Were you expecting 3 links I love today? Well, this is way better. I will run 3 links tomorrow instead.
JetBlue and Azul founder David Neeleman has been not-so-secretly working on his next airline for months now. Today, he is officially unveiling that the name is not Moxy but rather… Breeze. This is anti-climactic since the Salt Lake City-based holding company already publicly has that name, but it’s just one more step toward launch. This week, David says they are filing paperwork with the Department of Transportation, and they’ve been working hard with the team to get the FAA work done as well.
Breeze previously ordered 60 A220-300 aircraft, and it has just finalized a sub-lease of up to 28 Embraer 195s from Azul. That’s a lot of airplanes, but we still don’t really know that many details about the airline itself. That’s why I was pleased to speak with him at length this week.
My summary is that David is trying to build an airline with smaller, low-cost aircraft flying an Allegiant-style network that has the customer technology interface of Uber. But he’s also willing to spread his wings into a ton of different areas from charter to… wait for it… real estate partnerships. But don’t take my word for it. You’ll find our conversation below. It’s a long one, but with David, it’s always worth the read.
Oh, one last thing. If you know David, you know that any conversation with him can involve jumping around from topic to topic, so I’ve tried to clean this up and organize it for clarity, including the use of topic headers.
On Acquiring Embraer 195s For Cheap
Brett Snyder, Cranky Flier: You’re announcing the name Breeze. And what else? What else are we gonna learn on Friday?
David Neeleman, CEO, Breeze: I’m not gonna tell you Friday where we’re flying, but I will tell you conceptually what we’re talking about.
Cranky: Okay! You ordered the 220s. Those are coming in April next year and now you’ve got [the Embraer 195s coming from Azul]. Are you getting rid of those when the [220s] come?
David: No. One’s an apple and one’s an orange. They have completely different missions to them and will never overlap, probably. They’ll be doing different things. The 195 is an airplane that’s great. Two-by-two seating, millions of people flying it every week in the United States. The 175, this is just a longer version of that. The planes are relatively new. They’re six or seven years old by US fleet standards. They’re pretty young. They’re very young. And Azul had the opportunity to get a more fuel-efficient airplane with more seats from Embraer.
Cranky: Yeah, I read through the investor presentation over on that side.
David: Yeah, so they took the write-off and got us some planes. Now we’ve got some planes for a really low cost; what can we do with that?
On Flying Embraer 195s Short-Haul With Low Utilization
David: I’ve got a bunch of guys on the team that were at Allegiant. And this plane has a 15 to 20 percent lower trip cost than Allegiant’s [A]320. We think we can fly a lot of markets that couldn’t be flown by a 180-seat airplane without planning to have 122 seats on it. So we think between the 74-seat regional planes and 150 to 180 seats, this is a niche that we can fill, and we can serve a lot of markets.
Cranky: Do you know what the configurations gonna be on the 195s? It sounds like on the 220s you’re going to do more of a quick change type of thing, but on the 195s it sounds like will be more dense with no premium?
David: We’ll have premium up front. Today we do [at Azul]. We have ’em at 118 seats. We’re gonna have 118, but we do have the option if we go with some new seats that will allow us to put one more row in the back and keep almost the same legroom we have today with the thinner seat. Then we go to 122 seats and premium seats up front.
Cranky: And the routes?
David: A lot of it is overflying hubs; where we can look at what the [daily passengers each way] PDEWs are and say “okay, well there’s 30 people to go between these two cities a day. If we lower the fare by half and can get them there twice as fast — which in some cases is even more important — instead of taking 4 hours to get you there, it’ll take an hour and 22 minutes to fly direct… People will go more often, and that’s been proven over and over again with what Allegiant does.
Cranky: You talk about the Allegiant-style model here and, I know I saw with the 195s, Lukas [Johnson, Chief Commercial Officer of Breeze]’s quote about being a good short-haul, low-utilization airplane and even getting into charters which I’ll talk about in a minute. Is the idea in these markets that you’re going in with more of an infrequent sub-daily kind of schedule?
David: Yeah, I mean some markets we can do daily and other markets we’ll do twice a week and other markets we’ll do four days a week. A lot of these markets will be leisure-oriented. People don’t want to go Tuesday, Wednesday… they want to go Thursdays or Friday and come home Sunday or Monday, so we’ll fly on those days. Lukas was at Allegiant for 10 years, and nobody knows how to do it better than he does. I have a lot of faith. He’s got a list of 500 city pairs he’s looking at right now.
