JetBlue’s CEO Battles to Appease Passengers and Wall Street

Monday, February 16, 2015 8:24 pm | 2 Minute Read

In this Feb. 5, 2015 photo, Robin Hayes, the new CEO of New-York-based JetBlue Airways, walks through the aisle of an Airbus A321 at John F. Kennedy International Airport in New York. (AP Photo/Kathy Willens)

Robin Hayes, the new CEO of JetBlue Airways, is balancing between passengers and Wall Street.

As he takes control of the New York-based airline Monday, Hayes faces a difficult task: increase profits without destroying the culture that has made JetBlue stand out from other U.S. airlines.

For years, the airline has resisted charging for a first checked bag and boasted the most generous legroom in the industry. But, while the airline remained profitable, it lagged behind competitors. Wall Street demanded change.

To appease investors, Hayes recently announced that JetBlue will add a fee this spring for the first checked suitcase — a move estimated to bring in an extra $200 million annually by 2017. It will also add 15 more seats on most of its jets. That should increase the profit per flight, but passengers will lose some personal space.

To the airline’s fans, those were jarring decisions. Hayes stayed up until 3 a.m. answering the flood of emails.

“People are so passionate about the JetBlue brand and the JetBlue story. They are very protective of it,” Hayes says. “I see that as a good thing.”

Hayes, 48, was chosen in September to replace outgoing CEO Dave Barger. He is more receptive to investors than Barger, but JetBlue prides itself on doing right by workers and passengers. So, following the lead of his predecessors, Hayes flies to Orlando, Florida, every two weeks to welcome new hires at the airline’s orientation and training program. And while he’s cramming more seats into planes, passengers sitting in them will be getting larger screens and other perks.

For every 1,000 miles JetBlue flew last year, it collected an average of $119 for each available seat. By that same measure, Southwest Airlines took in $135, United Airlines saw $137, American Airlines had $140 and Delta Air Lines led the industry with $146.

JetBlue’s passengers flew a combined 37.8 billion miles last year. Getting the same revenue out of each seat as Southwest does would have brought in an extra $615 million, at an airline whose profit last year was $401 million.

Hayes doesn’t expect to match the other airlines, but he wants to come much closer.

This article appeared in print on page 8 of the February 17th, 2015 edition of Hamodia.