AP Features, February 20th, 2007
JetBlue Airways rolled out a customer bill of rights Tuesday that promises vouchers to fliers who experience delays, hoping the move wins back passengers after an operational meltdown damaged its brand and stock price.
Founder and chief executive David Neeleman described the crisis as "a huge bump in the road" but said JetBlue would move past it, and told reporters in a conference call that he had no intention of resigning in the wake of the worst corporate mess in the airline's 7-year history.
"I think I'm uniquely qualified to deal with these issues," Neeleman said.
JetBlue said the first step in getting people to fly on the airline again was the customer bill of rights, something more than a mere verbal pledge. JetBlue, Neeleman said, would hold itself accountable.
JetBlue customers will be compensated based on the length of the delays. The vouchers range from $25 to the full amount of the ticket. The delays include airplanes unable to taxi to the gate within 30 minutes and flight departures held up for a minimum of three hours, according to JetBlue.
If JetBlue cancels a flight within 12 hours of its departure, customers can ask for a full refund or a voucher. JetBlue said passengers would also receive vouchers if flight delays are the airline's fault.
JetBlue also vowed to deplane passengers if an aircraft is delayed on the ground for five hours.
The airline said it was fully operational Tuesday after a sequence of events led to the canceling of 1,096 flights and tarnished the reputation of a carrier known for its low fares and exceptional customer service. More than 100,000 passengers were affected, Neeleman said.
Snow and extreme temperatures last week froze equipment and grounded the company's planes at JetBlue's terminal at John F. Kennedy International Airport, stranding passengers inside the aircraft for up to 10 1/2 hours.
JetBlue said it waited too long to call for help in getting the passengers off the planes because it hoped the weather would let up and the flights would be able to proceed.
The bad-weather delays and cancellations led to customer questions and complaints that overwhelmed the company's reservations system, and many of its pilots and flight crews wound up stuck in places other than where they were needed.
When the bad weather struck Feb. 14, JetBlue didn't have a system in place for so many stranded flight crews to call in and be rerouted to their next assignments, something it was working to rectify within a few weeks.
"What we did was wrong and we didn't have a plan," Neeleman said. He called last week a "somber" time.
To prevent future breakdowns, Neeleman said he intends to put in place a reserve force of JetBlue employees in the New York area who can come to the aid of the airline in the case of a serious crisis.
"Had we had that in place for this event, it would have been much better," Neeleman said.
Neeleman said JetBlue's reservation operational center in Utah was also overwhelmed.
"We are addressing that very aggressively," he said.
Since those "cascading events," Neeleman has been making the media rounds, trying to convince people _ investors and customers _ that the airline will recover. In the conference call, he calmly said JetBlue was not going away as he patiently answered a barrage of questions.
"This is a great company," he said. "We've had seven years of unbelievable service."
JetBlue's shares fell more than 4 percent in morning trading Tuesday.
The debacle was sure to hit JetBlue's bottom line. Prudential analyst Bob McAdoo wrote in a Tuesday research report that "revenues and added expenses will cost the company about 4 to 6 cents in the March quarter."
Neeleman said he expects JetBlue to dole out $26 million in refunds and credits and another $4 million in incremental expenses such as paying overtime for crews and chartering airplanes.
Neeleman said his company would detail the costs in a filing later Tuesday with the Securities and Exchange Commission.
It's not clear if the damage to JetBlue will hurt its future prospects. McAdoo suggested the effects would be temporary.
"Although the press coverage of JetBlue's problems has been widespread, the problems experienced are not likely to be repeated nor any negative impact on the company's reputation be long lasting," he wrote in the same note. "Other new airlines have experienced similar problems with few lingering image problems."
