By Chris Sloan / Published March 17, 2014 / Photos by author
The second in our two part series, find out what makes JetBlue’s corporate so unique, but does blue translate into green? Read part one!
The cornerstone of the JetBlue Culture are “The Be’s: Our Jettitude”. These values are constantly instilled in each crew member, right down to appearing on each identification badge. CEO David Barger, who has been with the company since the beginning, and VP/Customer Service Frankie Littleford who worked for David Neeleman back at his original airline Morris Air personally take the Baby Blues through “The Be’s”:
Be thankful to every customer – Acknowledge every airline is getting better so we have to be appreciative of our customers. JetBlue doesn’t carry passengers we have customers.
Be engaging – Just try to be present and be engaged. Littleford says this is as simple as showing someone whose bag has been lost the computer monitor so they can see it is being addressed, or pilots addressing the customers before the flight on the PA system from the front of the plane in person, not behind the cockpit door.
Be in blue always – personal appearance, how the terminal looks, and how the airplanes look all matters. Littleford says Dave Barger “has X-ray vision and sees gum in the corners. If a tray table is broken what does that say about the airplane as a whole?”
Be Personal – Be present; know what’s happening on the plane. Littleford tells a story of some recent flights she’s been on. “If you’re flying to Syracuse, it might be a big basketball game and we became Jet Orange. Realize where you’re flying as the flights are all different. Have fun with where you’re going. I was on a flight on the JetBlue Boston Red Sox themed plane flying to Tampa and the gate agent comes on the P/A and says ‘If you’re a Tampa Bay Rays fan you will be boarding last’”.
Be the answer – If you don’t know, help find someone who knows),
Be _____ – Find your own be. How do you want to be? Fill in the blank. This is the well respected empowerment part of the JetBlue culture.
The airline business is an industry known for multi-million dollar pieces of flying aluminum, egos as big as the sky, financial volatility (an understatement to say the least), tense and outright hostile relations between management and labor, not to mention feelings ranging from apathy to downright antipathy by its customers.
Indeed, many passengers would find a trip to the dentist more enjoyable than flying. Do these new-age egalitarian values and platitudes that aim to, as the carrier claims, “bring humanity back to air travel” translate into truly better customer service, personnel morale, and improved financial results?
From a customer experience perspective, Barger says “you can tell if the flight is clicking right off the bat.” Simi seconds that. “Culture is what people do when people aren’t watching. Culture is service. What a difference body language, eye contact and a smile make.” Henry Harteveldt, a senior analyst at Hudson Crossing, believes that the culture does translate to better service. “Because 80% to 90% of what airlines do are the same, corporate culture can have a disproportionate impact on the passenger experience, at all touch-points. JetBlue is a shining example of this.”
“Culture is what people do when people aren’t watching. Culture is service. What a difference body language, eye contact and a smile make.”
The airline also works hard to gauge customer service in the field via several programs. First up, “Culture is Service”, is a program for cabin and ground crews. The program is based on what percentage of customers gave the staff member ‘Wow’ scores in surveys. The results move a meter that motivates all crew members to be on their game and help each other out. Unlike other airlines, though, even the flight deck crew has its own program. Though voluntary, the Leading Edge Program provided customer-driven feedback to participating captains every sixty flights.
Not that the cabin crew need too much motivation, says Layton. “We are the first impressions people get about JetBlue. Customers decide how they feel about the airline after meeting us. They come on with expectation of how we’ll be. I get a charge out of when people are happy. I feel bad when we have a bad flight. I take it personally. If we’re happy, our customers will be happy.”
Addressing morale, JetBlue employees recognize each other’s performance in a program called Lift where they receive bonuses and other perks, but according to Simi “most perform intrinsically as they want to serve. A thank you and note of appreciation typically goes the farthest.” The airline also runs a program where employees help each other financially and in a myriad of other ways. This program came heavily into practice when many JetBlue employees lives were disrupted by Hurricane Sandy, including 100 who lost their homes.
Layton adds that morale, and therefore customer service, are high in part thanks to the exceptional freedom given to him to do his job. “I am empowered to do whatever it takes to keep customers happy if I can justify it in one of my five values. Why did I comp all the drinks? The TV’s were not functioning all the flight. Why? We were very delayed whether it was our fault or not. It’s the right thing to do. My supervisor said ‘nice job’”.
Hartveldt agrees that “The airline succeeds because it places such great emphasis on internal communications and creating and sustaining a positive work environment. Its employees are both trained and empowered to make decisions that take care of the airline’s customers. JetBlue is also careful about the people it hires, even if they are not in customer-facing roles. Attitude is as important as aptitude.”
DOES BLUE TRANSLATE INTO GREEN?
