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May 10 2007 1:16PM EDT

JetBlue Ouster: Look at the Shares, Not the Storms

David Neeleman has been ousted as JetBlue CEO by the airline's board, and everybody (Portfolio, CNN Money, Bloomberg, NYT, you name it) mentions at the very top of the story the service problems that JetBlue suffered in February. Call it journalistic solipsism: journalists always think that what they do – news – is a bigger driver of such events than it actually is.

I very much doubt that the Valentine's Day cock-up actually had any more than a marginal role to play in Neeleman's ouster. The much more important thing is the share price, which is now languishing near all-time lows, and is lower than it was when the company went public in 2002. This year alone the price has fallen from over $17 in January to under $10 at the end of April. The biggest one-day fall during the service problems in February was just 66 cents, and over the whole period of the disruption the share price actually rose a little. And a large part of the fall in the stock price this year happened before the February storms, not after them. Much of the rest of the drop happened quite recently, at the end of April – and I suspect that final lurch into the single digits, which had nothing to do with the February storms, was what precipitated today's announcement.

The main job of a CEO is to get the share price rising, and Neeleman managed that only during 2003. Ever since then, the stock has been either falling or moving sideways, and that's more than sufficient reason for the board to replace him with someone else.

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