Open Computing Facility at UC Berkeley



IEOR 171 Case Study III

JetBlue Airways: Starting from Scratch

Ranpreet Battu

Pretycia Darma

Nikolas Krukowski

Ralph Lee

Lorena Nunez

Timothy O’Donnell

Prof. Jon Burgstone

December 1, 2003

Opening

In February 2000, JetBlue Airways (JBA) launched amid troubled market conditions; most major airlines were teetering on financial ruin, and the events of 2001 would soon present unprecedented challenges to the airline industry5. Yet, only two years later, in June 2002 JetBlue had already completed a successful initial public offering (IPO) and had a market capitalization of $2B USD in June 20023—three times that of United Airlines. JetBlue was lauded by pundits for its low-cost yet high-output strategy, similar to that of similarly profitable Southwest Airlines (SWA). However, JetBlue faced strong challenges ahead: not only were major airlines initiating their own offerings to capture JBA’s market, but JetBlue needed direction on how to expand successfully again.

Goals

JetBlue’s main goal is to maintain its success of profitable growth without compromising its values and current accomplishments. Three strategies towards those goals are: hiring employees that share JetBlue values, serving “not-yet-served” markets, and keeping the camaraderie of a small company.

The Industry

While profitable and rapidly growing, JetBlue is still dwarfed by the major US airlines in terms of routes and passengers. By design, JetBlue most resembles Southwest, first as point-to-point carriers. This route system is most efficient, according to industry experts2. Consumers see this benefit directly, as both share comparatively low fares. Turnaround times, the amount of time a plane spends on the ground between flights, is minimized in both for a higher revenue stream. Also, the duo has embraced “ticketless travel” as a more efficient way of doing business.

JetBlue distinguishes itself by providing luxuries like more comfortable leather seats with more personal space, new Airbus airplanes, and satellite television in every seat—where everyone can choose from a range of 24 channels3. Yet perhaps what customers appreciate most is more fundamental:

A ride on JetBlue is cool, clean and hassle free, and the price is right. But the important part is this: while not luxurious, neither is the experience without some flair. People often lump JetBlue with the likes of Southwest, but in many ways it is the anti-Southwest. Both offer low fares, sure, but JetBlue's strategy is something more upscale than a get-what-you-pay-for cattle car. To help save the industry from an all-out Southwest-style descent, it would behoove the majors to emulate JetBlue's careful balance of style and price.

-Patrick Smith, airline columnist and pilot7

What Southwest Does Well

They stole a lot of our people…but the culture will never be the

same…What we’ve got here, [the culture at Southwest], it’s real.

-Southwest Airlines Captain of Flight 834 on 26 Nov 200312

A recent book, published by the author of the case study, espoused The Southwest Airlines Way. Employees are often cited within the book as the driver of Southwest’s success. In fact, they seem willing to bet their money on it—As a group, employees are SWA’s largest shareholder9. Yet while Southwest “pays its people well,” it doesn’t have the highest pay in the industry9. People pay off for Southwest when the airline achieves 20-minute turnaround times.

Look back. The flight attendants are out there cleaning the seats [to get ready for the next flight]. On any other airline, they’d have a cleaners come in and the flight attendants would be out on a smoke break or something.

-Southwest Airlines Captain of Flight 834 on 26 Nov 200312

The elusive factor motivating Southwest’s employees is what JetBlue should strive for.

Southwest is also simply bigger than JetBlue. This allows SWA to offer more flights to more cities at more times, flexibility that customers are filling the planes for. Its larger size also gives Southwest more resilience during fare wars4.

All of these practices help Southwest towards the ultimate corporate goal—making money. In 2002, Southwest recorded a $241M USD profit—the highest of any US airline and #6 worldwide9. While JetBlue strives to distinguish itself from Southwest3, the Company is well served by following Southwest’s lead on this metric.

