JetBlue Hits Turbulence Case Study

Question I.
What types of information systems and business functions are described in this case?
The information system described in this case is the Transaction Processing System (TPS) which is used to perform and record the day-to-day business transactions including reservations, paperless ticketing and baggage handling. JetBlue attempted to standardize its IT processes by utilizing a single vendor for its technological framework for all facets of its operations from logistics to passenger online booking tools.
JetBlue’s mission was customer satisfaction and retention. From the beginning, efforts were made to attract passengers. E-commerce in the form of online ticket sales was a means of attaining customer satisfaction.

Question II.
What is JetBlue’s business model?
JetBlue’s goal was to deliver airline a luxurious customer experience while operating at low cost. JetBlue’s technological expenses were approximately one-third of its competitor’s IT costs in spite of the fact that operations were extremely reliant on automated systems. This automation helped keep headcount low and union affiliation nil. Planes operated at or near capacity as customers were attracted to JetBlue’s leather seating, personal entertainment systems and paperless ticketing – all at lower fares than their competitors, albeit with arrivals and departures to second-tier airports. How do its information systems support this business model?
JetBlue’s information systems supported its business model because they were standardized to involve a single vendor across its entire operation hence its IT cost remained low in comparison to its competitors. Additionally, web-based booking tools offered convenience to its customers, also at a low cost.

Question III. What was the problem experienced by JetBlue in this case?
The problem experienced by JetBlue in this case originated with a decision to proceed with its flight schedule in spite of an ice storm. Passengers were stranded as JetBlue ambitiously attempted to operate while other airlines opted in favor of grounding. Consequently, JetBlue passengers were stranded in planes that were frozen or trapped - some for more than ten hours. This experience severely damaged customer satisfaction levels with the carrier as flights were subsequently cancelled for the next six days due to the debacle.
What people, organization, and technology factors were responsible for the problem?
JetBlue’s low headcount led to staffing issues during this crisis. Communication systems failed and pilots and flight attendants remained out of position for days with no one available to direct them. Reservation systems also failed due to overload and luggage was lost when a flaw in its electronic luggage tracking system revealed that there was no way to determine if a passenger’s bag had been retrieved, or not.
While upper management was obviously key in the decisions involving staffing, IT expenditures, lack of consulting and JetBlue’s actual operating decisions, JetBlue’s CEO was held responsible and subsequently removed.
Question IV.
Based on what you’ve learned in this chapter, what kinds of systems and business functions were involved in JetBlue’s problems?
JetBlue’s TPS was ill-equipped to deal with anything beyond the norm with respect to utilization. Additionally, a more sophisticated logistics application was needed as evidenced by additional days of grounding due to crew displacement.

Question V.
Evaluate JetBlue’s response to the crisis. What solutions did the airline come up with?
Shortly after the crisis, public apologies were made by JetBlue’s CEO (David Neeleman). The airline acknowledged staffing issues and communication systems would undergo upgrades. Customers were promised that the carrier was committed to them.
How were these solutions implemented?
Communication software was introduced and employees were cross-trained in preparation for another such crisis. A passenger Bill of Rights was introduced to outline passenger rights under circumstances such as those that arose during the ice storm crisis.
Do you think that JetBlue found the correct solutions and implemented them correctly?
Although JetBlue identified its immediate weak spots and took steps to fortify the areas that were lacking, I feel that their solutions merely scraped the surface - an online communication tool for pilots and flight attendants – while a step in the right direction – hardly suffices as a solution for the communication problems experienced in a crisis such as the one described on February 14, 2007.
What other solutions can you think of that JetBlue hasn’t tried?
JetBlue needs to invest in a more reliable means of transferring its information to the SABRE system. Additional phone lines are also needed and a computerized system is needed to deal with lost luggage.
Question VI.
How well is JetBlue prepared for the future?
JetBlue is not well-prepared for the future. While it has acknowledged flaws in its reservations systems and communications infrastructure, the steps that were taken did not work toward dealing with the flaws, themselves.

Are the problems described in this case likely to be repeated?
Unless the carrier grows all aspects of its operations alongside its customer base, the problems described in this case could be repeated.
Which of JetBlue’s business processes are most vulnerable to breakdowns?
JetBlue’s most vulnerable business process that remains most likely to breakdown is its communication system. The aforementioned online communication tool for pilots and flight attendants does not suffice as a fix for a communication failure during a crisis of similar magnitude.
How much will a customer bill of rights help?
The Bill of Rights provides detail regarding compensation to its passengers for inconveniences experienced due to delays and cancellations. This extends a gesture of good will to its customers and states the carrier’s commitment to service.