A JetBlue Turnaround Story In The Making

| About: JetBlue Airways (JBLU)
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JetBlue (NASDAQ:JBLU) does care. This week I published an article, JetBlue's Flawed Customer Service Could Be Detrimental To Business, where I outlined a bad experience that I had with the company and spoke to several aspects of the customer service process that I find to be lacking. Subsequent to publishing the article I received a phone call from JetBlue's corporate office, and I found the conversation with the corporate representative to be quite refreshing and one that demonstrates to me that the company is willing to find ways to improve its processes.

To be fair, I am not an airline expert, but as a frequent traveler, I have had more opportunity than most to interact with airlines and see how they handle many aspects of their business, including customer service, reservations and booking, gate crew, flight crew, and terminal employees. By having the chance to sample several airlines over the course of a year, I am able to determine what I like and dislike about any airline from a consumer perspective. I do invest in companies solely on a consumer opinion, but if I like a product or service and have a good experience with it the company passes the first blush test of my investment decision. If I do not like a company from a consumer perspective, I tend to shy away from investing in it. In the case of JetBlue, the 10% bad was bad enough that I would have great pause before putting money into the company, and I expressed that. My conversation with JetBlue demonstrates that the company seems willing and concerned enough to implement measures that will make that 10% bad turn better.

As I stated in my previous article, I am satisfied with JetBlue 90% of the time. My overall concern from a consumer perspective happens when there is a hiccup in the system and how the company reacts and interrelates with customers. Bad experiences with customer service can make or break a company in the eyes of a consumer. This is particularly true when that company often only has one opportunity per year (a family vacation) to impress people. A ruined vacation due to flight cancellations (due to weather or otherwise) does not just impact the family that was taking the vacation. That family will relay the experience to many other people. An airline can be a hero or villain, and oft that depends on how they interact with consumers.

My conversation with JetBlue's corporate office was quite lengthy and they wanted to take the time to go over all of the issues I experienced. They took the time to review the my calls with customer service prior to speaking with me, and had spent a good part of the day discussing what transpired prior to contacting me. This showed smart business sense in my opinion. While the call was prompted by my original article, they were not re-actively shooting from the hip when they reached out to me. They had taken the time to understand and digest the events. The company was not on the defensive when we spoke. It was instead a dialogue of intelligent discussion relating to the situation that prompted me to write. This gives JetBlue another point in the win column of passing my consumer likeness test.

In my conversation with the corporate office, JetBlue did not read down the Bill of Rights, and did not quote "company policy." Instead they did what any consumer would want. They took the time to listen and took an interest in me as a person, not as some guy that wrote a critical article. They took the time to talk to Spencer Osborne the True Blue member, not Spencer Osborne that jerk that criticized them. That type of conversation works wonders on any consumer perception of a company. Another point in the consumer likeness test for JetBlue.

At the end of the day I feel that some good may come out of the whole ordeal. Will the JetBlue Customer Bill of Rights change? Probably not, but the way it is handled with consumers by customer service might and that is the key. As I have stated, in a delay or cancellation situation, the end result may be the same (a flight out the next day), but the road to get there can either be nice or unpleasant. Good customer service makes it as pleasant as possible by giving the consumer some input into what happens and showing some compassion for the situation.

Some felt that my original article was about "revenge," or about getting something out of the ordeal. In my conversation with corporate I did not seek any remuneration, nor did I ask for any special treatment. At this point I do not know whether the passengers on that flight will receive travel vouchers or anything. It was actually the furthest thing from my mind at that point. If vouchers are issued, I will get nothing more than every other passenger. The purpose of the article was not related to anything like that at all, but something greater, something that I consider much more valuable. When the JetBlue Corporate office reached out to me I got to see first hand a company that took the time to take something negative and turn it into a positive. That is impressive. I saw a company that listened to suggestions that would improve their ability to embrace consumers. That is fantastic. I got to see a company that did not blow smoke at me, but rather took the time to make the future of JetBlue better. The past is the past, but the right steps toward the future is what will sustain JetBlue.

In a press release this week, JetBlue added Florida in the list of destinations that might be impacted by Hurricane Irene. This move impressed me in that they added Florida even though current predictions show the storm moving off of the coast. The company was proactive in this decision and that allows for consumers to have a choice in whether or not they wish to travel. Flights have not yet been canceled, but at least consumers can make better plans now. Likely the company will be following this storm closely and similar travel options will be made up the Eastern seaboard. Kudos to JetBlue for allowing this choice.

Will I invest in JetBlue? Not quite yet. Airline stocks are tricky at this point but worth watching. JetBlue is well off of its 52 week high of $7.59, and it is possible that it is a good entry point, but I still want to see what transpires with the company in terms of better handling that 10% of the time that it fails my consumer likeness test. The call from corporate went a long way in changing my opinion. One thing is certain. JetBlue is now a stock I will be watching and following more closely now.

I have always shied away from airline stocks as a general rule. There are simply too many things that can go wrong from an investment standpoint. I am not even talking about something as dramatic as a crash. The industry is extremely cutthroat. If one airline lowers rates, the others must quickly follow suit. If the Middle East sees turmoil and fuel prices rise, the airlines need to increase prices. Simply stated, airline stocks are ones that I would play with extreme caution. Look for extreme pullbacks as an opportunity to make a trade. Look for massive spikes as a chance to short. Being in an airline stock long term is a nerve racking way to make a dime.

The one aspect of airline stocks that may be attractive to traders is that many are near 52 week lows. The burning question is whether or not the economy will recover soon allowing the airline industry to garner better rates. From this perspective both JetBlue and Southwest (NYSE:LUV) are at low points an active trader may want to consider.

Overall, my blush test of consumer satisfaction applies here more than perhaps any other investment. In a recent article by Everett Potter the airlines with the most complaints included JetBlue at #7. Southwest, whom I consider very good at customer service avoided the list.

A correction of note is that it appears JetBlue does have a reciprocal deal with American Airlines (NASDAQ:AMR) for non-weather related delays or cancellations. This is not published on its website as yet, and was not communicated to me in the several different conversations I had with JetBlue on that day (or on past occasions where I have had to try to re-book a flight). It was communicated to me by the corporate office.

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