CASE STUDY ANALYSIS: JETBLUE

SUBMITTED TO DR. SUGANT R

SUBMITTED BY GROUP 11

18070 Deepa Puranik

18136 Karthik K

18105 Pavan Kumar

18031 Adarsh

18164 Salapu Sravani

1. What Went Wrong on February 14?
A strong ice-storm hit New York on 14th February 2007 and as the company were wrong in
thinking that the storm would reduce, they faced a strong offense from the customers. More than
1000 flights got cancelled and there was a huge loss of $30 million which is said to be a
“Valentine’s day nightmare- Severe ice-storm in NYC” and effected a costly error and a
customer disaster.

 Due to bad weather 10 passenger flights failed to take off.

 Passengers waited for a long time with little or no food
 Due to 10 hours of halt, the air ventilation stopped, and toilets piled up.
 No JetBlue employees to guide passengers.
 The calls that were received from the customers and their guardians in huge were not
managed by the JetBlue’s front office.
 No info about take-off.
 Jet Blue couldn’t provide any bus facility to for transporting customers from runway to the
terminal
 JetBlue narrowly started the flight operations which is unsafe & unethical for not loose
profits.

2. How did JetBlue handle the crisis?

During the crisis
 JetBlue concentrated on earning profits and started the flight operations which is unsafe
& unethical, they didn’t realize it as warning stage or prodromal stage.
 Crisis hit JetBlue as 10 passenger flights failed to take off due to bad weather conditions at
this point, they reached Acute stage.
 There was an overall damage to JetBlue’s brand, public relations and corporate where they
suffered chronic stage.
 CEO of JetBlue came forward and addressed the media and apologized for the
inconvenience and reached to a resolved stage.
 Immediately after the crisis
 Published code of ethics reviewed and implemented new policies like Customer bill of
rights.
 Promised full refund and free round-trip tickets for customers detained on runway for more
than 3 hours.
 Trained their employees to handle any such crisis or emergency situations and followed all
the promises made strictly.
 Passengers were removed safe from planes if left on runway for more than 5 hours.

3. What could JetBlue have done to handle the crisis better?

The JetBlue could have handled the crisis in a better way if they had done the following things.

 There should have been an internal communication and coordination between airline staff.
As we can see from the case that there was lack of communication and coordination
between airline staff as they had no clue on what was going on and there were no answers
with the staff for customer’s queries.
 JetBlue delivered its first news release late on February 14, apologizing to customers and
calling the day’s events unacceptable. But Neelman did not appear in the media to address
the situation until February 19. If JetBlue executives responded more quickly, the extensive
use of apologies may not have been necessary.
 JetBlue should have provided appropriate communication with the customers directly
besides media interviews.
 There should have been a contingency plan. But in this case we can say that JetBlue had
no contingency plan for such an event. People were stranded for up to nine hours on planes
with nothing to do. Passengers were literally left out in the cold for hours on end without
food, proper rest room facilities or basic necessities
 Tactics like evading responsibility due to the weather, could have been utilized as part of
JetBlue’s explanation of the crisis if they had responded more quickly, especially while the
storms were still in motion.
 The JetBlue should have communicated with the passengers on board information about
the situation (Winter storm).
  They could have cancelled the flights sooner to prevent stranding passengers.

4.What are the long term and short-term implications of the problem?

Even though the problem of snow occurred due to external and uncontrollable situations, it is the
mistake of Jet blue because it still chooses to operate by neglecting potential dangers

Long term implications

 Customer will lose the trust in the airline because it is not just the money that they lost.
People lost their precious moments. So compensation may made them satisfied but the
customers will feel difficult to trust the company again
 Company cannot use “Jet blue experience” as a differentiating factor as it may turn as
negative factor
 As the company is low cost it always requires large number of passengers and that is the
reason why it chose to operate on that day. So due to this if the number of passengers
reduced in short term, it will affect the business model of the airline
 The reputation of the company will also fall due to this and it will affect the company
internally. It will also affect in reducing employee morale and goodwill of the company.

Short term implications

 It will lead to frustrations in the travelers as they were stuck there for long time
 Customers are unsatisfied and it will result in negative publicity

5. What are the service recovery strategies that were adopted by JetBlue?

A service recovery strategy is the response of service provider in case of service failure. The
primary focus is basically on customer retention and not the attraction. Service recovery plays a
very important role in achieving customer satisfaction and it also has a direct impact on customer
loyalty and future profitability of the company. Some of the service strategies include such as
encouraging and tracking complaints, to ensure quick response to the customers who complained
and to learn from the recovery experience and use tools to evaluate the experiences.

The service recovery strategies adopted by the company are:

 The company issued a public apology

 It also announced to give a full refund and a free round-trip ticket to any passenger detained
onboard for more than three hours and the airline announced that it was relaxing its policies
about rebooking so that customers who were affected by the storm would not be penalized
for booking new flights
 Jet blue made a quick response, the service recovery was initiated by the front line
immediately and not by any senior executives. The company established a visible
leadership policy by facing the public, media interviews and apologies
 David Neeleman gave an explanation regarding the failure that happened and accepted the
responsibility to prevent this kind of problem happening in the future
 The company also published Customer Bill of Rights, which created a positive impact in
the customers/passenger’s mind
 The company improved its service recovery system by keeping track of the locations of its
crew, allowed to make online booking by updating the website and made sure to train the
staff members at the headquarters to help out at the airport whenever required
 The company also made sure to provide a service guarantee to all it customers by providing
Customer Bill of Rights

6. What are the Positives and Negatives of Customer Bill of Rights of JetBlue?

Positives

 Although government opinion felt that the crisis was inexcusable, the firm was commend
ed for the client Bill of Rights
 Notification shall be made of delays before planned departure, cancelation or misappropr
iation shall also be reported to the cause
 Specifies how and when a business will offset delays and other issues to travellers

Negatives

 A voucher that is not acceptable to many of the clients who value the time more than the
voucher will be provided to most of the service failures.
  The payment of vouchers is questionable because it is impossible to quantify time lost or
postponed.
 The customer's mind is doubtful when the ticket is canceled by JetBlue, as JetBlue did
not refer to the clause "In case of unprecedented conditions in which JetBlue sadly has to
cancel its flight"
 Departures of up to 3 hours are given by a mere $100 voucher, dubious because a
thousand dollars meeting may be missing from certain customers. The airline should
rather mention that it would attempt to avoid departures and reimburse them for more
than 3 hours at all cost.
 Overbooking: The airline states, on its face, that its pre-booked ticket could be refused
and that the overbooks on airlines constitute an infringement of customers ' confidence.

7. Does Customer Bill of Rights of JetBlue conform to all characteristics of an effective

service guarantee?

No customer service guarantee is not confirmed by bill of rights. Because it is the assurance that
is given after the incident as a part of service recovery. An effective service guarantee should give
hundred present assurance that this incident will never happen again. Here there is nothing is
mentioned about designing of better service standards so we cannot say that Customer Bill of
Rights of JetBlue conform to all characteristics of an effective service guarantee