In this episode of The Flight Pod, host Michael Arron interviews David Neeleman, a renowned airline entrepreneur who has founded several prominent airlines including Westjet, JetBlue, Azul and Breeze.
In this episode of The Flight Pod, host Michael Arron interviews David Neeleman, a renowned airline entrepreneur who has founded several prominent airlines including Westjet, JetBlue, Azul and Breeze. David shares insights from his upbringing and career, revealing his passion for the airline business and the logistics required to make it all happen. David discusses his initial academic challenges, being diagnosed late on in life with ADHD and how he found success in the travel industry through innovation and seizing opportunities. Neeleman discusses the evolution of his ventures, including the launch of multiple airlines, the challenges faced, and his proudest achievements. He also provides his perspective on the future of aviation, airport experiences, and the significance of customer loyalty.
The Flight Pod's Instagram www.instagram.com/theflightpoduk/
The Flight Pod Website www.theflightpod.com
David Neeleman’s Instagram www.instagram.com/davidneeleman/
00:00 Introduction to David Neeleman
00:36 Early Life and Passion for Aviation
03:31 The Journey Begins: From College to First Ventures
04:54 Building Airline Empires: JetBlue, Azul, and More
05:58 Challenges and Innovations in the Airline Industry
09:25 The Future of Air Travel and Personal Insights
21:51 Reflections and Final Thoughts
29:56 Conclusion and Credits
[00:00:00] Welcome to The Flight Pod, exploring the lives and journeys of the most influential people in aviation and travel. I'm your host, Michael Arron, and in this episode I got to chat to David Neeleman, serial airline entrepreneur and founder of many airlines, including JetBlue Breeze and us all. David once said, there are people that are so passionate about aviation.
That's just something about it that gets in your blood. His remarkable story takes many turns, but eventually leads him back to the country where he first grew up.
I was born in brazil. My dad was a expatriate journalist working there and we flew back and forth As as a young boy, I you know, we kind of relocated back to the u. s when I was five And when I was at JetBlue, my mom gave a scrapbook to the PR department and at my three year old birthday, I had an airplane [00:01:00] on my cake.
And so they said, oh, that's when it all started. Uh, but, you know, I think, I think it's just, you know, I'm kind of an innovator. I'm trying to look at the world differently. And I think particularly when I got into the business, it wasn't that long after deregulation in the U. S. and you had a lot of legacy carriers that were doing things not so great.
And so it just created an opportunity to kind of slip in there and do something different. And so, um, I guess I'm interested in aviation. I'm interested in logistics of all kinds. I'm not kind of this aviation crazy person that would just be in aviation for the sake of being in it. Of all my airlines, I think the trademark is that there's an opportunity.
And if there's an opportunity, I do it. If not, I don't. Then I'm not going to waste my time [00:02:00] and money to, to make it work. So I'm in a way, I'm, I'm an innovator. I've done a lot of things in aviation, but I'm not one of these people that just do it for the sake of doing it.
So when, when growing up, uh, what did you want to be?
You know, I, that's a long time ago. I, I'm not really sure, you know, um, I, I wasn't successful in school. Um, you know, I found out. Kind of in my early thirties, after I sold my first airline that I had ADD, I didn't really know what it was. So I wasn't that successful in, in business. Uh, yeah, I was successful in business, but not in school.
I, could barely read or write when I, when I graduated from high school, I did have the opportunity to go back to Brazil as a missionary for my church, spent two years down there and kind of relearned the language and learn some life skills that I think were, that have been very beneficial to me.
Uh, over the years and, um, and I, you know, I just saw a side of Brazil that was not the same side that [00:03:00] I grew up in, uh, as an expatriate kid. And so I, you know, I, I kind of had a dream of going back to Brazil maybe and doing something. Um, I was thinking about that when I was 19, I didn't know exactly what I would do.
Um, but I thought that I would like to do that. But then I just kind of in college fell into the Travel business and, and kind of have, have kind of been there ever since.
Yeah, so you kind of actually fell into travel accidentally. You want to just tell us , how that all came about?
