JetBlue CEO Tells CNBC: 'We Didn't Handle It Well'

The chief executive of JetBlue Airways apologized on CNBC for his company's handling of major flight delays in New York Wednesday and said the debacle will cost the carrier millions of dollars.

"We didn't handle it well," CEO David Neeleman said during an interview on CNBC's "Closing Bell." "Basically we didn't do a good job. We did a horrible job, actually, of getting our customers off those airplanes. We're going to work really hard to make sure it never happens again."

Neeleman said he was present at the company's operations center, which is less than 10 miles from John F. Kennedy International Airport, when hundreds of JetBlue passengers were left stranded on grounded planes for as long as nine hours during a snow and ice storm.

'I Was There'

"I was there and was following it," said Neeleman. "It was one of those things that spiraled out of control."

Ten departing and arriving flights were "significantly delayed," according to a JetBlue spokesman. The airline is offering delayed passengers refunds and free round-trip flights.

Neeleman told CNBC the company will lose "many millions" as a result of the logistical snafu.

But shares rose on Thursday after a Wall Street analyst took a more favorable view of the company. Goldman Sachs upgraded JetBlue  to "buy" from "neutral," citing the potential for its profit margins to improve as it diversifies its network.

The carrier posted a small loss in 2006, as load factors fell from 85.2% to 81.6%, and average fares rose by 8.8% to $119.73.

The situation is one that airlines try to avoid, said Michael Boyd, an aviation analyst for the Boyd Group in an interview on CNBC.

"It's one thing when it happens when you get diverted to - let's say to Atlantic City - and there are no gates to go to," Boyd said. "That's bad enough. But at your own hometown airport, you've got to have a better plan ... it's pretty hard to explain when its at JFK, and it's your focus of operation."

'It Was the Worst'

To Cheryl Chesner, 26, "unacceptable" was hardly the word for the 11 hours she said she and her husband, Seth, 27, spent trying to take a JetBlue flight to Aruba for their honeymoon.

"It was the worst. It was horrific," she said. Baldwin said the Aruba flight, scheduled to leave at about 8 a.m. Wednesday, ultimately left late Wednesday night. But the Chesners went home to the Bronx.

While they waited to take off, John Farrell waited to arrive. His JetBlue flight from Fort Myers, Fla., landed at 10 a.m., but passengers didn't get off until nearly 7 p.m., he said.
   
"You gotta realize the frustration -- you can look out the window and you can see, there's the gate, and if you let us off the plane, we can walk there," said Farrell, 48, of Brooklyn.

According to Baldwin, the jam arose as the airline sent outbound flights to the runway -- so as to be ready to leave immediately if the weather let up -- while incoming flights arrived and filled up the departure and arrival gates.

The problem grew worse as some equipment used to tow planes away from gates froze to the ground, he said.

'Gridlock Situation'

"We ended up with a gridlock situation where we couldn't move any of the aircraft at the gates," he said.

The airline stopped incoming flights by midafternoon, Baldwin said. By about 3 p.m., the airline gave up hope that the weather would allow the planes on the runway to take off and started arranging for buses to bring passengers back, he said. But the icy weather made that a slow process, he said.

"We need to make sure that it's always safe for the customers," he said.

JetBlue will review the day's events to determine whether it could have handled the storm differently and how to prevent similar problems from arising again, Baldwin said.

The airline said it cancelled 250 of its 505 daily flights on Wednesday.

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