Jetblue : Ice Storm

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JetBlue Airways:
Regaining Altitude after the Valentine’s Day Massacre of 2007

A Submission to the Arthur W. Page Society Case Study Competition

2 Abstract Valentine’s Day 2007 changed the course of history for JetBlue Airways. The upstart low-fare airline – which had enjoyed unprecedented acclaim from customers and industry observers – suddenly found itself in the midst of its first major operational catastrophe. A winter storm that enveloped the New York metropolitan region and JetBlue’s hub at John F. Kennedy International Airport left hundreds of the company’s passengers stranded in the terminal, and worse, in planes on the tarmac. The flight disruptions at JFK plunged JetBlue’s entire operation into chaos, forcing the carrier to cancel more than one thousand flights over a six day period. The cancellations cost the airline an estimated $20 million in revenue and $24 million in flight vouchers to customers who were impacted by the disruptions. JetBlue founder and CEO David Neeleman and his executive team knew they had to find a way to restore the company’s once sterling reputation. This case study describes the corporate communication dilemma faced by JetBlue Airways in the wake of its 2007 winter storm-related crisis known as the “Valentine’s Day Massacre.”

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Table of Contents Introduction …………………………………………………………………………….. JetBlue Takes Off ……………………………………………………………………….. The Perfect Storm ………………………………………………………………………. On Thin Ice ……………………………………………………………………………… 4 4 6 7

JetBlack and Blue ……………………………………………………………………….. 8 Misery Loves Coverage ………………………………………………………………... Congress Comes Calling ………………………………………………………………. Dilemma ………………………………………………………………………………… 9 10 11

Discussion Questions …………………………………………………………………... 14 Appendices ……………………………………………………………………………… 15 References ……………………………………………………………………………….. 19

4 Introduction For JetBlue Airways, which prided itself on bringing the “humanity back to air travel,”1 Valentine’s Day 2007 served as a stark reminder that every honeymoon eventually comes to an end. The New York-based airline began the year on a roll; growth both in terms of destinations and fleet size was far outpacing even the most ambitious projections. JetBlue enjoyed a cult-like following among its loyal customers, thanks in large part to uncommonly attentive service, generous legroom, free satellite television feeds in every leather seat, and of course, the company’s signature blue Terra potato chips. In fact, the airline ranked highest in customer satisfaction among low-cost airlines in 2006 and among all major airlines in the United States in 2005.2 Yet as a winter nor’easter barreled toward the New York metropolitan region on February 14, 2007, JetBlue leaders were blissfully unaware that the next seven days would be by far the most trying in the company’s eight year history. By February 19, the company had cancelled more than one thousand flights and incurred tens of millions of dollars in losses. Worse, JetBlue’s sterling reputation was now tarnished because of bad luck, flawed decision-making, and multiple systemic failures. As pressure mounted, JetBlue founder and CEO David Neeleman encouraged his executive team to search for bold and inventive solutions. If that meant parting with convention, then so be it, Neeleman told them. One thing was clear: JetBlue Airways needed a plan to win back customers, reassure employees and investors, and restore its public image. JetBlue Takes Off The launch of JetBlue Airways in 1999 was never supposed to work. After all, of the 58 start-up jet airlines that had commenced operations since the U.S. government deregulated the industry in 1978, only two survived.3 The prospect of making money in the airline industry is so exceedingly difficult that billionaire investor Warren Buffet once famously remarked that capitalism would have been better served had someone shot down the Wright brothers’ prototype airplane at Kitty Hawk, North Carolina, a century...
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