Cranky: I know originally the idea with the 195 was that you wanted to be able to get flying sooner than you’d have the [220s]. Now it doesn’t sound like you’d really get much of a jump on when the 220s arrive. Is this just opportunistic? Azul wanted to get rid of these, you could pick them up for a good deal to start this off, and it was just an easy way to do it? Or is there something about this model of having this airplane that you think really is going to help lead toward the success of the overall network?
David: Well, when you can spread the overhead, it’s good. It just gives us more planes, economy of scale quickly. They’re different, they’re apples and oranges, they don’t apply to the same missions at all. But you know, I think it’s opportunistic. We got the planes for a really great price and if you look at what Azul is paying for them versus what we’re paying for them, and then we negotiated some other things on the maintenance side…
Whenever you have a plane that is starting to get parted out, parts are a lot cheaper and they’ll be seven-, eight-year old airplanes. These are ones that came along late in the thing and then the E2s came along so they got obsoleted, but they’re kind of new in a sense. We’ll have an advantage on maintenance, advantage on capital costs. It just works good for low-utilization, four hours a day, five hours a day.
On the Commercial Strategy
Cranky: The commercial strategy here is… should people be thinking about this as a small-scale Southwest from a network perspective? By that I mean more point-to-point but it’s sort of a meshed network that connections are possible. Or is this really going to be more Allegiant-like where it’s point-to-point and no connections at all?
David: I’d guess more Allegiant-like. Our head commercial guy [Lukas Johnson] was at Allegiant ten years. I talk to him about markets and we sit there for hours. How about this market? No. How about this one? Yes. The guy knows. He’s brilliant to begin with, but then add 10 years of experience on top of that. It’s invaluable for us.
Cranky: It sounds like if we’re really talking Allegiant-style point-to-point here, is partnering, interline, is that not really a something that interests you? Or is that something that makes sense in a niche area like with Azul or something?
David: Yeah, with Azul it would make sense or maybe TAP in Portugal. We could do some of that if we flew to Lisbon or from cities they don’t serve. But I don’t think it makes a lot of sense to do it. Maybe some international stuff but not domestically.
On the Difference Between Embraer 195 and A220 Missions
Cranky: Is the big differentiator here just the size of the airplane? Is that what you’re saying, because Allegiant’s got plenty of A319s. This is obviously smaller [than the A320], but the A220-300 is probably in the same range.
David: Yeah, but that’s different. [The 220] has 7-hour range. We can fly Salt Lake to Maui or Denver to Kahului. That’s a whole different bird. It’s not a “cheap” thing in that case. What you can do [with] premium, you can’t really put economically on the 195s. But we could pull out a bunch of coach seats [overnight] and put first class seats in the 220s. So that plane will be flying long-haul and we’ll be flying thin markets where…
I’ve done this before. We’ve got [A]330s flying on Azul to the US. And an eight-hour flight on that airplane costs, call it, $100,000 for a flight. And if you can put an [A321]LR on it — a little range-challenged so you need an [A321]XLR — but if you have an XLR you’d probably be $50,000 to $60,000. And then [the A220] is under $30,000. So it’s just a whole different thing where you can actually fly city pairs that nobody has been able to fly before…. Usually range is equated with widebodies.
Cranky: Your point still goes back to this idea of the secondary/tertiary markets that that need longer range with the 220s that you can now serve because there really isn’t another airplane that can do it… unless it’s a giant airplane that’s not gonna make sense anyway?
David: Correct, exactly right.
On Route Opportunities
Cranky: You mentioned a western US to Hawaii market, but what other types of markets are are you interested in?
David: Transcon, secondary transcon, Northeast [US] to Europe, Florida to South America… particularly in Brazil and Azul’s network to some of the capitals they don’t fly and makes no sense to fly with a widebody. So, just all kinds of stuff that works, and we’re even talking about putting on some auxiliary fuel tanks a couple years later. It would give us another 500 miles on top of that; it would take us over four thousand miles. That would take us almost anywhere in Brazil from Florida, for example.
Cranky: So when you think about a lot of these domestic markets, you’re really talking more about these as 195 markets? Maybe not transcon or Hawaii or something like that, but you’re seeing the 195 as the base for that?