What the Majors are Doing

The Majors—established airlines like American, Delta, and United—are almost all losing money. In 2002, Southwest, JetBlue, and AirTran combined made a profit of over $300M USD while American, United, and Delta lost nearly $8 billion9. Thus many of their practices are not to be imitated by JetBlue, unlike the Southwest Airlines way. Pundits blame this spectacular failure of the majors on lower income, while they are being consumed by higher costs—several of their pricey leased planes are unused in the desert. Their traditional hub-and-spoke system—a profitable model when a lot of people were flying in the growing late 20th century economy—is failing them2. And attempts at starting discount-style airlines have been hampered by an inability to cut costs as low as JetBlue and Southwest1.

JetBlue and People

JetBlue’s goal to expand successfully can be reached by focusing on two main areas: people and structure/organization.

|STRENGTHS |WEAKNESSES |

| | |

|JetBlue Advantages |What could you improve? |

|Unique approach: customer and employee friendly. |Human success highly depends on “small company feeling” and customized|

|Emphasis on Core values: |HR approach. |

|Safety |Hiring system |

|Caring |Training and development |

|Integrity | |

|Fun |Avoid: |

|Passion |Changing core values |

|Service |One salary model (treat employees as mass instead of personal options)|

|Top management team |Loosing the company wide team attitude |

|Staff |Becoming less people friendly |

|Communication |Resting on your laurels, avoid complacency |

|Attitude | |

|HR approach | |

|Customized employment packages | |

|Efficient operations: Less paperwork, better for pilots | |

|OPPORTUNITIES |THREATS |

| | |

|Demand in the market for such a concept of airline is high |Impossibility to keep core values as growing. |

|Customers are turning to JetBlue for prices and destinations. |Expanding and developing HR and loosing customized people focus |

|JetBlue as a fun and profitable environment to work at. |Not developing ability to hire the right people and training |

| |Employees unionizing |

Figure 1. SWOT Analysis of JetBlue and People.

As Ann Rhoades realized, people form the foundation of JetBlue’s success. Crucial to the Company’s successful expansion are a productive team environment, emphasis on core values, and a union-free company. Recall the five core values in Exhibit 4: safety, caring, integrity, fun, and passion.

Job Structure

As the Company grows, JetBlue will need structure in their job design and analysis. These tools are needed to maintain the “friendly” HR approach with different salary options while the JetBlue scales to a larger organization. Specific job descriptions help with this effort.

JetBlue needs people certain knowledge, skills, abilities and other factors (KSAO) [Figure 2]. While JetBlue may currently be employing these types of persons, specifically listing its KSAO will provide direction and structure to future hiring practices. We suggest considering the Job Element Approach and focusing on the KSAO that JetBlue needs from their employees in the job design, analysis, and in the hiring process. To address the issue of team attitude, JetBlue’s approach of considering supervisors as “coaches” is a great approach. The specific characteristics of these important roles should also be listed and considered.

To keep a union free environment, JetBlue must allow employees to keep a certain degree of autonomy. It is also crucial to keep the customized employment packages—one of JetBlue’s competitive advantages in People. The Company’s flexible plans and higher salaries not only attract potential employees, but keep people happy within the organization, and if the Company provides its employees with a sense of importance and care, we believe that the Company can provide the a superior level of support compared to industry unions.

Hiring: Selecting the Right People

JetBlue’s targeted selection process translates values into specific desirable behaviors. This approach is analogous to the Critical Incident Technique for employee selection. This approach is very useful but may become costly as the company grows. For example, the existing requirement for multiple interviewers to arrive to consensus before hiring a new employee can be long and costly.

There is a need for a more efficient selection and hiring process. The interviews are needed, but should be kept to a minimum. We suggest having candidates fill application forms that will narrow the number of potential candidates to be interviewed. Interviews should be made by regional groups of interviewers, train to select future employees efficiently. After those future employees are selected, employment tests (psychological and cognitive), ensure that people will fit in the company culturally, and live up to the company’s expectations and their own commitments.

Orientation, training and development

The initial orientation session with all the company’s areas and top management has proven highly successful, and thus should be kept, at any size. It emphasizes the importance of the core values, gives employees a strong sense of belonging, shows top management as accessible people (key to team attitude), helps align the company’s and all employees goals, and gives workers responsibility over the firm’s performance.

