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Regaining Altitude after the Valentines Day Massacre of 2007 A Submission to the Arthur W. Page Society Case Study Competition.

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Presentation on theme: "Regaining Altitude after the Valentines Day Massacre of 2007 A Submission to the Arthur W. Page Society Case Study Competition."— Presentation transcript:

1 Regaining Altitude after the Valentines Day Massacre of 2007 A Submission to the Arthur W. Page Society Case Study Competition

2 1.JetBlue Takes Off 2.The Perfect Storm 3.JetBlack and Blue 4.Misery Loves Coverage 5.The Redemption Plan 6.Image Restoration Strategies 7.Discussion Questions Agenda

3 JetBlue Airways Launched Operations in 1999 Improbable Early Success Despite: Track Record of Start-Ups Since 1978 Barriers to Entry for Industry Newcomers High Fixed Costs & Volatile Expenses Intense Competition Industry Sensitivity to Economic Cycles September 11, 2001 JetBlue Takes Off

4 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 Ticketing Extra Legroom and Wide Leather Seats Satellite TV Feeds "Customers" not "Passengers"

6 Operating revenue for 2006 totaled $2.36 billion Represented 39% Growth Over 2005 By 2007 JetBlue Airways: Served 52 Domestic and International Destinations Operated More Than 575 Daily Flights JetBlue Takes Off

7 The Perfect Storm Valentine's Day Winter Storm in Northeast U.S. Deteriorating Weather Conditions at JFK Airport Gridlock on the Tarmac Frozen Ground Equipment Delay in Calling Port Authority for Assistance Problems with JetBlue Reservations Hotline Inaccurate Flight Info on JetBlue Web Site

8 Passengers Stranded Inside Planes Horror Stories 9 JetBlue Flights Sat on the Tarmac at JFK in Excess of 6 Hours Hero Stories Pilots and Flight Attendants Get Creative The $360 Cab Ride The Perfect Storm

9 According to Passengers Stranded Inside JetBlue Planes The Perfect Storm "This has been one of the worst experiences of our lives." "It was like – whats the name of that prison in Vietnam where they held [Senator John] McCain? The Hanoi Hilton. "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."

10 Lost Luggage Piles Up JetBlue Planes and Flight Crews Out of Place Throughout the U.S. The "Reset" Plan Cancellations 1,200 between February $20 Million in Lost Revenue $24 Million in Refunds and Vouchers JetBlack and Blue

11 The Primary Culprits Bad Weather Flawed Decision-Making Inadequate Communication Processes Overwhelmed Reservations System Lack of Cross-Trained Personnel JetBlack and Blue

12 Misery Loves Coverage Media Interest in the Crisis 5,000 Phone Inquiries Over Six Days Battling Misperceptions Concern on Wall Street Congress Comes Calling "Call it the perfect storm, the imperfect storm, the Valentines Day Massacre." – A JetBlue Vice President

13 The Redemption Plan "This is going to be a different company because of this. Its going to be expensive. But whats more important is to win back peoples confidence." – JetBlue Founder and CEO David Neeleman

14 Image Restoration Strategies Shift the Blame to the Weather Reduce the Perceived Magnitude of the Crisis Make Sincere and Repeated Apologies Compensate Customers Impacted by the Crisis Take Corrective Action Neeleman: Let's Issue a "JetBlue Airways Customer Bill of Rights"

15 Selected Key Publics Customers Impacted by the Crisis Unaffected JetBlue Customers Employees Shareholders Government Industry Authorities Eager Legislators Media Image Restoration Strategies

16 1.What image restoration strategies should JetBlue Airways employ to rebuild its reputation as a customer-centric company? 2.If you were in charge of JetBlues external communication effort, how would you try to make amends with customers who were delayed aboard planes or in terminals for hours? 3.How could JetBlue have better communicated with its internal stakeholders across the country on Valentines Day and during the days that followed? Discussion Questions

17 4.When addressing the companys stakeholders, how much blame for the crisis would you place on the inclement weather on Valentines Day? 5.What is the best way to publicly explain the hundreds of additional flight cancellations that were necessary because of JetBlues decision to reset its operations? Discussion Questions

18 6.Should 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 companys reputation? 7.What are the financial and reputational risks of publicly committing to an initiative like the JetBlue Customer Bill of Rights? Discussion Questions

19 8.What concerns might JetBlues shareholders as well as members of its legal and finance departments have about a proposed JetBlue Customer Bill of Rights? 9.Could JetBlue ever retract its Customer Bill of Rights once it is made public? 10.If implemented, how would you market the JetBlue Customer Bill of Rights to external and internal stakeholders? Discussion Questions

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