Introduction/ Who is JetBlue Airlines?
Jetblue Airlines is a low-cost airline operating in North America, the Caribbean and Europe. In 2022 it offered to acquire Spirit Airlines, an ultra-low-cost airline operating in North America. Jetblue was acquired To increase its client base and network’s number of routes. In this paper, we seek to examine this acquisition, determine its feasibility, and analyze its pros and cons.
What is its business model?
The foundation of JetBlue’s business model is the idea of low-cost carriers, which provide passengers with various services and amenities for affordable fares. Together with affordable domestic and international airfares, JetBlue also provides travel packages, rental cars, and loyalty programs. The airline also aims to make travelling comfortable with complimentary refreshments, onboard entertainment options, and many in-flight amenities. JetBlue also offers extensive customer support to assist customers with queries or issues. JetBlue will be able to extend its offerings further and reach more people thanks to the acquisition of Spirit Airlines. JetBlue’s mission is to offer consumers an affordable, high-quality travel experience while continuing its dedication to offering safe and excellent service to its customers.
Describe its performance over time leading up to the acquisition.
Before the purchase of Spirit Airlines, JetBlue had a successful history of operations. The company’s overall income increased from $4.5 billion to $7.5 billion between 2010 and 2020, while passengers increased from 24.5 million to 46.9 million (O’Connell et al., 2020). JetBlue also increased its operating margin from 5.4% to 11.5% during this time. Moreover, the airline’s stock price increased by nearly 270%, from $4.19 in 2010 to $15.37 in 2020, for a total rise. These impressive performance metrics show how successful JetBlue’s growth and expansion over the years, prior to the purchase of Spirit Airlines, have been. However, Jetblue has to get more innovative in its operations to put up with its competitors.
Who are the competitors in the industry?
American Airlines, Delta Air Lines, United Airlines, Southwest Airlines, and Alaska Airlines are some of the key rivals in the airline sector. Each of these airlines offers local and international travel and various other services like car rentals, vacation packages, and loyalty programs. Additionally, many provide extras like complimentary food, in-flight entertainment, and onboard WiFi. Since these airlines compete to provide clients with the best pricing and services, a highly competitive environment is created. JetBlue will need to keep up with the competition with these airlines to keep its place in the market. Jetblue and spirit airlines differ from these competitors in various ways.
How do JetBlue and Spirit differ from some of these competitors?
There are a few significant areas in which JetBlue and Spirit vary from some of their biggest rivals. JetBlue and Spirit airlines are both low-cost airlines, which means they provide fewer services and more affordable tickets than the larger airlines. Likewise, both JetBlue and Spirit emphasize offering excellent customer service and a relaxing onboard environment. While some other big airlines provide more amenities, such as in-flight entertainment and onboard WiFi, they might not emphasize these aspects of their operations as much. This sets JetBlue and Spirit apart from some of their rivals and enables them to target a different clientele. Jetblue has a task to integrate its operations and those of the airline it acquired.
How does JetBlue plan to integrate this company?
JetBlue intends to merge with Spirit Airlines by growing its route network, utilizing Spirit’s low-cost business model, and incorporating Spirit’s clientele into its own. JetBlue will benefit from Spirit’s proven customer care team and current infrastructure. Acquisition of existing resources such as infrastructure is one of the major benefits of a business merger (Cooke et al., 2021). JetBlue also intends to use Spirit’s loyalty program, enabling customers to accrue points and prizes when flying with the airline. Finally, JetBlue intends to employ Spirit’s planes to increase the size of its fleet and the number of flights it offers. I would make several proposals to Jetblue regarding its acquisition.
What recommendations do you have for JetBlue moving forward?
By purchasing Spirit Airlines, JetBlue made a wise decision. Now the business must concentrate on maximizing the acquisition. In order to offer affordable rates and draw in more consumers, JetBlue should first concentrate on utilizing Spirit’s low-cost strategy. This can be accomplished by figuring out ways to save expenses without sacrificing service quality. Service quality can be maintained at low expenses through strategies such as merging tasks performed by employees (Ozbekler & Ozturkoglu, 2020). To guarantee that consumers have a great experience, JetBlue should also concentrate on integrating Spirit’s customer support team and loyalty program into their own.
In order to provide passengers with greater benefits and discounts, JetBlue should concentrate on creating strategic alliances with other businesses and airlines. Offering reduced vacation packages, car rentals, and other travel-related services is one way to do this. The partnerships will see it benefit by inheriting different customer bases from its partners. JetBlue will be able to leverage the advantages of its acquisition and establish itself as a leader in the aviation sector by heeding these suggestions.
Conclusion
JetBlue made a wise decision in purchasing Spirit Airlines, and the business now needs to concentrate on maximizing the acquisition. JetBlue will be able to exploit the advantages of its acquisition and establish itself as a leader in the airline sector by utilizing Spirit’s low-cost strategy, growing its network of routes, and improving its customer service and onboard experience. JetBlue will also be able to provide consumers with extra advantages and discounts to make their travel experience even more pleasurable by establishing strategic agreements with other businesses and airlines.
References
O’Connell, J. F., Avellana, R. M., Warnock-Smith, D., & Efthymiou, M. (2020). Evaluating drivers of profitability for airlines in Latin America: A case study of Copa Airlines. Journal of Air Transport Management, p. 84, 101727. https://doi.org/10.1016/j.jairtraman.2019.101727
Cooke, F. L., Wood, G., Wang, M., & Li, A. S. (2021). Riding the tides of mergers and acquisitions by building a resilient workforce: A framework for studying the role of human resource management. Human Resource Management Review, 31(3), 100747. https://doi.org/10.1016/j.hrmr.2020.100747
Ozbekler, T. M., & Ozturkoglu, Y. (2020). Analyzing the importance of sustainability‐oriented service quality in a competitive environment. Business Strategy and the Environment, 29(3), 1504–1516. https://doi.org/10.1002/bse.2449
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