Contrite JetBlue vows to do better by passengers

NEW YORK — JetBlue Airways introduced a customer bill of rights Tuesday that promises vouchers to fliers who experience delays, hoping the move wins back passengers after an operational meltdown damaged its brand and stock price.

Founder and Chief Executive David Neeleman described the crisis as "a huge bump in the road" but said JetBlue would move past it.

He said he had no intention of resigning after the worst corporate mess in the airline's seven-year history. JetBlue's shares fell 66 cents, or nearly 5 percent, to close at $12.90 Tuesday.

"I think I'm uniquely qualified to deal with these issues," Neeleman said.

JetBlue said the first step in getting people to fly on the airline again was its new customer bill of rights.

Under the bill, 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 delays a flight in a situation within its control, passengers will get vouchers ranging from $25 to the full amount of a round-trip ticket, depending on the delay's length.

Compensation will be made if a plane lands but can't taxi to its gate within 30 minutes.

And if a plane's departure is delayed more than three hours, passengers will be eligible for vouchers of at least $100 and up to the value of the ticket.

JetBlue also vowed to deplane passengers if an aircraft is delayed on the ground for five hours.

The airline said it was fully operational Tuesday after a sequence of events led to 1,096 flights being canceled, tarnishing the reputation of a carrier known for its low fares and customer service.

More than 100,000 passengers were affected.

Snow and extreme temperatures last week froze equipment and grounded the company's planes at JetBlue's terminal at John F. Kennedy International Airport in New York, trapping some passengers inside a plane for as long as 10-½ hours.

JetBlue said it waited too long to call for help to get passengers off the planes because it had hoped the weather would let up and flights could proceed.

Weather delays and cancellations led to a spike in customer complaints that flooded the company's reservations system, and many pilots and flight crews ended up stuck in places other than where they were needed.

When the weather struck Feb. 14, JetBlue didn't have a system in place to reroute so many stranded flight crews, something it said it is working to rectify within a few weeks.

"What we did was wrong and we didn't have a plan," Neeleman said. He called last week a "somber" time.

To prevent future breakdowns, Neeleman said JetBlue will have a reserve force of employees in the New York area who can aid the airline in a crisis.

Neeleman said the reservation-operations center in Utah was also overwhelmed. "We are addressing that very aggressively," he said.

Since those "cascading events," Neeleman has been making the media rounds, trying to convince investors and customers that the airline will recover as it struggles to keep fares down and earn a profit in the face of mounting costs related to fuel and other issues.

"This is a great company," he said. "We've had seven years of unbelievable service."

The debacle is sure to hurt JetBlue's bottom line. Prudential analyst Bob McAdoo wrote to investors that "revenues and added expenses will cost the company about 4 to 6 cents in the March quarter."

Neeleman said he expects JetBlue to hand out $26 million in refunds and credits and $4 million in expenses such as paying overtime for crews and chartering airplanes.

He said the airline would provide more details about those costs in a filing with the Securities and Exchange Commission.

It's not clear if the damage will hurt JetBlue's future prospects. McAdoo suggested the effects would be temporary.

"Although the press coverage of JetBlue's problems has been widespread, the problems experienced are not likely to be repeated nor any negative impact on the company's reputation be long lasting," he wrote to investors. "Other new airlines have experienced similar problems with few lingering image problems."

Terry Trippler, an airline expert, said JetBlue will overcome this public-relations nightmare. He said it should be able to continue to tout its service and discounted fares.

"People will forgive them for this bad week, and people will continue to book JetBlue," he said, because travelers get a "fair price and good service."

But he questioned the bill of rights, saying it could set a bad precedent and will likely reverberate throughout the industry.

"If you start paying people when you're late, other airlines could be forced to join, and then you're in a bidding war," Trippler said. "And when you're selling tickets for a $100 and giving $100 vouchers away, something has got to give. It doesn't make good economic sense."

David Stempler, president of the Air Travelers Association, said the bill could also put "subtle pressure, for instance, on pilots or mechanics who might rush what they're doing to avoid some of these penalties."

JetBlue carried more than 112,000 passengers from Seattle-Tacoma International Airport last year on routes to New York and Boston, according to Port of Seattle statistics.

It ranked 13th among domestic passenger carriers at Sea-Tac.