Saul Ruiz

MGMT 320

Jet Blue Hits Turbulence

Case Study

1. What types of information systems and business functions are described in this
case?

The information systems and business functions described in this case are

Transaction Processing Systems (TPS), Customer Relationship Management

Systems (CRM, and Executive Support systems (ESS). The TPS system is

responsible for tracking ticket reservations and transactions. The CRM systems

provide customers the ability to communicate with JetBlue and acquire updated

flight information such as cancellations and delays. The ESS system provides senior

management a way to address strategic issues and planning based on results

provided by the systems.

2. What is JetBlue’s business model? How do its information systems support this

business model?

JetBlue’s business model was based on providing luxury and excellent

customer service at the lowest price in comparison to other airlines. Jetblue was

able to provide this luxurious flying experience by investing and using information

systems. These systems automated the process of ticket sales, and baggage

handling, they were also used to manage planes, crews and scheduling.

3. What was the problem experienced by JetBlue in this case? What management,

organization, and technology factors were responsible for the problem?

 A fierce ice storm hit New York City and caused an enormous crisis for Jet

Blue. The first problem was management; they were more interested in making a

profit than in ensuring they had systems that could handle an increased amount of

transactions if needed. They spent 1.5 percent of revenue on information

technology while their competitors were spent 5 percent. Senior management

assumed they had learned to work lean and smart based on the success they were

having. In an effort to maintain their reputation Jet Blue avoided cancellation of

flights while there competitors began to cancel. Weather conditions and delays

caused customers to flood JetBlue’s reservation systems and the systems were

unable to handle the onslaught. Systems tasks that included rebooking, baggage

handling, and the location of crew members became unavailable. In addition,

JetBlue did not have systems in place to keep track of off-duty flight crews and lost

baggage. Another problem was that Jet Blue did not have enough qualified

personnel to staff its phone lines, they had reservation agents that worked from

home and linked to a reservation system through the internet, this resulted in

customers not having the ability to determine the status of their flights due to

phones lines being jammed, and lack of response from the reservation systems.

4. Based on what you learned in this chapter, what kinds of systems and business

functions were involved in JetBlue’s problem?

One of the major failures was the TPS system which was responsible for

tracking ticket reservations and transactions. Because of TPS failure, Jet Blue had

problems rescheduling and rebooking passengers. The next big problem was its

breakdown in the CRM systems; Jet Blue did not have enough qualified personnel to
staff its phones, which resulted in customers not being able to communicate to

determine the status of their flights, in addition, their website could not handle the

spike of so many visitors trying to acquire information and stopped responding. The

ESS was involved due to the involvement of strategic planning throughout the

process, senior management did not plan accordingly in response to the company’s

rapid growth. The Human resources processes also failed by not responding to the

need of additional personnel to keep up with the company’s rapid growth.

5. Evaluate JetBlue’s response to the crisis? What solutions did the airline come up

with? How were the solutions implemented? Do you think that JetBlue found the

correct solutions and implemented them correctly? What other solutions can you

think of that JetBlue hasn’t tried?

Through the whole process, JetBlue’s CEO David G. Neeleman apologized and

took responsibility for the crisis. JetBlue responded to this experience by deploying

new software that sends recorded messages to pilots and flight attendants inquiring

about their availability. They also promised to train 100 employees from their

corporate office to serve as backups and upgrade their website and reservations

systems. One important customer relations strategy that they put in place was a

customer bill of rights to enforce standards for customer treatment and airline

behavior. The solutions implemented were correct but JetBlue needs to stay

maintain them current to stay competitive with other airlines and to avoid a similar

crisis in the future. To avoid similar possible scenarios, JetBlue needs to consider

training the staff in quick reactionary methods that will simulate similar situations

and also test its system more frequently.

6. How well is JetBlue prepared for the future? Are the problems described in the

case likely to be repeated? Which of JetBlue’s business processes are most

vulnerable to breakdowns? How much will a customer bill of rights help?

For the most part it seems that JetBlue learned a valuable lesson from this

wake up call. According to Liz Roche as cited by Laudon and Laudon (2010) “JetBlue

demonstrated that it’s an adolescent in the airline industry and that it has a lot of

learning and growing up to do” (p. 74). The problems described in this case study

may happen again if JetBlue does not stay up with current technology or maintains

an adequate personnel staff. According to PRNewswire (2011) “JetBlue has

successfully transitioned to a new reservations system and an upgrade to a new

loyalty program, and both projects were expertly executed by our IT team with

minimal impact to our daily operations and maximum potential for future growth.”

The customer bill of rights implemented will help JetBlue monitor its services and

make them aware of problems that their systems may not be able to identify.

References

Laudon, K. C., & Laudon, J. C. (2010). Management information systems: Managing the digital firm

(11th ed.). Upper Saddle River, NJ: Pearson.