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Starting with a Valentine's Day disaster in which Jet Blue passengers were stranded for 11 hours - America's formerly much loved budget airline is now in trouble.

The brand was founded on 'Bringing humanity back to air travel" and "making the experience of flying happier and easier for everyone". It is now facing a very difficult crisis that has destoryed much of its hard won brand equity.

 

 

THE INITIAL PROBLEMS: 

 

NBC11.com

More Jet Blue Flights Canceled, CEO 'Mortified'

POSTED: 8:17 am PST February 19, 2007

 

Low cost fares, quirky blue potato chips and even a mea culpa from JetBlue Airways' founder may not be enough to ease passenger anxiety Monday as the airline braces for another day of disrupted flights.

 

The company said it would be canceling almost a quarter of the day's flights but hopes to be fully operational on Tuesday, almost a week after a Valentine's Day snowstorm created a meltdown for the airline.

 

David G. Neeleman, the company's founder and chief executive, said he was "humiliated and mortified" by the breakdown in the airline's operations. He promised in an interview with The New York Times for its Monday editions that in the future the company would pay penalties to customers should they be stranded on a plane for too long.

 

Neeleman blamed the crisis on poor communications and a failed reservation system. He said the ice storm had left many of the airline's 11,000 pilots and flight attendants a great distance from where they could operate the planes. He also said JetBlue lacked trained staff to coordinate the flight crews. The reservation system had also been overwhelmed.

 

The airline had scheduled 600 flights for Presidents Day, more than the 550 to 575 flights on a typical Monday. Of those, 139 flights have been canceled, JetBlue announced late Saturday night.

 

JetBlue Airways Corp. spokesman Sebastian White said headway was being made on Sunday, but that the cancellations on Monday were needed to make sure all flight crews had gotten the legally mandated amount of rest before taking to the skies again.

 

"Canceling one more day's operations will really help reset our airline," White said.

 

All flights on JetBlue were canceled in and out of 11 airports: Richmond, Va.; Pittsburgh; Charlotte and Raleigh/Durham, N.C.; Jacksonville, Fla.; Austin and Houston in Texas; Columbus, Ohio; Nashville; Portland, Maine; and Bermuda.

 

White said the airline had tried to warn passengers through phone and e-mail of flight cancellations over the past couple of days, and was in the process of doing so for Monday's flights. JetBlue has been trying to reduce the backlog of passengers through a number of methods including flying charter flights, adding flights in certain sectors, rebooking passengers who had some travel flexibility to later dates, and booking seats on other airlines, White said.

 

The cancellations followed hundreds of other canceled and delayed flights since Wednesday, when a snow and ice storm grounded jets at John F. Kennedy International Airport through the weekend.

 

Passengers scrambled to deal with the disruption of their plans.

 

"Oh my God, horrendous," Maria Arbelo, a teacher from New Haven, Conn., said of her experience. "It's been a terrible ordeal, I tell you. We've been from line to line."

 

Arbelo and two companions had been ticketed for a JetBlue flight to Houston on Saturday morning to begin a Caribbean cruise. That flight was canceled, as were all flights to Houston on Sunday. The airline put the three women up in a hotel for the night, and placed them on a Sunday evening flight to Cancun. From there, they would have to find a driver to take them on a four-hour trip to meet their ship.

 

Arbelo said JetBlue staffers had been nice, but seemed confused about what to tell passengers. "I laugh about it because there's nothing we can do," the teacher said, resigned to losing two days of her vacation.

 

Baggage handlers also struggled with the mountain of luggage returned to the terminals because of the cancelations. Some passengers complained that they couldn't leave the airport, even after their flights were canceled, because no one could find their bags.

 

White said the airline had teams out in New York City and Long Island on Sunday delivering luggage to customers.

 

JetBlue's service hot lines became overwhelmed by people trying to rebook flights.

 

Affected customers may receive refunds or rebook their flights, the airline said.

 

The airline said it initially tried to get its system back to normal by selectively canceling flights Thursday and Friday, but long delays continued as a result of constraints that included a one-runway operation at JFK on Thursday, and flight crews burning through the number of hours they are legally allowed to work before taking a rest.

 

Prior to the current crises, JetBlue was overwhelmingly popular, offering affordable fares, in-flight snacks of blue potato chips and DIRECTV.

THE APOLOGY :

Jet Blue Apologizes to Customers
2/23/2007 11:18:49 AM

Dear JetBlue Customers,

We are sorry and embarrassed. But most of all, we are deeply sorry.

Last week was the worst operational week in JetBlue's seven year history. Following the severe winter ice storm in the Northeast, we subjected our customers to unacceptable delays, flight cancellations, lost baggage, and other major inconveniences. The storm disrupted the movement of aircraft, and, more importantly, disrupted the movement of JetBlue's pilot and inflight crewmembers who were depending on those planes to get them to the airports where they were scheduled to serve you. With the busy President's Day weekend upon us, rebooking opportunities were scarce and hold times at 1-800-JETBLUE were unacceptably long or not even available, further hindering our recovery efforts.

Words cannot express how truly sorry we are for the anxiety, frustration and inconvenience that we caused. This is especially saddening because JetBlue was founded on the promise of bringing humanity back to air travel and making the experience of flying happier and easier for everyone who chooses to fly with us. We know we failed to deliver on this promise last week.

We are committed to you, our valued customers, and are taking immediate corrective steps to regain your confidence in us. We have begun putting a comprehensive plan in place to provide better and more timely information to you, more tools and resources for our crewmembers and improved procedures for handling operational difficulties in the future. We are confident, as a result of these actions, that JetBlue will emerge as a more reliable and even more customer responsive airline than ever before.

