Final Project

JetBlue Airways
Irna Azzadina 29011002
Enny Nuur’aini 29011032
 JetBlue’s Profile
• JetBlue Airways Corporation is an American low-cost airline. Its main
base is John F. Kennedy International Airport (JFK), also in Queens.
• David Neeleman founded the company in February 1999, under the
name "NewAir.“
• JetBlue is the highest rated airline in the United States, and the
country's only four-star airline
• JetBlue started by following Southwest's approach of offering low-cost
travel, but sought to distinguish itself by its amenities
• JetBlue looks "to bring humanity back to air travel."
• JetBlue was one of only a few U.S. airlines that made a profit during the
sharp downturn in airline travel following the September 11, 2001,
attacks.
• First “paperless” airlines
• Substituting computers and information technology for everything
• In October 2005, JetBlue announced that its quarterly profit had
plunged from US$8.1 million to $2.7 million largely due to rising fuel
costs
• financial performance started showing signs of improvement, in
February 2007, JetBlue faced a crisis
• On August 4, 2008, JetBlue would replace their recycled pillows and
blankets with an "ecofriendly" pillow and blanket package
• September 8, 2008 JetBlue charges passengers $10–$30 for an
extended-leg-room seat depending on the length of the flight
• JetBlue is currently ranked as 4-star low-cost carrier by Skytrax, and is
the only airline in the United States to be ranked above 3 star
• Market Segment : people who aren’t going travel, people who are
disgusted with their current choices, people would drive, or people who
wouldn’t go at all
• Goals : low fares, great services, and to deliver on that promise over
time
• Operation Strategy :
o The world’s first paperless airlines
o Each pilot was provided with a laptop into which was loaded all the
required flight and operation manuals
o Almost all maintenance logs were also computer based
o E-mail as a media of communication
• Leveraging Human Resources : creating esprit the corps that was fun for crew members and
customers by keeping the company union free

• Values :

Safety caring Fun integrity Passion

• Selecting the Right People : hiring people with great attitudes, most likely to fit with the values,
airlines experience is not the most important thing, have to show up and be productive, Have to be
safe, no alcohol and drugs, Have to be Customer-Oriented

• Customized Employment Packages : by offering more variation in the design of jobs,

compensation, and benefit package, it was possible to give employees what they want
 JetBlue’s Resources
• In October 2005, JetBlue was struggling with their new
aircraft, the Embraer 190.
• The airline continued to plan for growth. It was announced
that 36 new aircraft were scheduled for delivery in the year
2006.
• In October 2006, JetBlue announced a net loss of $500,000
for Quarter 3, and a plan to regain that loss by deferring
some of their E190 deliveries, and by selling 5 of their
A320s.
• number N533JB is "Usto Schulz," named for JetBlue's
former VP of Safety.
• is tail number N655JB, "Blue 100," which was named by the
company in celebration for JetBlue's 100th Airbus A320
• tail number N658JB was named " Whoo-Hoo JetBlue! The
Official Airline of Springfield " in celebration of the release
of The Simpsons Movie. The plane also features Homer
Simpson giving a thumbs up
• Aircraft N651JB, titled "BetaBlue," features special titles
for Yahoo! and Research In Motion'sBlackBerry promotion
to offer inflight wireless communication aboard the aircraft
 JetBlue’s Routes
Timeline Rute Developing

September 1999 the airline was awarded 75 initial take off/landing slots at John F. Kennedy International Airport,
and received formal U.S. authorization in February 2000. It started operations on February 11,
2000, with service to Buffalo and Ft. Lauderdale
2001 JetBlue made plan to began a focus city operation at Long Beach Airport in California, and another
at Boston's Logan International Airport, in 2004. It also has focus city operations at Fort
Lauderdale – Hollywood International Airport and Orlando International Airport. The airline mainly
serves destinations in the United States, along with flights to the Caribbean, The
Bahamas, Bermuda, Barbados, Colombia, Costa Rica, Dominican Republic, Jamaica, and Mexico.
December 4, 2003 JetBlue pulled out of Atlanta

2006 JetBlue launched service to Pittsburgh, Portland (Maine), Charlotte, Raleigh, Nashville, Bermuda,
andAruba
December 7, 2011 JetBlue serves 71 destinations in 21 states, and twelve countries in the Caribbean, South America
and Latin America. JetBlue announced that service to DFW would start in May 2012.
 Business Strategy at Jet Blue
Jet Blue’s External Analysis:
The firm’s external environment analysis is challenging and complex. Because of the external
environment ‘s effect on performance, JetBlue must develop the skills required to identify
opportunities and threats existing in that environment. The External analysis is done through four
component (Ierland, Hoskisson, And Hitt. “The Management of Strategy: Concepts and Cases”)