David: The 195 works good at about 2 hours. Once you start getting to 3 hours, the fuel consumption per seat is… I mean the E2 has the same engines as the 220 and it’s burning 20% less fuel than the 195s are. So you can imagine if we have 145 seats on a 220 — that’s the coach configuration — and it’s burning less fuel than the 195s and you fly the thing on three-hour, four-hour, five-hour stage lengths… there are a lot of three, four-hour transcons in the US as well.
I don’t think we’ll have any routes for the 195 that are over 2 hours, maybe 2 hours 15 minutes. The fuel doesn’t make sense. It burns 600 gallons an hour and the 220 will burn maybe you know, 560, or something. But the [acquisition] cost of the 220s is a lot more, obviously. So you have to fly it more but if you’re flying it losing money on certain days of the week, then that doesn’t work either, so [the 195 and 220] work good together.
Cranky: Is there anything else you can tell me about the network? What might we see at the start? Obviously, it’s the Embraers so it’ll be shorter-haul, but is this gonna be in the middle of the country or more along the the coasts? I’ll take anything you’re willing to tell me at this point.
David: Wherever there is anybody flying. We have 500 routes we’re looking at, and there’s not one that I can think of that has another nonstop competitor on it. So, that’s about as much as I will tell you. Certainly I don’t want to give our competitors any kind of jump on anything, because obviously there’s a lot of people looking at us, but we’re very confident there’s a lot of opportunities.
If I was flying around [A]380s, I could only fly New York to LA. You go smaller, smaller, smaller. The lower trip cost airplanes you can get, exponentially more markets you can fly especially if your seat mile cost is down. It’s not like a 74-seat airplane that’s a scope airplane like the 175. It’s a fine airplane, but it’s not optimally sized for [unit cost] CASM because their pilots make the same, their maintenance is the same. Their capital cost isn’t more, burns a little less fuel because it’s lighter but they have basically 50 less seats than we do. That allows us to charge lower fares and stimulate the market.
On Network Focus
Cranky: When you start, are you going to have certain cities that you focus on and you’re gonna fan out, or are you really going to be all over the place and just put a couple airplanes here, a couple airplanes there?
David: I think a little bit of both. I mean, we’ll go into a city that we think’s a very attractive city that has nonstop service to a bunch of cities but doesn’t have [nonstops] to a bunch of other cities. Let’s say Orlando is the city that everyone’s flying to. It’s pretty much nonstop from every market, but there’s still some markets where it doesn’t have it. I’m not saying I’m going to Orlando but every single market has cities that could take [new service]. Wherever you’re flying over a hub, and you’re paying more, and it’s taking a long time, and there’s any kind of PDEWs in the market… it’s something that makes sense for us to do. Whether we have one of these cities and 10 [destinations] that aren’t being served and we can connect those cities to each other or we just go one-offs everywhere, it just gives us flexibility to do both.
Cranky: You’re talking markets that are smaller, so is one-a-day the ceiling of what you’re doing on these? Or are some of these gonna be more business style routes?
David: Yeah, one a day. Some would be two a a week and others four a week…. Allegiant started flying from Provo to Mesa, Arizona one day a week and now they do it two times a day, so there will be markets that this will work and other markets that just need less. It just depends on how they develop.
Cranky: It’s all going to be on a leisure focus, it sounds like.
David: Pretty much. There may be some business markets that don’t have service today that we can fly, but it’s gonna be leisure primarily.
On Charters and Other Distractions
Cranky: Let’s talk about charters.
David: There’s just a big need for charters. Big airlines are not really suited to do charters. You’ve got Swift out there. You know Swift is up to like 36 airplanes doing charters, all kinds of different charters. You’ve got sports charters and team charters, special event charters, and some flying low-utilization between certain markets. We’re gonna do all the above. We have a person that actually worked for me at Morris Air years and years ago. We started together. He came over from Swift, so we’ve got a lot of opportunities on charters. And those are very low risk obviously because you get paid before you ever take off. [The 195s are] perfect for that type of flying as well.
Cranky: Isn’t that a distraction though from the core business? I mean, doesn’t that spread you thin when you’re trying to make this airline work and stand up from nothing?
David: No, no it’s not. You know, if you’d have said to me, when we started Azul that we’d buy a bunch of 195s, and then you said, “10 years from now you’re gonna be flying five aircraft types,” I’d have said you’re crazy. But there’s a market there; we exploited it. So we went and got ATRs and then we went and got 330s and started flying international. And we saw the [A320]neos coming on. We needed those so we bought a bunch of 320neos and 321neos.
