Jetblue Case Study

JetBlue is a low-cost domestic airline in the United States that utilizes a combination of low-cost and value-added differentiation as its market strategy. From its launch in February 2000 to the time of the case, the airline grew to become the 11th largest player in the airline industry in a short span of 4 years.

Moving into the growth phase, JetBlue transitions from launch mode to an established product stage where it needs to focus on growth of scale. Executive leadership has determined that JetBlue must increase its existing route network by adding service to mid-sized markets. Vincent Stabile, Vice President of People for JetBlue Airways has a challenge: How must the organization understand the current organizational structure’s successes and evolve these learnings to support this growth?

JetBlue’s core strategy capitalizes upon superior customer service paired with a low-cost structure achieved through use of brand new single model planes that reduced maintenance and training costs, better use of technology including automated processes, a smaller and more productive workforce, and the staffing of content yet non-unionized workers.

JetBlue’s organizational structure is a modified hierarchy вЂ" divisional design so that “important decisions regarding strategy and implementation could be more easily executed by crewmembers at all levels of the organization.”

This balances with a corporate policies designed to create integration and standardization across divisions such as the Holiday Helper program through which office-based staff volunteered in customer service operations during peak holiday travel times to aid in the operational heavy workload as well as to interact with customers and stay in touch with the core product.

This aggressive growth plan mandates a departure from low-cost competitive advantage of supporting only one type of plane because a smaller plane is required to deliver service to these markets - the Embraer 190. This will directly affect the competitive edge that JetBlue has created for itself through increased maintenance and training costs, staffing needs and physical space requirements.

As JetBlue expands the scale of its operations, the company anticipates the number of employees will increase from the 6,000 at the time of the case to nearly 29,000 in 2012 to support new and existing aircraft. For each additional aircraft an estimated 100 crewmembers will join the JetBlue payroll for positions including pilots, flight attendants, customer service and ramp operations, mechanics/technicians, reservation agents and management personnel.

To bring the anticipated 23,000 new crewmembers into the JetBlue family, Stabile needs a strategic plan recruitment, training, compensatory requirements and career development. Current JetBlue employees undergo orientation training that encourages them to discover the JetBlue value. The new employees will need to buy in to these values and this culture.

JetBlue employees are committed to the company, to the company’s values and to furthering the company business. This company has built a culture where the employees are so indoctrinated in the core objectives and beliefs of the company that they function as brand ambassadors. In this manner, JetBlue has created an all-for-one and one-for-all culture. As such, the employees are not considered mere staff; they are crewmembers.

The Shared Values were collaboratively defined so that every crewmember becomes a stakeholder in their perseverance.

This non-hierarchical culture may be witnessed in the example where the CEO will actually get on the plan, serve passengers alongside the regular crew and then help to turn the plane so that it is ready for its next deployment. This CEO leads by example and shows his staff that he is serious about his belief in the brand and all things JetBlue. Once a staff member sees the CEO cleaning out the trash from the airplane one day, he or she may be willing the next day to pitch in and help the airplane pusher dig its vehicle out of the snow.

This equal playing field among this 6,000 person