Flying Along Technology’s Bleeding Edge

Jeffrey Cohen is vice president, IT and chief information officer at New York City-based JetBlue Airways. In this role, Cohen has led his team in implementing some of the most innovative technologies in the market today (e.g. Windows XP, Sharepoint Portal, Visual Studio, and Net Server), as well developing internal applications for projects such as the “Paperless Cockpit,” the JetBlue e-store and JetBlue’s online customer loyalty program, TrueBlue. JetBlue also has 650 reservation agents working from home in a “virtual call center” using VOIP phones.

Before joining to JetBlue, Cohen was a chief architect and senior consultant for USWeb/MarchFirst where he worked on assignments for clients such as Verizon Wireless and the Seagram Organization. Jeff graduated from SUNY at Stony Brook in 1975. JetBlue started in February 2000 and operates in 20 cities in the U.S. In this in-depth interview Cohen discusses how technology is being used to create efficiencies and save the low-cost airline significantly in operating costs.

Q: What is the Paperless Cockpit?

It is a method by which the company delivers its manuals and weight and balance information to the pilots. Every airline is required to have a set of manuals so every pilot and anyone in the flight operations aspect of the business — or in JetBlue’s case, we’ve told the FAA everyone in the company will have access to the manuals. It’s procedures on how the company will do everything from its fueling to…how many pets we allow on the plane or who’s allowed to fly in the cockpit. So those manuals must be up to date whenever there’s a change and what the airlines basically do is [make the changes] manually. They print up if there’s a change and send that change out to everyone in the company that is on the list. So you can see how inefficient that is because you have to print stuff and distribute it and people have to spend time to replace that. That could be as much as several times a week. We issue every pilot a laptop and they run a special piece of software that was developed by JetBlue called Blue Books, so every time a pilot plugs in to the network Blue Books runs automatically. So when you log on to the system the laptop automatically connects to the software and tests it to see what’s on the laptop versus your distribution folders.

We have 22 servers and a team of people that are basically responsible for keeping the manuals up to date. When they have a change in the manual they go to one place and make the change and when it’s done it automatically goes to the distribution site and goes to all the distribution servers. Rather than 550 pilots all getting a piece of mail, what happens is they have their laptops and they connect in to the network and Blue Book runs automatically and brings the manual to most current level and that way the pilots are not out of regulation. A pilot cannot fly without up to date manuals.

Q: JetBlue relies solely on e-tickets. Percentage-wise, how much money does that save the airline annually?

It would be a difficult number for us to equate because I don’t know the cost of a ticket. I only have the cost of an e-ticket. Some airlines say the cost of a ticket is $20 to $40 a reservation. In our case — and I don’t have those specific numbers, I’ve heard those bantered around — we sell over 70% of e-tickets online so therefore over 70% of our distribution costs only a few dollars per reservation. We have it because of efficiency and cost. If you want to be a low-cost airline, how do you become one and stay one unless you trim the fat off everything? Today, Delta as you probably know, will be starting Delta Song. Delta will be taking 37 757 planes and re-engineering them and coming up with entertainment like live TV and everything else JetBlue has and is basically going to fly to Florida like we do. We have a large stake in Florida. And they’re trying to play the JetBlue game. We already started as a low-cost airline and have the paperless system and virtual call center and paperless cockpit. Delta can do whatever it wants and may have a lot of things but one thing it’s never going to have is the true cost model we have. I’m not sure Delta can sell 757s full of tickets and still make money.

Q: Why did the company opt for a virtual call center and what are some of the challenges involved in managing that?

There really aren’t any challenges. You can monitor the calls and supervisors can watch the calls and see how effective people are like every other call center. It’s a lot of money to have a large call center. We have 750 home reservation agents that work from home 25 hours a week. It’s cost effective. With a traditional call center you have rent, electric and computing on top of that. We just have the computing experience and the cost of one telephone line at $25 a month. We know that our cost per reservation is significantly less than anyone else’s and I mean significantly less. We started this way so it’s not like we have to switch over. I will assume in a lot of businesses people will want to be careful about their revenue stream and having reservations that work on Voice over IP phones may be important for the future but today people may be afraid of that technology. For us it’s tried and true. We’ve been doing it for three years now.

Q: So what’s your view on the implementation of new technologies and bleeding edge versus a more conservative approach?

