JetBlue CEO Has Good Reason To Be Mortified

Feb.20.07 | About: JetBlue Airways (JBLU)

By Carl Howe

Yesterday's New York Times notes that JetBlue’s (NASDAQ:JBLU) CEO David Neeleman is mortified by his company's week-long inability to deliver customers to their destinations after last week's blizzard:

The founder and chief executive of JetBlue Airways, his voice cracking at times, called himself “humiliated and mortified” by a huge breakdown in the airline’s operations that has dragged on for nearly a week, and promised that in the future JetBlue would pay penalties to customers if they were stranded on a plane for too long.


The crisis began Wednesday when an ice storm hit the Eastern United States. Most airlines responded by canceling more flights earlier, sending passengers home and resuming their schedules within a day or two. But JetBlue thought the weather would break and it would be able to fly, keeping its revenue flowing and its customers happy.

On the contrary, JetBlue’s woes dragged on day after day. On Saturday night, for instance, the airline said that the 23 percent of flights it had canceled on Saturday and Sunday would also be canceled Monday. The confusion led to angry exchanges between customers and employees, prompting the airline to call out security personnel.

Neeleman has good reason to be mortified. As Dan Gilmore notes, even today, JetBlue's Web site is providing little guidance to travelers about how they can actually get to where they are going, putting what little guidance they have under the pleasant euphanism, "Operational Interruptions." And while Neeleman is promising financial compensation for future travelers that JetBlue strands, that's providing little comfort to current travelers sleeping in airports.

What can JetBlue do? Well, for one thing, it might help if customers didn't have to buy the New York Times to know that JetBlue is feeling their pain. Blackfriars believes that JetBlue should:

1. Step 1: Publish an apology online along with directions on what customers should do. Pretending operations are anything like normal at this point is pointless.

2. Step 2: Deliver stranded JetBlue customers to their destinations. At this point, JetBlue's competitors are running normal operations. If JetBlue can't fly them to their destinations, they should rebook their stranded customers with companies who are flying. Not tomorrow -- today.

3. Step 3: Send every inconvenienced customer something that proves JetBlue is sorry. This can be something as simple as a voucher for a free flight to get them to try the airline again. JetBlue got nothing to lose here, since few customers affected are likely to fly JetBlue again without it.

4. Step 4: Invest in JetBlue's people and systems to do the right thing by customers, even when conditions are bad. This crisis has proven the company needs better operations, more rapid communication, and smarter decisions when operational problems arise. While Neeleman's promise cited in the article to fix operations is great, it will take money to make it happen. Spend that money now.

5. Step 5: Document all these efforts on the Web site -- and keep it updated as changes occur. Like it or not, JetBlue isn't going to be able to hide its flaws from customers for a long time to come. Rather than fight the publicity, JetBlue might as well embrace it and make it work to its benefit.

Northwest Airlines (NWAXQ) went through this same process, eventually recovered, and now requires its pilots to return to the gate after three hours of delay. Mistakes and problems are always going to happen in the airline business.

The difference between bad and good companies is how employees are empowered and respond to problems. Southwest Airlines (NYSE:LUV) empowers its employees to break rules so long as they are doing right by their customers, and it has been the most profitable airline for years now. JetBlue, on the other hand, appears stuck trying to maintain its low-cost, low-frills origins, and is rapidly paying the price for its unwillingness to do right by its customers. And until it starts acting instead of apologizing for this crisis, it's going to have a lot fewer of those customers for quite a while to come.