Customer Service at JetBlue Airways

Customer Service at JetBlue Airways

Customer Service and How it Adds Value for JetBlue Airways

Good service is not meant to make customers smile, but to make customers come back. -- Patrick De Pelsmacker and Philip J. Kitchen, Integrated Marketing Communications: A Primer, 2004

Flying today can be dirty business - and scary sometimes, too. Long lines for security clearance and ticketing, lost luggage, no smoking for the smokers, overpriced food and watered-down drinks in the terminal, screaming kids and cramped quarters in the economy section on most airplanes make flying anywhere a grueling ordeal for many people today. When the vivid memories of September 11, 2001 are thrown into the mix, many travelers may just think that staying at home this vacation sounds like a great idea. In this environment, providing passengers with quality service and a friendly touch can make or break an airline, and major carriers such as Southwest are proof positive of this. Nevertheless, even regional carriers can gain a competitive edge by providing quality customer service with a smile, and JetBlue Airways is also evidence of this in action. The fact that JetBlue's founder is a former executive of Southwest may have much to do with the company's current approach to achieving success, but the fact remains JetBlue is prospering where other carriers are failing. To determine what JetBlue is doing right where others are doing wrong in terms of the relationship between the company's crewmembers and its customers, and how these serves to add value for the company, this paper provides an analysis of the case study, "JetBlue Airways - Adding Value," including a critical review of the relevant peer-reviewed literature concerning this carrier and its customer service approach. A summary of the research and important findings are presented in the conclusion.

Review and Discussion

While it is frequently difficult to discern the core competencies of an organization except in retrospect, it is also clear that sometimes company's just luck out and happen to be launched at the right time and place in ways that contribute to their future success and this appears to be the case with JetBlue. Just a few years before (or a year after), and the company might not have survived at all, but the company's inauguration in 2000 appears to have been perfect. According to Doganis (2001), "By early 2000 there were a dozen or so low-cost carriers operating in the United States in addition to Southwest Airlines. The youngest was New York-Kennedy-based JetBlue launched in February 2000. With the exception of Southwest, most of these airlines had done very badly in 1996 and 1997 when their conventional competitors were chalking up huge profits" (p. 135).

By 1999, though, the majority of these carriers were enjoying profitable operations or at least significantly reduced losses compared to the previous years. When JetBlue was launched, "Traffic growth and revenues were sharply up as passengers, including business passengers, switched from the majors who were pushing up fares sharply to compensate for falling yields and rising fuel prices. In brief, the low-cost, no-frills model has clearly become a permanent feature of North American aviation" (Doganis, 2001, p. 135). The impact of these start-ups on the airline industry was almost immediate and profound. According to De Neufville (2006), "The rise of the low-cost carriers, whose business paradigm is to increase efficiency, has irrevocably reduced the cost structure and lowered the real price of air transport. Real average U.S. airline revenue per passenger mile has dropped almost 60% since deregulation. In 2004 dollars, average fares went from around 27 cents per passenger mile in 1980 to around 12 cents per passenger mile in 2004" (p. 347).

This new low-cost business model is characterized by some common features among the new airline start-ups during this period, including the following:

New discount upstarts have homogeneous fleets;

Fill a high percentage of their seats;

Have a quick on-the-ground turnaround;

Avoid formal ticketing procedures;

Have been aggressive in marketing over the Internet; and,

Usually only offer one class of service (Couldry & Mccarthy, 2004).

Furthermore, De Neufville (2006) points out that low-cost carriers typically operate differently from the legacy carriers (legacy carriers may fire workers and slash pay to reduce their costs, but this in and of itself does not make them resemble Southwest or JetBlue), and suggests that successful low-cost airlines share two other key strategies as well:

They avoid airports with congested airspace, runways, and taxiways; and,

They avoid expensive capital projects.