Assesing

• The shape of
Monitoring • Airlines industry will
divide into two • Based on the changes
category: Traditional and trend of the
the domestic & industry, JetBlue
• The Changing was carrier and low cost
international argely the result of carrier determine to become
airline industry deregulation, low cost carrier player
was changes privatization, liberal air in the industry since its
traffic agreements, and offer huge opportunity

Scanning
economic downturns.
Forecasting for JetBlue
The External Environment Analysis for JetBlue

• The General Environment Analysis

 The External Environment Analysis for JetBlue

• The industry environment Analysis

Threats of new
entrant: Low
Since its need a
huge amount of
Capital for others
competitors to
enters this Industry

Bargaining power of
Bargaining power of Rivalry Among consumer:
supplier: High Competitor:
High
Since there are only two High
airplane manufacturer in Since there are many
Since there is
the industry, AirBus and many player in airline company in
Boeing the industry the industry that
offer service with
less distinction

Treats of
substitutes : Low
Since there are no
vehicle like an
airplane which can
deliver people in
relatively short time
(Five Porter Models)
The External Environment Analysis for JetBlue

The competitor environment Analysis

The Internal Environment Analysis for JetBlue

Tangible Resources

Financial Resource

• JetBlue had a lot of favorable position that comes from good financialperformance
• JetBlue had second largest at growth of revenue in the airline Industry, only lose by SouthWest Airlines
• Revenue, Gross Margin, EBITDA, and operating margin of JetBlue is above the industry average

Organizational Resource

• Leveraging Human Resources : creating esprit the corps that was fun for crew members and customers by keeping the company union
free
• Selecting the Right People : hiring people with great attitudes, most likely to fit with the values, airlines experience is not the most
important thing, have to show up and be productive, Have to be safe, no alcohol and drugs, Have to be Customer-Oriented
• Customized Employment Packages : by offering more variation in the design of jobs, compensation, and benefit package, it was
possible to give employees what they want

Physical Resource

•The airline continued to plan for growth. It was announced that 36 new aircraft were scheduled for delivery in the year 2006.
•The airline was awarded 75 initial take off/landing slots at John F. Kennedy International Airport, and received formal U.S. authorization in
February 2000.

Technological Resource

• JetBlue was the first airline which offeref the paperless reservation system
 The Internal Environment Analysis for JetBlue

Intangible Resources
•HR management approach that tailored jobs, pay and benefits packages to
the distinct need of different employees group
• Strong Leadership team
Human Resources • Highly motivated and loyal staff
•JetBlue value: Safety, Caring, Integrity, Fun, and passion which embedeed in
empoyee

•Offering low-cost travel, but sought to distinguish itself by

its amenities, such as in-flight entertainment, TV on every
Innovation Resources seat and Satellite radio.
•JetBlue looks "to bring humanity back to air travel.”

•Wellknown Airways company with high quality and low

price
Reputational •Jetblue is currently ranked as 4-star low-cost carrier by
Resources Skytrax, and is the only airline in the United States to be
ranked above 3 stars
 The Internal Environment Analysis for JetBlue

• Distinctive Capabilities
JetBlue has distinctive capabilities that enable it to become larger airline service Company in USA and winning
the competition against their competitor such as Southwest and United Continental. Distinctive capabilities that
JetBlue has are human resource, innovation, and reputation. JetBlue have a little number of employee compare
with other competitor but more effective than its competitors. JetBlue always keeps on improving the quality of its
service every single times. JetBlue also has managed its strong brand reputation with always provide customer
with the best service The distinctive capabilities will enable JetBlue to provide service in a superior way compare
to its competitors.
• Competitive Advantage
JetBlue has proven its flexibility and innovation can emerge as a winner in a fast changing environment of the
airlines industry in USA. While other airline companies collapse during the economic downturn, JetBlue was
gaining success and then become tough competitors for Southwest airlines. JetBlue firmly believes that with the
fast-changing and dynamic airline service business customer will tend to prefer airline with a low cost carrier
airline , JetBlue is rightly placed and has the ability to transform and quickly adapt to changes. JetBlue has
embarked on a holistic transformation to prepare itself to capture the growing opportunities that lie in low cost
carrier service. JetBlue is the first airlines company that has a paperless reservation system, an indication of the
importance of customer experience moving forward. Through its system and employee, JetBlue is aims to
mitigate the decline from traditional services airline and try to accelerate revenue from new businesses, low cost
carrier service
TOWS Analysis for JetBlue
From Internal & External
analysis we get TOWS
analysis
• Based on BCG matrix, JetBlue Airways is on “
Stars” quadrant since nowadays JetBlue enjoy
high market share because its strategy to
become low cost carrier company and JetBlue
is on airline industry which still have high
market growth due to US Government
regulation that prohibit monopoly and allow any
company to enter this industry, beside that the
high market growth also caused by Increased
demand and popularity of low cost carrier
airlines.
 Strategic Formulation at JetBlue

