Flying High With Jet Blue
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JetBlue is in a very competitive industry comprised of small, medium, and a few large competitors. One threat to JetBlue is that any competitive advantage that they implement is easily imitated by one of their competitors. This threat is a good reason why there is a limited number of profitable routes within the United States.
Being that JetBlue is not a large company within their industry leaves them susceptible to a buyout from a much larger airline corporation. Because JetBlue has become popular for a quick emergence into the industry and the profits they have made, JetBlue is constantly being looked over by these larger airline corporations for an easy acquisition.
Bankruptcies from other airline corporations are also a huge threat to the JetBlue airline. This is because airline that have filed bankruptcy are allowed to restructure with reduced labor rates, restructured debt, and reduction of cost structure which makes them more competitive.
Although JetBlue hedges fuel costs, the instability of fuel prices can harm them. In October 2005, JetBlue announced that its quarterly profit had plunged from $8.1 million to $2.7 million largely due to rising fuel costs. In addition, the airline was struggling with their new aircraft.
As seen in mid-February of 2007, extreme weather conditions pose an extreme threat to JetBlue. If severe weather grounds any flights, JetBlue must refund money to those effected and the profits will suffer. JetBlue said that the mid-February storm-induced delays will cost about $30 million in its first quarter and push its operating margin negative.
With the growing of the airline industry and the focus of most of this growth is in John F. Kennedy airport in New York. This is also the headquarters for JetBlue. This growth is causing overcrowding in turn causing operational problems.
Even though JetBlue faired most than other airlines