I think there’s actually a play with these airplanes, with 195s, also…. We’re talking to some real estate people too in areas that have almost no air service [about] bringing in air service and either them subsidizing it or us making money off the real estate. Because every time we fly into a market where there’s no air service, real estate values go up, so how’s that for distractions?
Cranky: Yeah, seriously. Do you have an example of the kind of market you’re talking about?
David: No. Just go up and down the coast on the west coast and the east coast. There are a lot of places. But you know, we can walk and chew gum at the same time.
On the Product
Cranky: Let’s talk a little bit about the product. Obviously from your history the product was a big differentiator at JetBlue. That was revolutionary in a sense with Live TV and all that. I know that this is a technology focus, but if you can talk more about what that means… what will actually be different here?
David: [Ed note: The exact transcription was garbled, but he said there won’t likely be TVs.] The in-flight experience is not gonna be JetBlue-like in a sense. We’ll have internet on the 220s, you know, maybe even free. I’m the big fan of that, but we’ll see.
But on the on the 195s from the customer-experience point-of-view, booking [will be better]. You know, changing it. Being able to see all the stuff, the ease of dealing with us. Our goal is just to make it like ordering an Uber car, and being able to change it, redirect it. We just don’t want you to have to pick up the phone and call us. We don’t want you to ever be aggravated. We want the fees to be reasonable. Change fees, we’re looking at maybe lowering them significantly over what the other guys do just because that’s a pain point. We’ll charge for bags, because it’s a cost to us. Those that don’t have bags, they save us money and they should get a lower fare. But we want to have more options. We want to have more food options where you’ll pre-order all your food beforehand, and we’ll serve it to you, just have it be kind of special from that perspective.
Ed Note: This would explain the design of the logo the company released today which has EZ and a check mark in a different color.
On the 220s, we’ll have internet and we’ll also have broadcast on your iPads and stuff, similar to what Southwest has.
Cranky: Will you have power, though, unlike Southwest?
David: Yeah, we’ll have power in all seats. We’ll have these quick change with 24 hours notice be able to pop in. You know, 36 first class seats before the exit row. If it’s flying in a leisure market in the summer time, shorter stage lengths, we can go 145 seats with the premium up front. Or we even have configurations that have lay flat seats, so we could actually have a mid-type lay flat service where we could put 21 lay flat seats in the front before the exit row. It’s flexible, and we’re gonna go where the business is and where the money is. We’re not gonna go try and do anything anyone else is doing.
On Competitive Response
Cranky: Ok, so that’s the biggest differentiator. The play here is “we’re gonna fly markets where no one else is going non stop. We’re gonna stay out of the way and do our own thing,” but what do you think the current competition’s gonna do? You may not be on competitive non-stop routes, but you’ll still be in cities that are served by other airlines that they may have an interest in defending. What’s your concern about the competitive response?
David: There will always be competitive response, but it depends on how much it’s hurting the other guys. If we go into a market that has 5 PDEWs, and we take it to 80 people, how many people did we actually steal? They probably will get some of that anyways over their hub. If we’re creating ten times more than we’re stealing, then there will probably be less reaction. People react if you’re going after their breadbasket, not if you’re creating markets.
It’s also not an office building. I can put this wherever I want to. If somebody wants to add 10 flights on top of our 1 flight… we’re gone.
Cranky: So you’ll just move around as you need to. I guess they can’t get you everywhere; it’d be like whack-a-mole.
David: Yeah, whack-a-mole.
On the Next Steps
Cranky: Alright, so when will we know more? Is it all dependent upon the certification timing or do you have a timeline mapped out for when you’re going to start releasing more info?
David: We’re not announcing any cities until we get certified. Can’t sell them, so I’m not going to announce anything I can’t sell. As soon as we get certification, then we’ll announce some cities and then be going 60 days later.
Cranky: All right well Breeze is coming soon, I guess and we’ll just have to wait for more info.
David: Yeah, I appreciate your time. We’re excited about it.
And with that, we were done. There’s nothing quite like talking to David. His grasp of what works and what doesn’t is just remarkable. Numbers roll off his tongue effortlessly and with authority. So far, that has grasp of what works and what doesn’t has helped him to build several successful airlines. Now we wait to see if Breeze will join that group. When we have more details about routes and all that, then I’ll try to break this down further.
