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For
years after it was set up in 1999, JetBlue Airways had been a
favorite with airline analysts. Modeled loosely on America’s
legendary low cost carrier Southwest Airlines, JetBlue achieved
relatively quick success by bringing an element of ‘coolness’ to
low cost travel.
Unlike Southwest, which took its low cost image seriously and
avoided frills altogether, JetBlue offered comforts like leather
seats and seat-back televisions.
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The airline also flew a new fleet of Airbus A380s and
Embraer-190s, and the crew was known to be cheery and helpful -
seemingly, a rarity in the airline industry. JetBlue was especially
known for its commitment to customer service, and positioned itself as
an airline that cared about its passengers.
It was known to give away free food passes and flight tickets to
passengers even when flights were delayed because of external causes
that were no fault of the airline. JetBlue was also known to never
cancel any of its flights, no matter what the delay, as it believed that
passengers would rather get to their destinations late than never.
It was this policy that landed JetBlue in trouble in mid February 2007,
when a huge snow storm affected the Northeast and Midwest regions of the
US. While other airlines cancelled flights and rescheduled operations,
JetBlue persisted in believing that the flights would eventually take
off, and kept passengers stranded for several hours.
In one extreme and well publicized instance, passengers were stranded on
board a plane on the tarmac at New York’s JFK airport for nearly 11
hours. Eventually however, the airline was forced to cancel most of its
flights.
However, even after the storm cleared JetBlue struggled to get back on
its feet as the cancelled flights had played havoc with its systems
which were not equipped to deal with cancellations.
The airline’s poor database management systems also resulted in major
problems in tracking and lining up pilots and flight crew who were
within federal regulation limits for the number of flying hours to
operate the resumed flights. In addition to this, the delays and
cancellations had caused a baggage crisis with several passengers
finding their luggage missing.
It took several days for JetBlue’s operations to smoothen, and the
airline was forced to cancel nearly 1,200 flights in all in the days
following the storm. Meanwhile, airlines like American Airlines,
Continental Airlines and Delta Airways, which had cancelled flights
immediately were able to resume operations more quickly.
Within days after the fiasco, JetBlue’s founder and CEO David Neeleman
unveiled a ‘Customer Bill of Rights’, which laid out the airline’s
policy towards compensating passengers for delays and cancellations.
JetBlue also created a new position of Chief Operations officer,
appointing Russell Chew, a former COO at the US Federal Aviation
Administration to the post. Additionally, JetBlue launched a new
database management system to help it track crew and baggage better.
The fiasco reportedly cost JetBlue $30 million, and was expected to
affect the company’s financial position adversely. JetBlue had been
grappling with financial difficulties (mainly because of a sharp rise in
fuel prices) since 2005, after years of spectacular growth.
Notwithstanding financial losses, the loss of goodwill was expected to
be much more serious for the airline.
Some analysts observed that Neeleman and JetBlue should be commended for
accepting blame and trying to make amends. Others however were skeptical
about whether any of the remedial steps would actually help the airline
regain favor with passengers.
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