Southwest Airlines and Jetblue essays

Southwest Airlines and Jetblue essays Many ask how can JetBlue offer great service, with low fares and still make a profit while all major carriers are losing money. Running a profitable airline may be as easy as supplying your customers with a clean airplane, arriving on time and having knowledgeable and professional employees. This simple thought process is what Chief Executive David Neeleman had in mind when he started JetBlue more than two years ago. Neelman stated, We set out to bring humanity back to air travel and to make flying more enjoyable. Last year JetBlue earned $14 million on $320 million in revenue and then in the first half of 2002 the carrier netted $27.6 million on $283 million in revenue (Publications Libraryâ„ ¢). Many ask how JetBlue did this with all the turmoil currently in the industry. Lets start with the fact that this two-and-a-half year old airline opened its doors with a blank slate in employee relations. JetBlue is not unionized, which helps keep labor costs to 25.2% of revenues. Compared to Southwest, which spends 33.4% of revenues on labor, and United and Delta, which spends roughly 44% (Publications Libraryâ„ ¢). JetBlues staff is also sufficiently young and many employees take the companies hot stock options over receiving higher cash salaries. Being able to lower labor costs is one aspect of several that has kept JetBlue profitable. JetBlue is the best-capitalized airline start-up in history. This means they are able to invest in the best products available. This can be seen in JetBlues equipment. Many low cost carriers such as Southwest fly older aircraft. However, JetBlue started with the brand new Airbus A320s, which cut down on operating costs. New aircraft are also more reliable, so they spend less time on the ground where they do not make money. The Airbus A320 is also more efficient, so JetBlue spends less on fuel than other carriers do. JetBlue flies point-to-point operations, unlike major carriers who run hu...