This website uses cookies to ensure you have the best experience. Learn more

Jetblue Essay

1178 words - 5 pages

Introduction:
JetBlue is planned to establish by David Neeleman in July 1999. Although the terrorist attacks of 9/11 made the huge loss of the whole airline industry, JetBlue airways try to publish its own IPO after 2 years of profitable operation in 2002,
This case study is summarizing the step to publish the IPO. Following this, it will discuss the disadvantage and advantage to publish the IPO and use the financial data to evaluate the price is suit for the first publish. In this case, there are three different share valuation methods: P/E multiple (comparison pricing); EBIT multiple (comparison pricing) and discounted free cash flow (fundamental pricing).
Analysis the advantage and ...view middle of the document...

4 For the wealthy reason, offering IPO will greatly enhance shareholder value and enterprise value.
Disadvantage:
1 The cost is higher to offering IPO. Once the company decides to offer the IPO, they need to prepare the huge document about the law and accounting information. Also the cost of time is obviously.
2 The owner wills loss control.
3 According to the rules of SEC, information disclosure is another problem. Not only competitors can easily get the financial information and also increasing the expanse to additional accounting staff and prepare the report.
4 Put more pressure from investors to managers to improve position of the company.
Evaluate the IPO price: Comparable companies’ analysis
P/E Multiple: in order to get the proper range for the JetBlue’s offering price, we look the financial data from the Low-cost Airline Industry which are AirTran, Frontier, Ryanair, Southwest, Westlet. According to the data of competitors which carried at the end 2001, we can calculate the price should be based these multiples and it is the same or JetBlue.
| Trading | | | Leading | |
| Price/ Share | Earnings/ Share | PE Multiple | Earnings/ Share | PE Multiple |
AirTran | 6.6 | 0.3 | 25.287356 | 0.3 | 20 |
Frontier | 17.0 | 2.0 | 8.3743842 | 0.4 | 45.945946 |
Ryanair | 32.1 | 0.7 | 44.024725 | 0.9 | 34.095745 |
Southwest | 18.5 | 0.7 | 27.586207 | 0.7 | 28.430769 |
WestJet | 15.9 | 0.8 | 19.567901 | 0.6 | 26.864407 |
Average | | | 24.968115 | | 31.067373 |
Jetblue (trailing) | 28.463651 | 1.14 | | | |
Jetblue (leading) | 40.387585 | | | 1.3 | |
At first, we separately calculate the average of the low-cost Airline industries PE Multiple using the Trading data and Leading data. The data of Earnings/ Share of Jetblue, we find them from exhibit 3. After the calculation, the price range of Jetblue is $28.5 to $40.4.
EBIT Multiple:

| | | Trailing | | Leading | |
  | Price/ Share | Book Debt/ Share | EBIT/ Share | EBIT multiple | EBIT/ Share | EBIT multiple |
AirTran | 6.6 | 4.0 | 0.8 | 13.037037 | 0.8 | 13.9 |
Frontier | 17.0 | 0.0 | 3.0 | 5.6889632 | 0.6 | 26.578125 |
Ryanair | 32.1 | 3.3 | 0.9 | 38.452174 | 1.2 | 30.261762 |
Southwest | 18.5 | 1.8 | 1.1 | 18.59633 | 1.4 | 14.274648 |
WestJet | 15.9 | 1.0 | 1.3 | 12.742424 | 1.6 | 10.578616 |
Average | | | | 17.703386 | | 19.1 |
Jetblue (trailing) | 16.19474 | 8.59 | 1.4 | | | |
Jetblue (leading) | 29.071628 | | | | 1.97 | |
We use the average EBIT/share of these companies as Jetblue trailing...

Other assignments on Jetblue

Jetblue Ipo Case Essay

922 words - 4 pages Case 1- JetBlue Airways IPO Valuation - Jing Zhang ( 23913134 ) A company issue stocks to generial public at its first time on a security exchange is call Initial Public Offering( IPO ). Initial Public Offering enable a company to raise capital from the public rather than private investors or institutions. IPO is considered as such a big deal for a company mainly because the company become a public

Jetblue Hits Turbance Case Study

2312 words - 10 pages 74 Management Information Systems JetBlue Hits Turbulence CASE STUDY n February 2000 JetBlue started flying daily to Fort Lauderdale, Florida, and Buffalo, New York, promising top-notch customer service at budget prices. The airline featured new Airbus A320 planes with leather seats, each equipped with a personal TV screen, and average one-way fares of only S99 per passenger. JetBlue was able to provide this relatively luxurious flying

Jet Blue - Case Study

7569 words - 31 pages JET BLUE - CASE STUDY EBS 5103 STRATEGIC MANAGEMENT Analyzing Strategic Management Cases “JETBLUE AIRWAYS” UFUK CANDAR FOYA BAHÇEŞEHİR UNIVERSITY Table of Contents INTRODUCTION 3 BRIEF SUMMARY 3 ENVIRONMENTAL ANALYSES: 4 VALUE CHAIN ANALYSIS: 10 FINANCIAL ANALYSIS: 13 SWOT ANALYSIS: 19 SPACE MATRIX: 21 TOWS MATRIX: 24 QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM): 25 CONCLUSION: 26 INTRODUCTION

