JetBlue case analysis
Contents
External Environment
To evaluate the external environment of JetBlue airways we will use the PESTEL analysis. PESTEL analysis stands for “Political, Economic, Social, Technological, Environment and Legal analysis”.
Political Factors
How and to what extent the government does intervenes in the economy. Political factors can be tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors that are found in the JetBlue case are:
Government monitors the airline industry more scrupulously as a result
60% of airline industry is unionized
Heightened sense of consumer information privacy
Airport slot/gate allocations
Security considerations since 2001 attacks
Bankruptcy
Economic Factors
These factors have major impact on how businesses operate and make decisions. They include economic growth, interest rate, exchange rates, and inflation rates. Economic factors that are found in the case are:
1978 Airline Deregulation Act created intense rivalry between airlines
Downturn in airline travel after 9/11 2001 affected most airlines – JetBlue reported 18 consecutive quarterly profits
IT Spending continued post 9/11
Fuel costs spiraled, aggressive competition and increased operating costs
Availability of venture capital
Interest Rates
Legacy Airlines exiting bankruptcy and streamlining operations
Strategic Alliances
Fair Pricing is an important competitive factor
JFK Expansion
Social Factors
Trends in social factors affect the demand for a company’s products and how the company operates. They include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Social factors that are found in the case are:
2001 Terrorist attacks in US negatively affected airline industry
Anxiety about safety at airports
Travel has become inconvenient due to safety precautions
Internal Culture at JetBlue – Management is
External Environment
To evaluate the external environment of JetBlue airways we will use the PESTEL analysis. PESTEL analysis stands for “Political, Economic, Social, Technological, Environment and Legal analysis”.
Political Factors
How and to what extent the government does intervenes in the economy. Political factors can be tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors that are found in the JetBlue case are:
Government monitors the airline industry more scrupulously as a result
60% of airline industry is unionized
Heightened sense of consumer information privacy
Airport slot/gate allocations
Security considerations since 2001 attacks
Bankruptcy
Economic Factors
These factors have major impact on how businesses operate and make decisions. They include economic growth, interest rate, exchange rates, and inflation rates. Economic factors that are found in the case are:
1978 Airline Deregulation Act created intense rivalry between airlines
Downturn in airline travel after 9/11 2001 affected most airlines – JetBlue reported 18 consecutive quarterly profits
IT Spending continued post 9/11
Fuel costs spiraled, aggressive competition and increased operating costs
Availability of venture capital
Interest Rates
Legacy Airlines exiting bankruptcy and streamlining operations
Strategic Alliances
Fair Pricing is an important competitive factor
JFK Expansion
Social Factors
Trends in social factors affect the demand for a company’s products and how the company operates. They include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Social factors that are found in the case are:
2001 Terrorist attacks in US negatively affected airline industry
Anxiety about safety at airports
Travel has become inconvenient due to safety precautions
Internal Culture at JetBlue – Management is