Jetblue Swot Analysis

SWOT ANALYSIS

INTERNAL FACTORS

STRENGTHS (+) JetBlue

Technological Innovation Since its inception, JetBlue has been at the forefront of technological advancement. JetBlue was the first to bring individual screens to the seat of every passenger with live satellite TV and 24 channels. They were the first to introduce DirecTV and SiriusXM radio. JetBlue was one of the first to have on-line booking and paperless check-in. Today, JetBlue offers Auto Check-In; a 100% automated system that checks a passenger in and e-mails their boarding pass to the passenger's mobile device 24 hours before departure. This eliminates the need to stand in line for flight check in. JetBlue was one of the first airlines to give flight attendants tablets, making payments by credit card a possibility and is the only airline that is able to accept Apple Pay. JetBlue also was one of the first to receive approval from the Federal Aviation Administration to use custom equipped iPads to serve real time information related to the flight and eliminate the heavy paper-based manuals they would normally be required to use. The iPads have three apps that are pivotal to the pilot's jobs - real-time weather, pre-flight planning, and digital airport and aircraft charts. In 2015, JetBlue introduced Fly-Fi, their in-flight internet service across their fleet. Overall, JetBlue has been successful because it is one of the first to market with new technologies.

Targeted High Value Geography/ Route Structure "JetBlue utilizes a point-to-point system as the foundation of its structure, with the majority of their routes landing or departing JetBlue utilizes a point-to-point system as the foundation of its structure, with the majority of their routes landing or departing from one of the six focus cities. This allows JetBlue to optimize costs and have non-stop itineraries. The majority of their flights are centered in and around the heavily populated northeast corridor of the US.

JetBlue has expanded its network growth over the past few years has been focused on the business traveler in Boston as well as travelers to the Caribbean and Latin America region. JetBlue has been focusing on increasing its presence in Fort Lauderdale-Hollywood where there is an opportunity to increase operations to destinations throughout the Caribbean and Latin America. Broward County Aviation Department has given significant investment in the airport and surrounding facilities."

JetBlue University In 2007, JetBlue created a unique gateway for people to become professional pilots. This program allows students from any of six AABI-accredited universities with an aviation major work towatds becoming a first officr at JetBlue. The stuents follow a defined pathway that guarantees an interview upon completion of the program.

Differentiated Product and Culture JetBlue has focused primarily on customer comfort and innovation for the convenience of the customer like on-line booking, paperpless ticketing, automated check in, satelite television, SiriusXM radio, inflight wifi, and additional legroom.

WEAKNESSES (–) JetBlue

Significant Fixed Costs There are significant fixed cost obligations in the airline industry such as operating leases, airport terminal space, and other facilities/office spaces. Beyond the infrastructure costs, there are also the committed contracts for new 115 additional aircrafts and various aircraft modifications planned through 2023.

Debt/Future Financing According to JetBlue's 2015 Annual report, aircrafts are financed through secured debt or leasing financing, with recent aquistions coming from cash operations (p15). The impact of global economic conditions could adversely affect credit availability and the cost of credit to JetBlue. Tese debts have the potential to affect obtaining additional financing for capital expansion. A loss of credit would divert cash flow from operations and commercial initiatives creating a competitive disadvantage compared to less leverage or competitors with more resources who receive more favorable terms. Interest could also negatively impact financing as approximately 24% of JetBlue's debt has variable interest rates.

Workforce Salaries and Benefits As employees tenure matures the cost of salaries and benefits increase. As one of JetBlue's strengths is loyalty from its employees, this will increase costs. Also, as the employees age, medical and related benefits are likely to increase as well.

Aging Fleet/Maintenance When JetBlue started as a new carrier, all of their fleet was under multi-year warranties for parts and services. As JetBlue matures as a carrier, the initial warranties on its fleet are beginning to expire. This will increas maintenance fees and new agreements with maintenance providers will need to be negotiated.

Automated Systems The downside of having a paperless strategy and relying on technology is that any failure of the systems does significant harm to the business. If there were a failure on the computerized airline reservation system, telecommunication system, flight operations system, maintenance systems, check-in kiosks, website or the primary and redundant data center JetBlue would suffer. Moreover, the website and reservation system must be able to handle high volumes of traffic and deliver accurate information. Like all systems, these need periodic patching, upgrades, and replacements. If this infrastructure is not maintained in a timely manner it would severely impact the business.

Information Security No automated system is completely secure. Computer viruses, cyber-attacks, security breaches, or other telecommunication failures are all risks when dealing with automated systems. Beyond those are the risks of malicious third-party penetration of networks where customers, employees, business partners' or JetBlue's internal operational data are stored. Confidential credit card information is taken by private retail networks that rely on encryption and authentication but even those can be affected as was seen with the dirty cow vulnerability discovered in December 2016.

EXTERNAL FACTORS

OPPORTUNITIES

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