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Service Marketing Article Analysis

:
JetBlue’s Winter Nightmare

1. Introduction
2. Implication of service marketing to analysis of
the article
2.1 Service Recovery Strategy
2.2 Service Guarantees
2.3 Service Recovery Paradox
3. Personal Evaluation
4. Conclusion
5. Reference

It canceled 435 flights and affected 150.000 passengers.000 passengers is a fraction of the complaints of some of its rivals. capacity and   tracking   complaints.com/2014/01/07/news/companies/jetblue/.1 Service Recovery Strategy JetBlue must ensure the proper form of recovery after 150.3 complaints per 100.   When   the   dealy   occurred. this article relates to the similar incidence occurred in 2007 February due to ice storms.   JetBlue   immediately   refund . This article mainly reports on JetBlue’s service recovery effort to retain customer loyalty after it shut all operations at Boston airport and three New York area airports due to ice storms in January. free tickets and reimbursement of out of pocket expense on a case-bycase basis.000 passengers and 435 flights were affected. It turned out that due to satisfactory and timely recovery effort.000 passengers. Introduction JetBlue Airways. frequent flier points. for example United Airlines (UAL) which had 2. Lastly. headquartered in New York City with its base at JFK International Airport. JetBlue tried every possible way to earn their forgiveness and loyalty. Implication of service marketing to analysis of the article 2. timely and accountable   treatment.cnn.1.   JetBlue   has taken a course of customer fix startegy (Exhibit 1) in this case rather than a problem fix strategy because customer fix at this point is the most urgent and important.   This   could   include   both   financial   and   non­monetary compensations   to   reduce   afterward   customer   swithing   to   competitors. JetBlue's rate of 0. While problem fix strategy could be more long­term such as operating efficiency. JetBlue’s compensation plans for stranded passengers are comprehensive and well designed including extra credits. Their customers based on experience with service failure from other airlines or word of mouth formed their recovery expectation of a fair. 2. commonly know as JetBlue is an American budget airline.67 complaints per 100. This article entitled “JetBlue’s Winter Nightmare” is published on 2014 January 7 on CNN website: http://money.

 JetBlue offers TrueBlue points (Exihibit 2). Non­ TrueBlue   members   were   contacted   through   contact   information   given   when   they reserved the tickets. To provide fair and accountable treatment. credit toward a future JetBlue flight. free tickets and reimbursement of out of pocket expense.                                 Exihibit 1: Customer Fix and Prolem Fix             Exhibit 2: TrueBlue memebr and non­member flier points compensation  2. reducing switching to competitors. 2015). To ensure appropriate communication. The above customer fix solutions are effective in saving company’s reputation and retain customers. JetBlue members (TrueBlue) were contacted through email address in their TrueBlue account. Fliers who booked through third­party were contacted directly through agents.2 Service Guarantees . frequent flier points.customers  for  the  canceled  flights  and  some  customers   were rebooked  with  other airlines (O'Toole.

Secondly. JetBlue’s stock price jumped 7% in 2015 despite its two major service failures in the past (Reed. 2015). the customer must view the failure of service unstable and that the firm has little control over such failure. for intangible service are often not guaranteed because it is inseparable from service provider and vulnerable to changes. JetBlue has excellent customer fix process to boost customer’s satisfaction and turn the winter nightmare into its own advantage. This is true for JetBlue as the severe ice storm is not within its control and it affected all airlines equally. Firstly. customers have not experienced prior failures.000 passengers compared to 2. 1990). However. Hence. Furthermore. if a service company could turn an angry and unsatisfied customer into a loyal and satisfied one. In the case of JetBlue. JetBlue does not provide big guarantees very frequently. This is especially evident in JetBlue’s example due to unpredictable weather condition and regulations such as the new Federal Aviation Administration rules. This can be seen from its JetBlue’s low compliant rate of 0. compared to smooth and satisfactory service in the first place. 2. Businesses especially tangible products give a pledge that the product offered will perform as promised and this require company’s preparation to fulfill the service guarantee.67 per 100. customer complaint rate has significantly reduced.Service guarantee refers to an assurance and fulfillment of a condition. The reason for this paradox is due to the conditions necessary for such paradox to exist. It is unlikely that customers who experienced 2007’s ice storm are the same customers who travelled . Through generous and timely compensation plans to customers. despite customers experiencing frustration and delay when flights were cancelled.3 Service Recovery Paradox According to Hart.3 of United Airlines. the customers could stick to the brand and repeat purchase (Hart.

Furthermore. Conclusion Service failure for JetBlue indeed has caused the company money. Hence. 3. Most importatnly. However. due to little control over natural disaster. they should keep in touch with the affected passengers to make them feel valued and well treated so as to reduce switching to competitors. However. JetBlue also could tracked customer’s complaint rate and opinions to better prepare for future events.with JetBlue in 2014. this suggests that customers could be more lenient and forgiving when faced with JetBlue’s service failure. JetBlue could focus not only on customer fix but also more on problem fix to track the opinions of affected customers. customers are more lenient towards the delay. customers felt well treated and fairly compensated for their loss so that they have a low complaint rate towards JetBlue’s service failure. This gives customers great comfort and lessens their frustration and anger due to delay of airports. This experience also taught JetBlue a lesson which is to not give big guarantees very frequently as intangible service is very susceptaible to human and non-human factors such as weather conditio . It provided fair treatment to affected passengers and view special case individually. 4. human resource and reputation. capital. Personal Evaluation JetBlue’s service failure though urgent and severe did not inflict a huge loss on the company and customer faith due to its quick and responsive customer fix. JetBlue has an effective and responsive recovery strategies to focus on all customers and minimise their loss. This helps JetBlue to understand the weaknesses of its recovery strategies and prepare for any future similar events.

