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3 JetBlue Airways

Corporation — 2009

Mernoush Banton
Adjunct Faculty/Consultant

JBLU

www.jetblue.com
In April 2009, the fear of a swine flu outbreak shocked the airline industry and airline stocks
dropped by almost 16 percent. JetBlue’s stock slipped by 7 percent to $4.91. A bad outbreak
could be disastrous for this industry because most airlines already are suffering from high
unemployment, slow economic growth, and significant drops in business and leisure travel.
The stake is particularly high for JetBlue, which is on track to generate free cash flow this
year for the first time in its nine years of flying. A low-fare, low-cost passenger airline
headquartered in Forest Hills, New York, JetBlue expects its 2009 full year revenue and
profit to rise slightly. It is ranked as the number-ten U.S. airline by traffic. Southwest
Airlines, based in Dallas, Texas, is 1.
JetBlue employs over 11,000 crew members and recently achieved the number-one
customer service ranking among low-cost carriers, according to J. D. Power and
Associates. The company offers passengers new aircraft, roomy leather seats with lots of
leg room, 36 channels of free DirecTV, 100 channels of free XM satellite radio, and for
purchase, premium movie channel offerings from multiple major movie studios. JetBlue’s
onboard offerings include free and unlimited brand-name snacks and beverages, and for
purchase, premium beverages and specially designed products for overnight flights.
As of mid-August 2009, JetBlue operates 650 flights per day, serving 56 cities in 19
states, Puerto Rico, Mexico, and five countries in the Caribbean and Latin America. JetBlue
in mid-2009 began international flights to Montego Bay (Jamaica), Cancun (Mexico),
Barbados, Saint Lucia, Kingston (Jamaica), and Santa Domingo (Dominican Republic).

History
JetBlue was incorporated in Delaware in 1998 and commenced service in 2000 with
primary base of operations at New York’s John F. Kennedy International Airport. The
company’s goal has been to establish itself as a leading low-fare, low-cost passenger airline
by offering its customers high-quality customer service and a differentiated product. The
airline focused on serving “underserved markets” and large metropolitan areas that have
high average fares with a diversified geographic flight schedules that includes both short-
and long-haul routes.
From its first day of operation, JetBlue differentiated itself from other airlines by:
• Starting the business with a lot of money—the only carrier with over $100 million
startup capital
• Flying new planes that are more reliable and certainly more efficient. Seats are
covered in leather with individual monitors for viewing programs from DirecTV.
• Hiring the best people by screening the employees rigorously, offering exceptional
training, and equipping them with best tools. The employees are highly motivated
and are trained to be service oriented.
• Focusing on service by listening to customers and ensuring their flight is joyful and
friendly.