JetBlue's feeling blue...

Washington DC
Source:
This story is sourced from Airline Business
Subscribe today »

JetBlue Airways, long a darling of Wall Street and a passenger favourite, is enmeshed in a series of problems that threaten its brand name and passenger reputation.

A major operational foul-up during a February snow and ice storm stranded dozens of JetBlue aircraft in New York's JFK airport for up to 10 hours, outraging 130,000 passengers and bringing the airline five days of non-stop negative media coverage.

The crisis, which lasted several days as JetBlue "pre-cancelled" some 1,200 flights, could cost the airline as much as $30 million in the first quarter, said JetBlue chief executive David Neeleman. The low-cost carrier launched a voluntary "Passenger Bill of Rights" (see below) that promises refunds of about $10 million plus $16 million worth of vouchers and other recompense for stranded or badly delayed passengers.

Despite Neeleman's efforts, which included a live television appearance, analysts say the carrier's weak recent fiscal performance and its continuing problems have tarnished its investor reputation. Morgan Stanley's Bill Greene thinks the company "has a public-relations problem now and is likely to take dramatic steps to improve its brand image. This will have a significant cost in both revenue and expense."

JetBlue has brought in former FAA chief operating officer Russ Chew to help restore its operational integrity (see p77). It is also being hobbled by continuing problems with the Embraer 190s which it has used since late 2005 to increase medium- and short-haul flying.

JetBlue has experienced significant teething pains with the new fleet, including software problems, which is forcing the airline to take its 25 E-190s out of service two at a time for software fixes. Other carriers, including Air Canada, have also experienced software problems with the type. JetBlue expects all its E-190s to be back in service by May. Until then, it has hired ExpressJet to serve some routes from Boston Logan and its New York JFK hub with smaller 50-seat Embraer ERJ-145s.