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Case
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Reference no. 324-0032-1
Published by: Amity Research Centers
Published in: 2024
Length: 8 pages
Data source: Published sources

Abstract

JetBlue, a US based low-cost air carrier, was founded by David Neeleman (Neeleman), a former Southwest Airline employee, in 1999. Around this time and in the preceding decade many airlines had either failed or gone bankrupt. With an aim to swim against the tide and defying business logic, JetBlue offered ticket prices for as low as USD49 and yet ferried passengers in new aircrafts, on leather seats, with excellent operational efficiencies and with live entertainment on each seat. Growth followed and JetBlue became the sixth largest airline in the US. However, as years progressed some trouble began to erupt. Some were due to industry headwinds (rising oil prices, lack of air traffic control staff, pandemic) while others were JetBlue specific. For instance, some of the newly purchased JetBlue aircrafts were found to have faulty engines. The result was heavy losses in Q3 of 2023. While acknowledging the losses, Neeleman, undeterred and being optimistic, laid a growth strategy for the future basing his optimism in the surge in air travel demand. Was this growth strategy for future along the right track? Would it deliver amid the headwinds?

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Time period

The events covered by this case took place in 2024.

Geographical setting

Region:
Americas
Country:
United States

Featured company

JetBlue Airlines
Type:
Public company

About

Abstract

JetBlue, a US based low-cost air carrier, was founded by David Neeleman (Neeleman), a former Southwest Airline employee, in 1999. Around this time and in the preceding decade many airlines had either failed or gone bankrupt. With an aim to swim against the tide and defying business logic, JetBlue offered ticket prices for as low as USD49 and yet ferried passengers in new aircrafts, on leather seats, with excellent operational efficiencies and with live entertainment on each seat. Growth followed and JetBlue became the sixth largest airline in the US. However, as years progressed some trouble began to erupt. Some were due to industry headwinds (rising oil prices, lack of air traffic control staff, pandemic) while others were JetBlue specific. For instance, some of the newly purchased JetBlue aircrafts were found to have faulty engines. The result was heavy losses in Q3 of 2023. While acknowledging the losses, Neeleman, undeterred and being optimistic, laid a growth strategy for the future basing his optimism in the surge in air travel demand. Was this growth strategy for future along the right track? Would it deliver amid the headwinds?

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Settings

Time period

The events covered by this case took place in 2024.

Geographical setting

Region:
Americas
Country:
United States

Featured company

JetBlue Airlines
Type:
Public company

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