JetBlue needs a better training process. This orientation can be followed by a one day training session for each area of the company (flight attendants, coaches, general employees), using the case analysis method. Using the simulation method with role playing is also highly recommended. After this intensive training session, beginners can have training on-site, among experienced crews and under coach supervision.

Coaches play a very important role, and should be trained to be leaders, motivators and role models. Selecting rising people from crews can be important for this position, help in personnel development, and let the company keep the good people after their 1-5 years period. Pilots should receive basic training on the computer programs used by JetBlue. Training pilots for qualification on A320 is now very expensive. A cost-benefit analysis should be made to decide whether to outsource this or have this function in-house.

For personnel development, feedback is very important. As Hackman & Oldham’s Job Characteristics Model emphasizes, employees must perceive their work is meaningful, associate a sense of responsibility with the job and get feedback on the results of their work. JetBlue should keep their 320° performance appraisal. It helps give feedback, encourages employees to better performance and helps keep the team feeling.

Communication

As mentioned before, to keep the small company feeling, upper management should keep contact with everybody, employees, no mater their position, should be able to contact them. It empowers employees to know they have a voice and their suggestions and comments are taken into account. In this matter, a decentralized flatter organization might be the only possibility. In this matter, the 320° performance appraisal should be used not only for feedback, but also to strengthen communication and coherence along the organization.

It is also needed to keep good communication among all levels of the organization, specially a close relationship with managers and other coaches. Integrity is one of the core values, all employees are to be held accountable for that.

JetBlue and Structure

|STRENGTHS |WEAKNESSES |

| | |

|JetBlue Advantages |What could you improve? |

|Efficient operation |30 minute turnover? |

|Paperless |Frequent flyer program? |

|Low cost |Lacking expansion model: |

|Low fares |Where are they going. Next step? |

|Accurate forecasts (known demand) |Better business plan |

|What do you do well? |Expand fast enough |

|Efficient operation | |

|Keeping costs down |What do you do badly? |

|Turning profit in short time |Limited destinations |

|Paperless |Lack of expansion model |

|What relevant resources do you have? | |

|Capital and faith from investors |Avoid: |

|Technology |Becoming like the Major airlines |

|What do other people see as your strengths? |More seats crammed in planes |

|Low cost | |

|Low pricing always | |

|Know the demand as static | |

|Turning profit in very short time | |

|Paperless: less cost and better service. | |

|OPPORTUNITIES |THREATS |

| | |

|Demand in the market for such a concept of airline is high |Competitors |

|Good market view of the firm |Southwest: cheaper is ahead of time. |

|Grow in size: |Other big ones: promotions, other capabilities as size and power in |

|There are niches and gaps in the current market. |the market. |

|Opening a second hub: having two small locations instead of a big one |Lack of expansion model |

|Offering more flights and destinations |Not expanding fast enough |

|The organization is highly efficient: makes it easier to grow. |Market conditions |

| |Managing change |

| |Keeping level of technology |

| | |

Fig. 3: SWOT Analysis of JetBlue and Structure

Location

I’d fly JetBlue if they flew here [to Santa Ana, CA].

-Southwest Airlines Passenger “Billy” on Flight 798 30 Nov 200313

JetBlue’s primary markets have been those largely untapped by other airlines. This strategy allows JBA to not only avoid costly fare wars but to create new market share. JetBlue’s low fares make travel by air not only economical but more convenient and pleasant than competing forms of travel, such as the automobile. By reaching into this largely untapped market of drivers—characterized by SWA’s CEO as its primary competitor6—JetBlue can get people out of their cars and into airplanes, like its successful New York strategy.

Destinations should be chosen carefully, as they represent a major investment for JetBlue. Large population bases and business/tourist hot spots that are underserved represent JetBlue’s “perfect” target. However, performances in Oakland, Long Beach, and New York’s JFK have shown that the even the largest US population markets can be considered to be underserved. These large population centers represent opportunities for JetBlue because they can provide a steady source of income from which JetBlue can risk expanding into locations with less projected demand. In addition, these large population centers often give rise to in-state and nearby destinations like JBA’s current JFK-Buffalo route. Thus location is critical to success for JetBlue.

