| Course | AVT-3010 Airline Management |
|---|---|
| Module | Module 2 |
| Paper type | Written Assignment 2: industry structure and airline economics |
| Length | About 785 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | B.S.B.A. in Aviation Management |
| Updated | October 2026 |
Free sample paper for AVT 3010 Module 2
Neither Network Nor Ultra-Low-Cost: JetBlue's Place in the Structure and Economics of U.S. Airlines
Student Name
B.S.B.A. in Aviation Management, Thomas Edison State University
AVT-3010: Airline Management
Mentor Name
Month Day, Year
Neither Network Nor Ultra-Low-Cost: JetBlue's Place in the Structure and Economics of U.S. Airlines
Introduction
After deregulation, U.S. airlines sorted themselves into a few business models. Each model has its own cost structure and its own way of earning revenue. This paper describes the structure of the industry, explains the economic measures airlines use to manage that structure and places JetBlue Airways within it.
Four Kinds of Carriers
Network carriers, today American, Delta and United, run hub-and-spoke systems with domestic and long-haul international routes, several cabins and global alliances. Low-cost carriers, led historically by Southwest, began with one aircraft type, point-to-point routes and simple service. Ultra-low-cost carriers, such as Spirit, Frontier and Allegiant, sell a very low base fare and charge separately for nearly everything else, from bags to seat assignments. Regional carriers fly smaller jets under contract for the network airlines. Gillen and Lall (2004) explain that low-cost carriers gained their advantage by building a whole business model around low cost, including fast turnarounds, high aircraft use and simpler airports, rather than by cutting a single expense.
The Measures Airlines Manage By
Wensveen (2015) sets out the unit measures that let airlines compare costs and revenue across very different networks.
A short example shows how they connect. Suppose an airline's operating cost is 13.0 cents per ASM and its average yield, revenue per RPM, is 16.0 cents. Its break-even load factor is 13.0 divided by 16.0, or about 81 percent. If it fills 84 percent of seats, it earns a profit; if it fills 79 percent, it loses money. A small change in either cost or yield moves the break-even point, which is why airlines watch these numbers so closely.
Airline costs are also largely fixed in the short run. Aircraft, crews and airport facilities must be paid for whether a flight is full or not, so an empty seat earns nothing once the aircraft leaves the gate. That is why airlines use pricing and revenue management, covered in Module 4, to sell as many seats as possible at the best price.
| Measure | What it means |
|---|---|
| Available seat miles (ASM) | One seat flown one mile; the airline's output |
| Revenue passenger miles (RPM) | One paying passenger flown one mile |
| Load factor | RPM divided by ASM: the share of seats filled |
| Cost per ASM (CASM) | Operating cost divided by ASM |
| Revenue per ASM (RASM) | Operating revenue divided by ASM |
| Break-even load factor | The load factor at which revenue just covers cost |
Where JetBlue Fits
JetBlue began as a low-cost carrier but added features usually found at network airlines: free Wi-Fi, seatback entertainment, a generous coach seat and, since 2014, a premium cabin called Mint on long flights (JetBlue Airways Corporation, 2025). It now flies to Europe as well as across the Americas. Its main bases are New York's JFK, Boston, Fort Lauderdale, Orlando and San Juan.
This middle position has strengths and weaknesses. JetBlue can attract travelers who want a better product than an ultra-low-cost carrier offers, but its costs are higher than theirs. It competes with network carriers for business travelers but lacks their global networks and large loyalty programs. Alamdari and Fagan (2005) found that low-cost airlines that kept closer to the original low-cost model tended to be more profitable, while those that drifted toward network features earned less. JetBlue's financial results in recent years, which include several consecutive annual losses, are consistent with that finding, though other causes such as engine problems and costs in New York also played a role.
Competition at JetBlue's Bases
Borenstein (1992) showed that hub dominance can give one carrier pricing power. At JFK, JetBlue competes with Delta and American; at Boston it is the largest carrier but faces Delta's growth; in Florida it faces Spirit, Frontier and Southwest on price. Goolsbee and Syverson (2008) found that incumbent airlines cut fares when a low-cost carrier merely threatens to enter a route, so JetBlue's presence can lower fares even on routes it does not yet fly. This helps travelers but limits what JetBlue can charge.
Final Project Step 2: The Chosen Airline and Preliminary Sources
I have chosen JetBlue Airways. Preliminary sources: JetBlue's most recent Form 10-K, the Wensveen (2015) text, Borenstein (1992) on competition, Alamdari and Fagan (2005) on low-cost models, Belobaba (1987) on revenue management and research on aircraft financing to be added in Module 6. I will also use U.S. Department of Transportation traffic data for route and market share figures.
