Customer Relationship Management and Flight Attendants

Essentials of MIS Additional Cases 1 BUSINESS PROBLEM-SOLVING CASE JetBlue Hits Turbulence In February 2000, JetBlue started droping quotidian to Fort Lauderdale, Florida and Buffalo, youngly York, promising net- nonch client serv meth at budget prices. The air passage featured new Airbus A320 levels with leather seats, each equipped with a personal TV screen, and average unidirectional fares of only $99 per rider. JetBlue was able to give up this relatively luxurious flying eng give uper by using culture arrangings to automatize key processes, such(prenominal) as rag sales (online sales dominate) and baggage discourse (electronic tags help cartroad luggage).Jet Blue prided itself on its paperless processes. JetBlues investment in tuition applied science enabled the respiratory tract duty to turn a profit by running its seam at 70 percent of the comprise of larger competitors. At the uniform time, JetBlue fill a higher percentage of its seats, employed non- union tempters, and established sufficiency good lead to score an impressive customer safekeeping rate of 50 percent. Initi bothy, JetBlue flew only angiotensin-converting enzyme type of plane from one vender the Airbus A320. This approach enabled the air passage to standardize course operations and maintenance procedures to a tier t put on resulted in considerable parsimonys.CIO Jeff Cohen used the same simple-is-better bug outline for JetBlues study strategys. Cohen depended nigh exclusively on Microsoft software products to fictitious character JetBlues extensive network of information corpses. (JetBlues reservation dodge and bodys for managing planes, conclaves, and schedule are run by an after-school(prenominal) contractor. ) Using a single vendor provided a engineering framework in which Cohen could keep a small ply and favor in-house development of systems over outsourcing and relying on consultants. The benefit was stable and focused engineering spen ding. JetBlue spent only 1. percent of its receipts enhancement on information technology, as impertinent to the 5 percent spent by competitors. JetBlues technology strategy helped get a pleasing flying draw for passengers. As president and chief run officer Dave Barger put it, Some hoi polloi say airlines are powered by fuel, moreover this airline is powered by its IT al-Qaida. JetBlue consistently frame itself at the top of J. D. Power and Associates customer satisfaction surveys. JetBlue believed it had versed to work tenuous and smart. The big headspring was whether JetBlue would be able to fend for its strategy and its success as the airline grew.By the end of 2006, the company was operating 500 safety valves daily in 50 cities and had $2. 4 zillion in annual revenue. A grand the way, JetBlue attached to purchasing a new plane every five workweeks through 2007, at a cost of $52 historyion each. Through all of this, JetBlue remained true to its formula for s uccess and customers continued to pitch. February 14, 2007, was a raise-up call. A fierce ice storm afflicted the New York City area that twenty-four hour period and cut back in motion a string of events that threatened JetBlues superlative reputation and its s publishar customer relationships.JetBlue do a fateful decision to maintain its schedule in the belief that the dire weather would break. JetBlue typically avoided pre-canceling flyings because passengers usually favored to sire a delayed arrival than to camp out at a terminal or check into a hotel. If the airline had guessed correctly, it would have kept its revenue streams intact and made the customers who were scheduled to fly that day very happy. Most new(prenominal) airlines began canceling relief valves early in the day, believing it was the discreet decision even though passengers would be inconvenienced and money would be lost.The former(a) airlines were correct. lodge JetBlue planes left their gates at butt F. Kennedy International Airport and were obscure on the tarmac for at least half dozen hours. The planes were frozen in place or trapped by iced-over vex roads, as was the equipment that would de-ice or move the aircraft. Passengers were enwrapped inside the planes for up to ten and one-half hours. Supplies of food and water on the planes ran embarrassed and toilets in the restrooms began to back up. JetBlue found itself in the middle of a massive forked crisis of customer and public relations.JetBlue waited excessively long to solicit help for the separated passengers because the airline figured that the planes would be able to dramatise off eventual(prenominal)ly. Meanwhile, the weather conditions and the delays or cancellations of different(a) flights caused customers to flood JetBlues reservations system, which could non like the onslaught. At the same time, many of the airlines pi give outs and flight crews were also stranded and unable to get to locations where they could pick up the slack for crews that had just worked their maximum hours without rest, but did non actually go anywhere.Moreover, JetBlue did not have a system in place for the rested crews to call in and have their assignments rerouted. The glut of planes and displaced or jade crews forced JetBlue to cancel more flights the neighboring day, a Thursday. And the cancellations continued daily for nigh a week, with the Presidents sidereal day holiday week providing few opportunities for rebooking. On the sixth day, JetBlue sour 139 of 600 flights involving 11 other airports. 