JetBlue Airways: Neeleman's Future Bet
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Code : COM0038
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Region : USA
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The US Airline Industry The passenger airlines industry in the US was fragmented into three classes: the traditional carriers, the regional carriers and the low-cost carriers (LCC). While the traditional segment was dominated by the six network carriers, American Airlines, United Airlines, Delta Airlines, US Airways, Continental and Northwest Airlines, the regional segment comprised of players such as Comair, American Eagle, Atlantic South East, Sky West and Mesa... JetBlue:Genesis and Growth Even after a large number of LCC had failed, Neeleman felt the need for a low-cost airline in the US market. Neeleman was an aviation industry veteran who had co-founded Morris Air in the early 1980s along with June Morris. Morris Air was a low-cost carrier and was based on the Southwest model... The Challenges Ahead Although JetBlue was one of the profitable airlines in the US, analysts were worried about its ability to maintain its low costs and maintain its growth. Though at 6.09 cents it had the lowest operating costs per seatmile in the industry, expenses were bound to rise as insurance costs, fuel costs and maintenance charges increased as it added new planes. Also, JetBlue had lowlabor costs as it provided stock option to its 6000+workforce... |
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