Jetblue - Leadership with Wings

JetBlue: Leadership with Wings

"To continue to bring humanity back to air travel." This is the promise JetBlue Airways Corporation has made to its shareholders, customers, and "crew members" in order to build a strong, solid and rapidly growing company. JetBlue uses two significant tools that drive its success: low fares and superb customer service. This growing discount airline works to keep its costs down and implies this goal by offering one-class service and eliminating airport lounges and full meal services. JetBlue relies completely on technology with an operation strategy of choosing less crowded airports located near large cities to keep its turnaround down. In addition, JetBlue offers leather seats, LiveTV (a satellite service with programming provided by DirectTV), and began adding XM Satellite Radio to its fleet in 2005 to stress customer value.

According to our chapter, the Service Value Model has six components that focus on customer value. The quality of JetBlue flights is a perception based on the expectation that the customers have before they actually try out the service. The comfortable leather seats along with the discount price, for example, are a perception that the customer has towards this airline, but value is created when the customer expectation is exceeded. Another component adding value to JetBlue is Intrinsic Attributes. This airline chooses its supplementary service very carefully; as mentioned earlier the full service meals are eliminated, however the airline offers beverages, DIRECTTV and XM Satellite Radio which are different approaches to value from other airlines. If the core service is delivered as expected, the first step to creating customer value is created. Time is another important element to be considered when striving to achieve customer satisfaction. When a JetBlue passenger spends less time on the plane, or when they reach the desired destination on time, the value of the customer towards this company increases.

A Little Bit of Each Strategy Creates a Marvelous Airline

During the incubation period of JetBlue Airways Corp., President and CEO, David Neeleman, realized he was entering a market full of competition from all angles while resisting an economy that was, in a short period after, lagging do to a war and a homeland tragedy. Hence, Neeleman knew it was either make or break time. Upon starting up in 1999, Neeleman had initially differentiated JetBlue from other "start-up" airlines with respect to his choice of aircraft: the European Airbus A320. The freshly and newly acquired JetBlue A320 seated 162 passengers, as opposed to its competitor's, the Boeing 737, capacity of 132 seats. Neeleman also based his choice of aircraft on the A320's fuel-efficiency, a well thought-about plan in today's soaring fuel prices, and cheaper maintenance. Hence, a completely different approach to acquiring aircraft for a start-up airline's fleet, as opposed to other start-up airlines' purchases of "hand-me-downs." Obviously, with this in mind, newer aircraft require less maintenance; this, of course, lead to one form of reducing overhead and achieving a competitive advantage while applying a cost-leadership strategy. In addition, upon ordering the new Airbus A320 aircraft, Neeleman insured, as mentioned, that each and every leather seat was equipped with a 24-channel, live satellite TV and XM satellite radio, and that each and every A320 was delivered with a "one-class service," which ensured customer comfort do to a larger cabin space with the elimination of the typical first class; a plus in differentiating JetBlue from other competitors utilizing. When asked why Neeleman insisted on this, he simply stated that "A lot of airlines, by creating a first-class cabin, squash everyone else in the back...so 12 people are happy...and the rest of the people are miserable...we don't thing that's the way to run an airline."

JetBlue's main focus is customer service and comfort. By listening to its customers through a new online program on their main website called "Sincerely, JetBlue," this "service company" has given their customers exactly what they wanted: comfort, entertainment, and security on all of their flights. As a result, JetBlue has, again, differentiated itself from other competitors by providing all customers with 10-ounce cups of Dunkin' Donuts coffee; a cross-branding strategy in response to customers' complaints about how bad "airline coffee" tasted. In addition, JetBlue, in conjunction with Bliss, a spa company, is currently offering its overnight passengers with kits that contain eye masks, earplugs, moisturizers, and lip balm in support of customer comfort on its "red-eye flights" between the East Coast and Western states. Yet, another differentiating aspect of JetBlue is their dynamic package, which provides established direct relationships with hotel, car and cruise suppliers for its customers. Customers are able to purchase such services through a single transaction with JetBlue; a step away from the traditional outsourcing of such services by other carriers. To aid customer service and comfort, Neeleman flies twice a week on his airline to "help out" in everyday operations and to meet and listen to his customers. JetBlue's stand on security is stressed through installed cabin cameras in all of their aircraft. As a result, JetBlue's own customer satisfaction survey showed that 94% of its customers ranked their JetBlue experience "much better than other airlines" while an enormous 99% said they "definitely recommend the airline to others."

Yet, Neeleman stressed the purchase and implementation of technology entirely throughout his company in order to gain a competitive advantage against other major and larger airlines. Neeleman, "automated" everything from direct ticketing sales to electronic tags on customer bags to "paperless cockpits," in order to reduce his company's overhead costs, to maintain on-time flights, and ultimately keep low fares low. For example, a customer can either purchase a ticket on their website directly, by phone, or through a reservations agent who works from their home, using voice over IP (VoIP). Once the ticket is paid for, the customer simply shows up to the airport and the ticket is "on file;" a ticketless system. In addition, all pilots are equipped with HP laptops to file all the necessary "paperwork" for flight with the goal of not relying on dispatchers to "crunch the numbers," which "helps to keep planes on schedule" and saved "an estimated 4,800 hours a year." The electronic tagging system, as well, saves