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JetBlue Service Initiatives To Be Cost Neutral, CEO Says

JetBlue Airways' heightened focus on customer service following an operational meltdown in February is unlikely to raise the carrier's costs in the long term, Chief Executive David Neeleman said on Friday.

JetBlue is eager to reclaim its reputation as a service-oriented carrier, and investments made to prevent a repeat of the public relations disaster last month will be returned by way of customer loyalty, Neeleman told an audience at Northwestern University.

"I don't think it's going to affect our cost," he said. "In fact, I think it's going to be a positive."

JetBlue suffered intense criticism after a February ice storm in New York caused the airline to cancel 1,191 flights.

Passengers were stranded at airports for days because of the carrier's reluctance to cancel flights early. Some were stuck on grounded airplanes for hours. The debacle was expected to cost JetBlue about $30 million.

Scrambling to make amends with its passengers, JetBlue quickly created a customer bill of rights that offers various forms of compensation for delays that are within the airline's control.

But Neeleman said JetBlue has only begun to overhaul its customer service. A priority now is to beef up its online reservations systems to allow delayed and stranded travelers to quickly locate another flight, skipping the often time-consuming step of contacting a reservations agent.

JetBlue intends to put computers throughout its terminals for travelers to manipulate reservations en route.

Last week, seven-year-old JetBlue lowered its 2007 earnings outlook because of high fuel costs and potentially weaker demand. U.S. airlines, recovering from a years-long slump, remain dogged by high fuel prices and low-fare competition.

Shares of JetBlue , which have fallen nearly 20% this year, closed lower on Friday.

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