35 comments on “David Neeleman's New Airline is Officially Called Breeze; Here's Everything He Told Me About It (Across the Aisle)”
Interesting interview.
I know there’s a ton of things still up in the air, but what’s a realistic timeline for the first scheduled (non-charter) flights for Breeze? Later this year? Summer 2021?
I read somewhere that he hopes to be flying before the end of the year, but doesn’t want to give any timeline that puts pressure on the FAA (I wonder who would do that?!)
Kilroy – David seems confident that flying by the end of the year is possible, but he’s not committing to that. The way certification works, you can’t guarantee anything, so they’ll fly as soon as they can.
The tie up with the real estate investors is just a modern version of what the Metropolitan railway did in London 100 years ago…
But what about those investors when the game of Whack-a-mole start and Breeze pulls out of the market?
Railways do this very well since they are quite permanent and also cheap to use and operate. Flights are just the opposite.
If it was anyone other than Neeleman, I’d have doubts. Whether or not Breeze succeeds depends on the competition’s response. I wouldn’t say that there’s a revolution coming, but certainly there’ll be some selective fine-tuning. Not sure there really is a need for another Allegiant, but I’d say Mr. N has his ducks in a row, now if he can get them to quack in unison he’s in business.
When I read, ” Florida to South America… particularly in Brazil,” I immediately thought of Melbourne (MLB) as a possible Breeze market. It’s an underused airport with a customs facility, it’s reasonably close to Orlando, and the North American HQ of Embraer is, pretty much, next door to the terminal.
Interesting and well constructed read. A few things I’d be interested in knowing:
How might Breeze convince a jaded and wary flying public that the airline is little more than just another flying cattle car?
And
Will the focus be on primary airports, or will Breeze, like Allegiant, make wide use of secondary airports?
And
Multiple mentions were made of a route network that includes Central/South America and Hawaii. What about Canada? Personally, I’d like to see a few more options to fly to Canada from cities other than mega-hubs.
This is such an illuminating article. Thank you CF.
The one part I found really hard to believe is A220 total operating cost being 50 to 60% of A321XLR. That seems unbelievably good. A220 is going to kill A321XLR if that’s the case. My own calculation is bout 70% total operating cost of A321XLR. Which in and itself is already really low.
FC – Well, on large routes, what really matters is the unit cost. The XLR can go a lot further than the 220, so that’s not the right comparison for apples to apples, but if the 220 can have a lower seat cost vs, say, a 321neo, then that’s insane. I find it hard to believe
I would dare say you have probably been able to publish more about Moxy -now Breeze – than anyone else has been able to do. Congrats.
The interview and strategies seem to be typically Neeleman – all over the board, a little of this and a little of that.
I also think he is colored by his Brazilian heritage to favor the E190/195 when it is known that maintenance costs for that aircraft jump substantially with age. I suspect the Ejets might not be in the fleet near as long as he thinks.
As for the point to point secondary city strategy, he probably will succeed at siphoning off traffic using smaller aircraft – ala Allegiant. But he also mentions SLC which is not a secondary market and will light up a contest with Delta, regardless of his affinity for the Mormon market.
I think he has the ingredients for a successful launch but it sounds all over the board right now.
> The interview and strategies seem to be typically Neeleman – all over the board,
> a little of this and a little of that.
Yeah, it does seem like a business plan that is all over the place. Perhaps deliberate at this point – what would be the benefit of sharing concrete details with the traveling public *and* competitors this early?
Well, we know what it won’t be: multiple daily frequencies, lower-density aircraft, high utilization, long routes (until the 220 shows up), or routes where they have to compete. That’s a start.
They should have had a squeezed lemon in the logo—then it’s Easy Breezy Lemon Squeezy!
Define “successful” airline. If you bought shares of JetBlue when the IPO rolled out (at approximately $40 a share), you’ve never made a dime. Never. All you’ve done is lose money. Someone said earlier “if this was anyone but David I would have my doubts.” I still have doubts.
For the love of all that’s holy, can an airline use ANY color that’s not blue?
Will be interesting to see if they’ll touch AUS. Allegiant just announced a handful of 2x/wk routes, reversing their steep down-trend as Spirit has come in with daily routes. In 2018, Frontier threw a lot of darts at the map from Austin, then dropped a bunch of them, but a fair number of those routes are a bit longer than the 2:15 cutoff mentioned here (e.g. JAX, CHS). Wonder how many of those 500 city pairs can only be served once 220s come online. Guessing AUS will get a few more options once the 220s are in the fleet, particularly with the quick change capabilities allowing for a more premium layout, which they can probably sell ex-AUS.
