Thursday, September 18, 2014

JetBlue CEO Barger to Retire in February: Robin Hayes, JetBlue President, Will Take Over As CEO

The Wall Street Journal
By Susan Carey

Updated Sept. 18, 2014 6:38 p.m. ET

Dave Barger, the longtime JetBlue Airways Corp. chief executive who has been criticized this year for the discount carrier's lagging performance, will step down when his contract ends in February, the company said.

Mr. Barger, 56 years old, will be succeeded by Robin Hayes, 48, a former British Airways executive who joined New York-based JetBlue in 2008 and was elevated to president in January.

"This is the right time," Joel Peterson, chairman of JetBlue's board, said in an interview on Thursday. "Robin is the right guy." Mr. Peterson said the board was unanimous in its decision, even after looking at other candidates.

Mr. Barger said he would have a standard one-year no-compete clause in his departure papers. "I have to figure out what I will do next," he said in an interview.

Lackluster for years, JetBlue's shares had risen nearly 40% since May, when speculation began circulating that Mr. Barger might be preparing to leave. The company also reported strong profit growth for the second quarter of this year—after a weak first quarter-with higher traffic pushing up revenue.

JetBlue's shares jumped more than 4% in after-hours trading on Thursday following the announcement. Analysts have posited that a new CEO might make changes including the start of fees to passengers for their first checked bags, which most other U.S. airlines already charge.

Mr. Barger joined JetBlue when it formed in 1998. He has been CEO since 2007 when he replaced company founder David Neeleman, who was ousted by the board after an ice storm severely disrupted its operations.

The No. 5 U.S. network carrier by traffic, JetBlue during Mr. Barger's tenure has earned plaudits for customer service. But its costs have crept up, challenging its low-fare business model. This year its pilots-long nonunion-voted to join the Air Line Pilots Association. And JetBlue was racked again this winter by weather-driven cancellations.

JetBlue's stock under Mr. Barger has lagged behind that of both big legacy carriers like Delta Air Lines Inc. and fellow discounter Southwest Airlines Co. Even with its rise in recent months, the shares were up just 9% at Thursday's close since Mr. Barger became CEO. Southwest's shares gained more than 140% in the same period.

Speculation about Mr. Barger's plans took off this past spring when a JetBlue director said he was considering leaving. But Mr. Barger had been cagey about his plans. In a May interview with The Wall Street Journal he said he expected to have discussions with his board over the next few months about whether he would be "continuing on or moving on." In July, he said that his future role at the company would be "the same as it is today."

Asked on Thursday if the pilots union vote was behind his departure decision to step down, Mr. Barger reiterated that he was "disappointed" with their decision but said the vote wasn't a factor.

Mr. Hayes has long been considered the likely successor to Mr. Barger. In an interview on Thursday, he declined to say whether JetBlue plans to initiate a first-bag fee, or to add seats to its airplanes, which analysts also have speculated might accompany a management change.

Mr. Hayes said JetBlue is "building on a great plan." Asked about the possibility of broader changes in strategy, he declined to comment but said JetBlue's investor day is where news tends to be made.

"A lot of exciting things are coming up," Mr. Hayes said.


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