When low-cost carrier JetBlue Airways began operations in1999, it promised customers cheap fares combined with exceptionalservice. JetBlue planes offer more leg room and all seats onJetBlue planes offer passengers 36-channel DIRECTV® service onseat-back screens.
For seven years, JetBlue, with a few exceptions, kept itspromise to passengers and shot to the top of customer satisfactionsurveys J.D. Power and Associates conducted. On Valentine’s Day,2007, however, the airline suffered the worst crisis in itshistory. Due to an unexpected New York ice storm, nine JetBlueplanes full of passengers were stranded on the tarmac for over 6hours—one plane and its 130 passengers sat on the tarmac for 10hours. The planes left the gate and then found they couldn’t takeoff, but the airlines, feeling that the storm would let up bymidmorning, did not allow the planes to return to the gate. In theend, the wheels of the planes were frozen in the slush, unable tomove. In the next few days things got even worse for JetBlue as asnowball effect (pardon the pun) from the storm caused hundreds offlights to be cancelled—JetBlue’s flight attendants and pilots werenot where they were needed, and the company’s communication systemstaff people were not trained to tell them what to do. At someairports, police had to be called in to help calm down the iratecustomers. While the airline was far less than satisfactory in itsresponse to the Valentine’s Day ice storm, its response to thecrisis was a model of excellent PR. Seeking to swiftly respond tothe crisis and appease angry customers, CEO David Neeleman quicklyapologized to customers and explained what went wrong. He said hefelt “mortified” and “humiliated.” To get his message across, heappeared on CNN’s American Morning, Today, Fox and Friends, andSquawk Box early the next day. But JetBlue did more than justapologize to consumers. The airline offered passengers who werestranded on JetBlue planes for three hours or more a full refundplus a free round-trip ticket to any JetBlue destination. In all,the airline spent $30 million on vouchers for passengers of the1,102 cancelled flights. In addition to its immediate response tothe February cancellations, JetBlue cited its dedication to“bringing humanity back to air travel” and established a CustomerBill of Rights retroactive to February 14. The Bill of Rightsoutlines what JetBlue will provide to its customers in cases offlight cancellations, departure delays, overbookings (customers whoare denied boarding will receive $1,000), and even when theDIRECTV® is noperable. But will these changes satisfy customers?Most customers reacted with caution, saying that they would bewatching the airline to see if it lived up to its promises. Otherstranded passengers were less positive, and some vowed never to flyJetBlue again. Will the Bill of Rights allow JetBlue to gain thelevel of customer loyalty it enjoyed before the crisis? While mostcustomers of delayed flights may be satisfied, others may not. Whatabout customers whose delays fall 10 minutes short of receiving afull-price trip voucher? And what will happen when another crisisoccurs? JetBlue must continue to develop customer service and PRprograms if it is to stay in the air for the long haul.
What is the decision facing JetBlue?
What factors are important in understanding this decisionsituation?
What are the alternatives?
What decision(s) do you recommend?
What are some ways to implement your recommendation?
