JetBlue Airways Corp removed David Neeleman as chief executive on Thursday, three months after a major service meltdown, putting the 47-year-old founder of the company into the role of non-executive chairman. JetBlue said Neeleman, who started the company in 1998, will be replaced as CEO by President Dave Barger, 49, effective immediately.
The company said the change had been in the works for some time. The change in leadership comes after JetBlue suffered an embarrassing service disruption on February 14 that exposed weaknesses in the No 8 US carrier's operations. A Valentine's Day ice storm stranded passengers on planes for hours, led to nearly 1,200 flight cancellations over several days, and cost the company more than $30 million.
Neeleman, an airline industry pioneer, said the new role would free him up to spend more time on strategic issues that had been neglected amid the carrier's rapid growth. "When you're a founder and an entrepreneur and you get mired in the operation, it's not good for anybody," Neeleman said in an interview.
"This is a much better structure for us going forward," he said. "That was the board's recommendation, and I said 'Great, let's do it'." "The whole thing with Valentine's Day, it got us all focused back on the operation," Neeleman said. "It really highlighted that the strategic part is so important."
He said the new role will give him more time to focus on issues like developing JetBlue's Live TV unit, alternative sources of jet fuel, new forms of electronic ticketing, and opportunities afforded by the open skies agreement between the US and Europe.
Barger, who has worked alongside Neeleman since 1998, said he didn't expect significant changes to the company's strategy. "We're situated well now," he said in an interview. JetBlue shares, which have fallen about 30 percent over the last four months, rose 5.5 percent to $10.97 on Nasdaq.
Neeleman, a Mormon and a father of nine, was a successful pioneer in the airline industry, shaking up US air travel. In JetBlue, he created a low-fare carrier that offered customer service perks such as live television and leather seats. Before JetBlue, he set up Morris Air before eventually selling it to Southwest Airlines Co.
According to the company's latest proxy filing with securities regulators in April, Neeleman owned 10.77 million shares of JetBlue, worth about $112 million. That represents about 6 percent of all the company's shares.
In 2006, Neeleman received a salary of $200,000 and a $50,000 incentive award. JetBlue had been strengthening its management in recent months, bringing on board Russell Chew - former chief operating officer at the Federal Aviation Administration - as its chief operating officer in March.