STANFORD GRADUATE SCHOOL OF BUSINESS JETBLUE AIRWAYS .docx

STANFORD
GRADUATE SCHOOL OF BUSINESS
JETBLUE AIRWAYS: A NEW BEGINNING
CASE: L-17
DATE: 9/13/10
If we were going to change on this magnitude as quickly as we
were trying to, we had to involve
everybody that did the work in the work.
-Rob Maruster, JetBlue Airways Chief Operating Officer
1
An ice storm bit JFK Airport in New York on February 10,
2010, severely reducing airport
capacity for more than 24 hours. The day before the storm hit,
JetBlue Airways, based at JFK,
had cancelled 386 flights scheduled for the following day,
including all 261 flights scheduled to
take off from JFK. The cancellation decision was made well in
advance, based on weather
forecasts-passengers and aircrews were notified up to 36 hours
before their flights. Since
passengers on cancelled flights did not come to the airport, the
level of stress generally
experienced when boarding areas were full of people impacted
by cancelled or delayed flights
was greatly reduced. The airline adjusted plans for airplanes

and aircrews so that it could
quickly recover once the storm passed. The next day, operations
resumed in an orderly way,
although another 138 flights were cancelled.
2
The schedule was completely back to normal two
days after the storm.
This was a far cry from the impact of a six-hour ice storm three
years earlier. That event, called
by some the "Valentine's Day Massacre," had stranded nine
JetBlue planes, full of passengers,
on the tarmac for more than six hours. The company had
delayed making cancellations, hoping
the weather would clear, but eventually had to cancel 1,195
flights over a period of six days,
costing about $41 million.
3
JetBlue was pilloried in the press and called before Congress-a
shocking turn of events for a company predicated on the idea of
"bringing humanity back to air
travel," and consistently rated as one of the best (if not the best)
airline for passenger service.
1
Quotations are from interviews with the author (Hoyt) unless
otherwise specified.
2
Cancellation statistics from JetBlue Airways.
3

John Harvey, JetBlue CFO, in "QI 2007 JetBlue Airways
Earnings Conference Call-Final," Voxant FD Wire,
A ril 24, 2007.
David Hoyt and Professors Charles O'Reilly, Hayagreeva Rao,
and Robert Sutton prepared this case as the basis for
class discussion rather than to illustrate either effective or
ineffective handling of an administrative situation.
Copyright © 2010 by the Board of Trustees of the Leland
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This document is authorized for use only by Ian Lansberry in
MGT-600 Resource Planning and Decision Making 18TW3
taught by Lindsay Conole, Southern New Hampshire University
from
January 2018 to April 2018.

JetBlue Airways: A New Beginning: L-17 p.2
The dramatic turnaround was the result of a company-wide
effort, involving more than 200
people from all levels and departments, working on 100 cross-
functional projects. The initiative,
called "IROP Integrity," not only transformed the way JetBlue
addressed disruptive events, or
irregular operations (IROPs), but established a model for large-
scale change in the company, and
instilled confidence among employees that they could work
together to solve even the most
challenging problem.
JETBLUE AIRWAYS
JetBlue Airways was founded in 1999 to provide low-cost
flights to previously underserved
markets. It would use technology both to improve the customer
experience and to increase
employee and aircraft productivity. The company was founded
by David Neeleman, who had
previously cofounded Morris Air, a low-cost airline based in
Salt Lake City, Utah, which he sold
to Southwest Airlines.
4
To balance his visionary leadership as JetBlue's founding
chairman and
CEO, Neeleman brought in an experienced airline executive
with strong operational expertise,
David Barger, as the company's chief operating officer.

JetBlue was quickly successful, beating the long odds faced by
airlines, particularly airline start-
ups. Of the 51 U.S. airlines that were founded in the 1980s,just
two were still operating by the
time JetBlue began flying-and one of these had experienced
several near bankruptcies. Of the
39 jet airlines that began operations between 1989 and 1999,
just 17 were still flying in 2000.
5
The company's flight operations were based at New York's John
F. Kennedy (JFK) airport. As
it grew, JetBlue adopted a route structure that was a hybrid
between the "hub-and-spoke" system
used by most legacy carriers, and the "point-to-point" system
used by many discount airlines.
By 2010, JetBlue had five "focus" cities (New York/JFK,
Boston, Orlando, Fort Lauderdale, and
Long Beach) that provided direct service from the east and west
coasts, and from the northeast to
the southeast. Flights to other cities originated from one of
these airports.
Several aspects of JetBlue's development are important to
understanding the conditions leading
to the problems surfaced by the February 2007 ice storm, as
well as the steps taken to address
those problems. These include the company's rapid growth, its
financial history, and its culture
and values.

Rapid Growth
From inception until the February 2007 ice storm, growth was
seen as a key imperative for the
company. Rob Maruster, who was senior vice president of
airports and operational planning at
the time, recalled: "Leading up to 2007, quite honestly, the
focus was on when the next city was
opening, and when the next plane is getting here."
4
For additional details about the founding of JetBlue, see Jody
Gittell and Charles O'Reilly, "JetBlue Airways:
Starting from Scratch," HBS Case 9-801-354.
5
Information on the early days of JetBlue from Jody Gittell and
Charles O'Reilly, "JetBlue Airways: Starting from
Scratch," HBS Case 9-801-354.
from
JetBlue Airways: A New Beginning: Ir17 p.3
JetBlue's first revenue flight, on February 11, 2000, flew from
JFK to Fort Lauderdale, Florida.

The next week, it began service between JFK and Buffalo, NY.
In March, it started flying from
JFK to Tampa, Florida, followed by service from JFK to
Orlando in June. By the end of 2000, it
had 10 Airbus 320 jets (A320s), had flown 1 million customers,
and had generated revenue of
$100 million. 6 By the end of 2001, JetBlue had 21 A320s
flying 102 flights daily to 16 cities.
Almost half of its flights (50) were between JFK and Florida,
with 18 between JFK and cities on
the west coast. 7
By the time of the February 2007 ice storm, JetBlue was the
eighth largest passenger carrier in
the U.S. It flew two types of airplane, the A320, which carried
156 passengers,8 and the
Embraer 190 (E190) regional jet, which carried 100 passengers.
It had implemented the hybrid
"focus city" route system, with 502 flights daily to 50 cities. Its
fleet had increased to 121 planes
(98 A320s and 23 E l 90s). At the time, it planned to add
another 80 A320s and 78 E l 90s by the
end of 2014.9 (See Exhibit 1 for a graph of the growth of
JetBlue's fleet through 2009.) JetBlue
also rapidly increased the number of cities served-in 2006
alone, it added an astonishing 16
destinations, bringing the total cities served to 49 by December
31, 2006 (it added a 50th
destination in January 2007) (Exhibit 2). 10
Early Profitability, Financial Stress
JetBlue's financial model was based on flights to underserved
markets and large cities, where
existing carriers (if any) charged relatively high prices. By

offering lower fares and more
frequent flights, JetBlue stimulated travel to these destinations.
The company's costs, as
measured by cost per available seat mile, were typically the
lowest of any major U.S. carrier. It
kept costs down in a number of ways, including: flying only one
type of plane (initially, a second
model was later added for lower-capacity routes) with a single
class of service; maintaining high
utilization of its planes; a highly productive, flexible, non-union
workforce; and low distribution
costs due to extensive use of online booking and electronic
ticketing.
JetBlue began passenger flights in February 2000, and was
profitable the following year, with net
income of $39 million on $320 million of revenue. It was
profitable for the next three years
(Exhibit 3). In 2005, however, the company posted a loss of $20
million, with revenue of$ l.7
billion. The loss was largely due to an increase in fuel prices-
the price of jet fuel increased by
52 percent in 2005 compared to 2004, resulting in $167 million
of increased costs, which the
company could not fully offset by increased revenues. 11
With higher fuel costs expected to be a fact of life, and facing
increased competition, JetBlue
initiated a "Return to Profitability" program in 2006. This
involved "improved capacity
6 JetBlue website, "Our History,"
http://www.jctblue.com/about/ourcompany/history/about
ourhistory.html
�accessed May 19, 2010).

