msnbc.com news services
updated 2/20/2007 9:03:15 PM ET 2007-02-21T02:03:15

The chief executive of JetBlue Airways Corp. said Tuesday that reimbursing passengers stuck on about 1,000 delayed flights and updating its operations to prevent further problems could cost the airline $30 million or more.

“It’s going to be very expensive,” CEO David Neeleman said in an interview on NBC’s TODAY show. “I don’t have the final number, but it’s going to be maybe $20 million or $30 million and maybe a little bit higher.”

The discount airline is struggling to make up ground after the worst crisis in its eight-year history, as it canceled more than 1,000 flights following an ice storm last week, leaving many passengers stranded. It usually operates about 600 flights a day.

JetBlue, which has won fans in the past for its reluctance to cancel flights because of bad weather, is blaming the problems on its inability to cope with rescheduling so many flight crews.

“We had a weakness in our system,” said Neeleman. “We were overwhelmed.”

Neeleman in the interview unveiled what he called a “Customer Bill of Rights” which contains a sliding scale of travel voucher reimbursements for delayed passengers.

He said the reimbursements would apply to passengers delayed over the past few days. “We’re going back and retro-acting all that, we’re going to give that to all those customers,” Neeleman said.

Under the new plan, passengers will get a $25 flight voucher for flights that arrive half an hour to an hour late; a $100 voucher for flights one hour to two hours late; the value of the one-way ticket for two to three hours late; and the value of the round-trip ticket for flights that are four or more hours late.

He added that no JetBlue employees would be fired over the delays and cancellations.

JetBlue canceled almost a quarter of its flights on Monday, but said it planned to restore full operations on Tuesday.

The onslaught of angry and disgruntled travelers at JetBlue’s terminal at John F. Kennedy International Airport, its New York hub, appeared to ease on Monday as service desks functioned more smoothly. Customer calm prevailed despite the cancellations of 139 of 600 scheduled flights at 11 other airports.

Last week’s snow and bitter cold temperatures froze equipment and grounded the company’s planes at Kennedy, stranding passengers inside them for up to 10½ hours. JetBlue, which prides itself on low fares and great customer service, said it waited too long to call for help in getting the passengers off the planes because it hoped the weather would let up and the flights would be able to proceed.

The weather delays and cancellations led to customer questions and complaints that overwhelmed the company’s reservations system, and many of its pilots and flight crews wound up stuck in places other than where they were needed.

Monday’s cancellations gave the airline time to get equipment to the proper places and helped make sure all flight crews had legally mandated amounts of rest before flying again, JetBlue spokesman Sebastian White said. Planes were being repositioned on Monday to be ready to go on Tuesday morning, he said.

When the bad weather struck Feb. 14, JetBlue didn’t have a system in place for many stranded flight crews to call in to be rerouted, something the airline is working to rectify, Neeleman said. The service breakdown “was absolutely painful to watch,” he said Monday.

One travel expert suggested the airline had brought the crisis on itself by trying too hard to accommodate its passengers.

“Most airlines don’t try to operate when there is an ice-storm problem — they’ve learned that it’s better to cancel all flights at the outset and then try to get back to normal operations as quickly as possible,” said David Stempler, president of the Washington-based Air Travelers Association.

Stempler said the fast growth of airlines such as JetBlue can create demands that are beyond their capability, especially in crises.

“JetBlue tried to do their best — tried to keep the system rolling,” he said. “Their heart was in the right place, but their head was not.”

Monday’s cancellations affected flights at airports in Richmond, Va.; Pittsburgh; Charlotte and Raleigh/Durham, N.C.; Jacksonville, Fla.; Austin and Houston, Texas; Columbus, Ohio; Nashville; Portland, Me.; and Bermuda.

The Associated Press and Reuters contributed to this report.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.74%
$30K home equity loan FICO 5.36%
$75K home equity loan FICO 4.72%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 10.91%
10.91%
Cash Back Cards 16.32%
16.36%
Rewards Cards 15.94%
15.96%
Source: Bankrate.com