Although these start-up carriers generally keep costs down by eliminating in-flight meals, some of the smaller carriers such as JetBlue have adopted the most innovative approach to in-flight media. "In building up new fleets," Couldry and Mccarthy advise, "start-ups have the option to buy newer planes which more easily accommodate new technologies; the majors, on the other hand, have to retrofit a substantial percentage of their fleet. Small U.S. domestic carriers, such as JetBlue and Alaska Airlines, were among the first to implement live television reception on their planes, striking deals with the largest satellite broadcaster in the States, DirecTV" (p. 241). This approach provides JetBlue passengers with 24 channels of live television programming, including four ESPN channels, the Discovery Channel, Animal Planet, the Travel Channel, the Weather Channel and CNNfn (Couldry & Mccarthy, 2004).

There was also more than luck involved in the company's initial success. For example, although money may not buy happiness, it can sure help an airline off to a good start and this was certainly the case with JetBlue. According to the case study, "JetBlue Airways is the best-funded start-up airline in U.S. aviation history, with an initial capitalization of $130 million" (Bodouva & Bodouva, 2004, p. 315).

In spite of all of this affluence, the company chose to adopt a simple formula for success which is straightforward and to the point: "The company's strategy is to combine common sense with innovation and technology" (Bodouva & Bodouva, 2004, p. 315). Alas, "common sense" is a feature rarely found in most corporations' business plans, but this simple formula seems to have paid off in major ways for JetBlue. The company's leadership clearly used some common sense, though, when they acknowledged that the way people were forced to travel by air was a miserable experience for many, and it was their original goal to "bring humanity back to airline travel and make flying more enjoyable" (Bodouva & Bodouva, 2004, pp. 315-6). Moreover, from the outset, JetBlue's leadership sought to establish a mission statement that would actually be read and followed by the company's employees rather than a nebulous proclamation concerning the need to provide quality service. Citing a former vice president of human resources for JetBlue and current board member, Bodouva and Boudova report that, "JetBlue did not want a mission statement nobody reads. They want words that allow everybody to talk together. Having shared values make decision-making much easier" (p. 321).

Even though words do in fact have power, it is probably impossible to force employees to be friendly and courteous to others, but it is possible to inculcate a corporate culture that encourages and rewards a friendly attitude towards internal and external customers, and this is precisely what JetBlue did to help accomplish the above-stated goal. "JetBlue has created a strong and vibrant service-oriented company culture. The company reinforces this culture by explaining to its employees the importance of customer service and the need to remain productive and keep costs down (Bodouva & Bodouva, 2004, p. 317). Indeed, JetBlue makes it clear to their employees that being courteous to each other as well as the company's customers is one of the reasons they have a job in the first place. In this way, the company has enjoyed a win-win ride thus far by keeping both its employees and its customers satisfied by adding value wherever possible if such initiatives are felt to contribute to the company's financial performance. In this regard, "JetBlue believes that values drive all other activities and are the basis for development of an organization" (Bodouva & Bodouva, 2004, p. 321).

The authors of the case study also report that the company's founder and current chief executive officer, David Neeleman, was a former Southwest Airlines vice president and obviously learned from the all-time master of having fun times at work and making customers feel comfortable himself, Herb Kelleher. Likewise, "For his new airline, Neeleman began with the strategy of excelling in the attributes that really distinguish the brand at a relatively low cost, such as comfort, punctuality, and courtesy, while dispensing entirely with airline meals" (p. 317). As discussed further below, comfort and punctuality may in fact be more expensive than the case study's authors suggest when it comes to operating and maintaining an airline, but the fact remains that courtesy is absolutely free and this became the guiding light of Neeleman's approach to providing value-added services to passengers.

For example, some fundamental concepts of Neeleman's corporate culture were three principles, which were also known as the company's "golden rules," that helped communicate this strategy to employees, which are as follows:

Flawless execution at every customer contact point;

Making matters right with customers if the execution is not flawless; and,

Treating employees well.

It is clear that when busy employees and weary travelers are treated with respect, dignity and courtesy, it can make a profound difference in how the company operates and is perceived by customers - and potential customers -- and this is how JetBlue has succeeded in adding value through these simple but important techniques. "These guiding principles have been extended to all levels of JetBlue's operation, internally and externally, and have created unique customer appeal" (Bodouva & Bodouva, 2004, p. 317). These guiding principles have also been the driving forces behind JetBlue's efforts to gain additional market share by adding value from both the customer and employee perspective.

