Barger out as JetBlue CEO

The date has been set for David Barger’s exit as CEO of JetBlue. On 16 February 2015 Barger will be replaced by Robin Hayes, currently the company President. The announcement ends much speculation about the future of the CEO role at the carrier and also opens up much more speculation about the future of the JetBlue “experience” and what changes may come.

Barger’s “retirement” when his contract expires early next year has been long rumored and pressure from the investor community is a big part of the push. Many in the markets have felt for some time now that JetBlue is leaving too much money on the table by keeping a free 1st checked bag, a lower seating density and other small perks which make flying with them generally a more pleasant passenger experience. Some of the resistance has been technical and some based on FAA rules. Ultimately, however, most of it seems to have been based on the company trying to remain a bit different under Barger’s leadership rather than just another player in the same game.

As the analysts from the banks press for more seats on the plane the magic number of 150 becomes more and more significant. Adding any seats means adding another flight attendant thanks to FAA rules. Just adding a single row probably means that’s a bad deal. The carrier could add two rows of seats and still keep a rather generous 32″ pitch but that would erode their ability to sell Even More Space seats with the 5 inches of extra legroom. And in the US market that up-sell option might just be the most profitable ancillary the carriers can have. Adding just a couple rows – with the associated higher costs for flight attendants – and dropping the ability to make money on the ancillary side of things doesn’t make much sense. Then again, American Airlines is headed towards 160 seats on their new 737-800s, adding a row and un-blocking 4 seats which currently have them right at 150. Seems they believe the extra FA on board isn’t so bad at that point.

And then there is the question of the seats themselves. JetBlue has newer seats on their A321 aircraft which could be retrofit on to the A320s. Theses are “slim line” seats which allow for more on a plane while nominally keeping the same knee room. That, plus choosing to not have a more generous 32″ option, would likely be sufficient to get a third row of extra seats and at that point the metrics likely shift towards making that a better investment. At least it would cover the costs of the additional flight attendant.

Hayes is quoted in the press release mostly saying all the “right” things about his vision for the future of the company:

It is a tremendous honor to succeed Dave as CEO of JetBlue. I continue to believe in our mission to inspire humanity, and as CEO I will be a faithful steward of the culture that has made JetBlue so successful. The airline industry has never been more competitive, but I believe we can continue to grow profitably. As we maintain our operational focus on safety and efficiency, we will continue to expand our network in underserved markets and roll out new products that enhance the JetBlue Experience and create value for our shareholders. Our commitments to our customers, crewmembers, and investors are all integrally connected and critically important to the long-term future of this great company.

While that is certainly what the investor community wants to hear I’m not quite so convinced as a consumer. A focus on safety and efficiency is great. So is expanding into new markets. But “new products that enhance” has me all sorts of worried, especially when the focus is to “create value for our shareholders.” There are enough buzzwords in there that I’m definitely expecting a few changes which are decidedly bad for passengers. Maybe I’ll be wrong and this time next year will be more of the same JetBlue I’ve been flying for over a decade. But I’m most certainly not making that bet.