as non-executive chairman of the airline he founded. Dave
Barger, chief operating officer, and long-time second-in-command was
appointed as the new chief executive.

Question No. 3:

How else might Neeleman and his successor make use of management
knowledge to improve the chances of JetBlue Airlines staying successful?

Question No. 4:
Why should passengers being trapped for hours in a idled plane be
considered a management problem?

You might also like