A Tale Of Two Is Projects

600 words - 3 pages A Tale of Two IS Projects Business Problem-Solving Case Week 7 Upper Iowa University Week Six Business Problem-Solving Case 1. How important is the reservation system at airlines such as WestJet and JetBlue. How does it impact operational activities and decision making? The reservation system is highly important to airline companies, especially small ones. These companies must give over the top customer service

Case Study- Southwest

500 words - 2 pages AirTran employees. Analysis: I believe this is a key problem for Southwest, because Southwest built its company on its reputation. If this reputation becomes tarnished because AirTran doesn’t follow the same protocols or have the same positive attitudes that Southwest has, customers might start flying with competing airlines that provide low cost, such as JetBlue. Because Southwest spent so much money acquiring AirTran (1.4 billion dollars

Jancuk

1056 words - 5 pages contoh jet blue airways menggunakan agen-agen yang bekerja dirumah untuk melayani reservasi tiket mereka. Mereka menggunakan komputer dan teknologinyang disuplai oleh jetblue dan menerima pelatihan jetblue. PEREKRUTAN MILITER Banyak personel militer merupakan sumber karyawan yang terlatih dan mempunyai disiplin yang sangat bagus. Militer mempunyai program untuk memfasilitasi tentara untuk mencari pekerjaan. Sehingga orang militer

Us Airways

8571 words - 35 pages planned fleet replacement and a recent interline agreement with JetBlue, will position AA to thrive as the economy recovers. April 7, 2010 Page 3 American Airlines Company Overview and History American Airlines, American Eagle, and AmericanConnection currently provide scheduled service to 250 cities in 40 countries, with an average of over 3,400 daily flights. Together, these carriers operate a fleet of over 700 aircraft, and are subsidiaries

Professionalism In The Aviation Industry

750 words - 3 pages during my training. Also, being part of the JetBlue Gateway Program will help me fulfill my dreams by opening up many possibilities and opportunities before and after I graduate. Finally, taking my career to the next level is my dream, and thankfully for this class I am able to properly manage my long and short term goals by knowing my priorities and important information I have to obtain for better results. -------------------------------------------- [ 1 ]. To arouse the curiosity or interest of by unusual, new, or otherwise fascinating or compelling qualities; appeal strongly to; captivate.

Nmbhvh

1217 words - 5 pages of communicating with customers is precarious at best. Whereas a certain market segment may feel comfortable receiving communication in this way, a large number may never see it. I believe JetBlue would have been far wiser to use its own website or public news source websites to communicate this extraordinary situation and the company’s concern for its customers rather than a more obscure website.  If I was using YouTube at the Café, I would

I Ricavi Ancillari Nelle Compagnie Aeree: Caso Alitalia

7009 words - 29 pages ancillari sul totale delle entrate Risultati 2009 29,2% 23,9% 22,2% Allegiant Spirit Ryanair easyJet Tiger Airways Jet2.com Aer Lingus Alaska Airlines Flybe AirAsia Risultati 2008 €1.650.000,000 American €1.200.000,000 United €1.125.000,000 Delta €625.350.240 €458.622.000 €396.468.000 €262.500.000 €207.298.140 Ryanair Qantas easyJet JetBlue 14,4% Emirates 13,3% TAM Airlines Alaska Airlines 13,1% 9,6% SkyEurope Fonte: Worldwide Review of

The Airline Industry

5166 words - 21 pages |92.8 | |4. |United |63.1 | |5. |US Airways |54.8 | |6. |Continental |46.9 | |7. |Air Tran |24.6 | |8. |JetBlue |21.8

Similar Documents

Jetblue Case Essay

3907 words - 16 pages ------------------------------------------------- MARKETING ------------------------------------------------- CASE ANALYSIS JETBLUE * SYNOPSIS This case illustrates the success that JetBlue Airline has achieved since founded in 1999, though it had trouble in 2007 during Valentine´s day and a few more, it managed to overcome the issue and become one of the most known companies for excellent customer service. The author mentions that JetBlue

Jetblue Airwau Inc Essay

810 words - 4 pages JetBlue Airway, Inc. was a low-cost carrier (LLC) airline company that began operations in early 200. With a unique “anti-establishment” business model and “value player” positioning strategy, JetBlue established itself as a low cost, hardworking, and dependable airlines company. After the 2001 September terrorist attacks, JetBlue seized the opportunity to expand by launching an initial public offering. When other airlines were slow to resume

Jetblue Case Study

1448 words - 6 pages JetBlue Case Study Analysis JetBlue Airways Corporation Overview JetBlue Airways Corporation is an American low-fare airline, which headquartered in the Long Island City near the New York City. Its main base is John F. Kennedy International Airport. Basically, the airline mainly serves destinations in the United States, as well as many Latin American countries. As of October 2013, JetBlue serves 84 destinations in multiple countries. Low

Jetblue Case 4 Questions Essay

551 words - 3 pages Vladimir Alicea Cestero (M00338255) COMU 2001 Prof. Joselyn M. Ortiz Pimentel December 15, 2015 Case 4: JetBlue Airways Regaining Altitude Questions 1. How could’ve JetBlue have better Communicated with its internal stakeholders across the country on Valentine’s Day and during the days that followed to enhance its image with customers? In order to maintain their previews image, JetBlue should’ve better assessed their internal