Question

If I was going to do a power point for JetBlue. What is this question wanting, can someone show me any power point that looks how mine should appear. I am confused at how it should look.

4. Analysis of financial performance using ROIC

Financial Statement Analysis.

Ratios compared to the Industry Average. SWOT analysis. What strategic issues does the company face?

Answer 1

For the year ended 31 December 2019, JetBlue Airways Corporation revenues rose by 6% to $8.09B. Net income before extraordinary items increased from $161M to $569M. Revenues reflect Loyalty Revenue (air transportation) segment increase from $160M to $391M, Domestic segment increase of 5% to $5.63B.

JetBlue ROIC= A capital efficiency ratio used to measure a firm's ability to create value for all its stakeholders, debt, and equity.

• JetBlue Airways's latest twelve months return on invested capital is 7.9%.
• JetBlue Airways's return on invested capital for fiscal years ending December 2015 to 2019 averaged 12.9%.
• JetBlue Airways's operated at median return on invested capital of 12.7% from fiscal years ending December 2015 to 2019.
• Looking back at the last five years, JetBlue Airways's return on invested capital peaked in December 2015 at 18.0%.
• JetBlue Airways's return on invested capital hit its five-year low in December 2018 of 7.8%.

SWOT Analysis for JetBlue:

Strengths:

Exceptional customer service: JetBlue is known for its exceptional customer service and innovative products. In the year 2014, the company was named ''Highest in Airline Customer Satisfaction among Low-Cost Carriers” for the 10th time.

Attractive amenities: the company provides great amenities to underserved customers rather than the usual high traffic business travellers.

Weaknesses:

High debt levels: The Company has usually maintained higher levels of debt as a percentage of its total capital, if we compare the same with its industry peers.

Earnings correlated with fuel prices: the company's largest expense is fuel, hence there is a huge possibility that the earnings of the company is dependent on future fuel prices.

Opportunities:

Higher margin services: JetBlue has generally served price sensitive travelers who are looking for good service. But the company is also interested in offering customers premium services, for a higher price, and higher margins.

Expanding into new and existing markets: the company also intends to expand its current market share and also venture into new geographical markets.

Threats:

Competition: great domestic airlines competition from rivals like Southwest airlines, Delta Airlines etc.

Geographic risk: the company intends to expand to Latin America where it might face many geographic, political risks.