JetBlue Vows To Win Back Passengers

Tuesday, February 20th 2007, 6:49 am
By: News On 6

NEW YORK (AP) _ JetBlue Airways introduced a customer bill of rights on Tuesday that promises vouchers to fliers who experience delays, hoping the move wins back passengers after an operational meltdown damaged its brand and stock price.

Founder and chief executive David Neeleman described the crisis as ``a huge bump in the road'' but said JetBlue would move past it. He said he had no intention of resigning in the wake of the worst corporate mess in the airline's 7-year history.

``I think I'm uniquely qualified to deal with these issues,'' Neeleman said.

JetBlue said the first step in getting people to fly on the airline again was its introduction of a new customer bill of rights.

Under the bill, customers will be compensated based on the length of delays. The value of the vouchers range from $25 to the full amount of the ticket. The qualified delays include those caused by airplanes unable to taxi to the gate within 30 minutes and flight departures held up for a minimum of three hours, according to JetBlue.

If JetBlue cancels a flight within 12 hours of departure, customers can ask for a full refund. JetBlue said passengers would also receive vouchers if delays are the airline's fault.

JetBlue vowed to deplane passengers if an aircraft is delayed on the ground for five hours.

The airline said it was fully operational on Tuesday after a sequence of events led to the cancellation of 1,096 flights, tarnishing the reputation of a carrier known for its low fares and customer service. More than 100,000 passengers were affected.

Snow and extreme temperatures last week froze equipment and grounded the company's planes at JetBlue's terminal at John F. Kennedy International Airport in New York, trapping certain passengers inside the plane for as long as 10 1/2 hours.

JetBlue said it waited too long to call for help to get passengers off the planes because it had hoped the weather would let up and flights could proceed.

Bad weather delays and cancellations led to a spike in customer complaints that flooded the company reservations system, and many of pilots and flight crews ended up stuck in places other than where they were needed.

When the weather struck Feb. 14, JetBlue didn't have a system in place to reroute so many stranded flight crews, something it said it is working to rectify within a few weeks.

``What we did was wrong and we didn't have a plan,'' Neeleman said. He called last week a ``somber'' time.

To prevent future breakdowns, Neeleman said JetBlue will put in place a reserve force of employees in the New York area who can aid the airline in a crisis.

``Had we had that in place for this event, it would have been much better,'' Neeleman said.

Neeleman said JetBlue's reservation operations center in Utah was also overwhelmed.

``We are addressing that very aggressively,'' he said.

Since those ``cascading events,'' Neeleman has been trying to convince investors and customers that the airline will recover. On a conference call Tuesday, he faced a barrage of questions but maintained that JetBlue was not going away.

``This is a great company,'' he said. ``We've had seven years of unbelievable service.''

JetBlue's shares fell nearly 5 percent in afternoon trading on Tuesday.

The debacle is sure to hurt JetBlue's bottom line. Prudential analyst Bob McAdoo wrote in a note to investors that ``revenues and added expenses will cost the company about 4 to 6 cents in the March quarter.''

Neeleman said he expects JetBlue to hand out $26 million in refunds and credits and another $4 million in incremental expenses such as paying overtime for crews and chartering airplanes.

Neeleman said the company would provide more details about those costs in a filing later Tuesday with the Securities and Exchange Commission.

It's not clear if the damage to JetBlue will hurt its future prospects. McAdoo suggested the effects would be temporary.

``Although the press coverage of JetBlue's problems has been widespread, the problems experienced are not likely to be repeated nor any negative impact on the company's reputation be long lasting,'' he wrote in a note to investors. ``Other new airlines have experienced similar problems with few lingering image problems.''