JetBlue's Flawed Customer Service Could Be Detrimental To Business

| About: JetBlue Airways (JBLU)

Customer service is often a thankless job that brings on migraine headaches and can make even the most joyful person in the world melancholy after countless hours spent on the phone dealing with upset and even irate consumers. If a company has a good customer service department in the eyes of a consumer, it's often the result of overall consumer satisfaction with that company or their products.

I fly quite a bit, and like any frequent traveler have come to appreciate some airlines, rental car companies, and hotel brands more than others. One of my favorite airlines to fly on the Eastern side of the United States is JetBlue (NASDAQ:JBLU). The airline does not have first class, but they do offer good value and a ton of flights to cities I frequent. Essentially I have made the choice to forego upgrades to first class on other airlines for the overall convenience of the sheer number of flights offered by JetBlue.

From a consumer standpoint, when things are going smoothly, JetBlue is amongst my favorite airlines. Now the sting. When things are going bad, like a delay or a weather system, JetBlue is almost deplorable in my opinion. After an experience this weekend I have almost gotten to the point that JetBlue will not earn my business anymore. The whole ordeal got me to thinking of whether or not I would invest in the company. If a passionate fan of the company like myself can become so frustrated that I consider avoiding the airline, what happens to the hundreds of people that have had their vacations ruined?

Before going into my story I must say that the customer is not always right. This mantra was made famous by Southwest Airlines (NYSE:LUV), and that company has a culture that is top notch both as a corporation as well as to consumers. Southwest does not walk all over the consumer, but they also do not get walked on either. Their style makes for a profitable airline that scores well with consumers in good situations as well as bad. Perhaps JetBlue should learn a lesson from the airline that has weathered every storm and remained profitable throughout.

As I stated earlier, my experiences 90% of the time with JetBlue are all positive. The employees of this company do very well by consumers in almost any situation. Where JetBlue falls short is when there is a hiccup in the system. It is a hiccup this past weekend that brought me to the conclusion that JetBlue has policies in place that may well alienate consumers to the point where they will simply avoid the airline. That is what I would find scary from an investment standpoint. If you alienate your customers, you are going down the wrong path.

Here is a story that explains why an investment in JetBlue scares me on a long term basis.

This past weekend a flight was scheduled to go from New York to Orlando at 4:30 PM. A weather system in the middle of the country started to cause delays which, as we are all well aware, create a domino effect. In this case, a crew was scheduled to land in New York at 4:00 PM and then take off at 4:30 PM for a two hour flight to Orlando. Due to the weather related delays in the middle of the country the plane did not land until 4:30. This caused a delay in the Orlando flight to 5:15 PM. No problem..delays happen. The underlying issue was that the crew scheduled to fly passengers to Orlando had now logged many hours in the air, and due to FAA regulations, could not fly the Orlando leg. With some forethought, this issue could have been resolved earlier by bringing in a fresh crew and not impacting the New York to Orlando flight. If JetBlue had called in a replacement crew at the first sign of delays, some 150 passengers would have been able to take off a bit behind schedule, but would have arrived on the same day as their vacation or business had been scheduled. To be fair, the company likely does not have dozens of crews on standby, but many airlines were able to get people to their destination much more quickly than JetBlue.

At 5:45 a new crew arrived and passengers boarded the plane. The plane left the gate, but by then the storm system which had caused havoc in the middle part of the country had made its way to New York, causing a weather delay there. The passengers sat in the plane on the runway for three hours, only being offered water. Because three hours on the runway is not allowed by the FAA without serious consumer compensation (a $50 voucher), the plane pulled back up to the gate. This is a loophole used by many airlines to avoid having to shell out perhaps well deserved travel vouchers or refunds. Passengers were allowed to de-plane (with all of their belongings), and all returned at shortly after 10:00 PM. Once again the plane left the gate and this time the passengers sat on the runway for almost 2 hours before the flight was ultimately cancelled at half past midnight.

At this point any consumer would be frustrated, but in fairness, all airlines were having a challenging time. This is where the real JetBlue customer service nightmare now bears its head.

JetBlue does not typically add a new flight to make up for the cancelled one. Instead they try to get the 150 passengers booked onto already scheduled flights, most of which are already nearly sold out. This means that consumers may have to wait days to get onto a new flight to their destination. On top of this, JetBlue, unlike other airlines, does not have "deals" with other airlines to get passengers to their destination (perhaps on a Delta flight). Instead the company begins the arduous process of booking passengers on the cancelled flight onto future flights. Some were lucky and left early the next day. Some were less fortunate and could not leave until the following evening. Still others got the unfortunate news that they had to wait as much as two days to fly to Orlando. Imagine having three kids in tow and you are headed to Disney for a 1 week vacation that now is cut 3 days short. Your vacation is ruined, and your one week passes to Disney, likely costing thousands, will now only see 4 days of use. If you are lucky you can hit three of the four parks as long as you skip the water parks or downtown Disney.

Remember earlier that I said I fly JetBlue frequently. On many flights I see uniformed people from other airlines such as Delta. Thus, JetBlue does not have a "deal" with other airlines for consumers, but they certainly have "deals" in place for peers in the airline industry. Why is it that this company can shuttle around employees of other airlines, but not offer consumers a way to get to their destination quickly? Essentially many airlines solve these problems and bend over backwards to save a vacation for a family by rerouting to another airline if necessary. JetBlue takes a much slower approach and hangs their hat on "weather" so as not to have to take care of the customer in a manner that many airlines do (even discount airlines).

I understand that business decisions need to be made, but JetBlue seems to tip the scales in their favor. They take up to 7 days to tell you if they deemed that you deserve any consideration. Imagine having to shell out the money to book a flight on another airline at a substantial premium, and knowing that the most you might get back from JetBlue is a $50 travel voucher good only on the airline that perhaps ruined your vacation! Imagine having no way to know what will happen. JetBlue does have a customer bill of rights, but those rights are dictated by JetBlue without the consumer having any input into the process. Customers can not contact JetBlue's Bill of Rights department, and are given an email that tells them what JetBlue deems as appropriate for a solution. Most "compensation" only happens with something the airline terms as a "controllable irregularity." Obviously the weather is out of the control of any airline, but could JetBlue control getting you there as soon as possible on the next flight after the weather event? In my opinion, JetBlue seems to be able to make the "weather" excuse last up to a few days! That is simply not reality.

On the positive side, JetBlue does have a travel advisory for the Caribbean and Bahamas issued due to the anticipated impacts of Hurricane Irene. Such advisories have not been implemented for Florida as yet. The company in this case is being proactive. I have seen such advisories from the company in the past. My real concern rests with the "unforeseen" weather systems, and how the company reacts.

JetBlue has not lost my business yet, but they are walking a thin line. I have already determined that if I were to invest in the airline sector, my investment would not be with JetBlue. I feel the flaw in their customer service risks alienation of consumers to a point where it could be detrimental to their business. This is one case where the facade presented looks great, but there are perhaps underlying problems in corporate policy that erode the quality of the company. I would have called JetBlue for comment prior to publication, but the customer service reps I spoke to refused to give a phone number and referred me to the web. Sorry JetBlue....I do not take orders from you, and if you fear giving out company contact information it is already quite telling.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.