The revenues are forecasted to continue to grow up to a level of $1,796.9 million in 2005 (Exhibit 9). JetBlue also faces one of the airline’s principal risks which is the rising fuel price. As per June 2003, JetBlue Corporation has a short-term debt of $26,580 thousand, a long-term debt of $731,740 thousand and equity of total $480,594 thousand (Exhibit 5a). The debt offering will afford JetBlue less financial flexibility, especially due to the jet fuel prices.

Show More. The first alternative is to issue additional 2.6 million shares at an estimated $42.50 per share. The fees and commissions of the bank for this proposal amount to $3,591,250 which represents a cost of 3.25%. The balance sheet of the company also needs to be strengthened. 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. August 12, 2013 Assuming a market rate of return 9 points higher than the risk-free return, we can use the WACC spreadsheet in order to estimate the financial structure of JetBlue that minimizes the WACC of the company: Appendix 1. The distribution costs of JetBlue are also low.

Indeed, JetBlue is committed to the purchase of 207 additional aircraft for a total amount of $6.86 billion over 8 years. Currently, all of JetBlue’s debt is secured. PESTEL Analysis 11 The company is operating only one type of airplane, the Airbus A320. Financial Condition 5 Introduction Swot Analysis Of Jetblue; Swot Analysis Of Jetblue. The first strength of JetBlue is its founding team’s background. Thus, JetBlue is a perceived as a solid and growing company by the investors. The low operation costs of JetBlue are one of the most important strengths of the company. SWOT Diagram…...………………………………………………….......3 July 10, 2018 July 11, 2018 admin Case Study Jetblue. Table of Contents The company serves densely populated cities in underserved airports, with high fares. One strength of Southwest Airlines is the strong fleet base, which enhances the company ability to deliver services effectively.

..4 It encompasses a host of decisions that range from what the company will produce, to how it will compete in its industry, to how it will grow over, is is derived from the positive work environment and ability to learn from the mistakes that are made. * Explanation of General Environment To accomplish this growth, the company is seeking to purchase 65 new Airbus A320, with an option to buy additional 50 ones, and also committed to purchase 100 Embraer E190 aircraft, with the option to purchase 100 additional ones. * Technological Changes Jetblue Swot Analysis. Instructor: Carol Hooper-Boyd The company is financing its existing aircraft through secured debt and operating leases, on favorable terms. The weighted average cost of debt for JetBlue, if they issue such bonds, will be: [(3.5%*150,000)+(1.5%*731,740)]/(150,000+731,740), thus 1.84%. Indeed, for the period from July 1 to December 31, 2003, the company has committed to purchase 8 Airbus A320 aircraft, for a total amount of $305 million to be paid in 2003 (Exhibit 8). This will cover for part of this capital expenditure estimated at $570 million for 2003 (Exhibit 9).

This stock might be considered as equity in accounting, to strengthen the balance sheet of the company, but will at the same time accommodate the board members’ concern about dilution. From exhibit 1, the JetBlue’s equity beta during the period from April 2002 to June 2003 is 0.69. JetBlue 's strategy was to combine common sense with innovation and technology to "return humanity to air travel". With the diversification of economic and geography environment, food producing companies, especially multinationals need to consider more about what situation they will be in and what barriers they will meet. The Civil War In Margaret Mitchell's Gone With The Wind, Examples Of Stereotypes And Misconceptions. From a mid to long-term point of view, he might as well negatively impact the internal stability of the company if he is not conservative enough to avoid any financial distress situation. The threats include issues like strong competition from other airlines and the volatility of the fuel prices.JetBlue Airlines is relatively new to the market, are able to levy the prices according to market demands. In addition, the debt will be convertible into shares of JetBlue at $63.75 per share, which represents a conversion rate of 15.6863 shares per $1,000 principal amount of notes. The shareholders of the company are on their side very concerned about any dilution. The company is intending to grow heavily in the following years, and has plans to acquire 207 new aircraft for a total $6.86 billion up to 2011. The financial structure of JetBlue will be as follows: Using the WACC spreadsheet, we can see the company’s financial position with regards to the optimal financial structure of JetBlue following the new cost of debt: Appendix2.

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