Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Quick Take: Vouching for JetBlue

One week after a winter storm disrupted operations and stranded passengers, and one day after it cancelled hundreds of flights, JetBlue (Nasdaq: JBLU  ) CEO David Neeleman introduced a bill of rights for his airline's passengers.

The list of purported improvements includes flight vouchers for service disruptions. For example, customers subject to ground delays of 30 minutes or more on arrival, or three hours or more during departure, are eligible to receive free tickets. So are passengers denied boarding for flights that, because of operational problems, are delayed by an hour or more.

Also, JetBlue now promises to let passengers deplane after five hours on the ground. (Forgive me if this doesn't sound all that appealing.) Some were held up for 11 hours last week at New York's Kennedy Airport, as winter weather froze planes at gates and on the taxiway.

All told, Neeleman says last week's debacle at JFK will cost roughly $30 million. Investors responded by selling JetBlue shares, which were down 5% on the day.

But that may be just the beginning. Tens of millions of dollars will likely be allocated to Neeleman's bill of rights. Why? Most of the payouts have to do with delays, and JetBlue has the worst on-time record of the 10 major carriers operating in the U.S.

Maybe that will change, now that Neeleman has expressed a newfound commitment to service. But that commitment will cost money, which, in turn, will blur the once-distinct line between this airline rebel and legacy laggards like US Airways (NYSE: LCC  ) , UAL's (Nasdaq: UAUA  ) United, and AMR's (NYSE: AMR  ) American. Think about that before you invest.

Do you agree? Disagree? Let me know.

JetBlue is a Stock Advisor pick. For full access to Tom and David Gardner's entire portfolio, which is beating the market by more than 40%, sign up for a free 30-day trial.

Fool contributor Tim Beyers, ranked 1,573 out of more than 23,000 in our Motley Fool CAPS investor intelligence database, no longer flies frequently. But he still enjoys the occasional first-class vacation. Tim didn't own shares in any of the companies mentioned in this article at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on travel, Foolishness, and investing in general may be found in his blog. The Motley Fool's disclosure policy is always on time for departure.

Read/Post Comments (0) | Recommend This Article (15)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 522336, ~/Articles/ArticleHandler.aspx, 10/24/2016 10:07:21 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 51 minutes ago Sponsored by:
DOW 18,223.03 77.32 0.43%
S&P 500 2,151.33 10.17 0.47%
NASD 5,309.83 52.43 1.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2016 4:00 PM
JBLU $18.75 Up +0.18 +0.97%
JetBlue Airways CAPS Rating: ****
AAMRQ.DL $0.00 Down +0.00 +0.00%
LCC.DL $0.00 Down +0.00 +0.00%
US Airways Group CAPS Rating: *
UAUA.DL $0.00 Down +0.00 +0.00%
UAL Corp CAPS Rating: *