Planes

JetBlue’s Airbus partnership has been a model for the industry. Not only were these planes less expensive than comparable SWA Boeing 737 airplanes, they have been less expensive. While this may be because Airbus is subsidized by various European governments, we see Airbus to be a potential JetBlue partner in the future. However, care should be taken not to enter into binding agreements with Airbus. For example, Southwest’s current reliance on the Boeing 737 restricts SWA from taking advantage of Airbus airplanes. JetBlue has already taken steps towards this goal by ordering smaller airplanes from Brazilian manufacturer Embraer—whether these planes will serve as well will be seen. However, the high exposure for the young Embraer may allow JetBlue some negotiating leverage. While new types of planes are certainly possible, JBA should maintain its competitive advantages of a more comfortable airplane with the “creature comforts” that its passengers have come to expect. In addition, the introduction of new types of airplanes into JetBlue’s fleet can introduce costs in regard to training its employees3.

Technology and Efficiency

Neeleman cites technology as a driver of JetBlue’s efficiency—and thus its profitability. He claims that JetBlue is the most technologically advanced airline in the industry, pointing to the laptops for pilots as well as a claim that 60% of JetBlue’s bookings are done online3. In short, his efficiency model allows JetBlue to do more with less, utilizing its people and planes better.

We believe in JetBlue’s $5 discount for online purchases, which provides incentives for discount travelers to book online. This allows JBA to handle more reservations efficiently. We also believe in the laptop initiative, as we believe it is an enabler towards the People side of the business.

One point where JetBlue can improve is on their “turnaround times”, the time that the airplane spends at the gate. When a plane is on the ground, it isn’t making money for JetBlue. One way we can work on this is on the People side—to provide structural incentives for crews to get the planes back up and running. For example, Southwest pays its pilots per trip. This means it is in the pilot’s best financial interest to get the plane back up and running. While our turnaround times are below the industry average—and the corresponding industry metric of seat-mile costs is between 6-8 cents10—JetBlue can do better. The technological costs involved in reducing seat-mile costs are relatively small when the potential benefits are considered.

RECOMMENDATION:

We have evaluated the current situation of JetBlue has in the form of two main components, people and structure. To grow viably and maintain the core values of the company, these two components can be developed. While company growth is inevitable and necessary for the success of JetBlue, this expansion must be carefully constructed. JetBlue will expand into new markets by creating new flight routes, destinations, and hubs. While this expansion must be quick, it must also be strategic. While successful, JetBlue does not have the resources to continually battle the major carriers. Thus the Company can carefully expand to where larger carriers do not want to fly.

We see strategic growth through hub research and airline niche research. Hubs allow JetBlue major destinations, and more importantly, a continuing source of revenue similar to its current position in New York JFK. The hub research team needs to evaluate less traveled airports, or the smaller airports in large markets in order to find an appropriate second hub location. The niche research group must evaluate the flight routines of competing airlines, finding the best approach for expanding destinations. At this point of JetBlue’s growth the niche team must focus on avoiding direct competition with the large airlines and find targets of opportunities in fresh venues. These teams should be implemented immediately in order to avoiding losing such opportunities. Examples of candidates, as well as sample methodologies, can be seen in Appendix A. In addition, the organization must not rest on its technological advantage, for competing airlines can quickly acquire similar systems. Thus JetBlue needs to develop a Strategy and Technology Advancement Team, whose goal is to use technology to improve JetBlue’s operations.

While these are the structural advancements that will lead JetBlue to further success, they cannot be successfully implemented without the strong foundation of JetBlue employees. To successfully execute the people aspect of JetBlue’s future, we recommend Kotter’s “Eight Steps to Transform Your Organization”.

