Could the JetBlue Fiasco Have Been Avoided?

| About: JetBlue Airways (JBLU)

It has been a tough week for JetBlue (NASDAQ:JBLU). Storms wreaked havoc on the company's systems and continuity plans to the point where it had to cancel 23 percent of its flights again on Monday to reset its operations.

jblu.gif Could this mess have been avoided? Perhaps, if JetBlue would have had a database in place to better track its crew members and reestablish its operations.

For a brief recap: JetBlue attempted to recover from the Feb. 14 ice storm by selectively canceling flights on Feb. 15 and Feb. 16. But those moves still didn't do the trick because JetBlue couldn't line up well rested pilots and flight attendants with planes.

By Tuesday David Neeleman, JetBlue's CEO, unveiled a customer bill of rights, which will promise better service and refund money in future incidents. Neeleman says the final costs of the delayed flights could top $30 million.

In the end, JetBlue just wasn't prepared for the storms. As a result, Neeleman said the company is "beefing up the organization in headquarters. That organization to pair pilots and flight attendants was overwhelmed."

Eric Brinker, spokesman for JetBlue, said one reason the system was overwhelmed is that it lacked a better system to track crew members in an adverse situation. Typically, crew members call into JetBlue headquarters to give their status and location. That system works fine in normal circumstances, but when ice storms wreaked havoc JetBlue "had a lot of calling and was tripping over itself to take in the information," said Brinker.

As a result, JetBlue launched a new database on Monday to better track crew members. During the storm, the company relied on a manual system–essentially pen and paper–that didn't centralize the information for everyone to see.

It's likely that this work scheduling database will tie into JetBlue's SAP (NYSE:SAP) enterprise applications somehow. In 2005 and 2006, JetBlue collapsed its enterprise planning systems — airline management software, payroll systems, materials management, financials and human resources–from disparate providers into SAP. JetBlue is primarily a Microsoft (NASDAQ:MSFT) and SAP shop.

The company has also created a new bag handling database to better track baggage. JetBlue's delays have created a baggage mess. In an advisory on Tuesday the company said:

"As a result of recent flight delays and cancellations, we have numerous bags looking for their owners."

By not having its baggage and crew databases up to snuff, customers couldn't get real time information from As a result it's no surprise that the company said Tuesday it will be "improving functionality on to support customer needs and allow JetBlue reservations and central baggage to maintain low on-hold time for customers."

On the bright side, Brinker said JetBlue's technology systems held up fine during the storms, but processes will need to be reworked. Notably, JetBlue's customer service reps, which work from home instead of a centralized location, will need to be trained on all IT systems. "We will have a number of technology enhancements and part of that is getting our people in home offices up to speed," said Brinker.

Brinker is checking on further IT details behind JetBlue's customer bill of rights. But any technology enhancements will fall to JetBlue's relatively new CIO Duffy Mees, who had been CTO. Mees was named CIO in November and will report to Neeleman after Todd Thompson left to go to Starwood Hotels. Thompson didn't report to the JetBlue CEO.