This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Candid JetBlue Learned From Its 2007 Mistakes

NEW YORK (TheStreet) -- In the six days from Thursday through Tuesday, U.S. airlines cancelled about 20,000 domestic flights, including about 1,800 flights on JetBlue (JBLU). Yet only JetBlue held a press conference to explain itself.

In fact, the harsh winter weather turned into an opportunity for JetBlue. It once again displayed why it is different than any other airline, just as it has been since it began flying in 2000, offering luxury service and low fares at an airport, JFK, which the rest of the airline industry then viewed as obsolete.

This week, as usual, JetBlue's effort to compensate passengers eclipsed what other airlines do: It offered a choice of refunds or rebookings, plus $50 credits or 5,000 frequent-flier points, plus extra credit for multiple cancellations.

Also, JetBlue took an unusual step when it shut down all Northeast operations for 17 hours from Monday afternoon into Tuesday morning. Lots of airlines shut down various operations -- some, in fact, acted more quickly at their hubs than JetBlue did, and suffered fewer problems -- but it was JetBlue that very publicly shut down nearly everything.

JetBlue's actions clearly showed the impact of the carrier's February 2007 operational meltdown at JFK, when the carrier seemed a bit too eager to operate in bad weather. Afterward, founder and then CEO David Neeleman apologized, very profusely and very repeatedly. The mistakes weren't repeated, but JetBlue's willingness to explain itself remains.

In recent years, the airline industry has moved to a policy of massive pre-cancellations in advance of weather problems on the theory that the worst consequences of a weather event would be to have passengers arrive at the airport only to find their flight cancelled, and to have airplanes and crews in the wrong places once operations resume.

JetBlue's shutdown was an effort to avoid those problems. Obviously, part of its rationale was that 80% of its operations involve two Northeast airports, JFK and Boston Logan. The four largest carriers are far more widely diversified in their geography, so a regional weather event will have less impact.

"If anything, JetBlue comes across as a little more honest than the other guys," said aviation consultant Robert Mann. "They were the only ones who were transparent about it. The other guys just hoped it would go away."

Also, Mann said, "What the other guys do is to cancel all their regional operations. Then they look great and their regionals tank." But JetBlue doesn't operate a regional carrier.

On the carrier's media conference call on Tuesday, Rob Maruster, chief operating officer, reminded listeners that JFK was shut down for four hours on Friday due to high winds and poor visibility, and for two hours on Sunday due to ice. He spoke of "a huge storm, followed by an ice storm, complicated by infrastructure challenges in the New York airports.


1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,493.37 -69.93 -0.42%
S&P 500 1,925.15 -5.52 -0.29%
NASDAQ 4,352.6390 -17.1340 -0.39%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs