- The Washington Times - Monday, February 19, 2007

JetBlue Airways’ losing battle with Old Man Winter last week will have consequences that linger after the ice that grounded hundreds of its flights has melted, some analysts say.

But the airline’s strong reputation for customer service will help it win back most of its customers and investors.

“They were faced with some difficult circumstances last week, and they clearly made bad judgments — and it snowballed on them,” said Anthony Tangorra, chief executive officer of Latitude Transport Advisory, a New York transportation consulting firm. “But JetBlue is very proactive in response to customer service problems, and the next few weeks is an opportunity for them to show just how good they are.”

JetBlue’s public relations debacle began Wednesday when hundreds of passengers were left waiting on planes at New York’s John F. Kennedy International Airport because of a snow and ice storm. On one plane, passengers were stranded on a runway for almost 11 hours.

The New York airline since has canceled 1,000 flights, including 139 flights yesterday that it said was necessary to ensure flight crews received the legally mandated amount of rest before returning to service.

The incidents caused the carrier much public ridicule and led to condemnation from several lawmakers, including Sen. Barbara Boxer and Rep. Mike Thompson, both California Democrats, who vowed to introduce legislation to hold airlines more accountable for flight delays, the amount of time planes can sit on runways with passengers, and cancellations.

JetBlue management quickly accepted blame and said it will issue a full refund and a free round-trip flight to customers delayed aboard any aircraft for more than three hours.

JetBlue has had a loyal customer base since its founding in 1999, largely because of its low fares, quirky marketing and service-oriented features including seat-back televisions and leather upholstery.

So because of its untarnished past, passengers and investors will be more willing to forgive the airline, predicted Jonathan Bernstein, president of Bernstein Crisis Management in Sierra Madre, Calif.

“JetBlue had the advantage of having a cushion of good will going into this crisis,” Mr. Bernstein said. “Some organizations don’t have that — particularly airline organizations.

“They have a much better chance at surviving [this] with no long-term damage than a lot of other airlines would.”

Investors may shy away from JetBlue until confident the airline has weathered the maelstrom, some analysts say.

“But hopefully for [JetBlue], as long as there are no other events that are negative, [the airline’s image problem] should begin to go away,” Mr. Tangorra said. “Wall Street understands more than the customers do that the problems of last week were not because of mismanagement at JetBlue but because of a weather event.”

JetBlue shares fell 29 cents to close $13.56 Friday on the Nasdaq Composite Index. The financial markets were closed yesterday for the Presidents Day holiday.

JetBlue’s low-cost operational model was ill-equipped to handle last week’s storm, airline analyst Terry Trippler of Minneapolis said.

“To a great extent, what happened to JetBlue helped vindicate the [major] legacy carriers,” Mr. Trippler said.

“You can get all new employees and bright new shinny airplanes and they can tell jokes on the plane, but when the chips are down you don’t have any of those 30- or 40-year veterans who really know how to handle” a crisis.

Still, JetBlue Chief Executive Officer David Neeleman is shrewd enough to navigate the airline out of its current trouble, Mr. Trippler said.

“Neeleman doesn’t mess around,” he said. “He’s made gross errors in not having his airline prepared for something like this, but he’ll correct it.”

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