Name: Brainstorm Tech 2024: An Entirely Different Kind of Flying
Uploaded: 2024-07-17
Duration: 13 min 56 s
Description: David Neeleman, Founder, Chairman, and CEO, Breeze Airways Interviewer: Jessica Mathews, Fortune

David Neeleman, Founder, Chairman, and CEO, Breeze Airways Interviewer: Jessica Mathews, Fortune

Brainstorm Tech 2024: An Entirely Different Kind of Flying

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So we both decided backstage that we're going to go on a bike ride after that. We were really inspired. Well, I'm wearing my glucose monitor. So it's kind of cool to see I get updates and, but it's, it's good to see lactose too. I'm excited to get that approved and more wearable the better. Yeah, definitely. Well, look. So Breeze is based out of Salt Lake City. So have you seen an uptick in flights this week for brainstorm tech? Um You know, we actually have flights into Provo and we serve a couple times a day from, from Orange County Airport. So I think there's a lot of tech down there. So I'm sure we have some people coming in. Do we have anyone here who took a brief flight in? Ok. Yeah, we got a couple of people going over there. We don't have a lot of service out of here. If we were in Charleston, then a lot of fans would go up or we're in Providence Rhode Island where we have big bases of operations. Got it. Well, David, we're really excited to have you today. As Andrew mentioned, you have founded several different airlines. And I guess my first question would be for you. Why start a brand new one? What's different about Breeze? So, you know, I, I, after I left jetblue, I went to, I was born in Brazil and my, my parents were living there and my dad was a journalist. And so I had the opportunity to be born there and I just, I don't know, I had had, and then I went back as a missionary for a couple of years and speak Portuguese. And I always want to make a difference for, for, for Brazil and, and the people and today it's, it's an amazing company as well. Has 1000 flights a day. We move 100 1000 people. So I was there and, and that was the airline you founded right before Breeze, right? As it was. Yeah. So as I look back to the US after 15 years, the airline started 15 years ago and today we, like I said, we have 1000 flights. We fly 100,000 people. We um deliver 200,000 packages door to door. Um I, I just looked back at the US market and I said, you know, there may be an opportunity here. Uh What's different about the US business airline business today than when I started jetblue is, it's a heck of a lot better. I mean, delta, you can partially because of jetblue. Uh you can sit down and, and there's live TV. And you have your free internet and the flights go on time. It's, it's a much better product than what it was back when I started jetblue. Uh also Delta United, everyone went through bankruptcy. So they were able to clean up all their legacy costs. So it was a much different market and a much better market. But what the trends that I saw because the cost that started going up is that the big airlines were forcing everyone through hubs if you lived in places like um, Hartford, Connecticut, if you lived in Hartford, Connecticut, if you lived in Huntsville, Alabama, I live in Bentonville, Arkansas. So you live in Bentonville, Arkansas, you had to always go to a hub. You, you had no really other choices to do that. Or if you lived in Huntsville, the other option, you could drive to Nashville two hours. So Providence, you could go to Boston but you couldn't have the flights out of Providence. So we thought if we could just get you there for twice as fast for half the price and do it with a different product mix than the traditional UF CCS. We call ourselves the NLCC, a nice low cost carrier and have options. You know, it's different today, Jessica about the industry is about 25% of the people want an upgraded experience. You know, one of the reasons the Southwest is kind of struggling today is that kind of the scramble for seats and it was cool back in the seventies and eighties and even the nineties. But today when Delta is so much better, when United is so much better, people don't want to fight for a seat. They want to pay a little extra to have extra leg room. They want to be able to pay a little extra for a first class seat, a lot extra for a first class seat. So on our breeze airplanes today. Uh First of all, we, we have about 200 routes, we serve 60 cities and about 90% of our routes, we have no nonstop competition. And then when you're outside of the huts, always, we're always outside. So, uh Huntsville, Alabama, we fly Huntsville to Las Vegas to Los Angeles, to Tampa, to Orlando places people want to go, they don't have to connect through Dallas, so they don't have to connect through um Atlanta for ex for example. So we get there a lot quicker. Let me, let me ask you. So you, you started this company at a very interesting time in the market. So you, you started building it right before COVID happened and then you launched it in early 2021 which is arguably one of the most devastating periods for airlines. So how was that? No, it was rough. It was really rough. And uh, it was not only because I mean, the business was coming back, but it was really the supply chain. It was being able to hire people during COVID. A lot of people decided they didn't want to go back to work or they wanted to work a lot less or they wanted to work from home. And so it was really, really tough and the, the big airlines had laid off and not laid off, they had bought off 7000 pilots, the most expensive pilots. They took some of the $53 billion they got from the US government and said, how about you guys all retire? And then when the business came roaring back, they said, holy, you know, crap, we got to hire 7000 new pilots. So they started going into the regional carriers and the regional carriers couldn't fly. The fa had staffing issues, certified stuff. So it was, it was a really challenging time to get it going. But thankfully now we're really hitting our stride and pilot issue has been resolved. We can hire anyone. We want to. We have, we have over 800 applications for pilots right now. So is the pilot issue totally resolved now? It is, it is mainly there's still a kind of a captain issue. You have to fly 1000 hours to become a captain. So captains are a little, a little, you know, it's interesting. The big airlines, the first officer pay has gone up so much that a lot of these people don't want to upgrade to captain because it affects their quality. Of life. So you may have a sitting in Miami, have a great line and then they say you want to be captain, you can be on reserve in Newark if you want. And they're like, no, thanks because I, I'm making 200 grand sitting here in Miami and I can make 350 in, in New York, but it's not worth it to me. So it kind of the marginal utility of money, you know, has, has forced a lot of people not to want to upgrade a captain. So I don't think we can have a conversation today about the airline industry without talking about safety. There's been whistleblowers at Boeing, they've had a lot of safety issues with their Boeing. 