Skift Take
David Neeleman's new airline promises to have good service at competitive prices. That's his strategy at every airline, and it's commendable. But Neeleman is also planning to operate what is essentially two business models at once. Can he pull it off?
When David Neeleman's startup airline, to be called Breeze Airways, begins flying as soon as late this year, customers may focus on its passenger experience, which Neeleman, who founded JetBlue Airways 20 years ago, says will be among the best in the United States. But from a business perspective, Neeleman’s airline is more intriguing for another reason — the chronic airline entrepreneur is pursuing two models at once.
At first, Breeze, which filed Friday for an operating certificate with the U.S. Department of Transportation, will be an Allegiant Air clone, albeit with better service — Neeleman is calling his new carrier “The World’s Nicest Airline” — and fewer fees. Like Allegiant in the late 1990s and early 2000s, Breeze will fly an older, used aircraft no other U.S. carrier wants on routes with little or no competition. Because these airplanes, the Embraer E195, are so cheap to acquire, Breeze may fly them as few as four hours per day and still make money.
Breeze next year will introduce the second part of its strategy. By April 2021, it will add the first of 60 Airbus A220s, a new single-aisle airplane capable of flying coast to coast, to Europe, and to South America. Breeze may load them with premium seats, and could fly them at least 10–12 hours per day, mostly from medium-size markets.
"They are separate missions — one is an apple and one is an orange," Neeleman said in an interview. "Those planes will never fly on the same route. They won't be in the same universe, really.”
[caption id="attachment_305594" align="aligncenter" width="1024"] Breeze founder David Neeleman. Photo: Bloomberg[/caption]
Few airlines have tried such a gamble. But Neeleman is calculating a mix of lower fares, more nonstop choices, and better service will ensure Breeze siphons customers from established players. Running what is almost two airlines is a challenge, but if anyone can do it, Neeleman is probably the person.
“I'm always skeptical about startups, but Neelem
