JETBLUE AIRWAYS CORPORATION: NAVIGATING TURBULENCE
WITH STEADFAST EVOLUTION CASE STUDY SOLUTION
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SYNOPSIS
In February 2024, Joanna Geraghty became the first female chief executive officer (CEO) of JetBlue
Airways Corporation amid challenging financial conditions. Facing significant losses and fierce
n
competition from industry giants, her key challenge was to navigate JetBlue’s path to stability and success
tio
in a male-dominated industry. Hindered by a failed bid to acquire Spirit Airlines Inc. (Spirit) and by pressure
from activist investor Carl Icahn, Geraghty was tasked with improving JetBlue’s reliability and cost control
to ensure stability and success in a competitive industry. Yet, the question lingered: how would she navigate
lu
these challenges to succeed?
So
OBJECTIVES
• Understand the competitive landscape of the airline industry.
• Evaluate the impact of operational inefficiencies on the profitability of a business (airline).
• Examine the role of stakeholder (investor) management in implementing strategies within the airline
industry.
• Discuss the implications of failed acquisition attempts and other external factors on the strategic
direction of an airline company.
• Develop strategies and recommendations for addressing financial and operational challenges faced by
an airline company.
The Case Solution Starts From page 5
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ASSIGNMENT QUESTIONS
1. Describe the fiercely competitive landscape of the airline industry and perform a strengths, weaknesses,
opportunities, and threats (SWOT) analysis for JetBlue.
2. Identify prevalent operational inefficiencies within the airline sector and analyze their implications on
the financial viability of airlines.
3. Within the framework of this case study, explain the influence of investors on JetBlue’s overall
operational strategies.
4. Propose actionable strategies that Geraghty can use to tackle JetBlue’s financial and operational hurdles
effectively.
The Case Solution Starts From page 5
, e
2. Identify prevalent operational inefficiencies within the airline sector and analyze their
pl
implications on the financial viability of airlines.
highlight the following operational inefficiencies to students that exist in the airline industry
m
and discuss their impact on the airlines sector’s financial viability. Real-world examples are provided to
further help students understand the inefficiencies and learn from the incidents. Students should also refer
Sa
to case Exhibits 1 and 5, which show financial statements for JetBlue, and relate these items to the values
provided in those statements.
Overcapacity
n
Overcapacity in the airline industry occurs when capacity exceeds demand. Airlines then lower fares to sell
tio
excess seats, leading to lower yields and price stress. It is difficult for airlines to raise ticket prices without
risking loss of market share. Overcapacity leads to underutilization of resources such as aircraft and crew,
which occurs due to poor demand forecasting, aggressive route expansion, or inefficient scheduling
lu
practices. Overcapacity leads to increased operating costs and reduced profitability.
So
Maintenance Delays
Maintenance delays can result in aircraft being grounded for extended periods, leading to disruptions in
flight schedules and increased costs associated with aircraft downtime. Inadequate maintenance practices
can also compromise safety standards, leading to regulatory penalties and damage to the airline’s reputation.
For example, in early 2019, it was reported that Southwest Airlines had been operating some of its planes
without performing required safety inspections.2 Specifically, the airline had reportedly failed to conduct
The Case Solution Starts From page 5
, EXHIBIT -1: SWOT ANALYSIS OF JETBLUE
Strengths Weaknesses
● Strong company values: JetBlue was known for ● Operational vulnerabilities: The airline had recently
bringing “humanity to airlines industry” and providing faced challenges such as flight delays, cancellations,
and operational disruptions, impacting customer
●
●
●
●
●
e
Opportunities Threats
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● Expansion into new markets: JetBlue can explore ● Intense competition: JetBlue faces fierce competition
opportunities for expanding its international route from existing major carriers and low-cost airlines,
m
network and entering new markets to diversify its
●
●
Sa
●
●
●
n
tio
●
lu
So
The Case Solution Starts From page 5
WITH STEADFAST EVOLUTION CASE STUDY SOLUTION
e
pl
m
Sa
SYNOPSIS
In February 2024, Joanna Geraghty became the first female chief executive officer (CEO) of JetBlue
Airways Corporation amid challenging financial conditions. Facing significant losses and fierce
n
competition from industry giants, her key challenge was to navigate JetBlue’s path to stability and success
tio
in a male-dominated industry. Hindered by a failed bid to acquire Spirit Airlines Inc. (Spirit) and by pressure
from activist investor Carl Icahn, Geraghty was tasked with improving JetBlue’s reliability and cost control
to ensure stability and success in a competitive industry. Yet, the question lingered: how would she navigate
lu
these challenges to succeed?
