Unending Pandemic. Global Anxiety. Travel Restrictions. Perfect Time To Start An Airline!
Bloomberg Businessweek|April 26 - May 03, 2021 (Double Issue)
David Neeleman, airline savant (think Jetblue) and perpetual optimist, is at it again with a new budget carrier called Breeze
By Drake Bennett

Among the strong and freely offered opinions of David Neeleman, America’s most successful living airline entrepreneur, is that the world has largely overreacted to Covid-19. “I think people who wear masks outside when they’re social distanced are complete morons,” he says. Doublemaskers drive him particularly nuts: “I just want to go up and shake them and go, ‘What the f--- is wrong with you!’ ” On the sunny March day when we met, in an indifferently furnished office suite in Darien, Conn., Neeleman did have a mask with him. Plain and black, it didn’t bear the logo of his new airline, Breeze, or his next-newest one, the Brazilian carrier Azul SA, of which he remains the chairman and controlling shareholder (and in whose satellite office we were talking). Nor was it from JetBlue, which he founded in 1999 at the age of 39 and ran until he was pushed out as chief executive officer eight years later.

Indeed, with his mask on his broad, still impish face, the 61-year-old looked like anyone else doing their part to end a global pandemic. But then, grinning, Neeleman unhooked the ear-loops and showed me the fabric: a mesh with holes so big they just might keep out mosquitoes. “It lets me breathe,” he explained, setting his Potemkin face-covering in front of him on the conference table. Neither of us had been vaccinated yet. Still, the medical-grade mask I was wearing felt suddenly conspicuous. I took it off.

Neeleman was there to tell me about Breeze Airways, a budget domestic carrier, headquartered in his hometown of Salt Lake City, that will start flying by summer. The business plan borrows from previous generations of low-cost airlines: a point-to-point network of smaller airports, as pioneered by Southwest Airlines Co. in the 1970s and 1980s; trips limited to the days of the week when vacationers are most likely to travel, a discipline perfected in recent years by Allegiant Air Inc.; and a shiny, state-of-the-art fleet manned by young, lowcost crews, not unlike JetBlue Airways Corp. in its startup days. Neeleman has dubbed Breeze “the world’s nicest airline.” He also likes to call it “a technology company that just happens to fly airplanes.” Those two things may or may not be in tension.

Breeze is launching at an uncertain moment for the industry its founder helped reshape. The acute trauma of the pandemic— cushioned at its worst by a $50 billion government bailout—has eased. On April 18 the Transportation Security Administration counted just under 1.6 million people flowing through its airport checkpoints—only two-thirds the traffic on that date in 2019 but an order of magnitude more than a year ago, when the number was hovering around 100,000. And yet, even as vaccination rates climb, airlines, like many other companies, are trying to figure out whether the disruptions of the past year were a grim anomaly or the acceleration of longer-term shifts. After the pandemic ends, will people travel as regularly as before? How comfortable will they be on airplanes and in airports? Will large companies return to sending their salespeople, consultants, conference presenters, and deal-closers around the world?

At the very least, it’s an environment in which comfort with upheaval is an asset. It would be wrong to call the airline industry stable, exactly—not with its rich history of bankruptcies, takeovers, and ruinous price wars—but it’s very hard to break into. Neeleman has made his career and fortune doing just that. “After deregulation, the failure rate of new airlines has been in the mid-90s or up,” George Hamlin, a longtime industry consultant, points out. “Most people have done one new entrant—and failed. A few have maybe tried another one. David has been involved in four successful startups. It’s unmatched.” That record is all the more striking given Neeleman’s temperament, one seemingly ill-suited to managing complex, highly regulated enterprises vulnerable to the vagaries of fuel prices, business cycles, and global health disasters. Azul CEO John Rodgerson was one of several executives Neeleman lured away from JetBlue to help found the Brazilian carrier. “It’s like working with an 8-year-old that’s a genius,” Rodgerson says. “He’s onto one thing, he’s onto another thing. You want to strangle the 8-year-old at times, but he’s generally right.”

Neeleman started his first travel company as an under graduate at the University of Utah. Like many of his classmates, he was Mormon, tracing his lineage to ancestors who knew Joseph Smith. But he’d also spent the first five years of his life in Brazil—his father fell in love with the country while serving his church mission there and went back for a stint as the São Paulo correspondent for United Press International. When the time came, the younger Neeleman, too, served his mission in Brazil, and two years proselytizing in the favelas gave the already extroverted kid a profound faith in his sales skills.

One day, after he was back at college, a classmate mentioned a friend of hers with some Hawaiian timeshares he couldn’t fill, and Neeleman offered to take on the job. “I started getting phone calls, and I’d book them. I’d pay him 135 bucks, I’d collect 400 bucks, and then I’d just keep the difference,” Neeleman recalled in 2019 on the National Public Radio podcast How I Built This. In the wake of the 1978 deregulation of U.S. airlines, new carriers were cropping up. Neeleman hired a sales staff and started offering cheap vacation packages with flights from Los Angeles to Honolulu; Utahans were more than willing to make the 700-mile drive to the coast for the right price. By the time Neeleman dropped out of college to run the company full time, it was doing $8 million a year.

Then, a few days before Christmas 1983, Neeleman’s preferred airline, Hawaii Express, abruptly ceased operations, taking his company down with it. He was left doing the books at his father-in-law’s drapery business and working the register at his grandfather’s grocery store to support his growing family. His rise and fall, though, had caught the attention of a successful Salt Lake City travel agent named June Morris. When he finally returned her phone call—“I didn’t want to be in the travel business anymore,” he told me—she cajoled him into coming to help her run her company. Soon the two were filling weekly charter flights straight from Salt Lake City to Honolulu on an old Douglas DC-8. Rather than have the plane sit idle the rest of the week, they added flights to Los Angeles, too.

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