Being based in BOS I always have my eye on JetBlue developments. I am an avid trueblue member and have been a fan of them since they began making Boston a focus city. They are my trusted airline when I need to get to the Caribbean and fly them whenever I get a chance. I was a little put off when they announced plans to institute a check bag fee but the reality of flying today, is if you want the cheapest fare you have to pay for incentives. When Wall St. started to put pressure on the airline to institute fees and pushed growth, you could smell the change in the air. The first move was boot the old CEO Dave Barger, who I personally was a fan of.
Earlier this month Robin Hayes a 48 year old British born career airline professional took over as JetBlues CEO. His main task is to balance Wall St. demand with passenger satisfaction. He needs to continue to increase profits without destroying the passenger friendly brand that Jetblue has work so hard to build. JetBlue was the first to offer Free seat back TV to all passengers and has resisted change throughout its history. To pleases investors, Hayes announced that JetBlue will add a fee this spring for the first checked suitcase — a move estimated to bring in an extra $200 million annually by 2017. The fees I can deal with but they also plan to add 15 more seats on most A320’s, my loyalty starts to wain. That should increase the profit per flight, but a main reason I fly Jetblue is for the comfortable spacious seating.
In another move to shake up the executive ranks, Marty St. George was appointed executive vice president of commercial and planning, a position that includes leading JetBlue’s sales, marketing and revenue teams, the carrier announced on Monday. St. George joined JetBlue in 2006 and most recently was the carrier’s senior vice president of commercial. His promotion was one of five announced in February, including Jeff Martin to executive vice president of operations and Jamie Perry to vice president of brand and product development. According to JetBlue the promotions are “an ongoing refinement of how we organize our teams at JetBlue to ensure we have the best talent and the right structure in place to achieve our goals for crewmembers, customers and shareholders”. Effective business speak indeed.
The Wall St. Effect
Part of the reason I believe Dave Barger was pushed out was because of his lack of receptiveness towards investors. He was great for passengers, building up the brand to focus on the customers rather than the bottom line. His resistance to change might have been his downfall. As noted above Hayes has a much more positive relationship with Wall St. but it also trying to stay visable to his employees and the flying public. Like Barger, Hayes fly’s to Orlando every two weeks to welcome the new crop of employees and kicks off the training periord. For the passengers he knows nobody wants less leg room but he is trying offset the negative by increasing the size of the seat-back TV screens and tripling the amount of channels. Will ploys like this work? For me legroom is king and I can deal with 30 channels as a opposed to 90. Hayes has his work cut out for him and it will take quite a balancing act to appease pax and the money men, but in the end if profits continue upwards, his job is probably safe.
Trial By Profits
How should we judge Hayes and how long should we give him to bring results? If you are a shareholder it of course will be by ROI. How much of a breakdown in JetBlues culture and brand can be allowed before profits are effected? If their route expansion continues and their ticket prices remain low, passengers might be able to put up with a lot. I mentioned in my previous tripchi Richmond Airport Review, I got a ticket from RIC-BOS one way for $39. That is an incredible deal. I will continue to be an avid JetBlue flyer if $39 fares keep coming my way, even if I am a little cramped.