The impact of these foregoing value-added approaches has been significant and they have paid major dividends for JetBlue to date:

JetBlue has made significant progress in establishing a strong brand that helps to distinguish it from the competition. It seeks to be identified as a safe, reliable, low-fare airline that is highly focused on customer service, provides an enjoyable flying experience, and is constantly evolving; and the company's value-added services include:

Leather seats;

An uncommon amount of legroom;

Free satellite TV at every seat;

Airplane yoga cards (there cards are stored right next to the "barf bags" and inflight instructions on how to survive a crash, and provide JetBlue passengers with some useful stretching exercises to alleviate the tedium, monotony and cramped muscles that can result from enforced sedentary activities, but cautions that the exercises may make "you look like a real weirdo to your fellow passengers" (Bodouva & Bodouva, 2004, p. 320);

Assigned seats;

Ticketless travel;

No discount seats;

"TrueBlue" loyalty program

All fares are sold one-way (no Saturday-night layover required);

Online booking discounts;

Reliable performance;

High-quality service; and Safety (Bodouva & Bodouva, 2004, p. 319).

It is equally clear that Neeleman took what he learned during his tenure at Southwest seriously and has since fine-tuned what was best at Southwest to his own unique operations at JetBlue. In this regard, Ashby and Miles (2002) note that when the September 2001 terrorist attacks rocked the rest of the airline industry in 2001, Southwest Airlines' employees "quickly aligned, accepting pay cuts to avoid layoffs and maintain operations and low fares despite low loads. While United and other airlines reduced flights, Southwest kept a full schedule, winning customer and employee loyalty along with market share" (p. 108).

Unlike JetBlue, though, Southwest has spurned the strictly high-tech approach to ticketing embraced by JetBlue (although they remain in the vanguard of paperless travel) by ensuring there are humans involved in the reservation process. In this regard and in sharp contrast to JetBlue, Southwest uses an unsophisticated approach to this customer service function. Although Southwest has invested in CRM packages to track and analyze customer data, it also determined that the benefits of this approach failed to outweigh the associated costs. For example, Southwest specifically rejects multi-channel tools that are being used by other airlines such as JetBlue such as email and online reservations system menus because "they are too impersonal and take the cost out of customer contacts, but also the quality. It is aware of the fact that, by following this strategy, it ignores one of the basic principles of CRM, i.e. that the customer should be able to reach the company how and when he wants" (De Pelsmacker & Kitchen, 2004, p. 124).

These authors also suggest that JetBlue's investment in some features that contribute to its "making flying enjoyable" initiatives are prohibitively expensive and these resources should be invested elsewhere. For example, De Pelsmacker and Kitchen emphasize that investing in high-tech systems does not make good business sense if it does not adequately meet customer service requirements: "This technologically conservative point-of-view may be in line with the strategy of high-touch personal service; it may also become a fundamental weakness in a competitive environment in which high-tech customer contacts are saving money that is reinvested in extra value for the customer (JetBlue, another low-cost airline, puts a satellite TV in each passenger's back seat)" (emphasis added) (De Pelsmacker & Kitchen, 2004, p. 124).

These concerns do not seem to have affected the company's zeal for using high-tech approaches to help add value for their passengers, though. For example, in response to heightened concerns over aircraft security following the terrorist attacks of September 11, 2001, JetBlue installed onboard systems with two to four cameras outside the cockpit door and in the rear galley that were designed to warn the crew of possible hijack and air rage incidents (Couldry & Mccarthy, 2004). In addition, "Placards placed on cockpit doors advise passengers that they may be under video surveillance, assuaging fears of privacy violation (although the American Civil Liberties Union thinks otherwise)" (Couldry & Mccarthy, 2004, p. 245).

As noted above, like JetBlue, Southwest has also been a pioneer in paperless ticketing and online ticket selling, and it is well aware of the fact that in the future it will have to support its high-tech systems with customer service features that will make these efforts worthwhile for all concerned. Although every company is unique, of course, it would appear that JetBlue is continuing to use what is best from its competitors to help them achieve their organizational goals, and it is not surprising that many of these initiatives are reflective of Neeleman's experiences at Southwest.