JetBlue clearly wakes up every day and we stay out on the bleeding edge. It’s really like the mantra of the airline. We do everything we can through technology. I’m not going to tell you technology is what makes JetBlue a great company but it’s what accelerates and enables our knowledge workers to be smarter. So clearly staying out on edge of technology and staying ahead of the game allows us to be prepared for anything that comes down the line as it pertains to new technology. If someone were to decide to deploy Web services, they don’t have the infrastructure to put it in place and it could be millions upon millions of dollars and months or whatever…to get to those places so they would not be prepared. Lot of companies have a very conservative approach to technology and those conservative approaches put them at times in a place where they’re not competitive. My job is to look at technology every day that makes us more efficient and deploy those technologies that bring us to those efficiency levels…JetBlue probably runs 30% to 40% of the business on beta or new software. And JetBlue for its backbone and its applications is basically a Microsoft shop.

Q: How has the economic downturn affected the pace of technological change and change management in IT?

It hasn’t. We continue to deploy software and technology at the very same pace we always have. My capital budget is actually three times larger in ’03 than it was in ’02 so we’ll deploy more in ’03.

Q: What else is occupying the bulk of your attention these days?

Just efficiency. Well, two things: making sure and continuing to get the right people on the bus; we hire about five people a day and that in itself has some issues. You have to build systems that are extremely scalable and in doing that and serving all the people we have at JetBlue is having the right people. It’s not just about having people it’s the right people that is a great asset. And obviously every day I’m out there lobbying for new technologies and more efficient technologies.

Q: How large is your IT staff and what skills are you in need of?

My IT staff today is 58 people. It’ll be give or take 80 to 85 people by year end and we’re look for everything. A lot of times it’s difficult for us because most people don’t have the skill sets we need. Like if we need SQL skill sets, we’re looking for people who understand 64-bit SQL. We get a major amount of calls like everyone else when it comes to outsourcing different technologies. We basically are not in a position to take advantage of outsourcing. On April 28th of this year, for example, Microsoft will release Windows Server 2003. JetBlue is already running Windows Server 2003 and has been since July of last year. So from that example how easy is it for me to find server talent? So we bring them in and take those people who have experience on the last server technology and train them. Microsoft people also work with us. We also have over 5,000 mailboxes on Exchange Server 2003, which was known as Titanium.

Q: Is more money being spent on network security this year?

We have a pretty aggressive plan about audits and things like that but we’re not uncomfortable with where we are today. We’ve done things and spent money and will sort of pressure test systems and make sure they work and if they don’t we’ll make the adjustments we feel we have to make.

Q: What will the bulk of your budget go towards?

The capital plan is to spend a lot of money on basically applications and application development. Applications for customer facing; it could be new kiosk software. We’re heavily engaged in our hosted reservation system today and it is our intent to move out and build a modern-day reservation system. We’re doing a joint venture with the people who host our reservation system today and…basically developing a new airline reservation system in modern-day technology, which has not been done in, I can’t even give you a date. And it will be special because it will be things other reservations systems can’t do.

JetBlue’s vision is to see its customers as customers and not as passengers. Other airlines have a tendency to look at customers as passengers. A customer is someone with a profile and someone will know if you’ve ever lost a bag — all kinds of information. A passenger is just another number. JetBlue is changing the focus. Instead of looking at people as passengers, we’re going to call people customers. We don’t even like the word passenger. We also don’t use the word employee. We use crew member. Crew members are not just another employee. They are special people. We really feel…even in my area, everyone at JetBlue is a customer of the IT group. We ask these people to get on the plane and deliver the JetBlue experience. So I need to deliver that experience from the IT perspective. Delivery is everything.

Q: Which of your skills has served you best in managing IT?

I would say the best skills are obviously my background, which is technical, and my people skills. Those two together have served me best in the IT world. If a CIO is a promoted manager from some other walk of life, I don’t believe that CIO will ever be able to run the business the same as somebody who grew up through the IT ranks. There’s just no comparison. Lots of people bring projects to the table and most times in large companies where the CIO does not have skill sets he makes a decision based on his team. Companies that put people in charge of IT who have not grown up in the IT world is a mistake. It’s bad for business.

Q: What advice would you give someone looking to advance his or her career the same way you have?

My advice would be to get a broad knowledge, if management is their desire, to make sure they know how to be a great team player, know how to inspire greatness in others, and get a broad knowledge of the IT world. Meaning, don’t just learn one thing. Understand how the pieces and parts work together.

Q: What keeps you awake at night?

Nothing really keeps me awake per se. If you want to ask me what treads most heavily on my mind I would say one, protecting the infrastructure and making sure it’s strong and resilient and making sure we hire the right people. And I would put having the right people first and having those right people look at the infrastructure and make sure the applications that have to remain online remain online. Those are areas that most concern me: people and mission critical applications.

Q. What do you do in your spare time?

I read a lot of books on managing people and understanding business infrastructure and things like that cause I’m always studying how to build a better organization. The other thing I do is play golf whenever possible.

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