A Case Study on

JetBlue Airlines
Course: Service Marketing; Course Code: MKT 412 (2)

Submitted to:

Saadia Shabnam Senior Lecturer Department of Business Administration East West University, Dhaka

Submitted by:

1. Chowdhury Ishita Israt Id. 2009-1-10-198 (Sec-2) 2. Farhana Sharmin Id. 2010-1-10-128 (Sec-2) 3. Sanjib

Submission Date:

25 February 2013

Summary
JetBlue is a low-cost domestic airline in the United States and has an interesting combination of implementing its low-cost and differentiation strategy. From the beginning of its inception, the airline grew to become the 11th largest player in the airline industry in a short span of 6 years. JetBlues success is due to more than weakened competition, but it was from the start when the airline paid more attention to its identity as a brand. With its new planes, low fares, nonunionized labor, and an effective business model, JetBlue caught the big carriers off -guard. There has also been a consistency and coherency in the companys service ideology of putting a human element back into flying that has resonated deeply with passengers. Despite its success JetBlue has faced several challenges that have not only affected the airline industry but also its own core existence. To better understand the profitability and risks involved in the airline industry; one must know a little about the industry as a whole. In order to understand how new aircraft might fit into the current market; one must understand the customer. To meet the requirements of their increasingly discerning customers, some airlines have to invest heavily in the quality of service that they offer, both on the ground and in the air. This case study examines JetBlues core service positioning and its operational challenges within a very turbulent industry.

Reasons of Service Failure of JetBlue

One of the biggest disasters that happened in JetBlue history took place on Valentines Day, February 14, 2007, a high air-traffic day. Caught by a bad winter storm and bad airline planning, JetBlue passengers ended up spending as many as 11 hours trapped on planes on a frozen tarmac in New York. Flights throughout the nation were stranded due to bad planning. Customer service was damaged for JetBlue, as most people were not happy with the long amount of time they were spending on the planes. Passengers on all airlines experienced delays and cancelled flights, yet JetBlue was the airline making it into the news for the excruciatingly long runway delays, cancellation of all flights, and long wait to claim baggage. The reasons behind this huge failure of JetBlues service can be categorized into following issues;

1. Unavailability of the Service Quality that was Promised:

The First of all failure of JetBlue was the failure to provide the quality of service that was promised. The news media focused on the issue that the company that once promised to Bring humanity to air travel had abandoned its commitment to stellar customer service and became an uncaring airline. Moreover JetBlue had not the proper service strategy for any kind of weather emergency which drove the company to many other service failures. Before the Valentines Day events happened JetBlue had no effective plan that would have helped defuse the situation that they were in. If they had a plan they would have been able to notify passengers earlier of the delays and cancellations.

2. Late/Slow Response:
JetBlues initial responses to the weather disruption on Valentines Day were not quick and immediate. While the storm was occurring and even immediately afterward, JetBlue failed to cancel flights on time, leaving some passengers stranded on the tarmac for as long as 10 hours. The policy of initially postponing, but not cancelling flights, resulted in

snowballing cancellation for nearly a week, with long lines at the airport as customers attempted to get on flights. It also happened before in May 2004, when JetBlue introduced a new aircraft the Embraer 190. The aircraft arrived behind schedule.

3. Employees Communication and Responsiveness:

A basic problem was JetBlues internal communication system which led to lower quality in employee responsiveness. The ice storm had left a large portion of the airlines 11,000 pilots and flight attendants far from where they needed to be to operate the planes, and JetBlue lacked the trained staff that was needed to find them and tell them where to go. It was the first time in the companys history that they had so many people out of position. Another problem was the reservation system; the system was so overwhelmed that customers were unable to get through to human agents to check on a flight. One of the significant problems about employees responsiveness was demonstrated after the Valentines Day storm melt-down situation occurred, which is that JetBlues managers always followed a Wait and See approach with the weather. This created the situation of late cancelling of the flights and all the hazards of the passengers.

4. Execution:
When the new aircraft was introduced JetBlue was failed to execute a satisfactory performance by both the aircraft and the employees. They had many of its planes and flight crews scattered across the rest of the country were out of place due to the disruptions at its hub in New York. The in-flight entertainment system which is so integral to the passengers experience took longer than expected to install. Also pilots and mechanics were not properly trained in operating the new aircraft, which led to grind down the on-time performance and cancellations of flights. David Neeleman cited multiple operational failures that compounded the crisis. Among the primary culprits: inadequate communication protocols to direct the companys 11,000 pilots and flight attendants on where to go and when; an overwhelmed reservation system; and the lack of cross-trained employees who could work outside their primary area of expertise during an emergency.

JetBlues Service Recovery

After the tragic service failure JetBlue started its recovery with ensuring the Outcome fairness of the service, by issuing public apology and announcing full refund and a free roundtrip ticket to any passenger detained onboard for more than three hours or whose flight was cancelled. And they also relaxed the policies of rebooking for the customers who were affected by the storm. For the further recovery of services and assuring the quality JetBlue followed the following strategies to recover their service from failure;

1. Fail-Safe:
JetBlue had no service recovery plan. JetBlue isnt the only airline or company without a service recovery plan and employees empowered to put it into practice, however. It took United Airlines almost four months to offer to reimburse meal, hotel, car rental, and airline tickets for passengers who were stranded on two flights in late December. Before the March 16th storms were to arrive, JetBlue officials let the passengers know the day before that there were going to be delays and weather cancellations. Letting the passengers know earlier enabled them to adjust their plans. JetBlues revised policies and procedures addressed many of the issues that caused their original problem.

2. Quick Response:
JetBlue acted more quickly, neither airline acted quickly enough. The magic with service recovery is that it has to happen on the frontline, immediately, not by a senior executive the next day or the next week, And this time JetBlue didnt get late to take necessary recovery steps for the failures. They Quickly established their commitment to Visible Leadership policy by making David Neeleman the companys public face, granting dozens of media interviews and apologies.

3. Explanation: When David Neeleman came in public he issued a personal apology for the losses of all the passengers and the companys failure. He accepted the responsibility, expressed remorse and pledged to prevent this kind of problem from happening again.

4. Cultivate Customer Relationship:

To encourage healthy CRM JetBlue published a Customers Bill of Rights, specifying how and when it would compensate passengers for delays and other problems. Reaction to this bill was positive. USA Today published that JetBlues service failure was inexcusable but its response is praiseworthy.

5. Experience:
Neeleman learned from the failure and used the experience to build a rather improved service recovery system. He changed information systems to keep track of the locations of its crew, upgraded the website to allow online rebooking, and trained staff at headquarters to help out at the airport when needed.

6. Fairly:
After the tragic service failure JetBlue started its recovery with ensuring the Outcome fairness of the service, by issuing public apology and announcing full refund and a free roundtrip ticket to any passenger detained onboard for more than three hours or whose flight was cancelled.

7. Service Guaranty:
By issuing the Customers Bill of Rights JetBlue ensured a service guaranty for all the customers.