Service Marketing Article Analysis:

JetBlues Winter Nightmare

1. Introduction
2. Implication of service marketing to analysis of
the article
2.1 Service Recovery Strategy
2.2 Service Guarantees
2.3 Service Recovery Paradox
3. Personal Evaluation
4. Conclusion
5. Reference

1. Introduction
JetBlue Airways, commonly know as JetBlue is an American budget
airline, headquartered in New York City with its base at JFK
International

Airport.

This

article

entitled

JetBlues

Winter

Nightmare is published on 2014 January 7 on CNN website:

http://money.cnn.com/2014/01/07/news/companies/jetblue/.
This article mainly reports on JetBlues service recovery effort to
retain customer loyalty after it shut all operations at Boston airport
and three New York area airports due to ice storms in January. It
canceled 435 flights and affected 150,000 passengers. JetBlues
compensation plans for stranded passengers are comprehensive
and well designed including extra credits, frequent flier points, free
tickets and reimbursement of out of pocket expense on a case-bycase basis. JetBlue tried every possible way to earn their forgiveness
and loyalty. Lastly, this article relates to the similar incidence
occurred in 2007 February due to ice storms. It turned out that due
to satisfactory and timely recovery effort, JetBlue's rate of 0.67
complaints per 100,000 passengers is a fraction of the complaints of
some of its rivals, for example United Airlines (UAL) which had 2.3
complaints per 100,000 passengers.
2. Implication of service marketing to analysis of the article
2.1 Service Recovery Strategy
JetBluemustensuretheproperformofrecoveryafter150,000passengersand435
flightswereaffected.Theircustomersbasedonexperiencewithservicefailurefrom
otherairlinesorwordofmouthformedtheirrecoveryexpectationofafair,timelyand
accountable treatment. This could include both financial and nonmonetary
compensations to reduce afterward customer swithing to competitors. JetBlue has
takenacourseofcustomerfixstartegy(Exhibit1)inthiscaseratherthanaproblem
fixstrategybecausecustomerfixatthispointisthemosturgentandimportant.While
problemfixstrategycouldbemorelongtermsuchasoperatingefficiency,capacity
and tracking complaints. When the dealy occurred, JetBlue immediately refund

customers for the canceled flights and some customers wererebooked with other
airlines(O'Toole, 2015).Toensureappropriatecommunication,JetBluemembers
(TrueBlue)werecontactedthroughemailaddressintheirTrueBlueaccount.Non
TrueBlue members were contacted through contact information given when they
reservedthetickets.Flierswhobookedthroughthirdpartywerecontacteddirectly
throughagents.Toprovidefairandaccountabletreatment,JetBlueoffersTrueBlue
points (Exihibit 2), credit toward a future JetBlue flight, frequent flier
points, free tickets and reimbursement of out of pocket expense.
The above customer fix solutions are effective in saving companys
reputation and retain customers, reducing switching to competitors.

Exihibit1:CustomerFixandProlemFix

Exhibit2:TrueBluememebrandnonmemberflierpointscompensation
2.2 Service Guarantees

Service guarantee refers to an assurance and fulfillment of a

condition. Businesses especially tangible products give a pledge
that the product offered will perform as promised and this require
companys preparation to fulfill the service guarantee. However, for
intangible service are often not guaranteed because it is inseparable
from service provider and vulnerable to changes. This is especially
evident in JetBlues example due to unpredictable weather condition
and regulations such as the new Federal Aviation Administration
rules. Hence, JetBlue does not provide big guarantees very
frequently.
2.3 Service Recovery Paradox
According to Hart, compared to smooth and satisfactory service in
the first place, if a service company could turn an angry and
unsatisfied customer into a loyal and satisfied one, the customers
could stick to the brand and repeat purchase (Hart, 1990). In the
case of JetBlue, despite customers experiencing frustration and
delay when flights were cancelled. JetBlue has excellent customer
fix process to boost customers satisfaction and turn the winter
nightmare into its own advantage. Through generous and timely
compensation plans to customers, customer complaint rate has
significantly reduced. This can be seen from its JetBlues low
compliant rate of 0.67 per 100,000 passengers compared to 2.3 of
United Airlines. Furthermore, JetBlues stock price jumped 7% in
2015 despite its two major service failures in the past (Reed, 2015).
The reason for this paradox is due to the conditions necessary for
such paradox to exist. Firstly, the customer must view the failure of
service unstable and that the firm has little control over such failure.
This is true for JetBlue as the severe ice storm is not within its
control and it affected all airlines equally. Secondly, customers have
not experienced prior failures. It is unlikely that customers who
experienced 2007s ice storm are the same customers who travelled