JetBlue SEC Form S-1, dated February 12, 2002, p. l .
8 At this time, JetBlue A320s were in the process of converting
from 156 to 150 passengers, by removing one row
and providing passengers with additional legroom.
9 JetBlue SEC Form 10-K for 2006, p. l.
10
0 . 6 p. Cit., p. .
11 Op. cit., p. 27.
from
management, revenue opt1m1zation, [and] cost reductions."
12
lt reaffirmed, however, its
commitment to delivering the "JetBlue Experience" of
outstanding customer service. While
suffering a loss in the first quarter of 2006, the company was
profitable for the rest of the year,
reporting a full-year loss of just $1 million.
Company Culture and Values
ln founding JetBlue, Neeleman wanted to "bring humanity back
to air travel." There was only
one class of service in JetBlue planes-all passengers sat in

leather seats with more leg room
than provided by other airlines, and every seat had a television
system providing a wide variety
of channels. The company was extremely reluctant to cancel
flights-it believed that passengers
preferred to get to their destinations late, rather than have their
flight cancelled. As a result,
cancellation was a last resort for JetBlue prior to the February
2007 ice storm. This was seen in
industry statistics, which showed JetBlue had an exceptionally
high flight completion rate, while
at the same time having a relatively poor rate of on-time
arrivals.
As a result of its focus on the customer experience, the
company had received many awards for
outstanding service. The public regarded the "JetBlue
Experience" highly, and saw it as a
different type of airline. (See Exhibit 4 for a partial list of
awards.)
JetBlue's workforce was not unionized, a rarity in the airline
industry. The company strongly
wanted to maintain the non-union environment. As Neeleman
said, "We're always concerned
about unions; the minute we stop being concerned about them is
the time we will be
unionized." 13 To maintain a non-union workforce, JetBlue
tried to provide a good working
environment, from small things such as providing high-quality
coffee, to giving employees
(referred to as "crewmembers") the opportunity to interact with
senior management through
regularly scheduled "pocket sessions," where they were
encouraged to ask tough questions.
Building and maintaining trust between crewmembers, at all

levels of the company, and across
organizational disciplines, was a high priority.
JetBlue crewmembers prided themselves on their "can-do"
attitude-using their creativity and
skill to deal with problems. In part, this was a legacy of the
early days of the airline, when
crewmembers would all pitch in to help turn an airplane around
when it arrived, regardless of
their regular job assignments.
IRREGULAR OPERATIONS (IROPs)
The airline industry is incredibly complex. In February 2007,
JetBlue's 121 planes flew 502
flights daily, for an average of more than four daily flights per
plane. Each plane also had to be
taken out of service periodically for scheduled maintenance-and
the plane had to be at a
specific location for that maintenance. Each member of the
flight crew also had to be scheduled
(a process called "pairing"), with schedules complying with
strict limits imposed by FAA
regulations. There were limits on the length of time that a pilot
could be on duty in a 24-hour
period (defined as beginning when the pilot checked in one hour
prior to his/her first flight of the
12
JetBlue 2006 Annual Report letter to shareholders.
13
"JetBlue," GSB No. E-150, p. 9.

from
JetBlue Airways: A New Beginning: L-17 p. 5
day, and ending 15 minutes after s/he arrived at the gate on the
final flight of the day), the
number of hours a pilot could fly in any day or month, and other
restrictions. If beginning a
flight would cause a pilot to exceed the FAA limits ("timing
out"), a plane would be forced to
return to the boarding gate, even if it was next in line to take
off.
14
Schedule modifications were often complex, but had to be
handled quickly. Suppose, for
instance, an airplane was scheduled to fly from Boston to JFK,
then continue on to Orlando, but
its departure from Boston was delayed due to bad weather.
Passengers connecting at JFK for
other JetBlue flights might miss their connections, and have to
be rescheduled. The aircrew
might time out, and be unable to fly the continuation to
Orlando, requiring another crew to be
assigned or the flight to be cancelled.
Events that triggered cancellations or delays of multiple flights,
such as bad weather, resulted in
"irregular operations" (IROPs). Even after a triggering event
had passed, and the initial wave of

cancellations had been addressed, the impact of the IROP was
not necessarily over. Planes, and
the aircrews scheduled for them, might be in different cities,
making it difficult to immediately
resume normal flight schedules. Pilots and flight attendants
might have logged many more hours
than originally planned, impacting their availability to fly.
Airplanes needing maintenance might
have been routed to cities that were not equipped to perform the
needed service. As one
maintenance scheduler put it, "My IROP begins three days after
[the rest of the company's] is
over,"
15
since airplanes needing maintenance were scattered among the
cities served by JetBlue,
rather than being routed to the service centers.
The Ice Storm of February 14, 2007
Wednesday, February 14, 2007 was expected to be a busy day
for JetBlue. Flights leaving JFK
were full, with many passengers travelling early for the
upcoming Presidents Day holiday. The
weather forecast was for snow, turning to rain. JetBlue loaded
its planes, which pushed back
from the gates to prepare for takeoff. However, the snow
changed to ice pellets, which closed
the airport. With its strong bias against cancelling flights, and
in hopes that the storm would
abate, JetBlue continued to load passengers and push planes
back from the terminals.
Eventually, it was clear that the planes would not be able to
take off. To compound the problem,

they could not get back to their gates-the runways were frozen
(as was the equipment used to
de-ice and move planes), and the gates were occupied by other
planes. Nine planes full of
passengers were stranded on the tarmac for more than six hours
each.
16
That day, 356 flights
were cancelled-more than 70 percent of JetBlue's schedule.
Most of the flights were cancelled
after their scheduled departure times, stranding more than
30,000 passengers at airports across
the country.
The problems did not end when the weather cleared. Many
flight crews were no longer able to
work due to FAA duty time restrictions. Many others were out
of position, and could not be
assigned to flights. Planes were not in the proper locations to
resume service. Over the next five
14
For calculating duty time, the scheduled length of a pending
flight was used. For instance, if a pilot had already
been on duty for 14 hours, s/he could take off on a flight
scheduled to take 1 hour, but not for a flight scheduled to
take 2.5 hours. If the flight actually took longer than anticipated
(due to weather, for instance), there was no penalty.
15
This quotation was made at a JetBlue meeting, later related to
the author during an interview.
16

Jeff Bailey, "Long Delays Hurt Image of JetBlue," The New
York Times, February 17, 2007.
MGT-600 Resource Planning and Decision Making 18TW3 tau
ght by Lindsay Conole, Southern New Hampshire University
from
days, JetBlue cancelled an additional 839 flights. Normal flight
operations did not resume until
February 20, six days after the original storm. Altogether, the
storm cost JetBlue about $41
million-$24 million in vouchers issued to affected passengers,
and $17 million in lost revenue
due to flight cancellations.
17
Other airlines were impacted by the ice storm, but most
cancelled
flights early, and recovered relatively quickly.
The "Valentine's Day Massacre" shook the company to the core,
and shocked the flying public.
JetBlue, previously viewed by passengers as one of the best (if
not the best) airlines, took a
pounding in the press. Neeleman apologized, both to the public
and before a congressional
bearing. On February 21, JetBlue issued its Bill of Rights,
promising to compensate customers

for inconveniences within the company's control. (The Bill of
Rights, as it appeared in 20 l 0, is
presented in Exhibit 5.)
No one at JetBlue at the time ever wanted to endure the
experience again, yet the disaster was
not a surprise within the company. JetBlue had outgrown its
operations infrastructure. The
complexity of an airline increases dramatically as it becomes
larger. Maruster commented,
"Somewhere between 50 and 100 airplanes, complexity gets to
the point that becomes
unmanageable with very simplistic operating systems in place."
The company's "can do" attitude, and heroic efforts of
crewmembers, had previously overcome
technical and procedural shortcomings. Previous efforts to
address difficulties in dealing with
IROPs had focused on reducing ground time for planes, rapidly
turning them around. Jenny
Dervin, JetBlue's director of corporate communications,
observed that these efforts:
. ... were very much focused on the spirit of 'just get it done,'
instead of truly
understanding the roadblocks to operating a great airline. The
assumptions built
into those programs were that we weren't going to cancel. We
were basically
putting the entire burden of getting the operation back on track
on the ground
crew, on the airport crew. We made pretty posters and put them
in the break
rooms, but it really didn't go anywhere.
The drum beat had been going since Christmas 2005. We had a

significant
weather event, and we plowed through it. We didn't cancel. It
took a couple of
days to get the operation back, and it was very messy, but we
were a much
smaller airline. Even back then, pilots were telling us, 'Look,
this is no way to
run an airline.'
A JetBlue pilot, commented: "It [the February 2007 problem]
wasn't a surprise to anybody
except people outside JetBlue. I remember the year and a half
leading up to it, knowing it was
going to happen. I just didn't know how or when. We were
going to have a spectacular
meltdown. Our operation was wound so tightly that it was going
to unwind pretty spectacularly,
and it just happened to coalesce on that one day."
17
John Harvey, in April 24, 2007 conference call, loc. cit. Harvey
also stated that incremental expenses incurred
due to the storm were offset by cost savings from not operating
aircraft.
from

In addition to two initiatives to reduce airplane turnaround time,
the company had also done an
extensive benchmarking study with other airlines and companies
that had complex operations.
However, there had not been a serious attempt to upgrade the
operations infrastructure. Instead,
the focus had been on sustaining the company's rapid growth
and on returning to profitability.
Changes After the February 2007 Ice Storm
JetBlue made a number of management changes after the
February 2007 ice storm. The most
important was the appointment of Russell Chew as chief
operating officer in March.
18
Chew had
been chief operating officer of the FAA, and before that was
managing director of American
Airlines' System Operations Center.
19
Chew brought in experienced managers from other
airlines, particularly those with operations expertise. The most
immediate change was to
recognize that cancelling flights early could benefit both the
customer and the company. Bonny
Simi, an E190 captain and JetBlue's director of customer
experience and analysis, commented
on the impact of pre-cancellations, saying:

If you pre-cancel 50 flights going into an IR.OP, and you make
the right call, you
will end up cancelling 50, maybe 55 flights in the end. If you
don't cancel, you
may end up cancelling more. You might cancel 100, and they'll
all be painful.
They'll all be when the customers are there at the airport, sitting
there for six
hours. So, if you pre-cancel, you cancel less-as long as you
make educated
decisions.
The company began to change its focus from reacting to
problems and overcoming them by
heroic efforts, to preparing for disruptions. Dervin commented
that the change "forced us to
pour our energy into pre-event rather than post-event. It took us
about a year to figure out how
to work together to prepare for something, because we were so
good at reacting to things."
As the winter of 2007-2008 approached, in Dervin's words,
"everybody held their breath,
because we lived in fear that we wouldn't be able to fix it."
However, despite some challenges,
JetBlue made it through the winter without serious problems,
seemingly validating the change in
cancellation philosophy and the company's ability to prepare.
August 2008: Thunderstorms Cause More IROP Havoc
There is a large difference between the nature of irregular
operations in winter and in summer,
however. In winter, storms can be fairly accurat�ly forecast,

and pass relatively quickly. With
advance notice, flights can be cancelled in an orderly manner.
In summer, storm cel1s can
develop with little warning, and their paths are difficult to
predict. Rather than completely shut
down the airport, thunderstorm activity causes delays that
reduce the airport's overall capacity.
Airlines can adapt to this by cancelling the appropriate number
of flights to match this new,
lowered, capacity.
18
Barger had been appointed president in August 1998, and also
served as COO until Chew joined the company. In
May 2007, Barger replaced Neeleman as CEO, and Chew
became both president and COO. Neeleman remained as
chairman until May 2008, when he was replaced by Joel
Peterson.
19
JetBlue press release, "JetBlue Names Russell Chew Chief
Operating Officer," March 7, 2007.
from

In the summer of 2008, a series of thunderstorms and air traffic
control departure procedure
changes caused havoc with JetBlue's operations. From July 23
to August 16, the company
cancelled 814 flights.
20
This period of stress led to a renewed interest in addressing
problems in
handling IROPs.
After stepping over customers sleeping in the JFK terminal one
night, Joel Peterson, who had
become JetBlue's chairman in May 2008, told Maruster, "For a
company that has fun as one of
its values, this surely doesn't feel like a lot of fun." On August
10, Peterson was returning to
California after attending operational meetings at the company's
New York headquarters. While
he did not sense an acute IR.OP problem, he had a feeling of
unease about the general level of
urgency and focus of the operations team. He boarded the
JetBlue plane for San Jose.
That same day, Bonny Simi was commuting home after
spending the week working in New
York. Each Friday before heading to the airport, she would go
downstairs from her office and
visit the System Operations Center (SOC). As a pilot, who also
had experience as a dispatcher,
she was comfortable in the SOC. She would talk to the
dispatcher about the flight she wanted to
take, the customer load, and the weather. Then she would go to
crew services, just a few feet
away, and find out if there were any issues with crew timeouts

in the event of a delay. She
noticed that the two groups used different systems, and each had
information that was
unavailable to the other.
That day, there was a large weather front approaching New
York. Simi could take flights to any
of three airports in the San Francisco Bay Area. After talking
with crew services, she knew that
the San Francisco and Oakland flights would be cancelled due
to crew timeouts, even though
system operations did not yet have this information, and had not
yet cancelled the flights. The
San Jose flight would probably get out, but a delay of more than
three hours would also result in
its crew timing out. She went to the airport and boarded the
flight to San Jose. On her way to
the rear jump seat, she passed Peterson. As she had anticipated,
there was a long delay, and Simi
talked to Peterson about what was happening, including
showing him the weather front on the
JetBlue LiveTV at his seat.
The storm shut the airport down for awhile, and when they
eventually started taxiing, Simi went
to the jump seat and contacted the plane's captain. From her
earlier conversations at the SOC,
she knew he was close to timing out, and now she learned how
close that was-he would timeout
in 10 minutes. The plane was far back in the line for takeoff-if
it stayed in the queue it would
not depart before the pilot timed out, and would have to return
to the terminal. She called the
JetBlue air traffic coordinator at the SOC, and told him that the
flight would have to be cancelled

and return to the terminal unless it could be moved to the front
of the takeoff line. Soon, the
plane pulled out of line, taxied to the front of the queue, and
took off with two minutes to spare.
The JetBlue coordinator had contacted the FAA air traffic
coordinator, who had moved the plane
to the front of the queue.
Simi told Peterson what had happened behind the scenes, and
how vulnerable the airline was
with its current operations infrastructure: "I'm telling Joel this
story. It's not scalable, when you
20
JetBlue Airways.
MGT-600 Resource Planning and Decision Making 1 BTW3
from
have 600 flights a day, to manage it like that, right at the
individual level. But that's the
challenge. He saw and understood the complexity of it."
After this experience, Peterson recalled:
I started talking with crew members, pilots, and others to learn
the hoops they

have to go through. I recognized how completely disruptive and
demoralizing it
was. There's nothing you can do to change the weather. There
are always going
to be irregular operations, so it wasn't that. But, could we get a
more efficient,
better response? I realized at that point how many interfaces
there were, how
many pieces of information, how many people had to get
involved. It was a
cross-functional thing. I was concerned and felt, wow, we've
really got to get a
task force. We have to get cross-functional energy behind this,
with a sense of
urgency.
At about the same time, Maruster knew that major change was
needed. During a conference call
with the airport general managers that summer, one said, "We're
dying out here. Help us figure
out how to solve the challenges."
The Birth of IROP Integrity
After this experience, Peterson wrote in the company's weekly
Jet to the Point communication to
crewmembers that bow the company dealt with IROPs as an
urgent problem that must be solved.
In his message, he said:
In observing first-band what Crewmembers regularly deal with,
I'm-above all
else-impressed with your dedication to "doing the heroic" on
behalf of our
Customers. This is not sustainable, however, nor is it fair to
continuously expect

Crewmembers to bear the brunt of IROPs. Your professionalism
and grace under
pressure is impressive, but we have to find a way around
outmoded space,
inadequate technology, gaps in leadership, coordination between
various
functions and the necessity for on-the-fly decisions. The
"uncontrollables" (such
as thunderstorm activity, FAA regulations and general crowding
at JFK) are part
of life, but we can do better in managing around them.
21
Maruster went to Chew, now JetBlue's president, and Barger,
now the CEO, with a proposal to
address the company's operational problems. He observed that:
"We didn't have the internal
infrastructure. We didn't have the communication infrastructure.
We didn't have the correct
operations procedures in place to actually execute the
complexity of the operation that we were
being asked to run." He told Barger and Chew that, "I'll put my
career on the line, because I
believe in this so much. If we don't make change in a dramatic
fashion, I don't know if this is
the kind of company I can work for. I see it as actually harming
our brand. Crawling over
people who sleep in the terminal, that's not the kind of airline
we are." Later addressing the risk
of taking on such a high-profile project that had the potential
for spectacular failure, he said, "In
21

Joel Peterson, "Jet to the Point: A Board's-Eye View," JetBlue
Airways, September 4, 2008.
from
my view, doing nothing, or not putting myself out there, would
have been the most risky thing I
could have done."
With Barger and Chew's support, Maruster then met with
Peterson. As he recalled, after
explaining all the complications of a project to improve
performance during IROPs, Peterson
summed it up, saying, '"I think what you're trying to say is that
you're trying to: effectively
cancel flights when there is bad weather; recover the airline
very, very quickly; and
communicate to all stakeholders what those plans are.' I said,
'That's exactly it.' And so that
became our tagline: improving how we cancel, recover and
communicate during disruptive
events." The target was to have the improvements in place by
June 20, 2009-before the start of
the peak summer travel season (and also the summer
thunderstorm season).
Peterson commented on the courage required to take on such a

project:
It's not self-evident when you take on a big messy problem
that's cross-functional,
and you've got the FAA, and you've got the Port [Authority],
and you've got all
the complexities, that you'll be successful. ... I think courage is
an element that is
sometimes underestimated, and I think it took a lot of courage
to step up and say,
'Look, this is on my shoulders. I'm not backing away from it.
We're going to
make this happen.'
During this period, Maruster had also been talking with Simi,
who worked for him at the time
and had similar feelings about the urgent need for change. The
two began scoping out a project
that would address the company's deficiencies in dealing with
disruptive events, which would
eventually be called "lROP Integrity." As they discussed
approaches, Simi realized that in
addressing the problem they needed to take advantage of the
experience of people from
throughout the organization. She bought Maruster a copy of
James Surowiecki's book, The
Wisdom of Crowds, saying, "Read this. You'll know what I'm
talking about." Rather than
recruit a small task force to address the problem, they proposed
a large-scale effort involving
many people from throughout the organization. They also
reviewed previous change initiatives
at JetBlue, which supported this approach-those that were
driven from the top tended to fail,
while those that involved front-line crewmembers tended to
succeed. (See Exhibit 6 for

biographical sketches of Peterson, Maruster, and Simi.)
The project began to take shape. With the support of Peterson,
Barger, and Chew, Maruster
became the executive sponsor, dedicating about half his time to
the effort. He described his role:
My role was to be the unflappable executive sponsor of the
initiative itself. That
meant rallying the troops, showing up for the big offsites,
encouraging them that
anything is possible, encouraging them to be skeptics but not
cynics, and to
participate and throw their heart and soul into this, because
great change is
possible if we actually pour our heart and soul into it. Do we
have the people
involved at the right levels? Are we really making this a
priority?
I also found my role to be plowing the path forward with the
senior leadership
team, keeping them updated on the work, as well as the
importance of the work,
from
JetBlue Airways: A New Beginning: L-17

arranging whatever money or resources we needed, not making
that an issue, so
that people would actually believe in what we were doing.
Whether it was
through finance or through IT, whatever those groups were that
were support
functions to this process, it became my role to make sure that
those resources
were available to us.
I think there are way too many initiatives that lack senior level
support. Once I
knew that I had the COO and the CEO's support, it became so
much easier.
p. 11
While Maruster provided the executive sponsorship, Simi
provided day-to-day leadership as the
project's full-time director. Peterson recalled how Simi
overcame the challenges of running a
large cross-functional project: "I don't think Bonny was
empowered as much as it was that she
just grabbed the controls and had the energy, and made things
happen. Nobody slapped her
down, so she kept moving forward. I think from that, the team
learned that you don't have to
have every element buttoned down."
She recruited a small team to help plan the project. This team
included crewmembers from
various parts of the company, as well as an industrial engineer
to guide LEAN process
improvement sessions, and a consultant to lead organizational
and cultural change efforts.

