JetBlue Damage Control

Tuesday , February 27, 2007

By Terry Keenan



What a difference a week makes.

A few short days ago, JetBlue was in danger of becoming widely known as "Jet Black and Blue." But a combination of nimble damage control and a quick change of tactics in reaction to a Sunday night snowstorm has helped JetBlue's regain its footing. Corporate image experts are taking notice.

How did they do it? With a blunt three-word statement: I am "humbled and mortified.”

With that confession, JetBlue CEO David Neeleman managed to turn a public relations nightmare into a second chance at brand establishment at the airline he founded. It was the start of a remarkable 5-day turnaround that has set a new standard for corporate damage control.

With an icy snowstorm spiraling into the cancellation more than 1100 flights over the busy holiday weekend, JetBlue management faced a potentially ruinous situation.

But remarkably, now JetBlue appears to have regained the upper hand. Its quick cancellation of dozens of flights on Sunday and Monday also showed that JetBlue is learning quickly from its past mistakes in order to avoid a repeat meltdown. It's a lesson that other CEO's should study carefully and learn from.

On the face of it — the strategy is simple: accept blame, be humble, compensate and re-assure your customers. The fact that so few corporate chieftains (or politicians for that matter) follow the script, shows how far many so-called damage control experts can run afoul.

What was also so notable about Neeleman's efforts to repair JetBlue's image is that he did so without the typical trappings of the imperial CEO. Neeleman didn't hide behind spokespersons or an op-ed piece. Instead, Neeleman managed to put a human face on the public outrage over his company's performance.

Contrast that to Bank of America CEO Kenneth Lewis, who is trying to manage a P.R. crisis of his own. At issue: customer fury over his bank's efforts to make credit cards more easily available to undocumented customers. After nine days of bad press, Lewis finally addressed the controversy. But rather than address the issue head-on, Lewis wrote a lengthy opinion piece in Thursday's Wall Street Journal that did little to allay his critics.

The two situations are surely different — but no doubt Lewis would have been better served by advisers who would have encouraged him to quickly appear on television to explain Bank of America's position.

What also worked to JetBlue's advantage is that its stellar reputation was not built on aggressive advertising. but through enthusiastic word of mouth. The good will JetBlue had "banked" during its seven years of operation paid dividends many times over this week.

JetBlue certainly still faces big challenges getting its operations up to snuff, and another significant scheduling snafu will not be met with such customer forgiveness. But the stock market, as it often does, rendered its verdict — reflecting the collective wisdom about JetBlue's recovery.

Investors are clearly betting that JetBlue will more than endure the storm. "This mea culpa has likely gone a long way to mitigate customer frustrations," Morgan Stanley analyst William Greene wrote to his clients this week. Several other firms upgraded JetBlue's shares to a "buy".

Yes, sorry always seems to be the hardest word. But as the JetBlue debacle demonstrated, for the airline's employees and shareholders it may be the most valuable word in the dictionary. Too bad, so many other embattled executives are reluctant to use it.

Terry Keenan is anchor of Cashin’ In and is a FOX News Channel business correspondent. Tune in to Cashin' In on Saturdays at 11:30am and find out what you need to know to make your money grow and keep what you already have!