Unit level activities in Jet Blue Airways
Unit level activities are activities that are performed every time a given unit is produced. These activities vary depending on the number of units produced in a particular period.
The concept of unit level activities is applicable to all organizations.
The concept of unit level costing has proven to be effective in the airline industry. A good example of this is its application in Jet Blue Air ways. For Jet Airways to improve on its performance, the company decided to alter the activities performed for every service offered. This resulted in the increase of the number of activities undertaken for the various services offered. The basic objective of the program was enhancing the level of customer experience. In this regard, a number of activities aimed at adding value to the services offered by the airline were developed including unlimited snacks to passengers, provision of comprehensive in-flight entertainment, introduction of a customer’s bill of rights and increment of legroom in the company’s planes thereby increasing passenger comfort (Froehlich, 2008). The company also provided more parking spaces for its clients by opening a new terminal and introduced access to the Air train through a connection bridge for its clients. All this measures have been highly effective as observed through the increase in the airline’s revenue streams.
Other than increasing the number of activities performed for every service offered, the airline also altered activities performed per flight as a cost cutting measure. The company has also changed the model of its aircraft to Airbus A320 that has more capacity in place of Boeing, which has a smaller capacity (Froehlich, 2008). The company also changed its routes and destinations and now focuses on routes where market dominance is guaranteed due to the presence of only a few players. It increased the number of flights in routes that were deemed profitable. Due to the high fuel prices, the company uses energy efficient planes to operate its flights.
By altering and efficiently managing its unit level activities, the company was able to improve on its overall performance. The Jet Airline case demonstrates that if a company is able to manage its unit level activities efficiently, it can achieve better service delivery leading to increased revenues.
Froehlich, M. L. Fin 48 Answer Book, 2009 Edition. Wichita, KS: CCH, 2008