The communications strategy for the project was a departure
from that used in previous change
initiatives-JetBlue had previously launched projects for large-
scale change with heavy publicity
throughout the company. Often, the projects had failed to make
an impact. Rather than raise
expectations before improvements had been made, IROP
Integrity would speak through its
actions. Dervin recalled the philosophy adopted at the start of
the project, "We will not spin or
package this as a communications campaign. This is about
muscle, not message." Senior
management agreed, but it was sometimes difficult not to
promote the project. When pressured
to publicize, Dervin said, "The refrain from corporate
communications was, 'It doesn't matter
until people start feeling the difference."'
The specific objectives of the project, as stated in the project's
after-action report, were:
22
• To improve how we cancel, recover, and communicate before,
during and
after IROPs.
• Identify talent within the organization.
• Build cross-departmental relationships through cross-
functional and cross-
level working teams.
• Build internal capability for project management and process
improvement
(LEAN tools), by providing crewmembers and crewleaders at all
levels the

guidance, tools and opportunity to "learn by doing" in a
collaborative,
supportive, corporate sponsored program.
22
Objectives quoted from Shawn Overcast and Jason Lei, "IROP
Integrity After Action Report," JetBlue Airways
internal document, October 5, 2009, p. 4.
MGT-600 Resource Planning and Decision Making 181W3
from
Process Mapping, Working Teams, and Offsite Meetings
The project was scheduled to be completed by June 20, 2009,
and was planned around three
offsite meetings. Before the first offsite, groups of
crewmembers met to identify issues that
interfered with efficiently canceling, recovering, and
communicating during IROPs. At the first
offsite, all participants in these sessions shared their findings,
and were assigned to teams to
address the issues. They then developed recommendations to
present at the second offsite. At
the second offsite (attended by all team members working on
the project, plus other key
individuals), teams presented their recommendations, and also

met with crewmembers from
other parts of the company that could help with their issues.
They then finalized their changes.
The third offsite was a wrap-up and celebration.
Maruster and Simi brought several people into the planning
process. They wanted leaders, but
also skeptics. As Maruster explained, "A cynic is somebody
who questions the motives of
others. A skeptic is somebody who says, 'prove to me that we
can actually do this, and I'll
believe it."' They knew that once a skeptic was involved in the
process and became a believer,
s/he could become a powerful force for change. They also
wanted the project to establish a
culture of change. To help meet that objective, one of the initial
members was Brian Glaser, a
former JetBlue crewmember who had formed gothamCULTURE,
a consulting firm that focused
on organizational culture and change. One essential contribution
made by Glaser was to design
the three off-site meetings that established a series of milestone
events for the project.
The group identified many areas that needed attention, and set
up sessions for further in-depth
exploration. Each session involved about 20 people, with each
participant having a direct
involvement in the subject being discussed. Some individuals
were asked to participate due to
their expertise or critical role in the process being addressed.
Others responded to invitations
sent to a large number of crewmembers, asking for volunteers.
Gus Nicoll, a pilot and one of the
early leaders of the project, noted that, "We weren't solving for
what we thought the problems

were. We needed to know from everyone who touched metal and
moved people and moved
information what the problems were."
The process mapping sessions, led by industrial engineer.
Michelle Lofgren, began with a
training exercise in which participants worked as teams to make
a product. In the first phase of
the exercise, roles were strictly defined and communication
between team members was limited.
The facilitator then "mapped" the process, with input from the
participants. Starting with the
final step, each activity and input was recorded on a yellow
Post-it Note ("sticky"). Going
backwards through the process, all activities and inputs were
identified.
23
At the same time,
impediments, pain points, and other obstacles were recorded on
pink stickies. (In fact, the term
"pink stickies" became institutionalized as a way of describing a
challenge or problem within
JetBlue.)
Following this exercise, the facilitator taught a short session on
lean processes, identifying
sources of waste and inefficiency, using the exercise as an
example. The teams then repeated the
exercise, but were free to organize their efforts as they chose,
and to communicate openly. In
23
The process was mapped from last to first step because
identifying the inputs to each step prevented activities

from being overlooked, as sometimes happened when evaluating
a process from first step to last.
from
doing so, teams removed many of the obstacles, and saw
improvements in both quality and
throughput.
The participants were divided into groups that performed
similar functions, and were given
several scenarios common to IROPs. Each group was asked to
map the processes they used to
deal with these scenarios, and the pain points they encountered.
This identified many sources of
waste, inefficiency, and frustration. It also led to many simple
solutions. For instance, many
obstacles were the result of a lack of information. The person
facing the obstacle did not know
that the necessary information existed within the company.
Someone else in the room would
often have the information, but did not know that it was needed
by other groups. Hearing that
their information was needed, they modified the distribution:
problem solved. Other problems
required more study, such as evaluating technology, working

with other parts of the company, or
analyzing what other companies did.
Five process mapping sessions were held before the first offsite.
Simi and her core team also
conducted interviews with key stakeholders to identify
additional issues and to get a deeper
understanding of issues surfaced in the process mapping
sessions. The process mapping sessions
and interviews identified more than 1,000 issues and challenges
(pink stickies). Prior to the first
offsite, Simi and her team evaluated these to determine the ones
that IROP Integrity would
address. Glaser described the evaluation process: "It was based
on looking at the vision, looking
at the capacity for the business to handle, exploring the topic,
and then figuring out how much of
an impact it would have on the organization's performance."
They also checked the list of issues
against the executive team's key initiatives. Ultimately, Simi
made the final decisions as to
those issues that the project would address-the original list of
more than 1,000 was trimmed to
400, which were further grouped into 100 projects that touched
all working groups. These were
then grouped into 12 buckets, each of which would be addressed
by an IROP Integrity team. 24
This structure helped break down complex problems into more
simple and manageable pieces.
Before the first offsite, leaders for each of the teams were
recruited, with an eye toward
developing future talent by tapping front-line crewmembers
with the capability of taking on
additional responsibility.

The first offsite was held November 20-21, 2008 in a hotel near
the company's New York
headquarters. The meeting was attended by 120 JetBlue
crewmembers.2 Project leaders
presented the findings, in Glaser's words, as: "Here's what we've
heard, and here are some of
the trends, patterns, and themes." After the participants had
been briefed on the issues and the
topics that each team would address, they had time to rotate
through stations where they could
learn more about topics and sign up to work on any of the 12
teams that most interested them.
That night, Simi and Glaser made team assignments. As Glaser
described, "It was a late night.
But when they arrived the next day, we handed them a
personalized envelope from Rob
[Maruster], as sponsor." The envelope included the person's
team assignment, as well as the
schedule for each team's kickoff meetings. Some people were
assigned to two teams, with a few
assigned to three. Kickoff meetings were scheduled so that
crewmembers on multiple teams
could attend each of their team meetings. In addition to these
teams, Simi appointed two task
24
Overcast and Lei, op. cit, p. 6.
25
Ibid.
from

JetBlue Airways: A Ne"' Beginning: L-17 p. 14
teams to directly support those groups most impacted by IROP
Integrity: the SOC and crew
services (Exhibit 7). Throughout the project, Glaser worked
with team leaders to help drive
change through their teams.
After the first offsite, the teams met to work on their assigned
issues. Simi managed the process
by holding weekly telephonic meetings with a core group of
seven that reviewed the overall
status of the project. There was also a weekly telephonic
meeting with the leaders of the 12
teams and key stakeholders, in which they reviewed the status
of their projects, discussed
milestones and obstacles, and requested feedback. Keeping with
the theme of simplicity, Simi
developed a standardized, one-page format for team leaders to
report on their status and tracked
the projects on a dashboard (Exhibits 8 and 9).
The second offsite meeting was held on February 26-27, 2009.
One purpose of this meeting was
to demonstrate the large amount of progress that had been made,
as well as to acknowledge that
they still had challenges to overcome in order to meet the June
20 deadline. The meeting
allowed participants to share information about their work, and
to interact with others who might
provide useful input. In spending two days together, teams

could partner with other teams, or
with other individuals, to get information needed to make
decisions on critical questions, or get
different perspectives on issues they had been wrestling with.
They could also touch base with
groups whose work might be impacted by changes that a team
was considering. The goal was to
expand the "wisdom of crowds" philosophy, and tap all 120
crewmembers' experiences to fmd
solutions to the vexing problems.
One particularly motivational part of the second offsite was a
speech by Peterson. He wrote the
speech in the form of a Fortune magazine article, dated three
years in the future. The article
described bow JetBlue excelled at dealing with disruptions,
though this had not always been the
case. It then gave examples of many specific individuals, and
the changes they bad implemented
that made JetBlue excel--examples which Simi bad provided. In
his speech, Peterson said:
An airline, above all, is a bewildering array of teams, of
systems, of complex
logistics. By coming together across work groups, JetBlue
crewmembers
discovered efficiencies, learned from each other, came deeply to
trust each other
and developed a hard-to-replicate culture of cooperation and
support.
Peterson had mocked up a reprint of the story, which was
distributed to the offsite participants.
This speech was vividly, and fondly, recalled by many
participants long afterwards. After the
second offsite, teams continued work on their specific projects.

