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

2. Agenda JetBlue Takes Off The Perfect Storm JetBlack and Blue
Misery Loves Coverage
The Redemption Plan
Image Restoration Strategies
Discussion Questions

3. JetBlue Takes Off 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

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

6. JetBlue Takes Off 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

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. The Perfect Storm 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

9. "This has been one of the worst experiences of our lives."
The Perfect Storm
According 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" Plan
Cancellations
1,200 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-Making
Inadequate Communication Processes
Overwhelmed Reservations System
Lack of Cross-Trained Personnel

12. Misery Loves Coverage
"Call it the perfect storm, the imperfect storm, the Valentine’s Day Massacre."
– A JetBlue Vice President
Media Interest in the Crisis
5,000 Phone Inquiries Over Six Days
Battling Misperceptions
Concern on Wall Street
Congress 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 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. Image Restoration Strategies
Selected Key Publics
Customers Impacted by the Crisis
Unaffected JetBlue Customers
Employees
Shareholders
Government
Industry Authorities
Eager Legislators
Media

16. Discussion Questions
What 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 Questions
When 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 Questions
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 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 Questions
What 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?