Well, I was in college. And you know, I ended up dropping out of college. I never finished. I didn't finish college. I do have six or seven honorary doctorate degrees, but I don't have a a four year degree in college. I was in college and Just talked to someone in one of my accounting classes who who knew someone who had some timeshare condos in hawaii, and so I thought that would And that they couldn't sell them.
And so [00:04:00] I got in contact with the person and ask if, uh, I could pay him the maintenance fee and then rent them out and to give him some cashflow until he could actually sell off the timeshares. So that's kind of how I started. I started writing little ads in the newspaper and offering a week condo in Hawaii for 500.
I'd pay him 250 and a pocket 250. So it was kind of the way it all started. And then I started putting airfare with it and combining with the airfare and packaging it and, and that just kind of evolved that that company, the airline I was using failed. And so I went back to being out of the business and then was contacted by a travel agency and asked June Morris from Morris travel and said, would you come do that for us here and so I.
Started doing charters to Hawaii and that evolved into Morris Air, which was purchased by [00:05:00]Southwest Airlines. And, uh, I had signed a five year non compete with Southwest. Um, and then it just didn't work out at Southwest. I was driving everybody crazy down there. So Herb sent me packing and wouldn't modify my non compete.
So I went to Canada and helped them start WestJet up there. And then when the non compete was over, started JetBlue. And then when I left JetBlue under Um, not the best circumstances. I had my dream of going back to Brazil and starting, starting Azul, which is the largest airline now in Brazil. So, you know, it's, it's been quite a ride.
It had a lot of great people surrounding me and helping compensate for my weaknesses. And then, and then of course, Brie's now today. So, um, it's been, it's been quite a ride.
Amazing. I mean, you've just, you've just kind of said that under your wing, you've founded and been involved with Morris Air, WestJet, JetBlue, Azul, TAP and Breeze.
What is it that [00:06:00] challenges you to keep developing and creating new airlines?
I think just the opportunity, you know, I mean, there was a great opportunity. I didn't mention TAP, you did, but TAP was an airline that was completely bankrupt. I couldn't make payroll at the oldest fleet in all of all of Europe, but it was a great country and it was interesting.
It was, there was an article recently in the wall street journal that talked about how nobody had ever really, everybody wanted to go to Portugal, had a great reputation, but, uh, it was just so inconvenient to get there from the United States. And now everyone I know flies, goes to Portugal, they love it.
And that was just made possible because we started eight cities non stop to Portugal from, from the United States, put in a brand new fleet of aircraft. Uh, you know, brand new, um, A330 900s and, you know, 320NEOs and XLR, uh, LRs [00:07:00] and soon to be XLRs. So, you know, it's just finding an opportunity. That was a hidden little gem that we had been, uh, a government owned airline that was mismanaged and didn't have the capital to do it. And so we helped him do that. So I think just finding opportunities breeze the U. S. Travel markets change quite a bit over the years. We've got some very powerful airlines that are very successfully doing away with low fare carriers. I mean, it's much different than Europe where Ryan Air is thriving and doing great and easy.
Just doing okay. Um, yeah. But in the United States, they have, the airlines like Spirit and Frontier, they've overlapped the airlines, exact city to city, and the airlines like Delta, United, American, Southwest, have gotten bigger and bigger airplanes, and they've used those surplus seats on those [00:08:00] airplanes to choke out the, the ultra low fare carriers.
So, where's there room for Breeze? Well, when I heard about the Airbus A220, I thought, wow, this is a great airplane. Uh, it has it's very comfortable from a customer perspective has a long range. It can fly 67 hours. It has a short field capability. Um, it's conducive to a mixed class because it's 2 and 3 configuration.
And so we can, we only lose 1 seat by going with 1st class for row. Plus, uh, obviously adding some leg room. And so it, it fit perfectly into a business model in the United States that had lost a lot of cities, had lost nonstop service. The big airlines were forcing people through hubs. And, uh, two 20 with a lower trip cost maybe 20 to 25% below what a 7 37 or an A three 20, uh, has.
