JetBlue, Again:
Did its "customer bill of rights" provide any real value to its customers?
30 Jun 2007 in Regulatory Policy
JetBlue is back in the news. On Wednesday, JetBlue flight 62 was scheduled to leave Ft. Lauderdale, Florida at 2:30 pm and arrive at New York's JFK Airport at or before 5:20 pm. It actually arrived Thursday at 3:21 pm -- almost 25 hours later.
In February 2007, JetBlue suffered its "worst operational week" trying to fly during an ice storm that paralyzed the Northeast. Other airlines canceled their operations. There was a flurry of interest (now dissipated) in Congress to legislate a "customer bill of rights' (CBOR) for airline passengers. JetBlue announced its own CBOR almost immediately after the ice storm.
What difference did JetBlue's CBOR make to its customers?
The story is reported by Arlene Satchell and Tom Stieghorst of the South Florida Sun-Sentinel. While other airlines canceled flights from Florida to the Northeast because of bad weather there, JetBlue didn't:
Flight 62's takeoff at 2:30 p.m. Wednesday was delayed for three hours. The jet departed, only to be diverted by bad weather to Atlantic City, N.J., where passengers stewed on the tarmac for four hours. At 12:30 a.m. Thursday, they were allowed off the plane. It would be another four hours until they finally were sent to a hotel for the night. The flight ultimately arrived at JFK International Airport at 3:21 p.m. Thursday.
They report that JetBlue paid for hotel rooms and promised to reimburse taxi fares and provide vouchers for future travel. But what benefits did passengers receive on account of JetBlue's Customer Bill of Rights? Apart from the being informed that the delay was due to weather -- which passengers surely knew about -- it appears that they gained nothing.The reason is that nothing which happened to flight 62 appears to be covered. The CBOR addresses departure and ground delays caused by "Controllable Irregularities." When we first posted an analysis of JetBlue's CBOR, we noted that JetBlue never defined the term "Controllable Irregularity." Since then,What it's done so:
Controllable Irregularity: A delay, cancellation or diversion that is not caused by a Force Majeure Event (defined below). Examples include: crew unavailability due to JetBlue’s scheduling (not due to weather-event related disruption); delay or cancellation due to maintenance; that which is considered reasonably within JetBlue’s control.
What happened to flight 62 was not a departure delay due to a "Controllable Irregularity."
The CBOR also promises certain benefits in response to onboard ground delays. But being delayed on the ground at the airport in Atlantic City doesn't qualify as a ground delay. According to the CBOR:
Ground Delay: A Ground Delay is a delay where, upon departure from the gate, the aircraft is delayed from taking off; or upon arrival, the aircraft is delayed from arriving at a gate or hardstand/air stairs for safe deplaning. A Ground Delay may occur on arrival or departure. However, in the case of arrival, if your flight lands early (prior to scheduled arrival), we do not begin calculating the delay time until after the scheduled arrival time.
What happened to flight 62 was not an onboard "Ground Delay."
In our earlier post we characterized JetBlue's Customer Bill of Rights as a marketing policy that helps distinguish its product from its competitors, not a genuine "bill of rights."
We think it's odd for sellers (or buyers) of travel services to try to establish the "rights" of buyers (or sellers) Air travel is a contract in which sellers such as JetBlue agree to provide certain specified services to buyers in return for a specified cash payment. Any person not disapproved by the federal government for airline travel may either agree to pay this amount and receive the specified services, or not. So we interpret JetBlue's "customer bill of rights" as a new set of marketing policies that primarily concern how the airline wants to position itself with respect to future buyers in a crowded air travel service marketplace. Possibly JetBlue also intends to use this new policy to prepare for congressional oversight and potential future regulatory action.
We regard this as a useful thing to consumers, because consumers will differ with respect to which product they want. Whereas other airlines cancel flights when bad weather is expected to cause delays, Jet Blue's policy is not to cancel -- even when delays are expected to be extensive. If consumers pay attention to this important product difference, they can sort themselves out according to which product they want. If they prefer not to wait in airports, they can patronize airlines that preemptively cancel flights when bad weather looms and rebook their travel plans. If they don't mind waiting, they can patronize JetBlue and know that the airline will leave as soon as weather permits and get them to their destination as soon as weather permits, though it might take awhile.Armed with this information, JetBlue's customers should not complain about delays, for that's the bargain they struck when they bought their tickets from JetBlue. Customers of other airlines should not complain about preemptive cancellation, for they had the option of flying JetBlue and arriving at their destination as soon as possible even it meant 25 hours in transit.
What's not clear is why JetBlue believes that this product distinction is good for business. Not only are they held (perhaps unfairly) to the standards of other airlines that have established different policies with regard to cancellation, they may well be losing a lot of money. For flight 62, they had to bear all the costs of transporting passengers from Ft. Lauderdale to Atlantic City and from Atlantic City to JFK, and do so without earning any revenue (they agreed to provide refunds). Plus, they had to bear the cost of overnight accommodations in Atlantic City and provide vouchers for future travel. Bearing these costs is likely to make JetBlue more eager to cancel in the future, and over time their policies will slowly evolve to look more like their competitors. They can sustain their policy only if they can avoid making these various concessions, and it's unlikely that they can do that.