2 76 Part I Information Systems in Hits Digital Age JetBlue the TurbulenceJetBlues eventual recovery was of little solace to passengers who were stranded at the airport for days and befuddled reservations for family vacations. Overall, more than 1,100 flights were cancelled, and JetBlue lost $30 million. The airline industry is marked by embarrassed profit margins and high fixed costs, which intend that even short revenue droughts, such as a four-day shutdown, can have devastating consequences for a carriers financial stability. Throughout the debacle, JetBlues chief executive officer David G. Neeleman was very visible and forthcoming with accountability and apologies.He was quoted many times, saying things such as, We approve our customers and were horrified by this. in that locations going to be a lot of apologies. Neeleman also admitted to the press that JetBlues counselling was not strong enough and its communications system was inadequate. The department prudent for allocating pilots and crews to flights was too small. Some flight attendants were unable to get in touch with anyone who could tell them what to do for three days. With the breakdown in communications, thousands of pilots sand flight attendants were out of position, and the lag could neither find them nor tell them where to go.JetBlue had vainglorious too fast, and its low-cost IT infrastructur e and systems could not keep up with the transaction. JetBlue was accustomed to saving money both from streamlined information systems and lean moduleing. Under normal circumstances, the lean staff was capable to handle all operations, and the computer systems functioned rise below their capacity. However, the ice storm exposed the fragility of the infrastructure as tasks such as rebooking passengers, intervention baggage, and locating crew members became impossible. Although Neeleman asserted in a conference call hat JetBlues computer systems were not to appoint for its meltdown, critics of the company pointed out that JetBlue lacked systems to keep track of off-duty flight crews and lost baggage. Its reservation system could not expand enough to bet the high customer call volume. Navitaire, headquartered in Minneapolis, hosts the reservation system for JetBlue as well as for a dozen other discount airlines. The Navitaire system was configured to accomodate up to 650 agents at one time, which was more than sufficient under normal circumstances.During the Valentines Day crisis, Navitaire was able to tweak the system to accomodate up to 950 agents simultaneously, but that was still not enough. Moreover, JetBlue could not find enough qualified employees to staff its call offs. The company employs about 1,500 reservation agents who work primarily from their homes, linking to its Navitaire Open Skies reservation system using an Internet-based voice communications system. many a(prenominal) ticketholders were unable to determine the status of their flights because the phone lines were jammed.Some callers received a laying that tell them to JetBlues Web office. The Web site stopped responding because it could not handle the intertwine in visitors, leaving many passengers with no way of knowing whether they should make the mooring to the airport. JetBlue lacked a computerized system for recording and track lost bags. It did have a system for storing in formation such as the subjugate of bags checked in by a passenger and bag tag acknowledgement numbers. But the system could not record which bags had not been picked up or their location.There was no way for a JetBlue agent to use a computer to see if a lost bag for a item passenger was among the heap of unclaimed bags at airports where JetBlue was stranded. In the past, JetBlue management did not sense there was a need for such a system because airport power were able to look up passenger records and figure out who owned oddment bags. When so many flights were canceled, the process became unmanageable. JetBlue uses some(prenominal) applications provided by outsourcing vendor cut respiratory tract Solutions of Southlake, Texas to manage, schedule, and track planes and crews and to develop actual flight plans.Sabres FliteTrac application interfaces with the Navitaire reservation system to provide managers with information about flight status, fuel, passenger lists, and arriv al times. Sabres CrewTrac application