Uh, we could fly a bunch of routes. We're up to almost [00:09:00] 200 routes. With the have no about 90 percent of our routes have no nonstop competition, so it just carved out a niche. And so, you know, long answer to your short question, you know, just looking for opportunities and and, uh, finding them where where people aren't feeling and feeling avoid, even if it's a small little niche, it can be a few billion dollar business.
Amazing Does it become more difficult to create something unique though each time you launch a new airline?
I think it depends on on what the you know This is a pretty low margin business and if you can find a plane Like we have that has a 25 to 30 You A 20 to 25 percent lower trip costs X that opens up an exponential amount of markets.
Honestly, it's, you know, I, if, if I'm, I have 137 seats on our plane and there's 12 first class seats, there's [00:10:00] 40 extra legroom seats. And if I can fly 120 seats, I can make money and spirit and frontier have gone big and they've got 240 seats. And there is literally hundreds and hundreds of markets difference between a A plane that has 137 seats or one that has 240 seats when you're into at 240 You have to fly in big markets.
There just isn't enough travel demand to to be in the smaller markets And so yeah, I mean we have we have I think we're up to over 60 cities now, 200 routes. We've identified about 700 routes, you know, that we can fly. And it's just exponentially. And then I was talking to our people in planning the other day.
And I, I [00:11:00] posed the question, I'm going to give you 15 brand new A320 ones, 240 seats in them. Where do you want to fly them? And they said to the desert, we don't really see a market for an airplane like that today. Okay. And, you know, the other thing that's interesting is that in the United States, at least, I'm not sure if this is the same in Europe, but, uh, 25 percent of the people want an upgraded experience.
They want an extra legroom seat, they want a first class seat, they want to, you know, bundle it, you know, they want to throw in, they don't want to be nickel and dime for bags and internet and carry on bags and all that stuff. They just say, give me a price, I'll buy it all. I'll have the, the luxury of going nonstop as opposed to making a stop.
And that's really what I wanna do. And that's really resonating with our, with our, with our guests.
You kind of already answered it, but, um, you know, it's the advantages of setting up a new airline [00:12:00] rather than just expanding the roots of an existing one.
Well, you certainly you can start with a clean white sheet of paper it helps um, you know, we have a we don't really have a call center you can message us and we have people working at home that can respond and take care of you and If you get a little frustrated, we'll call you and talk to you and help you through it.
But You know that massive brick and mortar call centers, you know, i've never had Those anyways at jet blue we had everybody working from home But you can you can be more efficient. Uh, you can you know, have a have a new aircraft type like the like the 220 You know, you can just be really efficient using technology as opposed to legacy systems and, and different things.
So, you there are disadvantages because the, you know, the incumbent airlines have their credit cards and their frequent flyer programs and slots at airports [00:13:00] and exclusive gates and you can't get into certain airports and certain routes. But, you know, there's plenty of other stuff to.
To, to keep us busy.
What, what does it feel like to order a new plane and then board it for the first time?
I've done it a few times. I think it's cool. Uh, you know, I think I remember back in the JetBlue days when I was, you know, we were the first airline to have TV, live TV on our planes and, you know, we don't have live TV today on our planes because everybody has an iPad and we have a high speed internet on the planes, but walked on that plane and leather seats, brand new plane.
TVs and see and that wow, man, this is going to blow people away and it really did. I mean JetBlue really kind of stunned stunned the world because of the product and You know to the other airlines credit they've caught up in a lot of ways you know, it's delta's putting TVs in all the [00:14:00] airplanes now and united is putting them in theirs and you know, they they want the same experience and And I was at a, at Bastion a year or two ago, was giving a speech that I was at, and he kind of credited, you know, JetBlue and said, you know, they had a great model.
We had to,, copy it and give free internet and, and TVs. So I think in a lot of ways we've made the industry better.
Has working on the budget side of the industry made it more difficult to enhance the overall customer experience?
