JetBlue Airways Corporation has built its reputation on customer service to become a business school case success story. Since it was founded seven years ago, it has earned an illustrious status in the troubled airline industry by branding itself as different, especially in terms of cost and service. Over the last year, however, its glossy image started to tarnish as its rapid expansion coupled with higher fuel costs swung profits to losses. To combat that decline, it launched a “Return to Profitability” plan that involved raising fares, cutting back on its growth, and pushing into smaller, less competitive markets.
Still, its reputation for service remained largely intact. Then an ice storm in the Northeast on Valentine’s Day grounded flights and caused passengers to be stuck inside planes for as long as 10 hours. Additional thousands were stranded overnight or longer in crowded terminals. The airline failed to recover quickly from the storm, leading to more than 1,000 flight cancellations over the busy Presidents Day holiday weekend.
The company acted promptly to restore its reputation, with founder and CEO David Neeleman quickly and publicly acknowledging the mistakes the airline made. It took out full-page advertisements in several East Coast newspapers to apologize for the travel headaches, and sent lengthy mea culpa e-mails to all of its customers.
“We are sorry and embarrassed,” the full-page ad began. “But most of all, we are deeply sorry.”
The airline also enacted a new “Customer Bill of Rights” intended to alleviate passengers’ concerns. Now if JetBlue cancels a flight within 12 hours of its departure because of problems within its control, customers can ask for a full refund, a credit, or a voucher. If the airline delayed a flight in a situation within its control, passengers would receive vouchers ranging from $25 to the full amount of a round trip ticket, depending on the length of the delay. JetBlue also vowed to notify customers of delays prior to scheduled departures and to not only inform them of diversions or cancellations but also to give the cause.
But throughout the new bill of rights, the words “controllable irregularity” keep appearing. The way JetBlue describes it, that involves an event from which the airline can’t recover due to its own fault. So a weather-related delay means the company doesn’t have to pay up, but it would if planes were still grounded the day after a storm has passed. The qualification gives the New York-based airline room to decide whether it owes compensation to travelers caught in service snafus.
Significance: If JetBlue really wants to preserve its reputation for stellar customer service, it will have to be careful about using events beyond its control as a reason to refuse to pay cash or provide free tickets to displeased customers who will be expecting such treatment. A “controllable irregularity” might be interpreted differently by different people, who may not care about legal nuances and will simply take their business elsewhere if they are disappointed.