Jetblue Airline SWOT Analysis Paper Example

Introduction

Jetblue airline is an American Airline organization whose principal market is the low-cost air travel. Currently, the company is ranked as the fifth largest airline company in the United States. The position has been achieved after several years of development since its inception. According to Rhoades & Waguespack (2015), David Neeleman founded Jetblue airlines in 1988, and at that point, most of the staff were recruited from Southwest airline, which also operates in the low-cost air travel market. Therefore, the airline operated on the same model as Southwest airline as the workers had a background in the low-cost air travel segment, which mostly focused on domestic flights with small-sized aircraft. However, to beat the competition from Southwest airline in their early days, JetBlue airline management concentrated on product differentiation. In this regard, the organization incorporated additional in-flight amenities, which included entertainment, internet radios, and snacks. The features enabled the company to penetrate into the market and continued its growth steadily towards the millennium. JetBlue airline's current status is as a result of its continued growth and expansion. According to Morrell (2015), the company offers air travel to over 90 destinations in the US, South America, Central America, the Caribbean, and Mexico. Moreover, it still focuses on the low-cost air travel segment alone. The organization's main base is at John F. Kennedy International Airport. Furthermore, they have additional offices in Utah. Currently, only JetBlue and Virgin America airline companies have a four-star rating from Kytra.

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Despite the growth of Jetblue since 1988 to present, the company has enjoyed a positive return on profits which have enabled it to expand. However, on the low side, the company has had to deal with increasing competition and the periodic variation in the external environment due to technological incorporation in flight operations. Ideally, competition remains the biggest challenge for the firm. Principally, the entry of JetBlue in the low-cost air transport market in the United States led to an increased introduction of other air transport firms, which focused on the low-cost segment. Primarily, most of the competitors were rolled out by larger international airline companies such as Delta to help them conquer the domestic market. For instance, United Airlines launched TED while Delta Airlines introduced Song. Moreover, before JetBlue's launch, the low-cost transport segment in the US was mainly dominated by Southwest and Frontier airlines. Therefore, JetBlue had to compete with them despite the fact that they were well established on the market. High competition meant that the company needed to maintain high-efficiency services. Moreover, they needed to create proper awareness in people which they have actualized using various advertising strategies. Currently, the management hopes that the company's excellent record regarding accidents and product differentiation will help it to sustain itself in the American airline industry.

SWOT Analysis

The SWOT analysis for JetBlue is vital in understanding the internal environment of the organization. Moreover, it will offer insight on the challenges arising from the external business environment in which the company operates (Goodrich, 2015).

Strengths. JetBlue's operation is associated with a high level of customer satisfaction. The concept is realized due to the firm's product differentiation initiatives where additional in-flight services are offered while the cost of transport remains low (Anton, He, & Baumer, 2014). The company is also innovative and therefore manages to lead others in incorporating new flight features. Lastly, the firm enjoys support from their staff, as they are motivated. The concept is realized due to the provision of a proper working environment, free training, and competitive remuneration packages.

Weaknesses. The company's primary challenge is the in-house technological system, which is not adequately equipped to manage customer reservation effectively. Moreover, frequent maintenance and repair of their luggage handling systems increase their expenditures. Finally, the company's primary market of low-cost travel means that they cannot have premium customers who are always willing to spend more per flight hour. As a result, their profit margins are not high.

Opportunities. Agreements with other organizations are likely to help the organization gain access to new destinations in nations neighboring the US. Moreover, agreements can also help them to make reservations for other companies and be paid for the services. Consequently, this increases their income while bookings done for them by other partners can be a way of saving expenses through negotiated agreements. The company's competitive edge has been enhanced by innovation especially since the development of the paperless cockpit. Therefore, they can take advantage of their innovativeness and develop new features, which will put them ahead of their competitors. Lastly, opportunities exist in the reducing regulations regarding air travel. In this regard, the transition will save time and costs, which are currently involved in ensuring adherence to various scrupulous regulations.

Threats. The increasing fuel prices present a significant threat to JetBlue airlines as it means that the company has to spend more by cutting its gross income. Also, risks exist in the security of air travel as incidences of terrorism are on the rise. The effect of this is that it makes people refrain from traveling due to fear of attacks (Alamdari & Fagan, 2016). Lastly, the tax levied on-air travel is high. Therefore, despite the low-cost aspect, air travel fares are comparatively higher as compared to other alternative transport means. Consequently, customers are likely to shift to other means in the future.

References

Alamdari, F., & Fagan, S. (2016). Impact of the adherence to the original lowcost model on the profitability of lowcost airlines. Transport Reviews, 25(3), 377-392.

Anton, A. I., He, Q., & Baumer, D. L. (2014). Inside JetBlue's privacy policy violations. IEEE Security and Privacy, 2(6), 12-18.

Goodrich, R. (2015, January 1). SWOT analysis: Examples, templates & definition (Links to an external site.)Links to an external site. Business News Daily. Retrieved from http://www.businessnewsdaily.com/4245-swot-analysis.html

Morrell, P. (2015). Airlines within airlines: An analysis of US network airline responses to Low-Cost Carriers. Journal of Air Transport Management, 11(5), 303-312.

Rhoades, D. L., & Waguespack Jr, B. (2015). Strategic imperatives and the pursuit of quality in the US airline industry. Managing Service Quality: An International Journal, 15(4), 344-356.