In early February, JetBlue CEO Robin Hayes stepped away from his post unexpectedly due to health reasons, but just weeks later he’s been appointed head of Airbus in the Americas.
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JetBlue Departure
Robin Hayes, at the time a decade-long CEO for JetBlue Airways resigned unexpectedly from the company on February 12, 2024. His replacement as Chief Executive Officer was Joanna Geraghty, a near 20-year veteran at the company and the carrier’s COO.
His tenure at JetBlue was one of a maturing regional carrier and though the airline’s remarkable Mint class was approved before his arrival, he was responsible for roll out which marked a unique differentiation from its prior market position. Moving from a carrier that sometimes competed with low cost airlines with no discernible first class, to flying long haul with closed door suites at the front of the cabin was a challenging endeavor.
He also moved the carrier into trans-Atlantic routes opening gateways in London, Paris, Dublin, Amsterdam. The latter he challenged Department of Transportation officials to battle the Netherlands to ensure the flights were able to operate after climate initiatives nearly cancelled the route before it took off.
He joined forces with American Airlines in a regional codeshare agreement before fighting the very department that approved the deal under a new administration to keep it open. He attempted to buy Spirit Airlines in a bid to double the size of JetBlue and secure in-demand aircraft and pilots.
These many battles could (and likely did) take a dramatic effect on his health. At one point in time he was fighting all three at the same time.
“Extraordinary challenges and pressure of this job have taken their toll, and on the advice of my doctor and after talking to my wife, it’s time I put more focus on my health and well-being.” – Robin Hayes
At JetBlue, Robin Hayes fought hard to position the carrier at an elevated level and grow by any means necessary. However, he lost the Northeast Alliance with American, and he lost the initial round to acquire Spirit at the time his departure was announced. It would make sense that he left for either health reasons or was pushed out, the board allowing him to save face and fly off into the sunset after a noble tenure at the business though he was not ultimately successful in many of his endeavors.
New Role at Airbus Americas
Just weeks after officially leaving his post under the auspices of health concerns he was announced as the new head of Airbus North America, replacing CEO and Chairman, Jeffrey Knittel.
The role comes at a key time as Airbus has a unique market opportunity with continuing struggles at Boeing in both the 737 narrow-body market as well as wide-body aircraft with the delay of the 777-X series and quality concerns around the 787. Airbus competes with both categories in the A320-family of aircraft for narrow-bodies and with the A350 for long haul wide-bodies.
The US market is unique in that the carriers are among the largest in the world by fleet. American Airlines (which has a mixed Boeing/Airbus mainline fleet) is the largest in the world with nearly 1,000 aircraft. United had hundreds of aircraft scheduled for delivery from Boeing that have been delayed indefinitely, Southwest Airlines is a behemoth as well with an all-Boeing fleet, and Delta flies a mixture of the two but has leaned Airbus more as of late.
His role will also be fraught with delivery issues at Airbus as manufacturing issues with power plants have delayed delivery and slowed progress the airplane builder could have made in the light of the Boeing debacles.
It doesn’t exactly sound like a very restful role.
Is There No Duty To Shareholders?
While the official story is that Hayes retired over health concerns, is there any question now that he was dismissed by the board? And while I can appreciate an attempt to allow Hayes to save face, the explanation to shareholders, while common, is not truthful. Clearly there was pressure in the conference rooms at JetBlue for Hayes to leave the business either voluntarily or by force. But isn’t his departure tantamount to misleading the market and shareholders?
Hayes did extraordinary things and took risks to grow JetBlue. Of the many costly battles he entered, he suffered defeat, but for a carrier the size and position of JetBlue to even put themselves in those positions was admirable.
The performance of the carrier had also dropped, falling to last in the US three years running. While his focus, perhaps should have been on running the carrier more effectively, couldn’t one argue that was Geraghty’s job? How then could she be chosen to ascend to the top of the company?
If the board indicated it would ask Hayes to leave over the battles with the Justice Department, it would be fair and shareholders would likely agree given the time and cost of those court battles. And if the board asked him to leave over performance of the carrier as a whole, shareholders should know that too. They should be allowed to question whether the COO is then the best fit for the top job.
Is there no duty to shareholders to report the correct information? I understand the common responses and their place in society when a key figure departs to “spend more time with family” or for health reasons. But it was clearly untrue or Hayes experienced an incredibly rapid recovery and his wife changed her mind just weeks after departing his post at JetBlue.
Conclusion
JetBlue may have wanted to part ways for any number of reasons with Hayes, and frankly, it would have been fair. The company wasn’t performing well, it lost a ton of expensive DOJ challenges, and wouldn’t be able to grow in the fashion and rate he was seeking. But shareholders have a right to know that he was asked to leave and why, and then they have a right to examine his replacement. When he retires for health reasons – which could have been valid – the ascension of Geraghty is a reasonable one as she is deeply embedded in the business. Some could argue, however, that performance was her department and if Hayes was asked to leave for that reason, she may not have been the right pick. In public companies, transparency is key, yet in this instance, it appears that the company was anything but transparent and for that further examination is necessary. Or, perhaps, Hayes genuinely has made a rapid recovery in which case all parties are absolved. Regardless, we wish Hayes the best in his new role.
What do you think? Do public companies have a duty to report the way in which executives are asked to leave? Is it possible he had a true health concern that has somehow disappeared in a matter of weeks?