737 people. I talked to including myself, think a little differently every time you get onto an airplane now. And so e every airline carrier is having to think about that. You are in an interesting situation because you're also a start up where your brand is less known. And so how do you approach safety and how do you get customers comfortable with flying? Breeze in today's day and age? You know, it's um CP traveling by air, be it on a 737 max and an A 220 where we fly. Uh It is incredibly safe. I mean, it is unbelievably safe. I mean, it's really hard for anyone to think of the last accident um of, of, of an airplane, of an airplane, a large transport airplane in the United States. Uh, it's, it has been so long, uh, you know, I, I think, well, there was a, there was a regional plane Colgan that crashed in Buffalo, that was maybe 10 years ago. But, but if you go before that, it was like American Airlines, uh, out of JFK was like, right after 911. I mean, it was a lot of losing a door during your flight is also very terrifying. It is, but it shows the amazingly engineered engineering on that airplane that you lock the door and nobody was injured and the plane was able to last. Now, obviously, things happen will tires fall off airplanes, but the ability for these airplanes to withstand that kind of stuff is really incredibly. So does that feel like a non issue for you at breeze is that I can't very worried about people like you and everybody else, but it really is a non issue. But, you know, safety is our number one value. Every time I start an airline, we create values and safety is always at the very stop. And so we are, we, we talk about safety. We, you know, safety is part of our culture. Um you know, everybody can stop an airplane anytime if they feel like it's safety. So it's ingrained in our culture and because of that and because of the work the FAA does and because every time there's an accident or something, you close that, that, that something that caused it and, and uh, so that's why it's, it's really so incredibly safe to fly. Another thing that I feel is top of mind to many of us is customer service. And I'm thinking back in 2022 when Southwest had that insane scheduling crisis. And I think we can all relate to one of the most frustrating things in the world is if your flight gets canceled or delayed and you can't get a hold of a human on the phone. Um I know that breeze is very digital first in its approach to dealing with customers delays issues. Um Have you rethought that at all in terms of having people interact with the chat bot versus a human? Yes. You know, we just hired a brand new chief, chief customer officer. Ok. And when she was in charge, when did she join? She started last week? Ok. She's incredible and she is in charge of our any customer contact position. So she, she's in charge of all of our airports, all of our flight attendants and all of what we call our guest empowerment agents that work at home. So anyone that has contact with a customer she's in charge of. So, you know, her, her priorities are to a get make it the most on time airline in the in the country. I'm not content until we're 90% on time. We already um we operate, we cancel one in every 1000 flights. So we are hardly ever ever cancel a flight, but sometimes we have to overnight it or run late or something. So that's, you know, her number 1 90% on time. It will be today. We're around 70 we need to be better. So, so what about for those three out of 10 people that are, so then the second thing is our get agents right now. It's digitally. We talk to you by digitally. We don't have a big call center. Everybody works at home. So one of her jobs is to be quicker to call people. So somebody contacts us. Um, it's interesting that my, my daughter actually works for the company. She's in Dayton, Ohio and she goes, does all the MP S stuff and she told me the other day, dad, there's a couple of people that were blind that said they can't deal with it. How do we deal with them? You know, and I said, well, we need to call them. So, you know, we're going to be much quicker to be able to, we can interact with them, but then we, we can will call you. And so that's a much quicker. So you are incorporating more humans into the. Exactly. Exactly. Right. As it goes through, you know, using the technology and the A I to determine who really needs to be called. And then we, we, we're quicker to call them and then we're also going to have more people, our people at the airport right now. A lot of that's contracted. And the beautiful thing about having those two things combined is that somebody can actually work from home a couple days a week and then they can come to the airport and work a couple days a week. So it's a much more attractive job than having to go to the airport every week or, or stay home all the time so we can mix those two. Ok. So I think we only have time for one more question. So I'm gonna ask you to keep your answer brief so we can fit it in. I'm watching the clock myself. Um, so you have been in this industry for a really long time, have founded so many different airline companies. What do you think of this industry is gonna look like in the next five years, particularly after jetblue said earlier this year, it was terminating. It's ac it's proposed acquisition of Spirit Airlines because of antitrust issues. What, what is the next five years gonna look like in your opinion? Well, I think, you know, it's, I think, I think A I will, will, will play a huge part. A I in the operation of our airplanes for a better fuel economy for predictive maintenance. So we can predict when parts are going to fail quicker. So we don't have less cancellations. Um, a better, a really more connect super apps that understand you and know you better and can serve you up relevant stuff instead of just blasting out emails all the time. Um And so I think, you know, a I is going to change the experience dramatically, make it better, make our costs lower and, and really um communicate better with our customers and lower our marketing costs because we'll, we'll know our customers better. You know, today we have an upgraded experience. You know, you can go and say you want to buy the $49 fare. No, I want, I want the 90 $9 fare that has the extra leg room and the free bags or I want the 149 fare that has uh the first class seat. And so we have that ability um like you can't get on spirit or front here and, and we can take you to a bunch of places that people don't fly. So, you know, there's, there's, that's, that's all the time we have today. Thank you so much for being here, everyone. Thanks.