Jetblue Airways

JetBlue is a small passenger airline company that provides a special first class experience with a low budget coach price. JetBlue started out in 2000, by serving 12 destinations and by 2006, serving 33 destinations. JetBlue has been expanding but needs to expand more efficiently to better compete with other airlines like Southwest.

JetBlue was founded in 1998, by Dave Neeleman when Neelman was 39 years old. Neeleman wanted JetBlue to bring humanity back to air travel. Neelman envisioned combining low fares of a discount airline carrier with the comforts of a cozy den in people's homes. Passengers were able to save money while sitting in leather seats snacking on gourmet foods and watching television with individual monitors in every seat. Every television was equipped with satellite networking in September of 2002. JetBlue acquired Live YV LLC, which was its provider of in-flight satellite entertainment systems. In 2004 JetBlue added satellite radio and movie channels.

Neeleman raised $130 million in capital which was a record high for an airline industry startup. In 1999, Neeleman worked with a college student and created online ticket booking called "Open Skies" and it was sold to Hewlett Packard. JetBlue headquarters is in Forest Hills, New York City and its hometown airport is John F. Kennedy International Airport. JetBlue in its first year of business operated 64 flights a day, served 12 destinations, had 11 airbus aircrafts, and employed 1028. In late 2005 it was operating 318 flights a day, serving 33 destinations. JetBlue had a fleet of 82 airbuses and employed 8600 people.

David Neeleman became the CEO of JetBlue. Neelman suffered from ADHD and it attributed to Neelman creativity and high levels of energy to ADHD, but Neelman had a difficulty writing memos and keeping track of his belongings. In 1984, Neeleman joined Morris Air, a small local carrier based in Salt Lake City. The early ideas from Morris Air were put into effect at JetBlue. Working there for about eight years, Neeleman held the positions of executive vice president and later president. Neeleman paid college interns to drive around in Volkswagen Beatles and handed out bumper stickers buttons tote bags to anyone that could be a potential customer in motels and restaurants. These types of gorilla advertising were a part of the companies approach in JetBlue's marketing scheme.

Neeleman dropped out of college during his junior year to open up Neelman's own travel agency at the University of Utah. Neeleman was forced to close his business in 1983, Neelman reportedly learned two key lessons, "you should not rely on someone that could hurt your business and spend wisely so resources will be available when needed." Southwest purchased Morris Air for 129 million. Then Southwest tried to hire Neeleman but Neelman's membership in the executive planning committee was very brief. This was because Neelman was unable to adapt to the companies policies and procedures and Neelman was fired.

In this learning experience Neeleman learned that it was important to treat employees with respect and it was better to purchase new airplanes instead of leasing them. Neeleman had a philosophy in management to recruit talent from other airline companies. One of these recruits was David Barger who helped Neeleman make the decision to purchase all new aircraft of the same type. Barger also convinced Neelman to eventually operate point-to-point service instead of the more costly hub and spoke system. John Owen was the CFO and also the Executive Vice President. Every morning Owen received the previous day's financial report and operating statistics. Owen looked through all the information including the number of seats sold, revenue generated from every passenger take off, landing times, and the time it took to unload baggage. Owen first disagreed about installing the live satellite television, but agreed with the strategy that this featured was an essential part of the JetBlue experience and it helped contribute to customer loyalty that would result in higher demand.

Lastly, there was Ann Rhoades who was hired to handle human resources. Ms. Rhoades developed many of the company's successful human resource strategies to hire, retain, and motivate high quality employees. Rhoades laid the foundation to focus on people by calling employees crewmembers, passengers as customers, and venders as business partners. JetBlue received over 100,000 applications and only hired roughly 2500 employees each year. The company looked for employees that were energetic, had a positive attitude, and showed a broad skill-set. Every executive was assigned to at least one of JetBlue's destinations and was expected to tour the airport visit with the JetBlue staff and thoroughly check out how well things were. This was a way for managers to learn the names of their subordinates show that they cared and develop good working relationships with employees.

On February 11th of 2000 JetBlue had its first ceremonial flight between Buffalo and New York City. This flight made JFK international Airport its main hub. That same day the first flight from JFK to Fort Lauderdale Florida was made with 152 passengers aboard. The fare was $159 one way which was 70% less than the fares of competitors. The destinations to Florida eventually became one of JetBlue's most popular flights. The initial decision to start service at JFK was risky because of the crowded skies, high costs, and inevitable hassle. JFK had an average gate utilization of 2.7 flights a day which was much lower than La Guardia's 5.5 flights a day.

The JFK demographics worked out great. Neeleman originally thought JetBlue's target market would consist of 8 million people in a 5 mile radius around the airport. He later noticed that his service had also appealed to younger professionals with Manhattan zip codes. New York City travelers stated that there had not been such a low fare carrier since people express closed down in 1986.

JetBlue significantly expanded operations out of Long Beach. Expanding brought JetBlue into close competition with Southwest Airlines which had dominated the California market in pervious years. On the reverse side JetBlue removed its services from Atlanta, Georgia because competition from Delta and Air Tran on its transcontinental routes to Oakland and Long Beach. They all used the Airbus A320, this model allowed 30 additional seats than the Boeing 737, it was also more fuel efficient, and less costly to operate. Costs were kept down since pilots and maintenance crews were trained for only one aircraft.

JetBlue pilots did not have to carry heavy flight manuals in the cockpit. All instruction books and manuals were loaded on laptop computers. With these laptops, pilots and terminals