Think not necessarily. I mean, like I said earlier that the 220 is really conducive to what people want is a comfortable seat and they want to, they'll pay up for it. And if you have airplanes more conducive to it, we, we lose half as many seats per row as a 737 or a 320. So it's easier to do that.
And our first class seats are probably more in demand than our extra legroom seats. And [00:15:00] they fill up quicker and we're actually looking at maybe expanding those from 12 to 16 seats We kind of started out at 36 seats, which is a little much, but I think, you know, seating and that's really the major factor and giving people free internet if they get those seats.
And then they're, you know, they're, they're happy.
I used to love just getting on a plane and zoning out, phone off. And unfortunately, it's, uh, it's becoming the thing that, you know, everyone's got Wi Fi and they can stay connected and the WhatsAppping and the calling and the So those days of it being like, uh, you know, it was just escapism, but it seems to be changing.
So, um, I mean, do you find it more difficult to stand out now?
I think so. I mean, the airlines have gotten better. So, um, really what, how we stand out, the best way to stand out for us, obviously we're seriously nice and we, we try and never cancel a flight. [00:16:00] You know, on time percentage were really going to work on that. You know, we have a goal of becoming the most on time airline in the country.
There's no reason why we can't be. We just had a new, uh, chief, um, customer service officer start today. That's, uh, you know, coming from United and, you know, she's gonna be in charge of airports and flight attendants and, and, um, our guest empowerment team that works at home and anyone, anyone that touches the customer.
So, you know, we certainly can can improve in those areas. Um, but, you know, I think where we really stand out is, is kind of flying places where people. where there is an air service. And we can set up, we have 11 cities that we serve, we have more destinations than any other airline. So we can kind of go in there and dominate, um, in cities like Providence, Rhode Island and Hartford, Connecticut, uh, Charleston, West Virginia.
Um, we, we can dominate the [00:17:00] number of, of destinations. We serve Canton, Canton, Akron, Ohio. So, uh, these are cities where we can become the number one airline and people are really, you know, really. Really thankful for that.
So would you uh, like to develop further premium airline options to overcome the limitations of being a low cost airline?
And not really. I mean, I think we found a middle ground you can kind of go overboard too much And you know, then it gets too expensive and people, you know drop off you know, it's interesting Southwest is going through a bit of a tough time now and they had an egalitarian system where You Everybody gets the same seat.
Everybody's treated the same. They call a boarding number and you run on and grab a seat.
It's like easy jet in the original when they first started.
Yeah, and they were all copying southwest and people just don't like that anymore. It's just not it was cute for a while and it was kind of fun [00:18:00] But as people have kind of air travels matured and others offerings have improved I like to divide the cabin into three You have the premium the premium really premium customers that are 25 of your customers You That will pay for a premium upgrade experience and want an extra seat, want a first class seat.
They want to be able to not have a middle seat in between them. Um, they don't want to pay for bags or anything. They just want to pay a fare. And then there's the kind of the Southwest customer today. Uh, they don't want to be nickel and dimed, but no, they don't want a first class seat. Uh, they'll pay for internet.
If, if you want to do it. But then there's also the, the third category is those that are kind of in the basic economy. They want the cheapest fare absolutely possible, and then they want to have the option of paying for a bag or a carry on. And, you know, where Southwest is, [00:19:00] kind of fares are too high, they don't all have an offering for that third category of people.
Even though United does, Delta does, and American does, and, and they don't offer an upgraded experience either. And so, you know, they're, they're kind of going through it, talking about seat assignments, talking about premium seating, and, you know, maybe even charging for bags, charging, having, like I said, seat assignments.
So, you know, they're kind of caught in this new age of travel that's, uh, it's causing them a lot of difficulty, even though they've got a ton of cash and, and a ton of assets.
Do you see a future in premium travel?
You know, I, I don't, I don't think so. I mean, I think Alex Wilcox at GSX, you know, in the United States, they go FBO to FBO and, you know, they, they're kind of, um, they found a kind of a loophole in the law.
In the U. S. you have a [00:20:00] 121 carrier.
