Chapter 1: What is the main topic discussed in this episode?
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A major milestone reached by Breeze Airways, the low-cost carrier, has become the first U.S. airline in over a decade to be certified by the FAA as a U.S. flag carrier. That designation allows Breeze to make international flights, unlocking new growth for the four-year-old company.
Joining us now is David Nielman, a name that you surely know and are familiar with because he was the CEO and the founder of of JetBlue. David, great to have you with us. Thanks so much for joining Open Interest. What is your plan for expansion of this airline now that you've gotten this incredibly rare allowance?
Well, we're up to over 50 airplanes. We're kind of growing every... We get an airplane about every three weeks. We have on firm order about 90 Airbus A220s with an option to go to 120. So it's just doing the same thing that we're doing. We're flying... About 87% of our routes, we have no nonstop competition. So it's a perfect airplane size. We have first class. We have extra legroom seats.
And this international expansion is going to be great for us because Saturdays are a little bit of a down day for air travel. But being able to take those airplanes and fly to Cancun and to Punta Cana and to Montego Bay, Jamaica, is going to be a real great asset for us.
Well, David, for anyone who's not familiar with your resume, every airline you've founded has done something to be disruptive, to reshape its home market. Morris with e-ticketing, JetBlue with more comfort for reasonable prices, UL making secondary cities in Brazil, connecting them. For Breeze Airways, what is the disruption here that you're trying to bring into the market?
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Chapter 2: What milestone has Breeze Airways recently achieved?
market, 125 cities had lost more than 25% of their air service over the last 10 years. So... The big airlines were forcing people to all their hubs. And cities like Charleston, South Carolina, Huntsville, Alabama, vibrant, growing cities, you basically had to get on a plane and fly to a hub. And so we're just taking people and bypassing hubs and going nonstop. But doing it with luxury.
We're not really... like a ULCC. We offer first class. We offer extra legroom seats. We offer really low fares. We have kind of a basic economy equivalent. But then we have these bundles that people love to buy up. And, you know, we've got the highest NPS score I've ever seen of any airline I've ever run.
So we are voted by Travel Leisure as the third best airline in the country, APEX number one airline. So it's working. It's this combination of Getting you there for, when we started, I said, let's get you there twice as fast for half the price. That's kind of our goal. And do it with options to fly first class or extra leg room or have free Wi-Fi and a lot of things you don't see on a ULCC.
What are your biggest challenges right now, David? I mean, fuel prices have come down, but I guess planes are harder to get more expensive and labor must be, the cost of labor must be rising as well.
Well, you know, for a while it was the pilot situation, and that's totally been solved. We have 1,200 applications for ā we open it up and we have tons of applications. You know, I think staffing at airports, we rely a lot on third-party people. So we're really focused on making sure that they're doing a good job and they're keeping us safe.
We're coming up with a program where we're going to put AI cameras on all of our gates to monitor everything that's going on to make sure that the turn is efficient, but also, most importantly, safe, making sure that there's no damage to our aircraft. So that's really something we're really focused on is being efficient. And, you know, our on-time percentage has just gone through the roof.
I think last month we were almost 90 percent on time. We didn't cancel a single flight all summer long.
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Chapter 3: What are David Neeleman's plans for Breeze Airways' international expansion?
because we just wanted to get our guests where they're going. So, you know, it's just really focused on the operation. I really preach if we follow this operation, then people will come back and fly us more often. And that's what we're seeing, these markets.
You know, if we go to a market and we see there's about 15 people a day that travel between two cities, we believe we can turn that to about 100 a day.
David, it does fit. feel like an industry, though, that is split into the haves and have-nots. And in the have-nots, you have Spirit, which maybe has its own issue, but serving a lower income market. Then the big airlines, United, Delta, talking about that they're doing well because of luxury.
Ed Bastian yesterday at Atlanta Fed Conference saying that you have the lower end of the consumer spectrum, it's tough. And then he goes on to say all of the other airlines are basically going to lose money or come close to losing money. Again, talking to airlines that aren't serving the ultra luxury customer. David, do you think he's right?
I think he's right to a certain degree, sure. You know, you see now JetBlue's rushing to put first-class seats in their airplanes. Spirit's trying to put first-class frontiers, adding first-class. So, yeah, I mean, I think people want choice. Southwest Airlines had one product for everybody, free bags, and now they're starting to differentiate. People want choice.
to say, great for the free bags, but I don't care about free bags. I just want a lower fare. So you have to give choice to our guests and along the spectrum and make them feel good about every bundle that they purchase.
So I've always wondered about investing in airlines because, you know, the prices ā haven't really risen much since I started buying tickets for myself 30 years ago, right? I remember going to a Grateful Dead concert on the West Coast in the 90s and paying about $300 for the tickets, and I can still do the same thing today. Why invest in an airline if it's never going to make money over time?
Well, you know, trading some of our line stocks is a little bit like trading options, basically. They're up and down a lot. You know, I think there's a tremendous amount of leverage if you can get everything right. You know, we have... you know, some of the highest margins in the industry on routes where we have no nonstop competition.
So, you know, I think our goal is to create something that is not akin to an airline, something that is, you know, because the challenge that Spiro ran into is that their planes got so big they had to overlay Delta, United American, and that's a really tough business to be in because they could just create basic economy and match everything they were doing. So it's just finding those markets.
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Chapter 4: How does Breeze Airways differentiate itself in the airline market?
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