jetblue swot analysis
If fuel prices rise, this will incur less operating income and thus some difficulties to the company to meet its additional debt service payments. 1. ..4
The notes will be unsecured obligations and will rank equal in right of payment with all other unsecured debt.
The company, as by July 2003, is seeing several opportunities to grow by adding new markets and new flights to existing destinations. Other strengths are the revenue-increase using point-to-point service strategy, and the low-price strategy, which helps to maintain the volume of the passengers. Swot Analysis : Jetblue And Westjet 800 Words | 4 Pages. The alternative of issuing public bonds has been eliminated as this one will incur higher costs for the company. Student Name They are used to manage a highly leveraged and public company. Other investment needs are financed either through debt or equity, depending on the companies. Table of Content Goals within my organisation look at where we would continue, Acting Strategic Growth Plan For DTAG The low-cost airline companies seem to be, on their side, more conservative. This strategy helps the company capture market share in these segments. Thus, JetBlue is a perceived as a solid and growing company by the investors. The Civil War In Margaret Mitchell's Gone With The Wind, Examples Of Stereotypes And Misconceptions. Currently, all of JetBlue’s debt is secured. This revenue stability and expected high growth provide a strong confidence to JetBlue in its ability to meet its financial obligations, thus having the opportunity to issue either debt or equity.
All in all, airline companies are using both debt and equity (together with other financing means, including cash flows generated from operations) to raise money. In 1978, the deregulation policies in the US have reduced the entry barriers and resulted in the increase in the competition in the industry.
PESTEL Analysis 11 JetBlue is a profitable company, in comparison to peers, as stated in the following graph: JetBlue exhibits good levels of gross margin and operating margin. The reason for the company to go public was to wean off its dependence on the venture capital and private equity industries. Indeed, the company can issue some preferred stock. The private placement of convertible debt proposed by JetBlue’s investment bankers would provide sufficient capital at relatively low interest rates. Indeed, those need to be ranked by some ranking agencies and will have higher coupon rates (Exhibit 12). The company is also operating one type of aircraft, the Airbus A320, thus lowering maintenance and training costs and spare parts needs. * Socio-cultural Conditions Currently, SpaceX takes any ideas from any person in the company and explores those ideas. Goals are generally long term intentions or aims that hopefully can be achieved Introduction The group is principally using finance leases and hire purchases contracts to acquire aircraft (British Airways Annual Report 2010, p.104). This will cover for part of this capital expenditure estimated at $570 million for 2003 (Exhibit 9). SWOT Analysis 14 All of this calls for some financial conservatism for the airline industry. This fear of losing the control of the company limits the possibility of the CFO to issue new equity. Any of the two options, either the convertible debt or the equity, will probably pull the financial structure from its current optimal position. JetBlue was founded on the history of American aviation, in 1999 with an initial capitalization of $130 million. The company is operating 42 aircraft, for 73 flights per day and annual revenues of $635 million. The main work of this report is to identify what will influence the, ----------------------------------------------------------------------------- 5 - 6
JetBlue 's strategy was to combine common sense with innovation and technology to "return humanity to air travel". SWOT Diagram…...………………………………………………….......3
Business and Corporate Strategies 18 Indeed, JetBlue is committed to the purchase of 207 additional aircraft for a total amount of $6.86 billion over 8 years. This preferred stock option might however fail to attract investors. The company learned early on that it was more of a cost effective approach when employees are used in a variety of job roles, as opposed to having employees who are specialized in one area only and that are not permitted to work outside of their job expertise.
* Economic Conditions Company Analysis: Wal-Mart According to Laudon and Laudon (2014), both JetBlue and WestJet are using the same business strategy which is low cost and good service to achieve the goal. Indeed, the company was founded by a veteran in the low-fare airline industry, backed by a group of private equity firms. Issuing private debt securities represent a threat for JetBlue as this might lock back the company to such private investors. The company is spending a considerable amount of money in hedging for fuel prices volatility.
In addition, from exhibit 12, the Treasury bill interest rate as of June 30, 2003 is 1.09%, this will be used as the risk-free rate of return. JetBlue, as any airline company, incurs very high fixed costs due to its high value operating property and equipment. The second proposal from the investment banks is to issue $150 million in a private placement of convertible debentures. An economic downturn or additional terrorist attacks might impact negatively JetBlue’s ability to finance its debt obligations.
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