with JetBlue in 2014. Hence, this suggests that customers could be

more lenient and forgiving when faced with JetBlues service failure.
3. Personal Evaluation
JetBlues service failure though urgent and severe did not inflict a
huge loss on the company and customer faith due to its quick and
responsive customer fix. It provided fair treatment to affected
passengers and view special case individually. This gives customers
great comfort and lessens their frustration and anger due to delay of
airports. However, JetBlue could focus not only on customer fix but
also more on problem fix to track the opinions of affected
customers. This helps JetBlue to understand the weaknesses of its
recovery strategies and prepare for any future similar events.
Furthermore,

they

should

keep

in

touch

with

the

affected

passengers to make them feel valued and well treated so as to

reduce switching to competitors.
4. Conclusion
Service failure for JetBlue indeed has caused the company money,
capital, human resource and reputation. However, due to little
control over natural disaster, customers are more lenient towards
the delay. Most importatnly, customers felt well treated and fairly
compensated for their loss so that they have a low complaint rate
towards JetBlues service failure. JetBlue has an effective and
responsive recovery strategies to focus on all customers and
minimise their loss. JetBlue also could tracked customers complaint
rate and opinions to better prepare for future events. This
experience also taught JetBlue a lesson which is to not give big
guarantees very frequently as intangible service is very susceptaible
to human and non-human factors such as weather conditio

Reference
Reed, T. (2015, April 29). JetBlue Jumps as Revenue Gains Surprise
Wall

Street.

Retrieved

April

30,

2015,

from

http://www.thestreet.com/story/13129769/1/jetblue-jumps-asrevenue-gains-surprise-wall-street.html
Compensation for delayed/cancelled flights. (n.d.). Retrieved April
30, 2015, from http://help.jetblue.com/SRVS/CGI-BIN/webisapi.dll/,/?
St=115,E=0000000000221608930,K=4648,Sxi=14,t=casePrint,cas
e=obj(395261),620,500)
O'Toole, J. (2014, January 9). JetBlue offers compensation to
frustrated

travelers.

Retrieved

April

30,

2015,

from

http://money.cnn.com/2014/01/07/news/companies/jetbluetravelers/

JetBlue's winter nightmare

By Chris Isidore
CNN Money (New York) January 7, 2014: 4:46 PM ET
Source:
http://money.cnn.com/2014/01/07/news/companies/jetblue
/
It's every airline's nightmare: Some of your busiest
operations grinding to a halt.
That's what happened to JetBlue Airways this week,
inconveniencing tens of thousands of customers and
raising questions about its basic competence.
JetBlue said it was forced to essentially shut operations at
Boston's Logan International Airport and the three New
York-area airports. While other carriers have canceled
flights, none has had to halt all operations at key airports.