Yeah, and 135. And then you
have a 135 carrier. And 135 carrier is supposed to only have nine passengers on board. That's it. That's the maximum. There is a loophole that says if you're a charter, you can go to 30. And so they just make all their flights charter flights.
And there's a lot of airlines that are trying to shut them down because of that. Um, obviously they couldn't make money At nine passengers, even with, with, uh, flying one 35, even at the salaries are, are lower, if you go to one 21, the salaries just get of the pilot salaries are, are just a lot, a lot higher.
And, you know, they have to compete in a different realm and it kind of kills their business model. So I've never been, there's been a lot of ultra premium models that have been tried in the United States. That are all, all first class. They've all failed every one of them. And, you know, I just, [00:21:00] for our model, it doesn't make sense.
If you go to New York to LA market and you try and compete in that market where you have the most premium customers, you've got all the big three airlines that are flying those with lay flat business class seats, they they're giving people extra miles. They earn credit on their credit cards, the frequent flyer programs just crush you.
So, you know, I, I don't think there is a place, uh, for an all premium service. Can you, can you fly between markets and nobody else serves and have a premium offering? Yes. Uh, that's what we're doing, but, um, I think that's, you know, as far as I would push it.
Yeah. Like no matter how good your airlines can be, you know, you're always impacted by things beyond your controls, such as the baggage handlers or airport [00:22:00] problems, strikes, to name a few, you know, in a, in an ideal world, what changes would you love to see implemented?
Well, it's, I mean, it's, it's a business that has a lot of, um, moving parts and there's a lot of things that affect you. And, you know, like I said, I, I, when I started JetBlue, the industry was in disarray. Legacy carriers, high legacy costs, horrible product. We just. We grew and, and really Delta came after us with, this mimicking product called song crush them, you know, nobody could compete.
And then all the big airlines filed for bankruptcy and they cleaned up all their costs. They started mimicking the product that we had. And, and they've done a fabulous job. I mean, you got to hand it to them, you know, imitation is the sincerest form of flattery and they did create a good product. And, you know, I think given that you're flying people through the [00:23:00] air in a tube at 600 miles an hour and knock on wood, you know, we haven't had a major accident in the U S for a decade, over a decade.
Um, with the millions and millions and millions of flights. It's really miraculous, um, what goes on in the U. S. business and, and I, I think it's pretty dang good. I don't think, uh, there's a ton of opportunity other than and you have your flight disruptions and computer outages and storms and hurricanes and those things but Just you know, the system's pretty good at bouncing back.
It's safe. And um, you know, it's uh, People have lots of options. And, um, I think, you know, I'm, I'm from where we've come to where we are, you know, it's, it's pretty impressive.
What stands out as the biggest challenge you've faced?
I think in Brazil, it's exchange rate. You know because most of our costs are in dollars and then all of a sudden Currency moves 25 percent against you [00:24:00] that's tough. And uh, certainly covid was tough as well for all all the airlines and It's particularly those Out of the united states the u. s. Airlines got a 53 billion dollar boost from the u.
s Government which we didn't get in brazil and other places. So covid was it's obviously devastating for the industry
Do you have any regrets?
Um, you know, I mean,
obviously everybody has regrets. I mean hindsight's always 20 20, but uh, you know, I I'm kind of proud of what we've been able to do and um, Create businesses where people like to work and where our customers like to fly
What do you consider to be your greatest achievement?
Azul, you know, by far. Azul is, given that we have 18, 000 people that work for the company, we fly over 100, 000 people a day. Uh, we doubled air traffic in Brazil. Uh, we have a [00:25:00] logistics operation that can, we deliver to 4200 communities in 48 hours or less. You couldn't, we never had that in Brazil before we got there.
Um, with vaccines and organ transplants and we serve 18 cities in the Amazon basin. 160 cities overall. Um, it's really done more for Brazil that I think probably any other company in the last 15 years.
So here's a random one thoughts on air tags, air
tags, air tags. Sorry.
