Although JetBlue is expanding very quickly and has already won many service awards, JetBlue still represents only 4.1% of the domestic airline market[1]. Our plan – Spring Break Great-Deal Package is to increase the domestic airline market by attracting college students.
Due to having high fixed costs especially salary, JetBlue has been lower their employees per aircraft. JetBlue had 14.1 pilots per aircraft in 2007, down from 38.3 per aircraft in 2000 which is its start-up year; JetBlue had 3.9 maintenance workers per aircraft in 2007, down from 10 per aircraft in 2000[2] (chart#1). One of the most important metrics to assess operating performance of airlines is cost per seat mile which is expressed in cents to operate each seat mile offered and JetBlue has a real advantage in this area. In theory, the lower the cost per seat mile the more profitable the airline should be. Their cost per seat mile is about 2/3 of the industry average. The cost per seat mile of JetBlue is 0.0838, while American Airlines is 0.114[3].
JetBlue at least superficially, appears to be an example of a low-cost leader. In their initial foray into the New York to Florida market, JetBlue offers ticket price about half of the existing competitor’s ticket prices. For example, a college student in New York who wants to have a vacation to Orlando in December 20th to 24th, compares the fare of both JetBlue and American Airlines. He will definity choose JetBlue, simply because the published fares show differences of as mush as 50%. JetBlue’s published fare is $294.5 (including taxes), and American Airlines’ published fare is $584.5 (including taxes and with one stop).
Since JetBlue has varies of comsomer, such as middle class and secnoirs, JetBlue do not have to lower their price in the first place. To attract JetBlue's main target - college students, JetBlue gives a special discount.
Because college students do not spend much on their vacation, JetBlue gives college student a 10% off from the published fare when they show their student id. By have this discount program, the fare of JetBlue will stay in the same.
JetBlue offers at least as many perks as the traditional legacy despite their low-cost model. The stigma in airline industry has been that low-fare equals low frills.
However, to convince domestic travelers especially college students that with JetBlue, they don’t have to sacrifices comfort, service, in-flight entertainment, and other amenities to obtain a low-fare ticket.