1) ESTABLISH A SENSE OF URGENCY:

Young carriers are notorious for failure, especially from expanding too quickly. Employees must realize that while JetBlue is performing well, there are many carriers in the industry that are compelled to see them fail, and even may even help in expediting the process. All employees must realize they need to fight, and fight hard for JetBlue to grow. Thus an internal advertising system will be developed in order to constantly remind employees that other startup carriers may fail, but JetBlue will not be one of those statistics. Upper management must also embrace this idea by visibly stressing this urgency. Appendix B lists some sample internal advertising campaigns. Finally, a common enemy can be developed to unite employees in a cause. This enemy can easily be found among the major carriers.

2) FORM A POWERFUL GUIDING COALITION:

In order to be effective, there must be a group who will lead the change. A coalition will be established to guide the company. The most important aspect of this coalition will be its diversity. This will not be a group of executives, instead a sampling of all JetBlue workers. This organization prides itself on a family style work environment, and thus all groups of employees must be involved. A sample coalition is in Appendix C. But an internal coalition is not enough. An external guiding force must also be established. Upper management must be responsible for creating a strong backing of local politicians, and airport coordinators and managers, who can be very effective in establishing JetBlue in new markets. Finally, Human Resources must continue to be the backbone of JetBlue. Ann Rhoades and her team have done an outstanding job of creating the perfect workforce. Now they must do so for a company that will grow exponentially in the immediate future. HR will have difficulty screening employees with the past practices for the future number of new employees. However, JetBlue cannot compromise this process. As a result, HR must expand, training its staff to recognize the people that will fit the core values, and then empowering this staff to make the appropriate decisions. Trust will be the deciding factor for this model, for the HR management must trust the training they have provided their staff, and trust their staff to make sound employment decisions.

3) CREATE A VISION:

A company cannot reach a goal, if they do not know what they are seeking. Thus creating a vision is necessary. While there are a great deal of supporting ideas that drive JetBlue forward, a vision must be concise. This vision must also agree with what can be called “the customers’ vision,” the idea of a reputable carrier, with reliable, affordable, comfortable, and friendly service. JetBlue has already embraced the vision of their customers, and when looking towards the future, cannot ignore this force. Thus JetBlue’s vision must be a combination of this and expansion. As a result, JetBlue’s vision is to become a successful national carrier without compromising core values or diminishing the established work environment.

4) COMMUNICATE VISION:

Keeping communication strong will contribute to maintaining JetBlue’s current small business feeling. HR will once again play a significant role in this process. HR must focus on right kind of leadership for the organization. Because JetBlue is a people oriented operation, HR must make sure to hire and develop relationship oriented leaders. In addition, upper management must be a visible part of all employees work experience in order to keep the small business atmosphere. Town hall meetings with upper management and the JetBlue employees must be scheduled in order to facilitate this interaction. To entice attendance, JetBlue can offer perks like entertainment from well-known music acts (who can be compensated with free travel benefits, perhaps leading to PR benefits) When communicating, it is also recommended that the following guidelines be utilized by management[1]:

- specify nature of change

- explain the whys, the bad news, and the criteria for success

- how people are rewarded for success

- LISTEN

- Be the poster child of change for your organization

5) EMPOWER OTHERS TO ACT ON THE VISION:

In order for employees to embrace a vision they must be allowed to develop with the vision. JetBlue needs to constantly evaluate their structure to insure that their employees have the proper tools to complete their jobs successfully. Upper management must also encourage innovation and creativity among all employees because one does not know who may have the next revolutionary idea. A JetBlue Future Success Program should be instilled, allowing employees the opportunities to formally present their ideas to management, along the lines of Rhoades’ Tiger Teams. While these steps will empower employees, the organization must make sure that poor employees do not bring down others. A “vision evaluation” program should be established to remove those employees who do not embrace the vision of JetBlue.

6) PLAN AND CREATE SHORT TERM WINS:

JetBlue’s vision will not be seen overnight, and it is in fact a long term goal. In order to keep the organization on track and more importantly motivated, small wins should be emphasized. Expansion should be laid out in increments, such as yearly plane allotments and employee hiring. Instead of only looking at the final outcomes, tasks such as the successful establishment of a new hub should be recognized. Reaching these expansion benchmarks will keep the employees in tune with the larger vision.

