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Pest Analysis for Jetblue Company

Essay by   •  June 7, 2011  •  Case Study  •  531 Words (3 Pages)  •  3,302 Views

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In looking for the major factors external of the company affecting its operations, the PEST analysis will be used:

Political. The legal factor that may have been pivotal to the operations of Jetblue would be the ratification of a "bill of rights" of the passenger during the Clinton Administration. This has been triggered by the 1999 hearings of the House Transportation Committee about the case of another low-cost airline carrier as it was stranded on a blizzard in Detroit. This bill has prompted the players in the industry to shift the focus from service-oriented to a customer-oriented one. It is on this aspect that JetBlue has become one of the top players in the industry.

Economic. Based on the case study, the industry is marred by numerous claims of Chapter 11. This may indicate that the industry turnover is considerably volatile and survival may largely depend on the flexibility of the company to deal with the changing economic environment. This is supported by the claim of the case study maintaining that in the period between 2001 and 2005, there has been over twenty billion dollars worth of losses within the low-cost air transport industry. Moreover, the recent catastrophes with hurricanes Katrina and Rita has similarly added up to the total operating costs of the players in the industry as crude oil and jet fuel rose because of the said natural disasters.

Social. As implied in the case study, the major customers of the low-cost air transport industry tend to seek higher value of their money. Thus, customer satisfaction is a great indicator of success in the industry.

Technological. A growing trend on internet booking and e-ticketing has contributed to the use of technology in the industry. On the part of JetBlue it hired a software company that will deal with these requirements in the industry. In the same manner, automation has also been implanted in the actual operations of the airlines as pilots now utilise laptops in storing the flight manuals in the cockpit.

In recognising these elements of the external environment, JetBlue has been able to modify its internal environment to complement the demands shown in the PEST analysis above. The fast expansion of the company tends to highlight the potential to take on the major players. However, as seen in the case study, the external environment tends to set hurdles for JetBlue. The rising operational costs have been noted as one of the major external factors that could bring JetBlue to their knees. Thus, the company is still far from beating the long established Southwest Airlines as it has been able to set a stable financial and operating performance in the low cost air transport industry.

However, one must note that JetBlue possesses a phenomenal situation as, being a new player in the industry, has surpassed other established airlines and have outlived other minor players in the industry. This may be attributable

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