The third offsite was held on June 30, 2009. In this meeting,
attendees were briefed on the
results of the work done by the teams, and fmal decisions that
had been made. Participants left
the meeting with an understanding of the company's plan for
dealing with disruptions. This
meeting also provided an opportunity for company leaders to
thank those that had worked on
IROP Integrity project for their efforts.
from
IROP Integrity in Action: The Cancellation Processing Desk
Addressing recovery and communication related to crew
scheduling after flight cancellations
provides an example of the IR.OP Integrity project in action.
One of the more difficult problems during IROPs was the
impact of flight changes or
cancellations on pilots and flight attendants. When flights were
changed or cancelled,
"pairings"-the assignment of crews to aircraft and routes-had to
be revised. This was a
difficult process, as the assignments had to be made so that
crews would be properly positioned

for subsequent flights, and so that assignments complied with
FAA regulations and company
work rules on duty and flight time. During normal operations,
much of this was done using
computerized scheduling programs. These were ineffective,
however, in dealing with large-scale
rescheduling during IROPs, resulting in substantial manual
effort. Once the crews' revised flight
assignments were determined, their logistics arrangements (such
as hotel reservations) had to be
made. This information had to be communicated to the affected
crewmembers.
Prior to the IROP Integrity project, JetBlue made pre-
cancellation decisions four hours prior to
the scheduled departure time. This was based on the telecom
capacity that required two hours to
notify passengers. The goal was to contact passengers at least
two hours prior to their scheduled
departure, requiring that the decision be made four hours prior
to scheduled departure (allowing
two hours for notification, with all notifications made at least
two hours before scheduled
departure). If passengers were notified earlier than two hours
before scheduled departure, they
could often be reached before they left for the airport, reducing
the number of people showing up
at the boarding gate for cancelled flights. Thus, cancellations
were made four hours prior to
scheduled departure.
This created a serious problem for the crew services group,
which was responsible for pairings
and crew logistics. Modified pairings could be processed at
about 10 per hour. If a 50-flight
cancellation "package" was issued, it would be five hours before

the changes could be made and
the affected crewmembers notified-or one hour after the first
scheduled departure. There was
no prioritization about notifying crews-for example, a pilot for
a flight scheduled to depart 10
hours after the cancellation decision might be notified before
the pilot for the first scheduled
departure. It was not uncommon for crews to arrive at the
airport, only to learn that their flight
had been cancelled and that they were being reassigned to a
different flight--even if the decision
had been made hours earlier. Andrew Paul, a pilot who was
heavily involved in the IROP
Integrity project, observed:
A good number of pilots and in-flight crewmembers have been
embarrassed by
the fact that our customers, at times, would be notified of a
flight cancellation
before we would. They would see us in the gate areas and say,
'Hey, I just got a
message from JetBlue saying: This flight has been cancelled.'
There we are,
standing at the gate, knowing less than the passengers.
Communicating with aircrews was also a problem during an
IROP. While crew services worked
hard to redo the pairings, pilots and flight attendants who had
heard about potential cancellations
would call to find out if they were affected, and if so, what they
should do. Others would be
calling to tell crew services where they were, in case they were
needed. Still others, unaware of
MGT� Resource Planning and Decision Making 18TW3 taught

by Lindsay Conole, Southern New Hampshire University from
the IROP, would call to conduct routine business, such as
discussing future assignments. All of
these calls would go to the people who were trying to redo the
pairings, further delaying their
work. Finally, when pairings were changed, and affected
crewmembers needed to be notified,
they would be called. If they did not answer, a message was left
asking them to call in-and
their incoming calls would join the huge number of other
incoming calls. This communications
overload led to extremely long hold times.
The problem was exacerbated by the fact that calls were not
prioritized to so those with the
earliest scheduled departure time were notified first. Karen
Cozzie, director of inflight service,
observed, "There was no urgency as to who needed to be
notified first because the technology
did not exist, and the crew services team was multitasking
during the pairing modifications. This
made timely communication to crews difficult. We had
crewmembers coming to work when we
knew hours before that their flight was cancelled or delayed,
resulting in duty limitations that
would further impact the operation." She summarized the impact
of the communications
problem on morale: "It was a huge sense of :frustration with our
flight attendants and pilots. It

built this wall of distrust that crew services didn't know where
they were, or didn't care enough
to call."
During the early phases of IROP Integrity, before the first
offsite meeting, crew services held a
process mapping session, also attended by representatives of
other affected groups, including
flight attendants and pilots. Cozzie commented, "We knew that
we bad issues. But, until we
completed the process mapping, I don't think we understood the
impact the current process was
causing for our crews." They had previously believed that
technology limitations restricted them
from efficiently dealing with IROPs. Through the IROP
Integrity project, they now looked at
ways crew services could improve their processes, even with the
technology limitations. 1n fact,
90 percent of IROP Integrity projects involved no technology
improvements-they involved
processes, policies, or training, all at relatively low cost.
At the first offsite, a team was assigned to work on crew
services, headed by Cozzie. Following
the offsite, they divided the work further, into three subsets:
crew logistics, call volume, and
crew services process technology. They conducted process
mapping sessions for each of these
three areas, facilitated by industrial engineer Michelle Lofgren.
The sessions were attended by
supervisors, pilots, flight attendants, crew services leadership
and front-line crewmembers, IT,
and personnel from the reservations group (who had expertise in
communications and running a
call center). After these sessions, they had 164 actionable
process items, with an additional 35

items related to information technology. Some of these items
could be immediately
implemented, while others required further work.
After these sessions, they expanded the group to include more
crew services crewmembers that
actually did the work, and met to discuss solutions. Cozzie
presented the problems that had been
surfaced, together with some possible solutions. She described
how she asked the questions:
'How would that process change affect your work environment?
Tell us how we
can meet this goal in a more structured and efficient way.' There
were 18 of us
brainstorming all of the different ideas and possible solutions,
identifying the
from
constraints on the floor, and evaluating the crew services
staffing model. We had
to take a11 of that into consideration when identifying potential
solutions.
p. 17

After brainstorming, they formed a smaller group to work
through the processes and issues in
detail, and make a recommendation. The group came up with a
"cancellation desk," which
would be activated when a package of 10 or more cancellations
was issued. A standard e-mail
was released by crew services, notifying pilots and flight
attendants that they were in an IROP,
and the number of flights that had been cancelled, with a list of
the cancelled flights. The e-mail
also informed the crews when crew services expected to have
new pairings completed. At the
same time, the voice recording that played for all incoming
phone calls was changed to say that
an IROP was in process and that cancellations were being
processed. Callers were requested to
call back if they did not need immediate assistance.
When the cancellation desk was activated, crewmembers
assigned to the desk were physically
moved to a different area, away from day-to-day operations,
where they could work together to
process the cancellations. After a pairing was modified, it was
handed to another group that
focused on logistics ( e.g. booking a hotel). Finally, the
modifications were given to a third group
that called the pilots and flight attendants to notify them of the
details of their revised schedules,
using standardized scripts that provided all the necessary
information. Each step of the process
would be completed without the interference of unnecessary
incoming phone calls. If the
reassignment process took longer than anticipated, e-mail
updates would inform the crews. The
process was further enhanced by a technology upgrade in June
2010, in which crews were

automatically notified by text message ( or other method, as
selected by the crewmember, such as
e-mail or an automated phone call) of changes as they were
made, eliminating the need for
verbal notification by phone.
They proposed this solution at the second offsite in February
2009, and received approval. They
then tested the approach during a couple of IROPs, using
specially trained crewmembers. When
the tests were successful, they formalized the procedures, which
became standard in April 2009.
While the cancellation desk effectively addressed many of the
problems posed by IROPs-
communications overload, prompt notification of crews,
dedicated focus on processing
cancellation packages-it did not address the basic throughput
time of processing cancellations.
In order to process 20, 50, or 100 cancellations per hour,
substantial improvements would be
needed to the computer tools available, to automate much of the
manual process. This would be
a subject for future improvement.
Result of the Initiative
IROP Integrity was officially finished on June 20, 2009, in time
for the summer thunderstorm
season. By this time, 85 of the projects that had been identified
to improve performance during
IROPs had been completed by the working teams. An additional
15 projects were in the process
of being completed. Many other small, but helpful, changes,
such as adding groups to e-mail
distributions, had been immediately implemented following the

early process mapping sessions.
Still other improvements had occurred simply as the result of
people from different parts of the
organization getting to know each other and understanding their
responsibilities.
from
The changes came in many forms-some involved technology,
others communications, others
process flow; some involved the physical layout of critical
facilities such as the System
Operations Center (SOC); and still others involved changes of
responsibility assignments during
IROPs. One of the critical changes was a philosophical change
in system operations
management. JetBlue used a matrix to provide guidance
throughout the organization during
IROPs. The matrix had four levels of severity-ranging from an
"Operations Advisory,"
impacting 5-20 percent of system departures to a "Level 3"
IROP, in which more than 70 percent
of departures were impacted. The IROP level was used to
determine when various IR OP-related
processes were activated throughout the airline. IROPs were
called by the SOC manager on duty

