Rumor has it that David Barger, CEO of JetBlue, will be stepping down soon and the sharks on Wall Street are already circling. JetBlue established itself in the early 2000’s as a customer focused airline and in that way sought to distinguish itself from other airlines, in fact, it was the only major airline that was able to turn a profit in the aftermath of the Sept. 11th attacks. Not bad for an airline that was still in its infancy and given the trepidation of fliers at the time.
While other airlines are charging more for less and cutting back services, JetBlue’s model has always been based on customer service with low fares, plenty of leg room, no checked bag fees and TVs in every seat back. Things that build customer loyalty but don’t necessarily add to a company’s bottom line. And that’s a problem for Wall Street. In light of Barger’s upcoming departure, the sharks, err…analysts, are already licking their chops about how a new incoming CEO might “foster a change in strategy throughout the company”, read: squeeze every penny out of customers just to add to the company’s stock value. These changes include cramming more seats into their airplanes and charging fees for checked bags and onboard internet. The sharks - excuse me, analysts - say that, “the revenue benefit to the company would probably trump any customer blowback”.
And there’s the rub. JetBlue has one of the highest ratings of major American airline companies and has been growing since their inception simply because they offer higher value to their customers, but that doesn’t sit right with Wall Street because Wall Street doesn’t understand customer value, they only understand bottom lines and ROI. So the question is, once JetBlue discontinues their customer-friendly services, how long will it be until their customers tell them to take a hike? Or until another airline comes along and offers these same services for free and swipes all of JetBlue’s formerly loyal customers?
To his credit, Barger, who has always had a customer first mentality, isn’t taking things lightly, saying in an interview, “You want to compare my track record to bankruptcies and layoffs? Go ahead. I’ll take that comparison.” But unfortunately for JetBlue, the sharks smell blood and they’re beginning to circle.