Business Level strategy

• The purpose of a business level strategy is
to create differences between the firm’s
position and those of its competitors. To
Position itself differently from competitors, a
firm must decide whether it intended to
perform activities differently or to perform
different activities. (Icleland, Hoskisson,
and hit. The Management of Strategy:
Concept and Cases. Page 95)
• Every firm is used to choose among the five
business-level strategies to establish and
defend that desired strategic position
against competitors: cost leadership,
differentiation, focused cost leadership,
focused differentiation, and integrated
cost leadership/differentiation
• JetBlue uses cost leadership strategy as
their business level strategy.
JetBlue Activity System to Support Their
Business level Strategy

Limited Passenger
No seat assignment No baggage
service
transfer

Interesting
compensati
on packages
Limited use
of travel Using Secondary
agents Airport

Lean, highly
productive
employee
Paperless Low Ticket
ticket Price
reservation
system

Standardized of
Airbus 320
High Aircraft Long Haul
Aircraft
utilization Flight
 Strategic Implementation at Jet
Blue
Strategic Leadership & Human Resource

• Strong leadership of David Neelman as founder of JetBlue

• HR management approach that tailored jobs, pay and benefits packages to the distinct need of different
employees group
• By offering more variation in the design of jobs, compensation, and benefit packages, it was possible to
give employees what they wanted
• JetBlue offered three distinct job option for flight attendants
• JetBlue managers were sensitive to the importance of communication within the firm
• Every year employees submit suggestions for the names of the new planes. Past winners have received
trips to Toulouse, France, to tour the Airbus hangar and fly home aboard the plane that bears their name
suggestion.
• Leveraging Human Resources : creating esprit the corps that was fun for crew members and
customers by keeping the company union free
• Selecting the Right People : hiring people with great attitudes, most likely to fit with the values, airlines
experience is not the most important thing, have to show up and be productive, Have to be safe, no
alcohol and drugs, Have to be Customer-Oriented
• Customized Employment Packages : by offering more variation in the design of jobs, compensation,
and benefit package, it was possible to give employees what they want
Strategic Implementation at Jet
Blue
JetBlue Value

Safety Caring Integrity Fun Passion

 Strategic Implementation at Jet
Blue
JetBlue’s employees core competencies

Core
competency

Soft Hard

KNOW
TW CSO SCT OC IU OA ACH CO SKILL
LEDGE
 The Quantitative Strategic Planning Matrix
(QSPM)

• QSPM attempts to objectively select the

best strategy using input from other
management techniques. From the
internal and external analysis, there are
two main strategies that JetBlue can
choose:
• Expansion to other market
• Product differentiation & Value added
services
The QSPM matrix for JetBlue is as follows:
• From the QSPM matrix we know that option 2
more favorable than option 1, since option 2more
acceptable than option 1 ( 5.76> 5.1)

• From the QSPM matrix, JetBlue is better to

choose product differentiation & value added
services strategy than to do expansion to other
market
Overall Business Model of
JetBlue:
Job Description
 TABEL 2. SUMMARY OF JOB
COMPENTENCY AT JETBLUE COMPANY
 Job Evaluation
• Kriteria
• Bobot
• Tabel job value
• External competitiveness
CONTOH PERHITUNGAN GAJI LTV-MANAGER PRODUCT
CONTOH PERHITUNGAN GAJI RESERVATION CREW
NEW SALARY OF JETBLUE COMPANY
(SETELAH DIKALI JOB VALUE)
 Kesimpulan
• Dalam menentukan gaji Direktur IT and Direktur Marketing, digunakan
executive benchmark. External competitivenes yang digunakan adalah nilai
gaji yang didapat dari Salary.com, dimana gaji untuk Direktur adalah
sebesar $ 124,000. Sehingga kami menentukan gaji untuk Direktur IT
adalah $ 124,00 and gaji untuk Direktur Marketing adalah $ 120,229.
Perbedaan gaji ini diperoleh dari perbandingan perbedaan gaji yang telah
dihitung antara Direktur IT and Direktur Marketing.

• Job value yang digunakan sebagai dasar menentukan internal equity dari
gaji pada perusahaan JetBlue adalah job value rata-rata sebesar $ 1,10.
Dengan mengalikan perhitungan gaji dari setiap jabatan dan dikalikan
dengan job value rata-rata, maka akan diperoleh gaji untuk perusahaan
JetBlue yang baru, yang ditampilkan pada tabel di slide yang sebelumnya.
TERIMA KASIH