So
OBJECTIVES
• Understand the competitive landscape of the airline industry.
• Evaluate the impact of operational inefficiencies on the profitability of a business (airline).
• Examine the role of stakeholder (investor) management in implementing strategies within the airline
industry.
• Discuss the implications of failed acquisition attempts and other external factors on the strategic
direction of an airline company.
• Develop strategies and recommendations for addressing financial and operational challenges faced by
an airline company.
The Case Solution Starts From page 5
, e
pl
m
Sa
n
tio
lu
So
ASSIGNMENT QUESTIONS
1. Describe the fiercely competitive landscape of the airline industry and perform a strengths, weaknesses,
opportunities, and threats (SWOT) analysis for JetBlue.
2. Identify prevalent operational inefficiencies within the airline sector and analyze their implications on
the financial viability of airlines.
3. Within the framework of this case study, explain the influence of investors on JetBlue’s overall
operational strategies.
4. Propose actionable strategies that Geraghty can use to tackle JetBlue’s financial and operational hurdles
effectively.
The Case Solution Starts From page 5
, e
2. Identify prevalent operational inefficiencies within the airline sector and analyze their
pl
implications on the financial viability of airlines.
highlight the following operational inefficiencies to students that exist in the airline industry
m
and discuss their impact on the airlines sector’s financial viability. Real-world examples are provided to
further help students understand the inefficiencies and learn from the incidents. Students should also refer
Sa
to case Exhibits 1 and 5, which show financial statements for JetBlue, and relate these items to the values
provided in those statements.
Overcapacity
n
Overcapacity in the airline industry occurs when capacity exceeds demand. Airlines then lower fares to sell
tio
excess seats, leading to lower yields and price stress. It is difficult for airlines to raise ticket prices without
risking loss of market share. Overcapacity leads to underutilization of resources such as aircraft and crew,
which occurs due to poor demand forecasting, aggressive route expansion, or inefficient scheduling
lu
practices. Overcapacity leads to increased operating costs and reduced profitability.
So
Maintenance Delays
Maintenance delays can result in aircraft being grounded for extended periods, leading to disruptions in
flight schedules and increased costs associated with aircraft downtime. Inadequate maintenance practices
can also compromise safety standards, leading to regulatory penalties and damage to the airline’s reputation.
For example, in early 2019, it was reported that Southwest Airlines had been operating some of its planes
without performing required safety inspections.2 Specifically, the airline had reportedly failed to conduct
The Case Solution Starts From page 5
, EXHIBIT -1: SWOT ANALYSIS OF JETBLUE
Strengths Weaknesses
● Strong company values: JetBlue was known for ● Operational vulnerabilities: The airline had recently
bringing “humanity to airlines industry” and providing faced challenges such as flight delays, cancellations,
and operational disruptions, impacting customer
●
●
●
●
●
e
Opportunities Threats
pl
● Expansion into new markets: JetBlue can explore ● Intense competition: JetBlue faces fierce competition
opportunities for expanding its international route from existing major carriers and low-cost airlines,
m
network and entering new markets to diversify its
●
●
Sa
●
●
●
n
tio
●
lu
So
The Case Solution Starts From page 5