So apple air tags. Yeah. So just as a, as an airline with customers, sort of all of a sudden having control, they know more than you, uh, what are your thoughts on them?
They're great. You know, I, I explore, I talked to Apple about, you know, check every bag we get. If someone doesn't have one, we throw an air tag in there and charge them a little extra and so that we can track their bags better too. So, [00:26:00] no, I think that technology is awesome. And if you don't, if you don't put one in your own bag, when you check it, then, you know, you should.
What's your favorite airport?
Hmm. Favorite airport. Um,
I usually don't stay in airports for long. I kind of used to be this mantra. If you don't miss a flight every now and then you're spending way too much time in airports. Um, but no, I think probably terminal six at, at JFK because it, you know, I helped create that and develop it. And at JetBlue, it's, uh, it's a little tired now, but it was really, it was an amazing terminal when it was first built and they're refreshing it now, but it's a, it's very convenient and, uh, it's got a lot of options there.
You probably already answered this, but your favorite aircraft, mine's, mine's behind me.
Oh, that, well, um, you know, I, I think, uh, the XLR is going to be a game [00:27:00] changer. The 321XLR, that's going to allow you to fly 4, 000 miles with trip costs that are 40 or 50 percent below a wide body. So I love that airplane.
And, and, uh, if I could ever convince Airbus to put some auxiliary tanks on the, on the 220, 300 and increase the gross takeoff weight, that'd be kind of in the similar class.
Did you ever get to fly Concorde?
I never did. I had the opportunity, but, uh, didn't take advantage of it. And, um,
Ah, is that, is that, is that you regret?
I'm not, I'm not that much of an aviation junkie.
I was, I was very, very lucky that when I was about 19, uh, British Airways had a competition to celebrate 10 years of being a PLC and they gave away a hundred seats. Uh, it was a, it was a full page advert in the daily mail and they gave away a hundred seats for 10 pounds return to New York.[00:28:00]
And bizarrely, this is like, before everybody had mobile phones, um, it was kind of, I ended up 45 minutes later getting through to someone and uh, took my now wife, over to New York and back. Um, we're a little bit too young to fully appreciate the food, uh, it was a bit kind of strange to, uh, you know.
Some of you with a dishing out caviar and, but yeah, it's, it's kind of that, that experience has, has really kind of stuck with me because that's the kind of thing that we're trying to do now. I mean, I know with boom. That they're trying to bring back supersonic, but it's kind of like looking at ways. I mean, for us in Manchester, if we want to go, we were very fortunate that we've got a place in Malaga.
Um, and for us to kind of go there, problem is a lot of people have second homes, but they don't go to them because it's, it's a long day experience to get from Manchester to Malaga and get to your apartment because, you know, it basically it's a, it's a nine, 10 hour experience. Uh, start to finish. So, [00:29:00]you know, we're looking at something that potentially it's kind of like supersonic without being supersonic.
If it can save you three to four hours by the simplicity of going through, you know, private terminals. Um, this is the kind of thing that we're looking at. I've got one more question for you. The last one is your favorite meal on a plane.
My favorite meal on a plane is, usually in the lounge before I get on the plane so I can go straight to sleep. You know, it's just, it, it, you know, I, I, I went for eight years back and forth to Brazil every week. And I got really good at, at, uh, getting on the airplane, going straight to sleep, sleep in eight hours in both directions.
And I was able to do that because I didn't stay up and eat and I don't drink alcohol anyways, but, uh, and watch a movie because that, that kind of takes it out of you. Go straight to sleep.
That was David Neeleman [00:30:00] regarded as one of the most successful airline entrepreneurs? This episode was produced and edited by Stewart Anthony. Original music by mood mode. I'm Michael Arron, and you've been listening to the Fly.
If you've enjoyed this episode of The Flight Pod, please be sure to subscribe and leave us a review. It really helps us reach more listeners. And don't forget to follow us on Instagram at theflightpoduk where you can send us a DM with your questions, comments or feedback.
We'd love to hear from you. Thanks for listening, and we'll see you next time on The Flight Pod.