7) CONSOLIDATE IMPROVEMENTS AND PRODUCE MORE CHANGE (AND)

8) IINSTITUTIONALIZE NEW APPROACHES:

These two steps must be evaluated after engaging the prior steps. While JetBlue has not reached this stage yet, there are several ideas that can direct when the time comes. To consolidate improvements, JetBlue needs to reevaluate after each benchmark. Some expansions may not be successful, and should not be repeated. Complacency must also be avoided, no matter what advantages (such as the paperless system) are possessed by JetBlue; competitors are always working on counter strategies.

Conclusion

We believe that JetBlue has done well, and pundits seem to agree. The future is bright for JetBlue, if the Company can continue to maintain its values while growing strategically. As Rhoades claimed, what sets JetBlue apart is its values. The values of JetBlue—safety, caring, integrity, fun, and passion—are what allows the Company to execute powerfully for customers, shareholders, and employees alike in its self-proclaimed mission to “bring humanity back to air travel.”

What matters is that customers have a good experience with your product at every single point of contact. At JetBlue, we're completely obsessed with flawless execution.8

-David Neeleman, JetBlue CEO

Appendix A

JetBlue Expansion Candidates

1. Chicago – Population = 2,784,000, Density (Avg. Pop/sq mile) = 12,300

Chicago contains the largest airport in the world, O’Hare. Also, Chicago is a highly populated area that is traveled by many different consumers. The diverse clientele and high demand for air travel make Chicago a great prospect to expand to. However, a major concern is being strong-armed by both American and United Airlines.

2. Houston – Population = 1,631,000, Density = 3,000

The attraction to Houston is very similar to that of Chicago, a large population and a high demand for air travel. Houston’s metro area is still growing quickly and is now the 3rd largest in the US. Again the main concern is the many other major airlines in the vicinity—particularly Continental Airlines’ hub. However, developing strong ties with the airports and local government could be very enticing to JetBlue.

3. Atlanta – Population = 2,158,000, Density = 7,500

Atlanta is a rapidly growing city where great economic growth is forecasted. Unfortunately, Delta’s main Hub is located in Atlanta, but with Delta’s cash flow crisis JetBlue may be able to capitalize and start effectively serving the Southeast US.

4. Milwaukee – Population = 628,000, Density = 6,500

Milwaukee is another area that should be seriously considered by JetBlue for expansion. Milwaukee is highly populated and also is dense in terms of its population. Also there are no Hubs located in the area. This could be a great opportunity for JetBlue to expand to the Midwest. A main concern, however, is the demand for air travel. It will be necessary to look at the growing trend of the city to see if this city is indeed viable for expansion.

5. Memphis – Population = 610,000, Density = 2,400

Memphis has the same attractions and concerns as Milwaukee. But again with no existing competition in the area, this could be extremely promising for JetBlue.

Jetblue Hub Expansion Candidates

1. Denver – Population =554,000, Density = 3,300

Denver has a lot of potential when being considered for a new JetBlue Hub. The first is minimal competition. The only other airline is United which has not shown competence in the discount market. Also, Denver is packed with tourism and commerce, which are essential ingredients to success in the airline industry.

2. San Diego – Population = 1,110,000, Density = 3400

San Diego should seriously be considered as JetBlue’s gateway to the west. San Diego is the second largest city in the state of California, and also is densely populated. San Diego is also a high traffic tourist area, and is expanding in terms of industrialization. Many companies such as Siemens, Sony, Phillips, Qualcomm, and leading biotechnology companies all have major headquarters in San Diego. In addition, it can be considered a “gateway” to all Mexican destinations. Yet its location in the corner of the US may be a limiting factor.