(MOD), who also specified the IROP level. Prior to IROP
Integrity, the level for a weather event
of a given severity would vary depending on which MOD was
on duty at the time. As part of
IROP Integrity, the matrix was refined, and much of the
subjectivity removed-affected groups
could be confident that a Level 2 event would be the same
regardless of which person was
working as MOD at the time it was called, so they could
implement plans that were appropriate
to the level of disruption.
Another critical change related to the role of the MOD once an
IROP was declared. Prior to
IROP Integrity, the MOD retained control of the details of
running the System Operation Center.
This meant that while the MOD was concerned about tactical
details, no one was focusing on the
longer-term situation. Tactical details might be handled well,
but the overall recovery might be
poor. As part of the changes coming out of IROP Integrity, once
an IROP was called, the MOD
would be responsible for looking 24 to 48 hours into the future.
Tactical decisions were
delegated to others.
JetBlue crewmembers and passengers saw an immediate impact
from the IROP Integrity
changes. During the summer of 2009, IROPs caused much less
disruption than had previously
been the case-a fact noticed throughout the organization. (See
Exhibit 10 for comments by
crewmembers.) Perhaps the most dramatic change can be seen
when comparing the disastrous
ice storm of February 2007 with the impact of an even worse ice

storm in February 2010. The
2007 storm had impacted JFK for about six hours, leading to a
six-day nightmare for JetBlue
crewmembers and passengers. On February 10, 2010 a more
intense ice storm severely limited
capacity at JFK for more than 24 hours. Rather than waiting to
cancel, as had been the case in
2007, this time JetBlue cancelled all JFK flights the day before,
in anticipation of the storm.
Two days after the storm, the airline was running as if nothing
had happened. The cost of
vouchers issued as a result of the storm was less than $170,000,
since almost all cancellations
were done more than four hours before scheduled departures.
26
While the one-day storm in
February 2007 had cost the company about $41 million ($24
million of which were vouchers),
the estimated cost of all weather events in Ql 2010, cancelling
1,300 flights (524 of which were
on February l 0-11 ), was just $10 million.
27
This was even more remarkable considering that the
airline was larger and more complex in 2010 than it had been in
2007.
26
JetBlue issued vouchers only for cancellations within four hours
of scheduled departure. All of the February
2007 cancellations had been within this window.
27

2007 cost from April 21, 2007 Earnings Conference Call, loc.
cit. 2010 data from "Event Brief of QI 2010
JetBlue Airways Earnings Conference Call-Final," CQ FD
Disclosure, April 28, 2010.
MGT-600 Resource Planning and Decision Making 181W3
taught by Lindsay Conole, Southern New Hampshire Universit y
from
IROP Integrity was not intended to provide a static, permanent
"solution" to the problems of
cancellation, communication, and recovery from disruptions-the
airline, and the aviation
environment, was continually changing, and the way that it
dealt with IROPs would also need to
evolve. As part of the process of continual improvement,
immediately after each IROP, a formal
report was prepared detailing how the company dealt with the
event. Maruster commented,
"After every significant event, we debrief as a team. We don't
ask leadership what they think
occurred, we ask the crew members that are working it what
they think we did well, and what
they think we didn't do so well." By evaluating its performance

during each IROP, JetBlue
could identify areas to improve, and ensure that newly
implemented changes were producing
results.
THE LEGACY OF IROP INTEGRITY AT JETBLUE
IROP Integrity changed JetBlue far beyond its ability to
effectively deal with irregular
operations--enormous as that impact might have been. The
company had taken on a serious,
cross-functional problem, and succeeded. It now had a model
for implementing major change.
Brian Towle, JetBlue's general manager at the San Diego airport
and one of the original
members of Simi's team, recalled:
When I first looked at it [IROP Integrity] I thought, 'How the
heck can you break
this down?' When I was watching Bonny, I thought, 'What kind
of mind takes
something so huge and just breaks it down to a pink sticky?' It's
just amazing
how impactful a little sticky can be. It's taught me that nothing
is impossible. If
you have the right leaders, the right people who want to work,
then you can do
anything.
In January 2010, for instance, the company installed a new
reservations system-a major cross-
functional change that it accomplished using some of the tools
it had mastered during IROP
Integrity.

Maruster noted the impact of the project on the company's
attitude toward large-scale change:
We asked the people who were doing the work, who, I think,
had lost all hope that
improvement was possible, 'what do you think is wrong, walk
me through the
process that you use to do this procedure every single day.' I
think that became a
very JetBlue cultural defining moment in terms of how we work
with labor, how
we work with one another, how we work on large-scale
initiatives. It was
engaging our crewmembers in large-scale change, whether it's
what type of new
uniforms we should have, or what should our service model of
tomorrow look
like. The model that we used with IROP Integrity is now
becoming a JetBlue
model for any large-scale change.
The project also initiated an attitude of continual improvement.
Maruster observed, "I think one
of the biggest improvements I've seen is this drive to
continually improve. I think this will be
for the rest of JetBlue's life-asking the questions, 'Did we do
that well enough? What could we
have done better?' Those are two great questions to always be
asking."
MGT--600 Resource Planning and Decision Making 18lW3

from
Dervin noted another change she believed would have a long-
term impact:
I don't think we're going to really appreciate the change in
company culture until
we look back five years from now, because based on our success
with IR.OP
Integrity, the entire company changed from the spirit of 'just get
'er done.' We
changed from that kind of heroics, to making data and
information and thoughtful
decision making a heroic activity.
p.20
The project also had an important impact on the individual
participants. First, it exposed them to
other parts of the company, and other people, that impacted
their work, but that they otherwise
would not have encountered. For some, it gave them confidence
that they had more to offer than
they realized, and inspired them to take on additional
responsibility-and it enabled their talents
to be recognized by their peers and leadership. Several front-
line participants in the project used
their experience to become first-level managers, and others took
on even higher roles.

In June 2009, Maruster was promoted to become the company's
chief operating officer. While
many factors were undoubtedly involved in this promotion, and
Maruster had a strong
background in airline operations, IR.OP Integrity provided an
opportunity for him to demonstrate
leadership of a large project involving all parts of the company,
including functions that had not
previously reported to him. His passion for the project also
provided a clear indication of his
priorities and his belief in the contribution of all JetBlue
crewmembers.
When Maruster became COO, he retained the change process
proven through IR.OP Integrity by
establishing a function to focus on strategic projects. This was
headed by Gus Nicoll, a front-
line pilot who became an important participant and ultimately a
project lead in IR.OP Integrity.
In mid-2010, Nicoll noted that "We now have several IR.OP
Integrity-type corporate initiatives
either [ completed] or in progress that in many ways are
modeled after the capabilities we
forged."
Nicoll reported directly to Maruster in this role, but also
continued to fly (much as Simi
continued to fly while leading IR.OP Integrity and later as
director of customer experience and
analysis). One of the benefits of this arrangement was to bring
front-line awareness into senior
management decision making, in much the same way as IR.OP
Integrity brought front-line
crewmembers into the process of designing operational change.
Nicoll commented, "What it says

to our peers on the front line is, 'your perspective is being
represented. You have an advocate.'
There have been times when I've put on my captain's hat and
said, 'Rob, let me tell you what
that's going to feel like to somebody on the front line.' "
One long-time crewmember observed, "One of our values,
passion, was reignited during the
IR.OP Integrity work. A lot of crewmembers felt as if they had
a voice, a say in how to fix the
problem." Annette Hill, a reservation agent working from home,
who was part of the project, put
it this way: "It just makes you feel like the company is really
interested, and everybody has a say.
Faith in leadership comes by letting us in on the company's
plans and letting us be part of this
company. This is our company-it's not theirs-it's ours."
from
The legacy of IROP Integrity could be seen in many ways. To
illustrate, during June and July
2010, JetBlue held six two-day sessions in downtown New York
for flight attendants, as part of
an initiative to determine the company's vision for service in its
second decade of operation.
Each session included about 80 flight attendants and 20

managers, supervisors, and other
personnel. The sessions combined motivational and
inspirational aspects with information
sharing and data gathering. During the data gathering, attendees
brainstormed visions for future
service related to several specific topics. They were then
offered the opportunity to be part of
task force teams that would meet later to refine these ideas.
Similar sessions were planned for
the other primary customer-facing groups: airport operations
and reservations.
CONCLUSION
The IROP Integrity project had successfully met its objectives.
JetBlue had become skilled at
cancelling, recovering, and communicating before, during, and
after IROPs. The project had
identified talent throughout the organization, allowed
crewmembers at all levels to grow, and
built cross-departmental relationships. It had also established a
model for future process
improvement.
JetBlue would face continual challenges as it grew, and as the
competitive and regulatory
environment changed. For instance, effective May 3, 2010, the
Congress instituted a fine to the
airline of $27,500 per passenger if an airplane is delayed on the
tarmac for more than three
hours. Thus, if JetBlue had a full A320, with 150 passengers
delayed past the three-hour
deadline, it would face a fine of more than $4 million. To
ensure that they complied with the
three-hour requirement, JetBlue was reviewing the procedures
put in place through IR.OP

