JETBLUE: HIGH-FLYING AIRLINE MELTS DOWN IN ICE STORM

Presented By: Ankit Pareek Dhruv Arora Ruchika Khanna Vipul Mishra Vishal Sharma

and helped in developing Open Skies Innovations like touch-screen check-in and “fares 65% less than other airlines on identical routes” Well capitalized combination of lower cost and strong balance sheet .“MAKING FLYING HAPPIER AND EASIER FOR EVERYONE”     Founded by David Neeleman in 1998 as “New Air Corporation” Co-founder of WestJet Airline.

service. and style First airline to deploy Embraer 190 regional jet and first to offer live television.” which combined value. acquired inflight television provider Live TV and began MOS to other airlines .S. Airline business by 2005 Carved out a profitable position as a low-cost airline offering high level of service Strove to provide every customer with “the JetBlue Experience.FLYING HIGH IN TURBULENT INDUSTRY     Leading highly competitive U.

3 most admired airline by Fortune and best in Customer satisfaction by Market Metrix(in 2007) Best domestic airline by Conde Nast Traveler and Travel + Leisure(in 2006) Best low cost/no frills airline by OAG ( Official Airline Guide) Best U. Airlines . Airline in AQRS conducted by the University of Nebraska-Omaha and Wichita State University 2nd lowest rate of customer complaints among the 10 largest U.SERVICE EXCELLENCE   Sought to provide “the best customer service in the business” Dozens of top awards for its performance: o o o o o No.S.S.

working alongside employees. talking with pilots in cockpit. and asking how the airline could better serve them Cultivating a source of team work “There is no „they‟ here.Neeleman‟s Vision     To have a more fun and more civilized airline He traveled frequently on JetBlue flights. We succeed together or we fail together” . It‟s „we‟ and „us‟. visiting with customers about their experiences.

WARNING LIGHTS IN THE COCKPIT     Labor and maintenance expenses began to creep up as jetBlue‟s people and planes got older Delta and United were launching low cost/ high frills offering to compete with JetBlue On-time performance eroded and flights were cancelled In 2005. Katrina . Florida and Gulf Coast(important markets) were ravaged by hurricane Rita.

in 2006 profit rose 39% to $2.Strategies Planned…      Grow revenue by raising fares.36 billion Investors appeared to share management`s confidence . using capacity and adding services to small and medium sized cities Operating flights with a delay rather than canceling the flight Improve workforce productivity Thus.

affecting 130.900 flights. 2007.Turbulence.000 travelers till February 20th) Additional Storms – Trouble to resume normal operations Granted $26 M as refunds and vouchers.     On February 14. a winter storm scrambled operations of JetBlue Airways Corp.. Cancellation of more than half of its flights (1. and $4 M on employee overtime and other storm related cost .

    Worst crisis in the young company‟s history Passengers publicized their complaints on blogs and in the media Investors began unloading JBLU stock Challenge to regain customer‟s loyalty. reverse a barrage of hostile press coverage. and reconfigure operations .

and they wouldn‟t have apologized I want you to come back to jetBlue so I can give you the jetBlue Experience you‟ve grown accustomed to and we do our best to deliver every day . you wouldn‟t have been compensated for your delay.EMPLOYEES DEFENDED THE AIRLINE  By posting a response to a blogger who had been critical of the company‟s handling of the situation: o o Had you booked a ticket on Delta or American. your flight would have been cancelled and you wouldn‟t have gotten a refund.

Service recovery.      On the evening of Feb 14. JetBlue issued a public apology Announced to refund and a free roundtrip ticket to passengers detained more than 3 hours Refund to passengers whose flight has got cancelled Customers affected by storm would not be penalized for re-booking JetBlue also published a Customer`s Bill of rights ..

What lies ahead?      Customers were confused whether or not they are going to get compensations Neeleman explained the difference between controllable and uncontrollable delays Russell Chew hired as chief operating officer Press continued to raise questions about Jetblue`s long term viability By march. the stock price had fallen to11% below from Feb .

what further action should be taken? What.Challenges. if any strategic and operational changes should be made to ensure the company`s full recovery? .     Could JetBlue depend on Neeleman to lead the company out of trouble? Did the executives at JetBlue learn enough from their service failure to fix what was wrong and prevent it from happening again? If not..

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