Neeleman Vacates JetBlue CEO Post

JetBlue Airways today said founder and CEO David Neeleman is stepping aside and president David Barger immediately will assume the chief executive role. Neeleman in a statement said he would remain with JetBlue as non-executive chairman of the board to focus on "long-term vision and strategy" of the eighth-largest domestic carrier.

A JetBlue spokesperson said the carrier's shareholders yesterday convened for its annual meeting, and the board made the decision shortly thereafter.

Though Neeleman had been the "external face of JetBlue," said UBS airline analyst Kevin Crissey, Barger has worked with Neeleman on day-to-day operations since the carrier was founded in 1998. "We do not expect a major shift in strategy but do expect JetBlue to continue beefing up its management ranks as it has moved from a startup to a large airline," Crissey said in a research note.

Neeleman had gained respect in the industry as an entrepreneur whose strengths played toward launching startups, but critics questioned his ability to lead an established carrier as it continues to grow. "The carrier has moved from being the aggressive small upstart to a major player and we believe that the enterprise is now at the stage where change was needed," Calyon Securities airline analyst Ray Neidl said in a research note, adding that the change comes "as no real surprise." Neidl said the company in the past year had made several key management changes and said JetBlue's operational difficulty at its New York-JFK hub during a winter storm in February "might have been the final determining factor" in shifting Neeleman's responsibilities.

Crissey noted, "Bulls may read this announcement as Mr. Neeleman choosing to step away from day-to-day operations to look for a merger partner for JetBlue (perhaps Delta or Frontier). We do not read it that way. He did not need to give up the CEO role to do that. The company also maintains that it would not be interested in an approach by Delta. The response regarding a Frontier combination is a bit less negative though still biased against it."

JetBlue said Neeleman's new position allows him to focus on JetBlue's overarching strategy, and explore larger growth opportunities for the carrier—including implications of the U.S.-EU Open Skies agreement and the growth of major airline alliances.

Neeleman today in a statement said, "This is a natural evolution of our leadership structure as JetBlue continues to grow. As chairman of the board of directors, I will focus on developing JetBlue's long-term vision and strategy, and how we can continue to be a preferred product in a commodity business."