While all this is great for the JetBlue’s customer and employees, the effect on the airline’s bottom line is mixed. “Well, so far JetBlue has unperformed the industry in terms of financial performance. Certainly they created an offering that people were willing to pay for, but they also have a relatively high cost base for what they do.” says Snyder. Indeed, the carrier’s 2013 unit costs, at 11.71 cents, are 15-20% higher than those of ultra-low cost carriers like Spirit Airlines, Allegiant Air, or Frontier Airlines. Unfortunately, JetBlue has to compete with these carriers for leisure travelers, which certainly creates a challenge. As fellow network-LCC hybrid Southwest Airlines has found out, maintaining an employee-friendly culture is hard on the financial bottom line.
Yet the impact of corporate culture has certainly contributed to revenue growth by attracting new and high-paying customers, even if the effect is not necessarily quantifiable. JetBlue’s financial results are certainly strong on their own, though they lag behind those of Delta, Southwest, and the ULCCs since 2009. JetBlue’s annual net profit has risen steadily from $58 million in 2009 to $168 million in 2013, while its operating margin, at 7.9%, is better than every nationwide network carrier save Delta.
More important, however, is the role that JetBlue’s corporate culture will play in its future finances. As a one-time low cost carrier trying to change over to a full-fledged network airline, JetBlue is undergoing a company-wide restructuring almost as challenging as a merger. Things like tackling business travel in Boston, launching the Even More premium product, launching Mint, and (eventually) launching long haul international service with a business class product represent a remarkable evolution from JetBlue’s founding business model. The United-Continental merger shows what can happen when a company’s corporate culture isn’t set up to handle that kind of change, and so the most significant financial impact of JetBlue’s corporate culture has been to allow the company to survive (thus far) these business model evolutions with the bottom line unscathed.
FEELING A LITTLE BLUE?
The airline, accounting for about 5% of the U.S. market, is finding it more challenging to be a disruptor and innovator competing in a land of now profitable, giant legacy carriers and their alliances in a post consolidation environment.
First up, ironically an improving economy has added to the airline’s pressures. JetBlue’s rivals, now out from under the thumb of bankruptcy, have caught up and in some cases surpassed the airline on a number of fronts: the hard product of live DirecTV that was once so innovative has been matched by carriers offering the same thing, or going a step further and offering competitive entertainment options with TV and/or WiFi. And of course there’s been the rush by legacy carriers to upgrade premium cabins, something JetBlue doesn’t offer…yet.
JetBlue is challenging this competitive position with its new core economy offering and premium cabin Mint Product. It will feature high-speed satellite based internet dubbed FlyFi along with an upgraded in-flight entertainment system featuring multitudes of high-def channels.
JetBlue’s fleet, once brand new, has aged and are some older planes are showing their age. JetBlue began taking delivery of new, larger Airbus A321s in late 2013 and has ordered the next generation A320 neo family of aircraft. Troublesome, JetBlue’s costs from labor (even though it is non-unionized) to maintenance for the aging fleet have increased while the legacy competitors have re-organized under bankruptcy and reduced costs. Of course the employee ranks have swelled and aged (affecting health costs) as the airline has only grown and never furloughed a single person, ever.
Mother nature again didn’t help matters when the recent weather related operational disruptions in January when JetBlue was forced to cancel much of its schedule have begun to taint its reputation. Many wondered if this was a repeat of 2007 all over again. While the airline is in crises, remains profitable, and generally well regarded, its indisputable that a perfect storm of circumstances have conspired to bring its highly valued JD Powers numbers a bit.
WHAT WILL BLUE DO?
Now, more than ever, culture matters as the overall mission the company lives by is the key to the carrier maintaining its edge as the competition improves their game.
Instead of being intimidated, the Baby Blues in the audience seem captivated and ready to take on the challenge as they introduce themselves one by one around the room. “I am so excited. I want to jump out of my seat” says one cabin attendant. “I’m happy to be on team JetBlue and be with my new brothers and sisters” a new pilot passionately remarks while adding that his “new favorite color is blue”. Another says “I’m changing my name for my initials to Lucky Winner” as I got chosen by JetBlue”. From a place of totally honesty, one anxious Baby Blue who used to play for the New York Mets confides “I am a total newbie to the airline thing and I am a nervous wreck but so excited”.
Likewise, the existing Blue Crew seems equally buoyant while acknowledging the challenges ahead. CEO Dave Barger hammers home the crux of the issue: “Anyone can replicate planes. They are like bricks and mortar. No one can replicate the culture. I am really jazzed to do this. Working with us is not for the faint of heart. It’s about interaction as much as transaction. What got us here will get us there from a cultural aspect. You can be a small player and be disruptive in industry landscape. You don’t have to be the biggest. You just have to be disruptive.”
Layton puts things into perspective from his nearly fifteen years with the company “I was here when customers said ‘you all are great, but let’s see how it is in five years.’ Media doubted us. As we’ve grown, it’s been challenging, but my responsibility and all of our responsibility is to keep the culture alive and flourishing.” Littleford echoes “We need to keep the small feeling while we’re growing. We need to continue to inspire humanity. We need to watch our competition, who is stepping up”. Finally, Simi points out that the Blue Crew is in this together “We are family who you can trust. We have your back.”
Next, stay tuned for an inside look at JetBlue University, coming soon!