Integrity, and making changes where necessary.
Maruster reflected on the importance of the IR.OP Integrity
process, saying, "We have not solved
for everything, but we probably took several years' worth of
process change and accelerated it
over a seven to eight month period. We still have things to work
on. We're not perfect, but I'm
not sure we'd be here today had we not done that initiative."
STUDY QUESTIONS
1. What made the IROP change effort successful?
2. How would you have organized the change effort differently?
from
Exhibit 1
JetBlue Fleet Size
p.22
JetBlue had the following number of planes in its fleet as of
December 31 of each year from
2000-2009. The planned fleet, based on planes as of December
31, 2006 plus firm orders for

new planes through 2009, is also shown.
200
X
180
2006 Plan
160
Vl 140
I'll
120
ci.
100
Airbus A320
80
E
:,
z 60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: JetBlue S-1 and 10-K SEC filings. 2006 plan is based

on firm orders as of the end of 2006, according to the
company's 10-K filing for 2006. In addition, JetBlue had
options for an additional 5 planes in 2008 and 12 planes in
2009.
from
QJ
C
'+-
0
....
(1)
.0
Exhibit 2
Number of Cities Served
Number of cities served by JetBlue flights at the end of each
year:
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Source: JetBlue SEC Form S-1 and Form 10-K for 2002-2009.
p.23
taught by Lindsay Conole. Southern New Hampshire University
from
60 -- --------------------------.
50 +------------------==--r----r-,:-r----1
40 ------------------
30 ;------------==-----1
20 ----------
10
0 -+-...._..........,__._____,_----r-_.__.....__...,,_.....JL-L......p--
&..---i...-...-...&.-..&...-,........&__.'---r-__._ ____ _.__ ...........
,,_....,..__._--f
Exhibit 3
Revenue Growth and Profitability
JetBlue had the following revenue and profit (loss), beginning

with 2000, its first year of flight
operations. All values in millions of dollars.
Revenue Net Income
(Loss)
2000 105 (21)
2001 320 39
2002 635 55
2003 998 104
2004 1,266 47
2005 1,701 (20)
2006 2,363 (1)
2007 2,842 18
2008 3,388 (76)
2009 3,286 58
Source: JetBlue 10-K SEC Filings.
from

Exhibit 4
JetBlue Awards
p.25
By July 2010, JetBlue had won more than 160 industry awards
in its first 10 years of operation.
A small sample of these awards include:
Year Award Source
2010 Top Low Cost Airline for Customer Satisfaction J.D.
Power and Associates
2010 Best Coach-Class Experience SmarterTravel Editors'
Choice
Awards
2010 Most Customer Friendly Airline SmarterTravel Editors'
Choice
Awards
2009 Top-Rated Large Domestic Airline-Economy Zagat Airline
Survey
Seating
2008 Best Large U.S. Economy Class Zagat Airline Survey
2008 Most Eco-Friendly Zagat Airline Survey
2007 Best Domestic Airline Conde Nast Traveler Readers'

Choice Awards
2007 Best North American Low Cost Airline Skvtrax World
Airline Awards
2007 Best U.S. Airline Airline Quality Ranking Survey
2006 Best Domestic Airline Travel+ Leisure World's Best
Values A wards
2006 Best Airline Value Entrepreneur Magazine
2006 Passenger Service A ward Air Transport World Magazine
2005 Best Airline Quality The Wall Street Journal Airline
Quality Survey
2005 Best Airline Service The Associated Press Annual
Survey
2005 Best Domestic Airline North American Travel
Journalists Association
2004 Best Low Cost Carrier in the World Global Traveler
Magazine
2004 Best Company in North America Global Finance Magazine
Note: JetBlue won some of these awards for many years. Not all
repeat wins are shown, in order
to illustrate the range of awards won. For instance, JetBlue won
customer satisfaction awards
from J.D. Power and Associates each year from 2005 through
2010.
JetBlue was also listed as the #1 Airline Brand by the Brand
Keys Customer Loyalty
Engagement Index every year from 2003 to 2010.
Source: JetBlue website: Awards,
http://www.jetblue.com/about/ourcompany/awards.asp (accessed
July 6, 2010).

from
Exhibit S
JetBlue Customer Bill of Rights
The JetBlue Customer Bill of Rights was published on the
company's website as follows. The
site also provided definitions of terms, a compensation lookup
table, a frequently asked questions
section, and a link to the "Travel Bank" showing the balance of
funds available to a customer as
the result of compensation due to flight delays, cancellations, or
other issues.
Customer Bill of Rights
Above all else, JetBlue Airways is dedicated to bringing
humanity back to air travel. We strive to
make every part of your experience as simple and as pleasant as
possible. Unfortunately, there
are times when things do not go as planned. If you're
inconvenienced as a result, we think it is
important that you know exactly what you can expect from us.
That's why we created our
Customer Bill of Rights. These Rights will always be subject to
the highest level of safety and

security for our customers and crewmembers.
Information
JetBlue will notify customers of delays, cancellations and
diversions. Notification may be given
in any of the following forms: via jetblue.com, via telephone,
flight information display system,
airport announcement, onboard announcement, email or text
message.
Cancellations
All customers whose flight is cancelled by JetBlue will, at the
customer's option, receive a full
refund or reaccommodation on the next available JetBlue flight
at no additional charge or fare. If
JetBlue cancels a flight within 4 hours of scheduled departure
and the cancellation is due to a
Controllable Irregularity, JetBlue will also provide the customer
with a $50 Credit good for
future travel on JetBlue.
Departure Delays
1. Customers whose flight is delayed for 1-1 :59 hours after
scheduled departure time due to
a Controllable Irregularity are entitled to a $25 Credit good for
2. Customers whose flight is delayed for 2-4:59 hours after
a Controllable Irregularity are entitled to a $50 Credit good for

3. Customers whose flight is delayed for 5-5:59 hours after
a Controllable Irregularity are entitled to a Credit good for
future travel on JetBlue in the
amount paid by the customer for the oneway trip less taxes and
fees ( or $50, whichever is
greater).
4. Customers whose flight is delayed for 6 or more hours after
scheduled departure time due
to a Controllable Irregularity are entitled to a Credit good for
future travel on JetBlue in
the amount paid by the customer for the roundtrip ( or the
oneway trip, doubled) less taxes
and fees.
MGT-600 Resource Planning and Decision Making 18lW3
taught by Lindsay Conole. Southern New Hampshire University
from
Delays (Departure Delays and Ooboard Ground Delays on
Departure)
For customers whose flight is delayed 3 hours or more after
scheduled departure, JetBlue will
provide free movies on flights that are 2 hours or longer.
Overbookiogs

Customers who are involuntarily denied boarding shall receive
$1,000.
Ooboard Ground Delays
JetBlue will provide customers experiencing an onboard ground
delay with 36 channels of
DIRECTV®*, food and drink, access to clean restrooms and, as
necessary, medical treatment.
JetBlue will not permit the aircraft to remain on the tarmac for
more than three hours unless the
pilot-in-command determines there is a safety or security-
related reason for remaining on the
tarmac or Air Traffic Control advises the pilot-in-command that
returning to the gate or another
disembarkation point elsewhere in order to deplane would
significantly disrupt airport
operations.
Arrivals:
1. Customers who experience an Onboard Ground Delay on
Arrival for 1-1 :59 hours after
scheduled arrival time are entitled to a $50 Credit good for
Arrival for 2 or more hours
after scheduled arrival time are entitled to a Credit good for
future travel on JetBlue in the
amount paid by the customer for the roundtrip ( or the oneway
trip, doubled) less taxes
and fees.

Departures:
Departure for 3-3:59 hours
after scheduled departure time are entitled to a $50 Credit good
for future travel on
JetBlue.
Departure for 4-4:59 hours
after scheduled departure time are entitled to a Credit good for
the amount paid by the customer for the oneway trip less taxes
and fees ( or $50,
whichever is greater).
Departure for 5 or more hours
after scheduled departure time are entitled to a Credit good for
the amount paid by the customer for the roundtrip ( or the
oneway trip, doubled) less taxes
and fees.
lntlight Entertainment
JetBlue offers 36 channels of DIRECTV®* service on its flights
in the Continental U.S. If our
LiveTV system is inoperable on flights in the Continental U.S,
customers are entitled to a $15
Credit good for future travel on JetBlue.

from
*DIRECTV service is not available on flights outside the
continental United States; however,
where applicable, movies from JetBlue Features are offered
complimentary on these routes.
These Rights are subject to JetBlue's Contract of Carriage and,
as applicable, the operational
control of the flight crew, and apply to only JetBlue operated
flights.
This document is representative of what is reflected in JetBlue's
Contract of Carriage, the legally
binding document between JetBlue and its customers.
Source: JetBlue website, "JetBlue's Customer Bill of Rights and
Tarmac Contingency Plan," updated May 27, 2010,
http://www.jetblue.com/about/ourcompany/promise/index.html
(accessed June 22, 2010).
from

