American airline JetBlue is actively entering new markets and moving towards a more elaborated business model. These days, the airline intends to expand its business worldwide. The strategic diamond concept consists of five elements: arenas, differentiators, vehicles, staging and pacing, and economic logic. All five aspects need to work integrated and without failures; in this case, the company’s strategy can be considered successful. JetBlue can be an excellent example of adjusting the plan according to the customers’ expectations and emerging trends in this business area.
The first step in developing a strategy is to identify areas in which the company will compete. JetBlue is committed to expanding the geographic scope of air travel. For example, according to the annual report (2019), on April 10, 2019, the airline announced that the company plans to open flights from the US East Coast to Europe beginning in 2021 (JetBlue, 2019). The company intends to operate several flights a day between London and airports in cities of primary interest. These are the Boston Logan International Airport and the John F. Kennedy International Airport in New York (JetBlue, 2019). Thus, the area for business expansion is the popular American cities for destinations and Europe.
Differentiators provide a company the competitive advantage which is necessary to succeed in the market. These factors determine why consumers are using this particular airline’s services and not competitors (Rothauer, 2018). JetBlue offers one-way fares, while regular full-service airlines adhere to standard round-trip pricing (JetBlue, 2019). JetBlue provides free internet; the “entire fleet is equipped with Fly-Fi®, a broadband product that allows gate-to-gate wi-fi at every seat” (JetBlue, 2019). This aspect can attract many passengers, increasing the customer flow.
Moreover, the company’s new product, called the Mint program, allows people to travel on transcontinental flights to the US in the premium class. Concerning aircraft type, Airbus A321, with the Mint service offering, has 159 seats (JetBlue, 2019). It consists of armchairs that transform into fully horizontal beds; some of the seats even feature lockable suites with a door (Mint, n.d.). These days, the new service has already proved to be successful.
After identifying the areas, the next step is to decide which vehicle the company will use. Several flights are operated on Airbus A321LR aircraft, which the airline purchased, converting 13 of the 85 already ordered machines (JetBlue, 2019). The A321LR models are equipped with an updated version of the top-rated Mint product with a two-class layout (JetBlue, 2019). The carrier initially introduced this product on highly demanded transcontinental flights and then expanded it to other market segments (JetBlue, 2019). Hence, JetBlue is focused on acquiring new aircraft that meet current requirements and consumer needs.
Staging and Pacing
The staging and pacing step involves developing a plan that includes the sequence of activities and the time frame required to complete them. JetBlue has significantly increased its growth rate; for instance, according to the annual report (2019), the company struck the mid-point of the 2019 initial cost guidance, achieving the Structural Cost Program. This accomplishment saved about $300 million on a yearly run-rate amount, exceeding the initial plan that JetBlue set in 2016 of $250-300 million (JetBlue, 2019). After the 2007 reorganization, JetBlue decided to abandon its hyperactive growth strategy (JetBlue, 2019). The company’s strategy was redefined, focusing on growth for-profit and improved return on investment. If JetBlue does not plan to compete directly with point-to-point carriers, it will have to enlist a European partner’s support (JetBlue, 2019). JetBlue has all chances of success in the air travel market.
It is assumed that against the background of continued high demand for domestic flights in the United States, the need for flights to Latin America will resile. JetBlue can transform the transatlantic market into a premium by offering a competitive product at low, flexible prices (JetBlue, 2019). The company’s growth factor is the reallocation of capacities and an emphasis on more developed markets that bring more profit (JetBlue, 2019). Fleet renewals and cost reductions should enable JetBlue Airways to lower unit fuel costs and improve fuel efficiency in the near future.
To sum up, competition within the air transportation market is high; at present, it is difficult for small air companies to gain access and profit in this business area. JetBlue’s strategy can be considered successful as it is built on friendly customer service and special programs that increase customer loyalty. The company is currently settling its premium Mint class for transatlantic flyings. The airline expects to start flights to the UK capital in the short-term perspective. There is an upward trend in business performance, so the overall outlook is beneficial for JetBlue.
JetBlue (2019) Annual Report.
Rothauer, D. (2018) Vision & strategy: Strategic thinking for creative and social entrepreneurs. Basel: Birkhäuser.