A computer failure caused dozens of JetBlue Airways Corporation (NASDAQ:JBLU) flights to be delayed Friday morning because the airline was unable to dispatch planes. The initial computer failure was corrected by 10:30 am, but much of the airline’s schedule for the day had to be pushed back, according to an Associated Press report.
Connectivity issues blamed for long delays
The problem started at JetBlue Airways Corporation (NASDAQ:JBLU)’s main hub in JFK Airport in New York, when all of the company’s flights were delayed for about 90 minutes. A company spokesperson cited connectivity issues, which could be any number of things. Connectivity issues could fail to calculate the amount of fuel airplanes need to reach their next destination, could fail to recognize that the planes had landed, or fail to notify crew members. It’s also possible that JetBlue found a workaround without identifying the specific problem—not that they would be eager to report that to the public.
JetBlue Airways has had a good year otherwise
JetBlue Airways Corporation (NASDAQ:JBLU) has had a good year, and stock prices surged after reports that David Neeleman was interested in merging the company with his start-up carrier Azul Linhas Aereas. The company has had strong financial performance and a relatively low valuation. Capital structure is skewed toward interest paying debt, but this just means costs have to be kept under control. During the second quarter of this year, JetBlue reduced its debt by $25 million and bought back half a million shares of common stock.
JetBlue shouldn’t suffer resulting from these delays
The latest incident might cause a temporary dip, but as long as JetBlue doesn’t become known for long delays it shouldn’t hurt the company’s ability to compete. JetBlue Airways Corporation (NASDAQ:JBLU) has actually done a fair job of customer service, including having the lowest rate of denied bookings last year.
People remember bad experiences more than good ones, but in the case of airlines it doesn’t really seem to matter. One of the challenges that airlines face is the almost complete absence of brand loyalty, as most flyers choose the cheapest ticket that fits their schedule. As long as JetBlue Airways Corporation (NASDAQ:JBLU) delivers low prices on its routes with a reasonable level of service, people will forget about this incident, and investors are unlikely to care.