JetBlue CEO Bows Out / Founder Neeleman Will Be Nonexecutive Chairman and Be Replaced By President

JetBlue Airways Corp.’s board replaced founder David Neeleman as chief executive officer. The move yesterday came three months after the airline canceled almost 1,700 flights and stranded more than 130,000 passengers because of winter storms.

President David Barger, 49, will become chief executive, and Neeleman, JetBlue’s largest individual investor, will be nonexecutive chairman.

“I’m not a day-to-day operator,” Neeleman, 47, said in an interview. “It’s not something I enjoyed. It’s just really good governance to separate the chairman and the CEO role.”

Neeleman’s exit extends the management and financial upheaval at New York-based JetBlue, which posted a $22 million first-quarter loss on storm-related flight disruptions and payments to travelers. Shares of the low-cost carrier plunged 20 percent after the Feb. 14 storm.

“Barger is a real operations guy,” said Ray Neidl, a Calyon Securities USA Inc. analyst in New York. “The airline has reached a certain size where visionaries are being pushed aside and the hard- core operations guys are taking over.”

The move is not expected to change JetBlue’s local operations, with four flights a day between Richmond and New York, and two daily flights to and from Boston.

“I don’t foresee that would have any immediate impact here,” said James Dunn, president of the Greater Richmond Chamber. “Our sense is they are getting support and feel they’re making progress in this market.”

In March, JetBlue had nearly 7.5 percent of the total passengers at Richmond International Airport. Neeleman visited Richmond in March 2006 when the carrier made its local debut.

“Remember who brought you these low fares,” Neeleman said at the time.

Anthony Sabino, professor of law and business at St. John’s University in New York, called Neeleman’s departure “absolutely shocking, unnecessary and overkill. The good news is Mr. Neeleman will remain as the guiding strategist of the airline he brought to unparalleled success among the low-fare carriers.”

Neeleman was the longest-tenured CEO at the eight largest U.S. carriers, many of which changed leaders during the industry slump that followed the September 2001 terrorist attacks.

He created JetBlue in 1998 with $130 million from investors. He also started low-fare Canadian airline WestJet Airlines Ltd. and was president from 1988 to 1994 of Morris Air Corp., which was acquired by Southwest Airlines Co.

Neeleman used luxury features including leather seats and personal television sets to lure travelers when JetBlue began flying in 2000.

JetBlue’s board made the change after the carrier’s annual shareholders meeting Wednesday. The move followed two straight years of losses at JetBlue, winter operating problems that cost the carrier $41 million, a reshuffling of lower management and ongoing software problems with its Embraer E190 regional jets.

Times-Dispatch staff writer Chip Jones, Bloomberg News and The Associated Press contributed to this report.

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