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Benefits and Growth of Jetblue

In: Business and Management

Submitted By minniemay
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Since its inception more than 12 years ago, JetBlue has undergone a fundamental shift in its business model to become one of the few carriers to achieve true hybrid status: low fares with frills. It has firmly entrenched itself in luring business travellers through a small corporate sales force and built up its network in Boston to largely cater to the more lucrative corporate traveller. This shift in strategy was primarily undertaken to even out the dramatic peaks and troughs JetBlue experienced with its leisure-focused model, and was also accompanied by a push into Latin American and the Caribbean to introduce markets with a strong base of visiting friends and relatives traffic (VFR) that JetBlue concludes is somewhat recession proof. At the same time, it has aggressively added interline partners that help to boost its passenger numbers and smooth out the revenue troughs it can experience during slow travel periods. But that strategy is not without critics. JetBlue’s growth rates during the last few years have raised eyebrows when most carriers have constantly refined their capacity growth to near zero or have actually shrank their supply. JetBlue counters it is still a young company in growth mode, and it justifies the expansion by pointing to its unit revenue performance. Both passenger unit revenue per available seat mile (PRASM) and yields grew by 10% in 2011, and its 5% to 7% supply growth forecast for this year remains intact after growing 8.6% in 2011. JetBlue estimated share of business travellers in its top Boston markets

Source: JetBlue JetBlue’s efforts to attract business travellers got underway in earnest in 2009 as it launched direct corporate sales, and now calculates its business traveller mix has soared by 354% since that time to account for 15% to 20% of its passenger base. The carrier stresses since 2007 it has either…...

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