Most importantly, we have published the JetBlue Airways Customer Bill of Rights—our official commitment to you of how we will handle operational interruptions going forward—including details of compensation. I have a video message to share with you about this industry leading action.

You deserved better—a lot better—from us last week. Nothing is more important than regaining your trust and all of us here hope you will give us the opportunity to welcome you onboard again soon and provide you the positive JetBlue Experience you have come to expect from us.

Sincerely,

THE FALLOUT: 

JetBlue Rides Out the Turbulence

February 22, 2007

By Mike Beirne

CHICAGO -- The customer bill of rights and the $30 million that JetBlue Airways will hand out in vouchers and expenses related to last week’s operations meltdown could deliver more impact than any marketing executed by the seven-year-old airline. Or the new policy’s downside is it creates an entitlement that would make profitability even more elusive.

By proactively enacting its own customer bill of rights, the No. 9 carrier, in terms of operating revenue, has grabbed industry leadership on the issue of reconciling with passengers on delayed and canceled flights. That policy eventually will include compensation for lost or late luggage, said airline spokeswoman Jenny Dervin. It’s a reform that flyers—particularly grass roots groups like the Coalition for Airline Passengers’ Rights and "Travel Insider" e-newsletter publisher David Rowell—have been pleading for since long before 1999 when 4,000 of Northwest Airlines passengers were stranded, some for up to eight hours, on airport tarmacs during a Detroit winter storm.

The JetBlue situation isn’t an oddity. On Dec. 29, Texas thunderstorms kept flyers cooped up for eight hours in an American Airlines plane with overflowing toilets. Thousands of Christmas travelers found themselves late or stranded during 2004 when a glitch in crew scheduling software grounded COM air and US Airways flights.

“I can almost hear the grumbling of the legal departments at some traditional airlines saying 'no way, we can’t have a passenger bill of rights; do you know how much money we would lose?'” said Gene Lewis, a partner at Digital Pulp, a New York digital agency whose clients include Lancôme and Continental Airlines. “Jet Blue is not afraid to do something that will cost them a lot of money. It is admirable.”

Whether JetBlue has set a gold standard that legacy carriers must follow is uncertain. The big carriers have plenty of routes where it doesn’t compete with the discount airline. “I don’t think the legacy carriers are prepared to create this brand new entitlement unless they feel they have to keep Congress from passing its own bill of rights,” said Joe Schwieterman, transportation professor at DePaul University. He adds that paying compensation on JetBlue fares that cost as little as $100 is cost-prohibitive. Also, with no relief in sight for the congestion at JetBlue’s home, New York's John F. Kennedy International Airport, and weather becoming more difficult to predict, the bill of rights might create an incentive for canceling flights.

Jet Blue’s policy offers vouchers equal to the roundtrip cost for flights canceled within 12 hours from scheduled departure. Not everyone is convinced that the JetBlue Bill of Rights will be meaningful to customers, particularly if it creates a relationship where stranded travelers become more irate because their delay fell 10 minutes short of receiving a full price trip voucher. “They nickel and dimed it,” said Peter Warren, chairman and CEO of Warren Kremer Paino Advertising, a New York shop whose clients include Palace and Helmsley hotels and the Maine Office of Tourism.

“My philosophy is go big or go home. Up until now (CEO David) Neeleman has been that big guy. He’s not in the transportation business; he’s in the experience business. He had an opportunity here to really go big by offering free travel with very dramatic compensation. From a PR perspective, Neeleman has been perfect,” said Lewis of Digital Pulp. His agency handled crisis management duties last May when Bausch & Lomb recalled contact lens cleaning solution after the Center for Disease Controls determined its ReNu with MoistureLoc was linked to fungal eye infections in 109 patients.

JetBlue is deftly using the immediate and interactive tools of the Web to get its apology out there after Neeleman appeared on TV networks and major publications saying he was “mortified and humiliated” by his airline’s lack of performance. In the video apology on Jetblue.com, a buttoned-down Neeleman promises “the events that transpired last week ... will never happen again.”

“There’s a campy feel to the video,” said Lewis. “It doesn’t seem rehearsed. It feels very much like a JetBlue conversation to the individual and I think that is what people expect to see. He says things that are very definitive. He’s not making side-sweeping political statements. They’re really making some very definitive contributions to the relationship.”

The Web page also includes an e-mail solicitation and an explanation of the company’s Customer’s Bill of Rights. Passengers will be compensated based on the length of delays with vouchers ranging from $25 to the full amount of a fare. In the video, Neeleman outlines two responses to boost customer service: Training non-airport employees to serve as a sort of SWAT team that can reinforce gate employees and help match flight crews with planes, and training reservation agents to help passengers book alternative travel plans.

The airline will use the Web for updates but only when there is meaningful progress to report and additions to the Bill of Rights. The carrier also sent apology e-mails by Wednesday and updates to its TrueBlue loyalty club members, but will use that communication sparingly so the messages won’t be perceived as spam. E-mail feedback solicited so far is 80% for versus 20% against the airline.(

“(The majority) is positive in the sense that they’re saying I’ll be watching you to see if you live up to your promise, but I’m just giving you one more chance,” said Dervin. “The 20% that is negative is at least is very instructive with people telling us why they will never come back to the airline.”

Dervin related a telephone conversation with one New York gentlemen who vowed never to fly JetBlue again. He even declined an offer to spend an hour with her and carrier managers to explain his decision. JetBlue brass intend to host town meetings in the markets it serves and are soliciting suggestions from customers on how to host those gatherings. “We know the next time we have a system delay our customers are going to get out their stop watches because they have an expectation,” said Dervin. “We have to deliver on that expectation.”

--Mbeirne@brandweek.com

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