Mike Paul's Blog - JetBlue’s Reputation In Crisis, Again!

According to Reuters, JetBlue Airways Inc., which was forced to cancel nearly a quarter of its flights this holiday weekend after last week's ice storm in New York, said on Sunday it expected to return to a normal schedule by today.

But it may take the low-cost airline a long time to regain its reputation after suffering harsh criticism from thousands of stranded travelers since the storm struck Feb. 14.

The airline admitted it didn't act swiftly enough to cancel flights after the storm struck and threw federally mandated air crew work-time schedules into disarray, resulting in massive flight cancellations at the start of a high-volume holiday period.

"This has never happened before on this scale," said JetBlue spokeswoman Tracy Sanford on Sunday. "We didn't cancel flights as much as we could have." She said the delays and subsequent cancellations had a "snowball effect" on air crew schedules.

The airline, already suffering from widely publicized delays and cancellations as ice and snow blanketed the New York area on Wednesday, said it canceled 173 out of a scheduled 600 flights Saturday and another 144 Sunday.

Late Saturday, the airline canceled another 139 flights slated for Monday, Presidents Day, to and from locations including Austin, Texas; Jacksonville, Florida, and Bermuda. It said it may yet be forced to cancel more and encouraged travelers to check the airline's Web site frequently.

The airline offered refunds and free flights to travelers scheduled for flights to and from a dozen or so cities and said it may reimburse some "on a case by case basis" to travel on other carriers.

The passenger strandings, coming in the wake of debacles at other U.S. airports in recent months, led to congressional calls to revive "passenger bill of rights" legislation, a push that abated in 1999 after the airline industry voluntarily agreed to customer service initiatives.

JetBlue said it is still assessing the financial impact of the debacle. In an interview last week, Chief Executive David Neeleman said debacle would cost the airline "many millions of dollars."

According to A.P., JetBlue Airways introduced a customer bill of rights today 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.

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.

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."

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."

A few comments from the Reputation Doctor regarding JetBlue’s reputation in crisis, again:

JetBlue CEO David Neeleman's statement about "being uniquely qualified" to deal with these issues" is full of hubris and inexperience.
With all due respect to Mr. Neeleman, in my opinion, he is not at all uniquely qualified to handle these crisis issues regarding JetBlue's damaged reputation. This is new territory for JetBlue, they have made big mistakes, they have no outside PR counsel on this crisis or past crises and humility at this time is a major tool for rehabilitating a reputation in crisis. Hubris is not a tool needed in any crisis and Mr. Neeleman gave a few statements filled with hubris.

Don't make promises you can't keep. Better to manage expectations then over promise and appear like Pinocchio.
Neeleman said the problem will soon be fixed and it will not happen again. How can he make such a claim? His airline is moving into unchartered territory for this small and growing airline and unrealistic expectations of future excellence can hurt JetBlue's reputation for the long-term with many key stakeholders.

JetBlue needs to hire an excellent PR firm with seasoned crisis public relations and reputation management experience today!
JetBlue is now negatively branded with a reputation as the cheaper airline you don't want to take when bad weather hits because you won't get off the ground for many hours or days. Look for consumers to not forget. In addition, larger airlines are sure to remind us all why they believe their service is more reliable and give more options in bad weather.

Remember, do the right thing when your reputation is in crisis and seek the counsel of an experienced reputation management expert. It will be a major challenge, but ultimately the rewards of repairing your reputation will be great. Why? Because Your Reputation Is Everything! ™

Mike Paul is editor of The Reputation Doctor blog. The Reputation Doctor is a nickname given to him by various clients. Mike's blog is located at www.ReputationDoctor.com. He appears regularly on Fox News Channel, CNN, MSNBC, Court TV, ABC News, ESPN, CBS News, BBC, and others as a weekly contributor and expert in the global news regarding corporations, CEOs, political leaders, athletes, celebrities, and other organizations with reputations in crisis. Mr. Paul is also president and senior counselor of MGP & Associates PR (www.mgppr.com), a leading strategic public relations and reputation management firm based in New York. For interview requests, speeches, senior counseling or other business opportunities with Mr. Paul, call 212-595-8500 or email info@mgppr.com.

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Comment from: Gemni [Visitor]

Despite those troubles, JetBlue's solid reputation largely stayed intact — until Valentine's Day. That's when a severe ice storm struck the Northeast, freezing planes to the ground and causing passengers to be stuck inside aircraft for as long as 10 hours. Then the airline failed to recover quickly from the storm, leading to more than 1,000 flight cancelations over the busy President's Day holiday weekend.

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Oct 14, 2009, 6:24 am

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