Exhibit 6
Biographical Sketches of Key IROP Integrity Personnel
Joel Peterson, Chairman
Peterson is the founding partner of Peterson Partners, LP, a
private equity firm focused on small-
to-medium sized growth companies. He is also founder of JCP
Capital, which provides early-
stage capital to entrepreneurs. He has been a lecturer at the
Stanford Graduate School of
Business since 1992, teaching courses on real estate investment,
entrepreneurship, and
leadership. He has served on the board of JetBlue since 1999,
and became chairman in May
2008. He also serves on a number of other boards. His is the
former national managing partner
of Trammell Crow Company, was the company's CFO for 10
years, and was CEO of Trammell
Crow Residential in the mid-1980s. He has an MBA from
Harvard.
Rob Maruster, Executive Vice President and Chief Operating
Officer
Maruster joined JetBlue in 2005 as vice president of operating
planning. In 2006, he was
promoted to senior vice president of airports and operational
planning. In 2008, he took
responsibility for the customer services group, which included
airports, infligbt services,
reservations, and system operations. In June 2009, he was
promoted to executive vice president

and chief operating officer. Prior to joining JetBlue, Maruster
had worked at Delta airlines for
12 years, beginning as a gate agent and working his way to
being the vice president responsible
for all operations at Delta's Atlanta hub. He has an MBA from
Emory University.
Bonny Simi, E190 Captain and Director of Customer Experience
and Analysis
Simi joined JetBlue in 2003 as a pilot, flying A320s, and later
E190s. She also taught cockpit
resource management in the JetBlue University. She took one
year off and completed the Sloan
Master's program at the Stanford Graduate School of Business.
While still flying, she has
worked in a number of capacities including director of airport
planning and director of customer
service. In 2010, she was director of customer experience and
analysis.
Prior to joining JetBlue, she was a senior captain at United
Airlines, flying Boeing 737s. Simi
(under her maiden name of Bonny Warner) is a three-time
Olympian competing in luge, and later
an Olympic television commentator. She is a graduate of
Stanford University.
Sources: Peterson: Stanford Graduate School of Business
Faculty Profiles,
https://gsbapps.stanford.cdu/facultyprofiles/biomain.asp?id=553
38009 (accessed July 2, 2010). Maruster: Interview
and JetBlue SEC Form 10-K for 2010, p. 21. Simi: Interviews.

from
Exhibit 7
IROP Integrity Organization
The IR.OP Integrity organization, as of October 2009, was:
�-T-•-•T_Org_�f------111��
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------------
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IROP Integrity Organizational Structure
,
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: ,-OP...-,Pll :
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◄-- -- -- ------,,
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p.30

◄•------,
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. �----� ,' ----------------soell.L��r..,.,.---------------' EJ[::JEJ
Source: JetBlue Airways, reprinted with permission.
from
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Exhibit 8
Weekly Working Team Presentation Samples
IROP Integrity working teams used a standard format for
presenting data during weekly
telephonic update meetings. The following are the updates for
two teams, prepared for the
December 9, 2008 update.
'
Call Volume
last Week
• Identified iow hang11g fruit" (pnl!Bcis already
l.lldetway assigned Plll!ect leads and denbtied
potenial stal<eholdets
Obstacles/Issues
• Sefflafolttle ....... �Cl,-..,SOCICl",w
Sel.-#OCIMJl>er,gdlal&sed-,.chr-.,gloans
--s,IA'I--
-uar,yo111e ........... 1c1-� ......

-- Wlneedll><bllllft�aoalyllOIO
_.,.,.lleslcrutedilCIICII.
Next Week
• Review Cal Process Flow aeated by Tiffany
• Discuss �talion of Blue Metncs
• Review lakea-Alays from la3t meeting
Support Needed
• Communicabon Plan/Collaborabon With other
working teams
• Business case br Blue Melnc$ and Blue
Dialer
IROP Customer Communication
-
Last Week
• Team meebng
• Rewort:ed ks! of prqecb, rnergmg some and
adding a fe-N olhers
• ldentdied sub-groups. lean leads and exlemal
contads
• R� lnleine on prqects
Obstacles/Issues

• Budgeting for 2009 cormg to a close and may
not be able b support a booget for wsl008
"oompermbon" for non-bi! of nght-
• PSS lransibon could prevent some of the
ledlnology manges needed to support some of
lhese initiabves.
-
Next Week
• Subteams wormg on thew prqects to identify
more detailed action plal5 and bmmg
• Reachng out to e:demal conlacb to educate
them on the nibabve and gelllng llem looped
into ihe spec:tlic proiect.
• Wormg on Int December deliverable of
N!W!Wlng al emai and reservation SC11p1s br
brand COIISl5tency
Support Needed
• External support ldenbfied at the proJect level
and should not present an issue unless we get
push bad: on !her �e involvement
Source: JetBlue Airways IROP Integrity After Action Report
Appendices, October 5, 2009. Reprinted with
permission.

from
Exhibit 9
IROP Integrity Project Dashboard
The status of projects was summarized on a dashboard, as
shown below ( example is of April 27,
2009):
IROP Integrity Project Dashboard
Pre-Cancel
Prioritization
Manual
Commercial
Training
-Complet e
ATC Portal
menlsi Jun.Oct I
Source: JetBlue Airways IROP Integrity Weekly Dashboard,
June 9, 2009. Reprinted with permission.

MGT-600 Resource Planning and Decision Making 1 BTW3
from
January 201 B to April 2018.
Exhibit 10
JetBlue Crewmember Comments About IROPs - Before and
After IROP Integrity
Comments from JetBlue crewmembers about IROPs, before
IROP Integrity:
•
•
•
•
•
•
•
•
•
•

"Sometimes you feel like you're on quicksand."
"It's just overwhelming, sometimes, especially when we cancel
a lot of flights. Then, the
floor just goes crazy."
"How many times can I say to a crewmember, 'I'm sorry. We're
working on it. We're
fixing it. It will get better?
"'
"They go through three days of IROPs, and you can see it on
their faces. They say, 'I don't
want to be here anymore. This is too much.' "
"Once we get all the information in, it's difficult sometimes to
communicate it out, because
of all the phone calls coming in to us."
"The phone is literally constantly ringing."
"They'll come to me and say, 'I just dropped a 3 position crew
recovery in Boston,' and I'm
looking at them and saying, 'I've got nobody in Boston.' And,
we make that happen in the
end. But then, 5 minutes later, I get another crew recovery crew
member saying, 'I need a 3
position [crew] in JFK, and I've got nobody in Kennedy."'
"I would say, definitely, chaos."
"I've been waiting on hold forever, just to let you know I'm here
to help. I can help you."

"It was a nightmare. I would rather have been on the airplane
for 18 hours than be in this
room [during an IROP]."
Comments from crewmembers after IROP Integrity projects
began to take effect:
•
•
•
•
•
•
•
•
•
"The pre-cancel plan goes out. Our crewmembers are notified of
pairing modifications .
There's no longer that 'Hey, what am I supposed to be doing? I
was supposed to be on an
airplane 12 hours ago, but no one's contacted me."'
"Ops updates us in a very timely manner. Everything's getting
done way ahead of time, and
that takes a huge burden off the airports."
''Now, with the pre-cancellation list, we can start calling people
before they even show up at

the airport."
"I can definitely see an improvement."
"We've cancelled 89 flights in one day, and it didn't impact our
operation at all."
"[Before], it would have been intense-crowds of people at the
podium, making
announcements over and over. But that day [ after IROP
Integrity], I went to my gate, made a
couple of announcements. The customers were relaxed."
"[An IROP] is like just another day."
"The days of just complete madness have gone away."
"This is the first time that I truly feel confident that I can wake
up in the morning after
having a major IROP and know that we have the confidence of
12,000 crewmembers out
there on the line, that this room, System Operations, will reset
the airline, unscathed, from the
previous day's event."
Source: JetBlue video interviews with crewmembers.
from

Compensation: Performance Appraisal
You have to make salary increase recommendations for eight
employees that you supervise. All of the engineers are of the
same age, education and experience (no previous experience
before joining your company). They have just completed their
first year with the company and are now to be considered for
their first annual raise.
In making your recommendations, you should keep in mind that:
1. You are likely to be setting precedents for future salary
decisions.
2. Your group has been asked to hold down salary costs to the
company as much as you can.
3. You are concerned about equity. All decisions ought to be
consistent with each other.
4. Employment opportunities are good for engineers in other
companies. The probability is very high that any of these
engineers will leave if they did not believe that they were
rewarded equitably for their year’s effort. However, remember
that maintaining equity is not the same as maintaining equality.
5. Your company has a policy of maintaining salaries which
correspond to those in the community and the industry at large.
Your company is competitive in attracting and holding
employees. However, it has no fixed job evaluation plans or
salary schedules. It prefers to remain as flexible and adaptive
as possible in offering competitive salaries and salary increases
– although it is constrained by the desire to keep salary costs
down and to maintain fair and equitable relations among its
employees.
Considering the guidelines that have been provided above and

the information about each of the employees provided below,
indicate the size of the raise that you would like to give each
employee by writing a percentage next to each name. In order
to give you some frame of reference, in this “make believe
world” inflation is running at approximately 4% and an average,
fully qualified employee who is reaching (not exceeding) all
required goals is generally receiving an annual increase of 10%
(I said this was make believe!!).
_____% Abraham Adams. Abe is not, as far as you can tell, a
good performer. You have checked your view with others and
they do not feel that he is effective either. However, you
happen to know he has one of the toughest work groups to
manage. His subordinates have low skill levels and the work is
dirty and hard. If you lose him, you are not sure who you could
find to replace him.
______% Benjy Berger. Benjy is singly and seems to live the
life of a carefree bachelor. In general, you feel that this job
performance is not up to par, and some of his “goofs” are well
known to his fellow employees.
______% Clyde Cohen. You consider Clyde to be one of your
best subordinates. However, it is quite apparent that other
people don’t consider him to be an effective employee. Clyde
has married a rich wife, and as far as you know, he doesn’t need
additional money.
______% David Dudley. You happened to know from your
personal relationship with “Dave” that he badly needs more
money because of certain personal problems he is having. As
fare as you are concerned, he also happens to be one of the best
of your subordinates. For some reason your enthusiasm for him
is not shared by your other subordinates and you have heard
them making joking remarks about his performance.
______% Ellie Ellesberg. Ellie has been very successful so far
in the tasks she has undertaken. You are particularly impressed

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