Several days of bad weather and runway closings at New

York's JFK airport on Friday and Sunday sparked cascading
delays -- and the delays in turn caused JetBlue to run out
of available pilots.
JetBlue said it canceled 435 flights Monday, affecting
49,000 passengers, in part due to new Federal Aviation
Administration rules that went into effect last week
requiring more rest for pilots between flights. Some
150,000 JetBlue passengers have been affected by
cancellations over the past six days.
"The old pilot rules were somewhat more forgiving in
terms of how much delay you could operate with," JetBlue
chief operating officer Rob Maruster said in a conference
call with reporters Tuesday. He agreed with a questioner
who said it was "a bad time" for the implementation of the
rule.
Maruster said it was too early to provide a cost estimate
for the debacle. In a post on its website Tuesday, the
company outlined its compensation plans for customers
who experienced multiple cancellations, offering credits,
frequent flier points and free tickets.
Maruster said the last of the stranded travelers should be
taken care of by Thursday.
"We have resumed departures from both New York and
Boston, and the recovery looks very good right now," he
said. "All decisions were made for safety reasons."
Some experts say the airline should have been better
prepared for the events of the past few days.
"Tying it to the storm and the FAA is a way to deflect
criticism, in my opinion. In reality, I think they simply
screwed
up,"
said
Mark
Murphy,
founder
of
TravelPulse.com. "Case in point: Look at what's happening
with other carriers. Same storm? Yes. Same FAA rules
going into effect? Yes. Same disruptions? No."

JetBlue representatives said that other airlines had also

likely experienced challenges with the implementation of
the FAA rule, but simply hadn't been as forthcoming about
it.
FAA spokeswoman Laura Brown told CNN Tuesday that
JetBlue last year requested an extension to the Jan. 4,
2014, work hour rules deadline.
JetBlue was the only airline to request an extension, she
said. In October, the FAA sent JetBlue a letter declining
that request.
JetBlue is also the only major airline whose pilots do not
belong to a union. Union contracts at other airlines
frequently have rest requirements that exceed the new
rules, so the rule changes do not affect those carriers as
much as they would JetBlue.
The new rest requirements were implemented after an
investigation into a crash by a regional jet in Buffalo in
February 2009 that killed 50 people and was blamed on
pilot error. The Transportation Department said that crash
raised the issue of pilot fatigue as a top priority for
regulators.
JetBlue (JBLU) is particularly vulnerable to the bad weather
in the Northeast because 45% of its flights go through
either Boston or New York. It also is a relatively young
airline, having started 14 years ago, and doesn't have the
size or staffing of older established carriers to deal with
these kinds of disruptions.
But other critics believe it should have been better
prepared for the new FAA rules, given that they were
announced two years ago.
"This is not the JetBlue experience [passengers] have
come to expect and we will do everything we can to earn
their forgiveness and loyalty," said company spokesman
Anders Lindstrom.

Linstrom said JetBlue is trying to find seats on other

airlines. But canceled flights at other carriers have left
available seats at a premium.
The airline is also addressing requests for reimbursement
for out-of-pocket expenses on a case-by-case basis, but it
cannot guarantee any expense will be covered.
Beyond those costs, the airline could find itself forced to
cut fares or offer costly promotions to win over customers.
The airline has had to recover from this kind of public
relations disaster in the past. In February 2007, JetBlue
passengers were stuck on the JFK tarmac for 8 hours after
an ice storm. The problems cost JetBlue an estimated $30
million and the backlash cost the company founder and
CEO David Neeleman his job.
It also prompted calls in Congress for a "passengers' bill of
rights." The Transportation Department eventually passed
rules requiring airlines to allow passengers off stranded
planes or face significant fines.
But JetBlue has developed a reputation for good service
since those 2007 problems. In the first three quarters of
2013, DOT stats showed it had the fourth lowest rate of
passenger complaints in the industry, behind only
Southwest Airlines (LUV), Alaska Airlines (ALK) and Delta
Air Lines (DAL).
JetBlue's rate of 0.67 complaint per 100,000 passengers is
a fraction of the complaints of some of its rivals -- for
example United Airlines (UAL) had 2.3 complaints per
100,000 passengers. It also had one of the lowest rates of
canceled flights, according to the DOT.
--CNN's John Murphy, Mike Ahlers and Ren Marsh and
CNNMoney's James O'Toole contributed to this report.