Why jetblue is successful

It built its success on low cost and high standards, which attracted and kept passengers, and at the same time helped the airline remain solvent in times when the majors were crumbling to dust. However, analysts wonder whether this magnitude of success can be sustained for a longer period. JetBlue's cost leader approach succeeded because the airline was in its growing stage and could yet exercise close control over the business.

There were no labor problems because the airline was small enough for all the employees to feel involved and for the management to look after its employees well. Things cannot be the same forever. With JetBlue growing at a very rapid pace, its real success would be in replicating the same model successfully on a larger scale. They require relatively no maintenance and Neelman was able to work out an undisclosed mix of leases and purchases to keep operating costs low.

However, as the fleet of aircraft ages, the company will surely face rising maintenance costs on the multi-million dollar jets. JetBlue has started on the right foot as they chose, partly for this reason, to have only one craft and one type of engine for their entire fleet.

What do you recommend to a company that has turned a profit in every quarter since its inception and in an era of unprecedented industry troubles has more than quadrupled the profit margin of the nearest competitor? How do you prognosticate or even guess the problems that an airline will face when the industry itself is so highly cyclical resultantly unpredictable?

Therefore, the difficult task of answering what JetBlue can do to immunize itself from the very turbulence that has arguably made them so successful is frightening.

However, if history is any indication of future events, JetBlue will be faced with many internal and external strategic issues to overcome to maintain its competitive advantage. A good lesson to any airline start-up: even the highly capitalized JetBlue, is the sparkle and fade fate met by the airline People Express. Twenty years before JetBlue a short-haul carrier under Donald C.

Burr set out to reap a profit on cheap, reliable service offered to underserved cities such as Buffalo, Columbus, and Sarasota. The more the airline grew and expanded its routes, the more it watched its profits grow anemic. Most analysts predict that JetBlue will experience growing pains in the future, as did People Express. Howe, P. Knight Ridder Tribune Business News, 1. We use cookies to provide the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Source: JetBlue Airways. Source: Business Insider. Source: New York Times. Source: Planespotters. Source: USA Today. Source: Airbus. Unlike other low-cost or start-up airlines of the time, JetBlue Airways became a household brand with its status as a major carrier in the US.

When it expands to Europe in , JetBlue will be the only low-cost carrier based in the US to operate on three continents. Though JetBlue's founder, David Neeleman, has moved on from the airline and can now be found between Portugal, Brazil, and the US, his name can now be found immortalized on the side of one of JetBlue's newest Airbus Aneo aircraft. For you. World globe An icon of the world globe, indicating different international options. Get the Insider App. Click here to learn more. A leading-edge research firm focused on digital transformation.

Good Subscriber Account active since Shortcuts. Account icon An icon in the shape of a person's head and shoulders. It often indicates a user profile. Log out. US Markets Loading H M S In the news. Thomas Pallini. JetBlue Airways is celebrating 20 years of operations, having had its first flight on February 11, Under the leadership of airline entrepreneur David Neeleman, JetBlue started with two planes in and quickly grew into one of the country's top airlines.

JetBlue thrived at a time when other airlines were failing and consolidating to stay afloat. Barger explained this well in his lecture at Wharton:. We are growing our company and trying to fend off competition that is insensitive to price.

In bankruptcy, companies have protection, and underneath that umbrella, they can offer very low fares. How do you compete with that? JetBlue took its differentiation further in , with the launch of a premium cabin. The cabin offers 16 premium seats in a and configuration. Simple Flying looked at the routes and the seats in more detail previously. This concept of business class at an affordable price has been a great success for JetBlue. It has now expanded to operate from five hubs, covering over 30 routes.

And in , it became the first US carrier to resume commercial services to Cuba. The airline plans a big step forward in international routes with its planned transatlantic flights starting later in London has been confirmed as the first destination, using the new ALR aircraft. Flying transatlantic is a big expansion for the airline, but what makes this more exciting is its upgrade to its popular Mint product.

It will install a new seat for its premium cabin, and has accompanied this with upgrades to soft products too. The first row will feature studio-style space, with room for a guest. With London to New York being the most profitable air route in the world and a big market for business travelers, of course, this is an exciting move.

Offering a product that competes with the legacy airlines and outstrips some could work very well if it is priced right.

Of course, like all airlines, JetBlue has suffered during the slowdown of and into Despite the slowdown, JetBlue has retained strong expansion plans.

It has used the slowdown period to open 62 new routes.