Final Group Project.docx

Final Group Project.docx

SWOT Analysis

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JetBlue Airways benefitted from boosted earnings in the early months of 2015 as a result of lower fuel costs. Management has managed costs effectively as well. Superior customer service and amenities that are leaders in the airline industry have kept demand for services high. The strong profitability of JetBlue and its positive outlook has driven stock prices up notably. The future of JetBlue Airlines is promising, with earnings expected to double in 2015. Strengths

Excellent customer service and products that are original have made JetBlue well known throughout the airline industry. JetBlue is the only U.S. major airline to have a Customer Bill of Rights. They compensate customers who are inconvenienced by avoidable circumstances, and some that are unavoidable. Beginning in 2012 and running through 2014, JetBlue received recognition from J.D. Power and Associates as the “Highest in Airline Customer Satisfaction among Low-Cost Carriers. Airline Ratings also recognized JetBlue as “Best Low-Cost Airline – The Americas”, and gave JetBlue 7/7 stars for safety and 5/5 for product offerings for two consecutive years.[ CITATION Dal15 \l 1033 ] The “JetBlue Experience”, JetBlue’s desire to provide customers with an extraordinary flying experience is another strength of the low-cost airline. They offer amenities that have helped attract customers, boosting both top- and bottom-line growth. These amenities include free snacks and non-alcoholic beverages, free DIRECTV, and free SiriusXM satellite radio. Rather than catering to business travelers or price sensitive travelers, JetBlue tailors their offerings to the majority of travelers that have found themselves underserved by competing airlines. [ CITATION Dal15 \l 1033 ]
Weaknesses

JetBlue has approximately $1.8 billion in long-term debt at the end of the second quarter of 2015. [ CITATION NAS15 \l 1033 ] This accounts for an approximate 41% of their total capital. In order to take delivery of equipment and new aircraft, JetBlue also has a notable amount of additional fixed debt. Profitability will be tempered by this high level of debt and the subsequent high interest payments and interest expense that will be required. [ CITATION Dal15 \l 1033 ] Their largest expense, not unlike most airlines, is fuel. In 2014, 36% of total operating expenses was fuel. As a result of a sharp decline in global crude oil prices, the company has seen a strengthening of profits in the last year. Should oil prices recover, JetBlue could see those profits weaken. Since the airline industry is competitive by nature, JetBlue may be unable to offset the higher fuel costs by increasing fares. [ CITATION Dal15 \l 1033 ] Opportunities

In recent years, JetBlue has expanded its focus to include Boston business travelers along with travelers to Latin Ame…………………………………………………………………………….