CASE 9: JETBLUE AIRWAYS

Case 9: Jetblue Airways

Case 9: Jetblue Airways

Industry Information:

When talking about the airline industry as a whole, the market size is indescribable. The reason for this is airlines are needed everywhere. Some airlines are not just in the business of transportation of people but also the transportation of cargo or freights. Age, race, sex, etc... are not important to most airlines due to the fact that airlines want to service as many individuals as possible in the need of transportation. Airlines market size depends on where there airlines fly to. Do they fly domestically or internationally? Where are their ports located? Do they just transport people or do they also transport cargo? So to define the market size of the airline industry as a whole is not as easily answered as you would assume. There are many variables and it would be easier to define the market size of an airline as individual rather than an industry.

The airline industry is highly competitive. Even a minor change in fuel costs, average fares, and passenger demand can curve airline profits dramatically. The general state of the economy, international events, industry capacity and pricing actions taken by other airlines has historically influenced passenger demand and fare levels. The major competitive factors used by the airline industry are fare pricing, customer service, routes served, flight schedules, types of aircrafts, safety record and reputation, code sharing relationships, in flight entertainment systems and frequent flyer programs (www.jetblue.com).

JetBlue's major competitors are Southwest Airlines Co., United Air Lines Inc., and American Airlines Inc. (http://finance.yahoo.com). Southwest airlines will fly any plane as long as it is a Boeing 737, and they also let passengers sit anywhere they like as long as they get there first. Southwest has expanded its low cost, no-frills, no-reserved seat approach to air travel throughout the U.S. to serve more than sixty cities in some thirty states. To cut back on office costs, Southwest offers ticket less travel and has its own reservation system. Southwest has enjoyed thirty three years of profitability even with the industry's ups and downs (http://finance.yahoo.com). Southwest's product mix is to serving the U.S. in air travel with low costs, and customer service excellence.

United Air Lines Inc. provides air transportation services primarily in North America , the Pacific, the Atlantic, and Latin America. It offers transportation of passengers and cargo. Therefore United Airlines Inc. product mix is not only the service of airline travel but also the transportation of cargo.

American Airlines Inc. operates as a scheduled passenger airline. The company operates scheduled air freight carriers, as well as provides freight and mail services to shippers. The company provides connecting service primarily in the United States, Canada, Mexico, and the Caribbean. American Airlines Inc. product mix is airline travel for passenger, mail services and a freight handler (http://finance.yahoo.com).

The target market for the industry as a whole is anyone in need of transportation. Every Airline has its own segregated target market depending on what kind of business they are ...