Presentation on theme: "A Submission to the Arthur W. Page Society Case Study Competition"— Presentation transcript:
1 A Submission to the Arthur W. Page Society Case Study Competition Regaining Altitude after theValentine’s Day Massacreof 2007A Submission to the Arthur W. Page Society Case Study Competition
2 Agenda JetBlue Takes Off The Perfect Storm JetBlack and Blue Misery Loves CoverageThe Redemption PlanImage Restoration StrategiesDiscussion Questions
3 JetBlue Takes Off JetBlue Airways Launched Operations in 1999 Improbable Early Success Despite:Track Record of Start-Ups Since 1978Barriers to Entry for Industry NewcomersHigh Fixed Costs & Volatile ExpensesIntense CompetitionIndustry Sensitivity to Economic CyclesSeptember 11, 2001
4 JetBlue Takes Off“It is a business whose margins are so razor thin that a couple of passengers on each plane can spell the difference between profit and loss and where a one-cent rise in the price of jet fuel can cost the industry an added $180 million a year."– Airline Industry Expert Barbara Peterson
5 JetBlue Takes Off Founder/CEO David Neeleman's Vision Bringing the "Humanity Back to Air Travel"Paperless TicketingExtra Legroom and Wide Leather SeatsSatellite TV Feeds"Customers" not "Passengers"
6 JetBlue Takes Off Operating revenue for 2006 totaled $2.36 billion Represented 39% Growth Over 2005By 2007 JetBlue Airways:Served 52 Domestic and International DestinationsOperated More Than 575 Daily Flights
7 The Perfect Storm Valentine's Day Winter Storm in Northeast U.S. Deteriorating Weather Conditions at JFK AirportGridlock on the TarmacFrozen Ground EquipmentDelay in Calling Port Authority for AssistanceProblems with JetBlue Reservations HotlineInaccurate Flight Info on JetBlue Web Site
8 The Perfect Storm Passengers Stranded Inside Planes Horror Stories 9 JetBlue Flights Sat on the Tarmac at JFK in Excess of 6 HoursHero StoriesPilots and Flight Attendants Get CreativeThe $360 Cab Ride
9 "This has been one of the worst experiences of our lives." The Perfect StormAccording to Passengers Stranded Inside JetBlue Planes"This has been one of the worst experiences of our lives.""They are right on the edge of human-rights violations… They have no contingency plan at all. When they say no frills, they mean it.""It was like – what’s the name of that prison in Vietnam where they held [Senator John] McCain? The Hanoi Hilton.”
10 JetBlack and Blue Lost Luggage Piles Up JetBlue Planes and Flight Crews Out of Place Throughout the U.S.The "Reset" PlanCancellations1,200 between February 14-19$20 Million in Lost Revenue$24 Million in Refunds and Vouchers
11 JetBlack and Blue The Primary Culprits Bad Weather Flawed Decision-MakingInadequate Communication ProcessesOverwhelmed Reservations SystemLack of Cross-Trained Personnel
12 Misery Loves Coverage"Call it the perfect storm, the imperfect storm, the Valentine’s Day Massacre."– A JetBlue Vice PresidentMedia Interest in the Crisis5,000 Phone Inquiries Over Six DaysBattling MisperceptionsConcern on Wall StreetCongress Comes Calling
13 – JetBlue Founder and CEO David Neeleman The Redemption Plan"This is going to be a different company because of this It’s going to be expensive But what’s more important is to win back people’s confidence."– JetBlue Founder and CEO David Neeleman
14 Image Restoration Strategies Shift the Blame to the WeatherReduce the Perceived Magnitude of the CrisisMake Sincere and Repeated ApologiesCompensate Customers Impacted by the CrisisTake Corrective ActionNeeleman: Let's Issue a "JetBlue Airways Customer Bill of Rights"
15 Image Restoration Strategies Selected Key PublicsCustomers Impacted by the CrisisUnaffected JetBlue CustomersEmployeesShareholdersGovernmentIndustry AuthoritiesEager LegislatorsMedia
16 Discussion QuestionsWhat image restoration strategies should JetBlue Airways employ to rebuild its reputation as a customer-centric company?If you were in charge of JetBlue’s external communication effort, how would you try to make amends with customers who were delayed aboard planes or in terminals for hours?How could JetBlue have better communicated with its internal stakeholders across the country on Valentine’s Day and during the days that followed?
17 Discussion QuestionsWhen addressing the company’s stakeholders, how much blame for the crisis would you place on the inclement weather on Valentine’s Day?What is the best way to publicly explain the hundreds of additional flight cancellations that were necessary because of JetBlue’s decision to “reset” its operations?
18 Discussion QuestionsShould the corporate communications team at JetBlue arrange for CEO David Neeleman to appear on the national television news and talk show circuit following the crisis? What are the potential benefits and risks to the company’s reputation?What are the financial and reputational risks of publicly committing to an initiative like the JetBlue Customer Bill of Rights?
19 Discussion QuestionsWhat concerns might JetBlue’s shareholders as well as members of its legal and finance departments have about a proposed JetBlue Customer Bill of Rights?Could JetBlue ever retract its Customer Bill of Rights once it is made public?If implemented, how would you market the JetBlue Customer Bill of Rights to external and internal stakeholders?