3. Jacksonville – Population = 635,000, Density = 800

Florida offers many great reasons to be considered as a potential Hub for JetBlue. The first is the High population, second is the abundance of tourism that is accompanied by the high demand for air travel. JetBlue currently does not serve this market and with so many major cities in Florida we consider it a great place to expand. Our reason for selecting Jacksonville over other cities is the high population, and the relative lack of competition. However, it might be necessary to consider more traversed cities.

4. Long Beach – Population = 462,000, Density = 3,500

Being the fifth largest city in California is one of the many things that Long Beach offers in terms of ability to become JetBlue’s next Hub. Long Beach, as stated before, is highly populated, but a key factor is Long Beaches’ consumer market. There is a high demand for air travel to the area, i.e. LAX, Burbank, Ontario, Orange County, but Long Beach is only 20 miles away from LAX and is highly industrialized. Also, Long Beach offers much tourism and is growing in both industry and tourism. Lastly, by positioning ourselves outside LA we protect ourselves from the competition, but retain the ability to compete in one of the most traveled places in the world.

5. Seattle – Population = 516,000, Density = 2,300

Seattle is relatively similar to Long Beach. Although there is not as much demand for air travel as Southern California, there still is plenty of demand to justify developing a Hub. However, there is substantial competition with the existing Hubs of United and American Airlines.

Appendix B

Internal Advertising

Conveying a sense of Urgency:

• Employees like you help JetBlue’s dream to take flight

• Without you there is no BLUE

• Focus on the 5 to keep JetBlue alive

o Constantly advertise the 5 core values

▪ Safety, Integrity, Fun, Performance, Caring

• If JetBlue succeeds so do you

• Building a bright future: Blue and You

• JetBlue: There’s no going back.

Key value is SAFETY! Highlight this with slogans and acronyms:

Example: P.I.R.A.T.E

Personal Involvement Reduces Accidents to Everyone

Appendix C

Exhibit 3

Sample Coalition: All members involved in Kotter’s forming a guiding coalition for JetBlue’s expansion

CEO: David Neeleman

VP: Thomas Kelley

COO: David Barger

CFO: John Owens

HR: Ann Rhodes and additional strategic HR employees

Director of Flight Operations Recruiting: Barbara Shea

Technology Developer: Al Spain

Local Government of expanding city: e.g. Governor Pataki

Airbus: Plane Design team

Representative sample of staff: Flight Attendants, Pilots, Maintenance, Customer Service, Reservation Center, etc...

Type of Network of communication for Coalition:

Decentralized: All voices should be heard at an equal level to ensure objectivity and diversity in opinion. However, management has ultimate decision

[pic]

Works Cited

1.

National Public Radio. United launches Ted, discount airline

2.

National Public Radio. Airline Fare Wars

3.

National Public Radio/Motley Fool. Jet Blue on Motley Fool June 2002.

Guest speaker David Neeleman, JetBlue CEO

4.

National Public Radio. Fare Wars

5.

National Public Radio. Frontier Airlines CEO on Motley Fool Oct 2002

6.

National Public Radio. SWA CEO Jim Parker on Motley Fool May 2003

7.

“Ask the Pilot” column [premium content] December 2002

8.

David Neeleman and Getting things Right

9.

“Ask the Pilot” column [premium content] 15 August 2003

10.

Atlanta Journal-Constitution. Delta’s Song all tuned up for battle. 9 November 2003

11.

. Excerpts from The Southwest Airlines Way by Judy Gittell.

12. Informal after-flight interview with the Southwest Airlines flight captain of Flight 834 on Wed 26 Nov 2003. He was laid off as a pilot by American Airlines.

13. Informal in-flight interview SWA passenger Billy on Flight 798 on 30 Nov 2003.

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[1]Harvard Business Essentials, Managing Change and Transition. Harvard Business School Press, Boston. 2003.

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JetBlue’s KSAO (Fig. 2)

▪ Attitude

▪ Productivity

▪ Punctuality

▪ Hard working

▪ Safe (no alcohol, drugs)

▪ Customer oriented

▪ In the case of pilots: Computer friendly and Cultural fit

Coalition

Coalition

Coalition

Coalition

Coalition

Management

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