commentary

 

THE JETBLUE MELTDOWN

Who’s Accountable for Airline Customer Service Failures?

By Kevin Mitchell
February 18, 2007

The problem was that management did not make a timely decision and inconvenienced travelers even placing some at risk. As the Express-Times wrote on Sunday, “The delay -- by several hours -- in recognizing that people weren't just stuck, some were facing hypothermia and other severe health complications without fuel, food, medications and water….”

This was the situation last Wednesday, but not at JFK with JetBlue. Rather, it unfolded on Interstate 78 in Pennsylvania as hundreds of travelers were stuck in their cars for up to 24 hours. Governor Ed Rendell apologized for the terrible ordeal indicating someone might get fired for mismanagement. Likewise, an embarrassed JetBlue CEO, David Neeleman, offered apologies for untimely management decisions as well as compensation to hundreds of customers stuck on planes, some up to 11 hours.

In Pennsylvania there will be an investigation into what went wrong. Eventually, a blue-ribbon panel will make recommendations to the governor, some of which will no doubt be implemented before next winter’s storms. However, travelers will receive no more than the governor’s apology and have little choice but to continue using Pennsylvania highways in the future. At JetBlue, the process is more immediate and punishing. Reporters and customers alike have pounded the airline. 

“Thousands of fuming JetBlue passengers were grounded this weekend”…said the New York Post. “JetBlue red-faced over strandings at JFK” read a Star-Ledger headline. “In today's society we as citizens/customers have the opportunity to disrupt a company's reputation,” stated the founder of JetBlueSucks.net. “The cancellations raise new questions about whether JetBlue’s management is equal to its ambitions,” exclaimed the New York Times. Ouch!

In the marketplace for commercial airline services, customers have choices and power to effect change; the media has an insatiable appetite for airline horror stories. In the case of JetBlue, the operational meltdown cost it millions of dollars in near-term lost revenue and higher costs, and badly tarnished its superior customer service image. The effectiveness of management in responding with changes to policies and procedures will determine its future success. The marketplace is holding JetBlue accountable, and like competitors before them, the pounding will likely lead to positive change.

JetBlue’s Neeleman is a smart, world-class entrepreneur and an airline industry icon. He will be driven to make sensible adjustments for the benefit of his customers and shareholders. In the immediate aftermath of the terrible conditions American Airlines’ customers endured on December 29, 2006, during a storm that paralyzed air traffic in Texas, the airline implemented new policies and procedures. The infamous January 1999 debacle at Detroit, during a horrendous snow storm, led to structural changes at Northwest Airlines and the justification of a new runway at Detroit Metro Airport.   

Indeed, the discipline of the marketplace has worked well. According to the Chicago Tribune, statistics from the U.S. DOT indicate that between 2000 and 2006, there were 330 instances (out of 88 million flights) where airplanes were stuck on the tarmac for more than five hours. Despite this overwhelmingly successful track record, there are some calling for government re-regulation of airline customer service standards; a “Passenger Bill of Rights” it is being dubbed.

One problematic proposal requires planes to be returned to gates after 3 hours on the tarmac. Despite the good news mentioned above, the better, unreported news is that there were likely hundreds of thousands of times where a captain decided to wait an extra 45 minutes for the next weather report and was able to take off. Yes, a plane may have been on a tarmac 3-1/2 or 4 hours, but the majority of business travelers on a Friday evening would rather get home to families latter than desired than spend a weekend in a distant city.

Another proposal would require compensation to passengers when airlines fail to deliver services as promised. This may be well intentioned, but it is an example of a dangerous idea with all manner of potential unintended consequences. It is imprudent to mix financial incentives and penalties with airline operations, go, no-go decisions and safety judgments.

On February 19, 2005, the No. 2 engine of a Boeing 747 failed after take off from LAX on a flight to Heathrow with 351 passengers on board. The captain decided to continue anyway with 3 engines. Because it was unable to attain normal cruising speeds and altitudes, the aircraft was forced to divert to Manchester, England. Under European Union passenger rights legislation, had the plane returned to LAX, BA would have had to compensate passengers some $250,000. BA denies that the penalty influenced its go, no go decision.

JetBlue has been managing in an exceedingly complex, pressure-cooker environment since Wednesday straight through this weekend. Frontline staff as well as executive management are no doubt physically, mentally and emotionally spent. The Sunday New York Times article is “Exhibit A” in the case against government involvement with airline customer service. It is supreme hubris to think that Congress could divine a set of passenger service standards that would deliver intended benefits without risking safety margins.

A survey currently underway by the Business Travel Coalition underscores the safety concern. Of 144 corporate travel managers surveyed thus far, only 10% would support a Passenger Bill of Rights in the absence of a guarantee that safety margins would not be decreased. Survey participants’ comments, representative of pro and anti legislation perspectives, are revealing.

“Yes, it is necessary to protect the public from this form of neglect and abuse. The law should be that the stranded passengers each should receive a large sum and not just a refund and a free ticket.”

“You can't lump cost and safety sacrifices together. I would gladly pay more for comfortable service being protected by a bill of rights but at no cost would I ever justify reducing safety constraints.”  

“This is a customer service issue. Every little thing can't be legislated. People/companies should just use a little common sense. Companies should reward employees who think outside the box to solve these issues.”

Interestingly, the New York Daily News reported Sunday, “As JetBlue was preparing to cancel 23% of its weekend flights, a pilot and co-pilot hopped a taxi from New York to upstate Newburgh, where one of the company's airliners was sitting unused. With the spirit that until last week seemed to make JetBlue unique, the pair flew to Kennedy Airport and continued on to Sarasota, Fla., with a load of passengers who otherwise would have been stranded.”

I am not certain if the pilots’ initiative represented out-of-the-box thinking, or was just common sense. However, I am certain that inflexible government-mandated service standards would tie the hands of airline and airport managers and likely result in a greater number of delays, cancellations and passenger disruptions than is the case today. BTC testified in Congress in 1999 against proposed passenger rights legislation. The Coalition believes it was a bad idea then, and still is today.

As Governor Rendell enjoys his Presidents’ Day holiday, David Neeleman will likely be reviewing, for immediate implementation, changes that will make his airline better. This is how a free market is supposed to work. We made a decision to deregulate the airline industry in 1978, with the notable exception of safety. It would be tragic if in an effort to re-regulate passenger service, we inadvertently undermined our airline industry’s laudable safety record.