The chaos that followed the Valentine?s Day ice-storm in New York will cost JetBlue Airways around $30 million, mostly to pay full refunds to customers whose flights were cancelled and give them a free future flight as a gesture of goodwill.

In a show of corporate responsibility and rapid reaction to correct operational weaknesses exposed last week, JetBlue founder and CEO David Neeleman has stated the $30 million cost is not the primary concern. What he wants is to restore the company?s good reputation and he believes that will be the result of a Customer Bill of Rights unveiled yesterday.

The low-price operator launched New York-Bermuda flights last summer. The Bermuda route was one of the casualties as the company cancelled a total of 1,096 flights between February 14 and 19. As of yesterday, JetBlue was back to 100 percent on all its schedules

?It has been a sombre week for us,? said Mr. Neeleman during a conference call as he took news media questions.

JetBlue attempted to keep as many flights operating as possible during the ice-storm disruption across north east US, but that plan collapsed due to poor communications, an overwhelmed reservations system and flight crews being stuck in locations other than where they needed to be.

One of the worst delays affected a flight from JFK Airport to Aruba which ended up being stuck on the snow-bound tarmac for eight hours before passengers were de-boarded, waited another eight hours in the terminal and then re-boarded.

Mr. Neeleman and his executives have spent the last few days producing the customer bill of rights that features a sliding scale of compensation for passengers who experience departure delays, extended waits to reach arrival gates or have their flight cancelled due to circumstances within the control of the company.

Although the bill of rights has just been produced it will be applied retrospectively back to February 14 to cover those affected during the past week, hence the expected cost of $30 million.

Mr. Neeleman said: ?The $10 million in refunds to customers will impact our first quarter. We have issued credits, to go with those refunds so people can take a future trip on us, of about $16 million. On the voucher side it would be an amount we would have to reserve from our first quarter. Then there is about $4 million of incremental expenses, overtime for crews and chartering other planes.?

He explained the problems began when a forecast of ?snow turning to rain? turned out to be inaccurate.

By the time the forecast had been proven wrong JetBlue had planes loaded with passengers and out on the tarmac waiting to depart JFK but unable to leave and were eventually turned back to the departure gates.

?We waited and waited, by the time we realised the rain wasn?t coming it turned very cold and everything froze, so we had a difficult time turning flights back to the gates,? he explained.

?A lot of focus last week was our inability to get people off planes in a timely fashion. What we did was wrong and we didn?t have a plan.

?We made a mistake, we should have acted quicker. We should have had contingency plans better able to offload customers. We should have called the Port Authority quicker. These are all lessons learned. We cancelled over 250 flights that day. That displaced 1,100 or 1,200 crew members. It created a cascading event through the company.

?We had to make a decision on Friday night that we would cancel in advance some flights for Saturday to Monday to reset things and give our crew members and customers a break so they would not be coming to airports for cancelled flights. In hindsight we maybe cancelled too many flights in advance.?

To improve its business JetBlue has changed parts of its operations that include having an easily accessible database of crew locations and movements and training staff at its New York headquarters so they can be deployed in an emergency to help out at the company?s positions at JFK Airport.

?One problem was that we did not have enough staff to handle the crush of passengers. We are in the process of airport badging our crew members in the New York area with Port Authority IDs and give them assignments and training on computers or being able to work out on the ramps to load bags,? said Mr. Neeleman.

?I think this will be unique to JetBlue that here at our headquarters we will be able to able to emergency dispatch maybe 100, 200 or 300 people to the airport who will be trained and ready to assist our crew members. If we had that in place for this event it would have helped. Had we been able to go out to the airport with trained people to help those that were exhausted turn planes quicker we could have been back to normal by last Friday or Saturday. So huge lessons were learned here.?

Mr. Neeleman believes customers will be reassured by the existence of a customer bill of rights ? written down in black and white ? that gives clear guidance on what compensation depending on how long a delay they experience. Travel vouchers of $25 for a 30-minute delay scale upwards to full refunds and a free flight on the bill of rights.

?This was a big wake-up call for JetBlue,? said Mr. Neeleman. ?If there?s a silver lining, it is the fact that our airline is going to be stronger and even better prepared to serve our customers. In addition, I want to publicly apologise to JetBlue?s crew members ? the best in the industry ? and I promise to get the right resources, tools and support for them going forward, so that they in turn can deliver the JetBlue experience you have come to expect from us.?

During the conference call he admitted parts of the company had not kept pace with the growth of the business.

?We just need to give our people a couple more tools. Our system today when a flight is cancelled it is hard to go find a crew in the system. So to be able to just download all the flight cancelled crews in one single database and organise them by location by duty time and they could be easily reassigned. That could have been done so much easier if we had known. It is something that we overlooked, it is not systemic, it is something that is easily fixed,? said Mr. Neeleman.