tracks crew assignments and provides pilots and flight attendants access to their schedules via a secure Web portal. JetBlue uses a Navitaire application called SkySolver to determine how to redeploy planes and crews to come to the fore from flight disruptions. However, JetBlue found out during the Valentines Day emergency that SkySolver was unable to counterchange the information quickly to JetBlues Sabre applications.And even if these systems had worked prudishly together, JetBlue would have plausibly been unable to locate all of its flight crews to redirect them. It did not have a system to keep track of off-duty crew members. Overtaxed phone lines prevented crew members from calling into headquarters to give their locations and availability for work. JetBlues chemical reaction to its humiliating experience was multifaceted. On the technology front, the airline deployed new software that sends record messages to pilots and flight attenda nts to inquire about their availability.When the employees return the calls, the information they supply is entered into a system that stores the data for access and analysis. From a staffing standpoint, Neeleman promised to instruct 100 employees from the airlines corporal office to serve as backups for the departments that were stretched too thin by the effects of the storm. Chapter 2of MIS AdditionalBusinesses Use Information Systems Essentials E-Business How Cases 77 3 JetBlue attempted to address its customer relations and image problems by creating a customer bill of rights to enforce standards for customer manipulation and airline behavior.JetBlue would be penalized when it failed to provide proper service, and customers who were subjected to poor service would be rewarded. JetBlue set the maximum time for holding passengers on a delayed plane at five hours. The company changed its operational school of thought to make more accomodation for inclement weather. An hazard t o test its changes arrived for JetBlue just one calendar month after the incident that spurred the changes. Faced with another(prenominal) snow and ice storm in the northeast United States on establish 16, 2007, JetBlue cancelled 215 flights, or about a third of its total daily slate.By canceling early, management hoped to ensure that its flight crews would be come-at-able and available when needed, and that airport gates would be kept clear in episode flights that were already airborne had to return. In the wake of its winter struggles, JetBlue was left to hope that its customers would be forgiving and that its losses could be offset. Neeleman pointed out that only about 10,000 of JetBlues 30 million annual customers were inconvenienced by the airlines weather-related breakdowns.On whitethorn 10, 2007, JetBlues jump on of Directors removed Neeleman as CEO, placing him in the role of non-executive chairman. According to Liz Roche, managing partner at Customers Incorporated, a cu stomer relationship management inquiry and consulting firm, JetBlue demonstrated that its an adolescent in the airline industry and that it has a lot of learning and growing up to do. Sources Doug Bartholomew and Mel Duvall, What rightfully Happened at JetBlue, Baseline Magazine, April 1, 2007 JetBlue Cancels Hundreds of Flights, The Associated Press, accessed via www. nytimes. om, March 16, 2007 Susan Carey and Darren Everson, Lessons on the Fly JetBlues New Tactics, The fence in Street Journal, February 27, 2007 Eric Chabrow, JetBlues Management Meltdown, CIO Insight, February 20, 2007 Jeff Bailey, old geezer Mortified by JetBlue Crisis, The New York Times, February 19, 2007 and prospicient Delays Hurt Image of JetBlue, The New York Times, February 17, 2007 Susan Carey and Paula Prada, cut through Change Why JetBlue Shuffled Top Rank, The groin Street Journal, May 11, 2007 Coreen Bailor, JetBlues overhaul Flies South, Customer Relationship Management, May 2007 Thomas Hoffm an, Out-of-the-Box Airline Carries Over far-out Approach to IT, Computerworld, March 11, 2003 and Stephanie Overby, JetBlue Skies Ahead, CIO Magazine, July 1, 2002. Case understand Questions 1. What types of information systems and business functions are set forth in this case? 2. What is JetBlues business model? How do its information systems keep this business model? 3.What was the problem see by JetBlue in this case? What people, organization, and technology factors were responsible for the problem? 4. Evaluate JetBlues response to the crisis. What solutions did the airline come up with? How were these solutions implemented? Do you think that JetBlue found the correct solutions and implemented them correctly? What other solutions can you think of that JetBlue hasnt act? 5. How well is JetBlue prepared for the future? are the problems described in this case credibly to be repeated? Which of JetBlues business processes are most vulnerable to breakdowns? How some(prenominal ) will a customer bill of rights help?