Analysis of JetBlue Airways

The airline industry is highly competitive but has been experiencing difficulty since the September 11, 2001 attacks. Revenues in the industry were down to $80.9 billion in 2001, a 13.5 percent decline from record high revenues of $93.6 billion in 2000. At the same time, the industry as a whole posted record losses of $7.7 billion for 2001. Major airlines, including American and United, continue to struggle: United Airlines·the second largest airline in the world·filed for bankruptcy protection at the end of 2002 ("Air Transportation," 2004).

JetBlue's certainly competes against these large carriers, but while America, United and Delta have laid off tens of thousands of workers since 2001, JetBlue has thrived. While not nearly as large as these carriers, JetBlue has found a niche by focusing on value-oriented customers who are interested in quality flyin

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avel budgets ("CEO Sees," 2004). MARKETING PROGRAM Air travel does not offer many alternatives in terms of product differentiation·the basic product is a seat on an airplane that takes a passenger from one location to another·but JetBlue has set out a product strategy that successfully differentiates it from other carriers. The airline flies only new aircraft·Airbus A320s with Embraer business jets on order. Both of these are small aircraft·the Airbus aircraft is configured as a single class 156 passenger aircraft while the Embraer business jets will seat 100 passengers in a single class. The airline does not offer first or business class, which can be problematic for some passengers, but does offer leather seats and in-flight satellite television (). Key to the airline's marketing program is its pricing strategy. The company launched with considerable capital, which is necessary in this industry, and has managed to keep its labor costs among the lowest in the industry. While this latter strategy has caused concern among some JetBlue employees, the company has been able to keep its fares low relative to the rest of the industry during a time when fuel costs have increased and there has been considerable upward pressure on
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