Conclusion
U.S. airlines fall into four main models, each managed through the same unit measures. JetBlue sits between the low-cost and network models, which gives it a distinct product but also costs that are hard to cover. That tension will run through the research paper.
References
Alamdari, F., & Fagan, S. (2005). Impact of the adherence to the original low-cost model on the profitability of low-cost airlines. Transport Reviews, 25(3), 377-392. https://doi.org/10.1080/01441640500038748
Belobaba, P. P. (1987). Airline yield management: An overview of seat inventory control. Transportation Science, 21(2), 63-73. https://doi.org/10.1287/trsc.21.2.63
Borenstein, S. (1992). The evolution of U.S. airline competition. Journal of Economic Perspectives, 6(2), 45-73. https://doi.org/10.1257/jep.6.2.45
Gillen, D., & Lall, A. (2004). Competitive advantage of low-cost carriers: Some implications for airports. Journal of Air Transport Management, 10(1), 41-50. https://doi.org/10.1016/j.jairtraman.2003.10.009
Goolsbee, A., & Syverson, C. (2008). How do incumbents respond to the threat of entry? Evidence from the major airlines. Quarterly Journal of Economics, 123(4), 1611-1633. https://doi.org/10.1162/qjec.2008.123.4.1611
JetBlue Airways Corporation. (2025). Annual report on Form 10-K for the fiscal year ended December 31, 2024. U.S. Securities and Exchange Commission.
Wensveen, J. G. (2015). Air transportation: A management perspective (8th ed.). Ashgate.
AVT 3010 Module 2 instructions, in plain terms
The second AVT-3010 written assignment goes with the module on industry structure and airline economics, Module 2, which covers the third and fourth course objectives. Expect to describe how the U.S. airline industry is organized, explain the economic measures airlines use and apply them to a real carrier. The syllabus also makes this module the second step of the final project: commit to one airline and list the sources you plan to use. No grade is given for that step beyond complete or incomplete, yet your mentor's comments on it shape the rest of the research, so pick sources that can support every required section, including financing, which is often the hardest part to research. Name the measures you will use to compare your airline with its rivals, since the research paper will need them again.
Inside the AVT 3010 Module 2 example
The sample opens by naming the business models that formed after deregulation. It describes network, low-cost, ultra-low-cost and regional carriers, citing Gillen and Lall on how low-cost advantage was built. A six-row table defines the unit measures, and a worked example computes a break-even load factor of about 81 percent, with a margin note on why the numbers are labeled illustrative. The paper places JetBlue between the low-cost and network models and uses Alamdari and Fagan to explain why that middle ground is hard. A section on its bases uses Borenstein and Goolsbee and Syverson. The project step names JetBlue and lists the sources. The conclusion names the tension between product and cost that the research paper will follow.
Where the marks sit in the AVT 3010 Module 2 rubric
The written assignment rubric gives marks for correct definitions of airline economic measures, accurate description of industry structure and sensible application to a real airline. A paper that explains why airline costs are mostly fixed in the short run, and what that means for pricing, shows understanding beyond the definitions. Placing the chosen airline within the structure, with evidence about its costs and competitors, earns more than describing it in isolation. Mentors also look for a usable source list for the project step, with a mix of company filings, government data and research. Clear headings and APA citations finish the work. Sources should be current, since carriers merge and exit often and an outdated example weakens the analysis.
AVT 3010 Module 2 help from the desk
Students often define ASM, RASM and CASM correctly and then never use them, so the paper reads like a glossary. Others describe carrier types with outdated examples, such as airlines that no longer exist, or ignore regional carriers entirely. Work one small example, apply the measures to your airline and check that every carrier you name still flies. For the project step, list real sources you can actually reach through the TESU library, not general websites. Keep illustrative numbers clearly labeled so they are not mistaken for an airline's reported results. A free first custom AVT-3010 sample on your own airline can be requested. Read the operating statistics page of your airline's annual report before you write this section.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
More AVT 3010 and B.S.B.A. in Aviation Management sample papers
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AVT 3010 Module 2 questions, answered
Where can I find a free AVT 3010 Module 2 sample paper?
The written assignment above places JetBlue within the structure and economics of U.S. airlines and lists its project sources.
What is CASM in the airline industry?
Cost per available seat mile: an airline's operating cost divided by the number of seats it flew one mile, used to compare costs across airlines.
How do you calculate break-even load factor?
Divide the airline's cost per available seat mile by its yield, the revenue per revenue passenger mile; the result is the share of seats it must fill to cover costs.
What is the difference between a low-cost carrier and an ultra-low-cost carrier?
Low-cost carriers keep costs down but often include some services in the fare, while ultra-low-cost carriers sell a bare fare and charge separately for almost everything else.
What is step 2 of the AVT-3010 final project?
Choosing the specific airline you will research and compiling a preliminary list of sources, which the mentor marks complete or incomplete.