May 10, 2007 1:42 pm US/Eastern
Trouble On The Tarmac: JetBlue Dumps CEO
COO Barger Will Assume Duties Immediately
NEW YORK (CBS/AP) ―
JetBlue Airways Corp. replaced founder David Neeleman as CEO less than three months after operating snafus essentially shut down the carrier for days and frayed relations with customers.
The low-fare airline on Thursday appointed Chief Operating Officer Dave Barger as its new chief executive, effective immediately. Neeleman had been chief executive since 1998 and will retain his role as chairman.
The move comes after storms on Valentine's Day and St. Patrick's Day essentially shut JetBlue down, forcing the cancellation of nearly 1,700 flights and stranding thousands of travelers throughout the Northeast.
That weekend, numerous travelers spoke out to CBS 2 and expressed outrage after spending up to 10 hours on board grounded flights without being told why, or when they would be departing. During that time many complained of being fed only crackers and cookies, with limited bathroom access.
To prevent a recurrence, JetBlue drafted a "customer bill of rights," the gist of which is that the company now issues vouchers to some customers who experience delays.
The canceled flights and vouchers cost JetBlue $41 million, contributing to the company's first quarter loss of $22 million, or 12 cents a share. That was an improvement over the year-ago quarter, but was less than analysts had originally expected.
Last month, JetBlue lowered expectations for the rest of the year.
In a statement, Neeleman characterized the change as "a natural evolution" of JetBlue's leadership structure.
Barger, 49, will retain his role as president. He joined JetBlue as president and chief operating officer shortly after Neeleman founded the airline in 1998.
Shares of the airline, which operates more than 575 flights daily to 52 destinations, jumped 54 cents, or 5.1 percent, to $10.94 in morning trading. The stock is off 35 percent since mid-January, when it hit an intraday high of $17.02.
(© 2007 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