E=0000000000221608930. January 9). T. Retrieved April 30.500) O'Toole.dll/.Reference Reed.). from http://help. 2015.thestreet. none has had to halt all operations at key airports.html Compensation for delayed/cancelled flights.620. (2014. J. JetBlue Jumps as Revenue Gains Surprise Wall Street.com/SRVS/CGI-BIN/webisapi.K=4648. (n. 2014: 4:46 PM ET Source: http://money. from http://www.cnn. That's what happened to JetBlue Airways this week.d.t=casePrint. JetBlue offers compensation to frustrated travelers.com/2014/01/07/news/companies/jetblue / It's every airline's nightmare: Some of your busiest operations grinding to a halt. .com/story/13129769/1/jetblue-jumps-asrevenue-gains-surprise-wall-street. April 29).cnn. from http://money. While other carriers have canceled flights.Sxi=14. 2015./? St=115.com/2014/01/07/news/companies/jetbluetravelers/ JetBlue's winter nightmare By Chris Isidore CNN Money (New York) January 7. JetBlue said it was forced to essentially shut operations at Boston's Logan International Airport and the three New York-area airports. Retrieved April 30. Retrieved April 30. 2015.cas e=obj(395261). (2015.jetblue. inconveniencing tens of thousands of customers and raising questions about its basic competence.

in part due to new Federal Aviation Administration rules that went into effect last week requiring more rest for pilots between flights. "Case in point: Look at what's happening with other carriers. I think they simply screwed up. In reality. Same FAA rules going into effect? Yes. JetBlue said it canceled 435 flights Monday.000 JetBlue passengers have been affected by cancellations over the past six days." Some experts say the airline should have been better prepared for the events of the past few days.and the delays in turn caused JetBlue to run out of available pilots." . affecting 49." he said.Several days of bad weather and runway closings at New York's JFK airport on Friday and Sunday sparked cascading delays -. and the recovery looks very good right now. the company outlined its compensation plans for customers who experienced multiple cancellations. Maruster said the last of the stranded travelers should be taken care of by Thursday. Some 150. "Tying it to the storm and the FAA is a way to deflect criticism. "We have resumed departures from both New York and Boston. "The old pilot rules were somewhat more forgiving in terms of how much delay you could operate with. Same storm? Yes. in my opinion. In a post on its website Tuesday. offering credits. Maruster said it was too early to provide a cost estimate for the debacle." JetBlue chief operating officer Rob Maruster said in a conference call with reporters Tuesday. He agreed with a questioner who said it was "a bad time" for the implementation of the rule.com. "All decisions were made for safety reasons. Same disruptions? No. frequent flier points and free tickets." said Mark Murphy.000 passengers. founder of TravelPulse.

" said company spokesman Anders Lindstrom. But other critics believe it should have been better prepared for the new FAA rules. JetBlue is also the only major airline whose pilots do not belong to a union. having started 14 years ago. work hour rules deadline. FAA spokeswoman Laura Brown told CNN Tuesday that JetBlue last year requested an extension to the Jan. but simply hadn't been as forthcoming about it. so the rule changes do not affect those carriers as much as they would JetBlue. and doesn't have the size or staffing of older established carriers to deal with these kinds of disruptions. she said. "This is not the JetBlue experience [passengers] have come to expect and we will do everything we can to earn their forgiveness and loyalty. the FAA sent JetBlue a letter declining that request. JetBlue (JBLU) is particularly vulnerable to the bad weather in the Northeast because 45% of its flights go through either Boston or New York. In October. The Transportation Department said that crash raised the issue of pilot fatigue as a top priority for regulators.JetBlue representatives said that other airlines had also likely experienced challenges with the implementation of the FAA rule. given that they were announced two years ago. 4. The new rest requirements were implemented after an investigation into a crash by a regional jet in Buffalo in February 2009 that killed 50 people and was blamed on pilot error. . Union contracts at other airlines frequently have rest requirements that exceed the new rules. 2014. JetBlue was the only airline to request an extension. It also is a relatively young airline.

the airline could find itself forced to cut fares or offer costly promotions to win over customers. It also had one of the lowest rates of canceled flights. But canceled flights at other carriers have left available seats at a premium. Alaska Airlines (ALK) and Delta Air Lines (DAL).for example United Airlines (UAL) had 2.3 complaints per 100. Beyond those costs. . In the first three quarters of 2013. --CNN's John Murphy. The problems cost JetBlue an estimated $30 million and the backlash cost the company founder and CEO David Neeleman his job. but it cannot guarantee any expense will be covered. In February 2007.000 passengers is a fraction of the complaints of some of its rivals -. It also prompted calls in Congress for a "passengers' bill of rights. according to the DOT. JetBlue passengers were stuck on the JFK tarmac for 8 hours after an ice storm. DOT stats showed it had the fourth lowest rate of passenger complaints in the industry. But JetBlue has developed a reputation for good service since those 2007 problems. Mike Ahlers and René Marsh and CNNMoney's James O'Toole contributed to this report.67 complaint per 100. The airline is also addressing requests for reimbursement for out-of-pocket expenses on a case-by-case basis.000 passengers. The airline has had to recover from this kind of public relations disaster in the past.Linstrom said JetBlue is trying to find seats on other airlines." The Transportation Department eventually passed rules requiring airlines to allow passengers off stranded planes or face significant fines. behind only Southwest Airlines (LUV). JetBlue's rate of 0.