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Jetblue Airways: Managing Growth: Group 2

JetBlue Airways is managing the growth of its fleet by adding the Embraer E190 aircraft to its existing fleet of Airbus A320 aircraft. The E190 has some advantages over the A320 like lower acquisition costs, higher utilization rates, and a greater range than regional jets, allowing JetBlue to access more markets. However, JetBlue's fast growth has also led to operational challenges. To slow its growth, JetBlue should cut capacity increases across both the A320 and E190 fleets rather than focusing only on one aircraft type, as both planes are important to JetBlue's network and future growth plans.

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Ravi Charan Kumar Reddy
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68 views6 pages

Jetblue Airways: Managing Growth: Group 2

JetBlue Airways is managing the growth of its fleet by adding the Embraer E190 aircraft to its existing fleet of Airbus A320 aircraft. The E190 has some advantages over the A320 like lower acquisition costs, higher utilization rates, and a greater range than regional jets, allowing JetBlue to access more markets. However, JetBlue's fast growth has also led to operational challenges. To slow its growth, JetBlue should cut capacity increases across both the A320 and E190 fleets rather than focusing only on one aircraft type, as both planes are important to JetBlue's network and future growth plans.

Uploaded by

Ravi Charan Kumar Reddy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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JetBlue Airways:

Managing Growth

Group 2
Himanshu Ritakshi – PGP/20/83 - +91 9971937981
Rishabh Jindal – PGP/20/106 - +91 8971888992
Suhail Ahmed Khan – PGP/20/117 - +91 8970534569
Do you agree with JetBlue’s
decision to add E190 to its
fleet?

2
Comparison

Airbus A320 Embraer E190

Seats 150 100

Seat Configuration 25 rows (3 & 3 layout) 25 rows (2 & 2 layout)

Seat Pitch 34-36 inches 32-33 inches


Seat Width 17.8 inches 18.25 inches
Cabin Height 7 feet, 1 inch 6 feet, 7 inches
Bathrooms 3 2
Length 123 feet, 3 inches 118 feet, 11 inches
Wingspan 111 feet, 10 inches 94 feet, 3 inches
Range 2700 Nautical miles 2100 Nautical miles
Estimated Acquisition Cost
$50-60 million $30-40 million
per plane

3
Inference

Decision to add E190 is valid because of the following reasons


1. Easier profitability :
• When compared to RJ utilisation of 8-9 hours E190 gave a higher utilisation of 10-12 hours
• It has lower breakeven point, Lower acquisition costs and improved transfers
• Has the advantage of higher capacity and better fuel capacity
2. Access to larger markets :
• As there is greater range relative to regional planes, it widens the number of serviceable locations
• Owing to greater seating capacity relative to regional planes, improved transferability to planes A320
servicing long haul routes

4
How should Jet Blue slow the
growth of its fleet? Should it cut
growth in A320 capacity, E190
capacity or both?

5
Airbus A320 154 172 Embraer E190
120 136171 183 150
200 108135 153
69 85 96 118 98 101
37 53 33 80 63 73

Planes
21 85 101 100 23 44 6243 53
Planes

10 53 69 26
100 10 21 37 50 77
0 0

Year Year
E190 (Dec 2005 Plan) E190 (Dec 2006 Plan)
A320 (Dec 2005 Plan) A320 (Dec 2006 Plan)

üJetBlue should slow down the üE190 as a unique plane that could be used as an engine for future
growth of its fleet. growth.
üA320 is a proven aircraft around which JetBlue had standardized
Reason
üThis cut should be across both in its training and operating activities.
A320 and E-190 planes. üIn addition, E190 and A320 could inter-activate utilization. So it is
not fit to cut growth in only A320 capacity or E190 capacity.

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