Lessons in ChaosBy Mel Duvall | Posted 2007-04-05 Print
A Valentine's day ice storm put a strain on JetBlue's systems and processes for handling reservations, rerouting traffic and tracking flight crews. How did they handle it?
Lessons in Chaos
Analysts say JetBlue is far from alone in suffering an operational meltdown. In fact, there were a number of other passenger horror stories at other airlines this past winter.
How JetBlue responds to its failings, however, will determine whether passengers return.
"Until this occurred, I don't think JetBlue had a test of their systems," says Dean E. Headley, associate professor of marketing at Wichita State University and co-author of the Airline Quality Rating, which ranks airlines according to criteria such as online performance, mishandled baggage and customer complaints. JetBlue was the number-one-rated carrier in the ranking for 2003, 2004 and 2005 (the 2006 rating is expected to be released in early April).
Vendors and analysts alike also point to a number of new technologies in the wings that may help airlines like JetBlue. Sabre launched a new system last fall, for example, that allows airlines to figure out the best alternative to a cancelled flight for an individual passenger and automatically rebooks it. "An airline can now re-accommodate all the passengers from a fully loaded jumbo jet in five minutes—a process that in the past took hours," says Ilia Kostov, vice president of product management and marketing at Sabre Airline Solutions.
Airlines are also capitalizing on new business intelligence applications to make better use of centralized passenger databases. Lydia Pearce, a senior partner in the travel industry practice with Teradata, a provider of data warehouse systems, is working with a large U.S.-based airline (which could not be identified) that installed a centralized database to capture all passenger information, from frequent flyer numbers through to reservation information and actual flight details. Using that database, the airline now runs business intelligence queries to determine, for example, how many flight disruptions, cancellations or delayed arrivals its "gold" level members experience in a given month. That way, the airline can proactively reach out to customers who may have been inconvenienced and ensure their continued business.
"They are able to automatically generate an apology and offer some sort of compensation, and then watch that passenger's record to see if it had an effect," Pearce says. "Capturing the impact of the action you took is just as important as the action."
IBM is also working with a number of airlines, including JetBlue, to install more sophisticated kiosks at airports. With these kiosks, says Bruce Speechley, a partner in IBM's travel and transportation practice, airlines may be able to automatically present passengers on cancelled flights with rebooking options, avoiding calls to reservation offices. Some airlines, Speechley says, are experimenting with systems that will present a passenger with a rebooking option, and if they choose not to accept it, offer three or four alternatives.
No matter what technologies JetBlue does decide to put in place, it won't matter if management makes the wrong calls.
For his part, Neeleman vows to learn from the event and win back customer loyalty. That promise was quickly put to the test when the East Coast suffered other major weather disruptions on Feb. 26 and March 16. This time, JetBlue immediately cancelled flights systemwide and was able to get its operations mostly back to normal the following day.
As a new CIO, Mees says the experience taught him more in a few days about the company's systems and employees than he would have learned in months.
"It helped me gain a higher respect for my team, and get to know each of them and their skills better," he says. "I think it was also beneficial for the technology staff in general. They hadn't spent a lot of time out at the airport. Now, they've seen how the systems are being used under extreme conditions—that's tremendously valuable."
Headquarters: 118-29 Queens Blvd., Forest Hills, NY 11375
Phone Number: (718) 286-7900
Business: A fast-growing low-cost passenger airline, operating approximately 500 daily flights and serving 50 destinations.
Chairman, CEO: David Neeleman
CIO: Charles Mees
Financials in 2006: $2.4 billion in revenue; $1 million loss.
Challenge: Win back customer loyalty in wake of major disruptions in service from winter storms in February.
- At least double the number of agents who can simultaneously use its reservation system, from 650 in early February to more than 1,300 in six months.
- Fast-track a project to add the ability to rebook a seat via the company's Web site, completing the work in one month instead of three.
- Limit the time passengers can be held on planes to fi ve hours before they must be deplaned, from previous system that left the decision to the discretion of pilots.
- Refine a new database system to track lost baggage so that it can be a core JetBlue application, instead of previous system that relied on manual processes.
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