JetBlue Airways: Growing Pains?

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Case Details:

Case Code : BSTR277
Case Length : 18 Pages
Period : 2000-2007
Pub Date : 2008
Teaching Note : Available
Themes: Business Strategy
Organization : JetBlue
Industry: Aviation
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"We don't spend tens of millions of dollars telling people how cool we are. We put low fares out there and let them tell us."

-David Neeleman, the founder and then CEO of JetBlue, in 2001.¹

"I do think they (JetBlue) had some growing pains. They were growing so fast they didn't have systems and redundancies in place."

-Michael Magiera, Managing Director at Manning & Napier, a Money Management Firm that owned JetBlue stock, in 2007.²

A Change of Guard at Jetblue

In May 2007, JetBlue Airways Inc. (JetBlue), a low cost carrier (LCC) based in New York, announced a new leadership structure for the company. David Barger (Barger), President and Chief Operating Officer (COO) of the airline, replaced David Neeleman (Neeleman) as CEO.

Neeleman, who founded JetBlue in 1999, had been its CEO ever since. Under the new leadership structure, Neeleman was designated as the non-executive chairman of the board. Russell Chew, a former Federal Aviation Administration (FAA)³ executive, took over as the COO; Barger retained his position as the President of the company.

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Neeleman said at that time that the board's suggestion that he step down had nothing to do with the service breakdown that JetBlue had experienced in February 2007, when the northeast region of the US had been hit by a severe snowstorm.

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1] Eryn Brown, "A Smokeless Herb JetBlue Founder David Neeleman…,"Fortune, May 28, 2001.

2] Chris Zappone, "JetBlue Struggles with 'Growing Pains'"money.cnn.com, April 20 2007.

3] The Federal Aviation Administration is an agency of the United States Department of Transportation with the authority to regulate and oversee all aspects of civil aviation in the US.