Boss Talk: JetBlue CEO Charts Route Toward Change — WSJ

Robin Hayes expands airline’s premium service, weighs flights from U.S. East Coast to Europe

By Susan Carey 
 Stock Market Quotes, Business News, Financial News from http://commodity-market-news.com

In the eventful 18 months since he was elevated to the top job at JetBlue Airways Corp., Robin Hayes has learned what it is like to manage a small, close-knit company that sees itself as an industry disrupter.

In April, he tried to buy smaller San Francisco-based airline Virgin America Inc. in the hopes of building up JetBlue’s presence on the West Coast. But Mr. Hayes was outbid by Alaska Air Group Inc.

The CEO quickly pivoted and announced plans to help the New York-based, low-fare carrier grow organically, primarily by expanding its new premium service, Mint.

Mr. Hayes made waves last month, when he said JetBlue might buy a longer-range version of the single-aisle Airbus plane it already operates so it could fly to Europe from the East Coast. While the decision hasn’t been made, it would be a big strategic departure from JetBlue’s predominantly domestic model and bring competition from a squadron of new rivals.

The British-born former engineer was named JetBlue president in early 2014, becoming the third leader in its 16-year history. He joined the company in 2008 as chief commercial officer after 19 years at British Airways, a full-service international carrier whose lineage dates back to 1919. BA is now a unit of International Consolidated Airlines Group SA.

In a recent interview, Mr. Hayes, who is 50 years old and now holds dual U.S. and U.K. citizenship, talked about JetBlue’s evolving strategy.

Edited excerpts:

Mr. Hayes: When we add a route to one of their high-fare monopoly markets, they seem to notice us because their fares come down a lot. Being in the middle is actually where most people are. There’s a role for all these models, but if I could choose where we want to be, we’re actually where I want to be. We have an amazing customer loyalty.

Mr. Hayes: We have to make sure for our owners we’re delivering competitive financial performance. I would better describe it as changing. The new cabins we’re creating have improved in-flight entertainment, bigger screens, more channels, more movies, new ergonomically designed seats. We’ve started rolling out fresh food on longer flights.

Mr. Hayes: Wi-Fi is the best example. We were actually the first airline to have Wi-Fi in the U.S. It was on one airplane as a test. It was very narrow bandwidth so it didn’t really meet the needs. Then some of our competitors started to install the Gogo Wi-Fi product on their planes. I think we were like three years behind everybody else. But we don’t like this model of putting in a me-too product that is expensive to use. We want to wait for a much better technology we can bring to the market and offer something to our customers for free. We ended up with ViaSat.

Mr. Hayes: Mint was a hotly debated topic. If we do this, are we going to change the future of the airline? Many of our crew members were concerned. The problem we were trying to solve was our business performance on the [transcontinental routes] lagged our competitors and the main reason was the lack of exposure to the higher-fare premium segment. Now crew members are absolutely so excited by it. They see the ways it’s transformed our transcontinental business. It was exceeded every expectation we set, and some.

Mr. Hayes: What’s held us back is that our growth priorities have been elsewhere. Second, there is a different operating model. It does require a new airplane. Either you have to go into the widebody market, which is a step change for us. Or you have to take advantage of new technology, like the A321 Long-Range [which Airbus is due to roll out in 2019].

Mr. Hayes: I used to drink a lot of tea and now I drink a lot of coffee. BA taught me everything about this industry. The biggest difference was that BA was an incumbent brand so the whole mentality was around defending its strength. JetBlue is a challenger brand. I’m kind of amazed I didn’t get fired in the first year. I’m sure I went into all these meetings, the guy with a legacy mind-set, and said, “We’ve got to do that.” It definitely took some time, but adjust you do. And man, it’s fun once you’ve adjusted.

Write to Susan Carey at susan.carey[a]wsj.com

Copyright (c) 2016 Dow Jones & Company, Inc.