I flew Jet Blue for the first time on
my recent trip to the investors' conference in New York. What a concept! Ample seat and leg room, a free soda and several bags of snacks if you wish, no extra fees beyond $2 to check a bag curbside and $1 for headphones, cheerful attendants who were pitching in to clean the plane as passengers walked off.
So, does it make sense to do the basics to keep customers happy even at a time when industry economics are brutal? Bring them back another day when conditions improve?
During
the media conference proper, I heard a couple of counterpoint comments on the assumed necessity of newspapers' cutting, then cutting some more.
Carl Schmidt, CFO of Lee Enterprises, said that since Lee operates in a number of lower cost markets, it has not felt the same pressure to outsource as its counterparts. He added, "There are some risks, as we have been hearing from other companies."
After
the presentation, I asked Schmidt to elaborate. "Service levels, difficulty training," he replied. "The point is that anything you do that touches the customer, you want to be very careful."
A.H. Belo CEO Robert Decherd responded similarly when a questioner asked about cost controls. "The expense profile of the legacy business" has to be examined constantly for savings, he said. But "we also need to be careful about what core readers expect of the print newspapers" and that includes being sure to keep "some absolutely essential content areas."
Conversely, newspapers really cannot shy from cutting when revenues are falling a total of roughly 20 percent in 2007 and 2008, more in California, Florida and some other markets. It is the same for airlines, which need to do something in the face of huge increases in fuel costs and current losses -- though the logic of obnoxious baggage charges on top of uncomfortable planes, at American and other carriers, eludes me.
Actually, I think many executives are aware of the perils Decherd and Schmidt articulate. They just don't say it, instead wrapping announcements of staff and news space cuts in the standard rhetoric about unprecedented hard times forcing reductions. We may be looking back before long at which management and news teams have made the necessary cuts most artfully, minimizing damage to print readers and users of other platforms.
Still, tough business is tough business, however you do the slicing. I checked and found that Jet Blue stock, like that of most airlines, is on the same ski-slope trajectory as public newspaper companies over the last six months.
Shares dipped below $4 this week. So it is an open question, I suppose, how much of the comfort and quality I enjoyed on that flight to New York will still be around in another year or two.
