JetBlue Airways founder steps down as CEO

May 11, 2007|By James Bernstein | James Bernstein,Newsday

JetBlue Airways Corp., the low-cost carrier that once was a model for the industry but more recently has suffered steep financial losses and embarrassing service disruptions, may be a different airline now that its board has eased out David G. Neeleman as chief executive.

Neeleman, who founded Jet- Blue in 1998, was replaced yesterday by David Barger, the airline's president, industry analysts said. Neeleman will remain JetBlue's non-executive chairman.

The move signals that there could be several major changes. JetBlue is likely to be run more like other airlines, at least in an operational sense.

The airline has always been reluctant to cancel flights, even if they are delayed by as much as 12 hours or more. That's what got the airline into so much trouble Feb. 14, when it did not cancel flights before a severe snow and ice storm in the Northeast.

About 1,000 JetBlue flights were unable to get off the ground, stranding hundreds aboard planes sitting on the tarmac, some for as long as 11 hours or more.

More flights are now more likely to be canceled in the face of bad weather, said Robert W. Mann Jr., an independent analyst and consultant.

"In the original Neeleman era, this airline never canceled a flight," Mann said. "They would operate 12 hours late if they had to. It ran very much like a charter airline. His methodology was very much like Morris Air's back in the 1980s."

Neeleman co-founded Morris Air, which began charter operations in Salt Lake City, in the mid-1980s. It was acquired by Southwest Airlines in 1993.

A second change, analysts said, might be establishing a first-class section aboard JetBlue flights.

Neeleman has always resisted the idea, saying all passengers should be treated equally no matter what they pay for their seats. But a spate of losses in recent times - including a $22 million loss in the first quarter of this year because of payouts the airline had to make after the Valentine's Day storm - might be changing things.

Some business travelers might think twice about flying JetBlue in the wake of its storm problems, said Alan Bender, a professor at Embry Riddle Aeronautical University in Daytona Beach, Fla.

"If it appears they're losing out on people paying higher fares, then I would expect them to institute a first-class seating," Bender said.

Bryan Baldwin, a JetBlue spokesman, said Neeleman will take on a more strategic role, looking for new opportunities for the airline in the United States and Europe.

"JetBlue is still his baby," Baldwin said. "He just hasn't been able to spend the time looking for the next great idea."

Barger, 49, who has been Jet- Blue's president since the airline's beginnings, is seen as more of an operational executive. Barger was a vice president at Continental Airlines, heading its operations at Newark Liberty International Airport.

Analysts said change was evident in early March, when Jet- Blue hired Russell G. Chew as chief operating officer. Chew spent four years with the Federal Aviation Administration as chief operating officer and 17 years with American Airlines, the nation's largest carrier, as managing director of system and strategic operations planning. The airline, analysts said, was looking for more operational executives.

The company's stock closed yesterday at $10.89, up 49 cents or 4.7 percent for the day.

James Bernstein writes for Newsday.

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