The real estate idea is interesting, but seems like that’d be a hard sell without the ability to connect to other markets.
Would love to see expanded NS service from SAT to Florida west coast – SRQ, PGD or RSW. For a city the size of San Antonio (1.5 million), there is not much in the way of NS service to FL, other than MCO
. Perfect for Breeze.
Their E195 strategy sounds very similar to Allegiant’s former fleet strategy with MD80s: Buy some obsolete, inefficient aircraft at a super-low upfront cost, and then run them at low utilization. It’s an interesting play, and the fact that they are targeting flights under 2 hours is an interesting limitation for network planning.
Route planning for the E195s seems hard. The constraints as I see them:
– Distance < 650 miles (roughly corresponds to DN's "2 hours, 15 minutes" maximum length"). Shorter is better.
– Demand needs to be primarily leisure & VFR. Frequencies and times probably won't be optimized for business travelers.
– Neither end can be a hub for a legacy airline, because the likely competitive response would be to add some 50- or 70-seat regional flights with Basic Economy fares to push Breeze out of the market. Southwest doesn't have this option (minimum response would be a 737-700 with 143 seats, which is too big to fill), so it's probably okay if either end is a major Southwest destination.
– No one else can fly the route nonstop.
As long as they avoid the legacy hubs, I think the major competitive risk actually comes from the ULCCs: Spirit, Frontier, and especially Allegiant. There's a risk that Breeze's E195s prove that there's a market on a specific route, and then Allegiant swoops in with a weekly or twice-weekly flight that sucks up a lot of the passengers and forces Breeze off. If they find routes that do well, they may need to demonstrate a commitment to defending them, which could be pretty expensive.
My initial guesses for E195 routes:
1. Small markets in the Southeast US to various destinations around Florida.
2. In the summer, small markets in the Northeast, Mid-Atlantic, and near-Midwest (OH, IN, MI) to beach destinations on the Atlantic coast in the Southeast (various destinations between Virginia Beach and Jacksonville).
3. Point-to-point routes from college towns that aren't near a major airport. There are lots of them, they have an affluent, mobile population (often without cars) with a lot of travel demand, but mostly not enough demand to regularly fill Southwest 737s. Plausible destinations here vary, but connecting the college town to population centers where a lot of students are "from" is probably a good bet – routes like ROA-ORF, PIT-AVP, TYS-MEM, CLL-SAT, LBB-SAT, etc. Each route needs some analysis to determine whether it's workable, but demand definitely exists on some.
Both #1 and #2 are squarely within Allegiant's target route profile. That's tough, because even if there is no direct competition on a specific city pair, passengers may be somewhat indifferent between various beach destinations, and might price-compare an Allegiant flight to e.g. Myrtle Beach vs. a Breeze flight to the Outer Banks (just an example).
It will be tricky, but it's exciting to see a company with a real differentiating vision here.
A speculative #4: They use their new entrant status to get some gates assigned at AUS and BNA, and fly some of the routes that the other ULCCs would like to, but can’t due to limited gate capacity. The process would probably take too long for this to be part of their initial launch schedule, though.
These routes would really be selected as a regulatory arbitrage, rather than because Breeze has a competitive advantage serving that market.
AUS is no longer gate-constrained with the new wing from early last year. There are parts of the day where common-use gates are rather quiet. And if Breeze wanted to use the South Terminal there’s space for a few flights per day from there. Otherwise, AA couldn’t have added multiple P2P flights per day recently.
That said, routes that Frontier dropped from 319s at 3x/wk might be viable with E95s at 2x/wk…routes that currently don’t have anyone flying them. Traffic at the airport has gone up maybe 10% since Frontier dropped those routes, so there’s a chance they could restart stuff.
Interesting – wasn’t aware. My guess is they won’t go into AUS, then – seems like a knife fight between the various ULCCs, and starting with routes that Frontier couldn’t make money on doesn’t sound promising. I also suspect that Delta would already be running CRJ7s or 717s on some non-hub routes if they thought it was viable.
A220 strategy is much simpler:
1. Fly transcons (and similar-length longhauls) where the demand is too small to fill an A320neo at an acceptable yield. Probably anchored at one end by a major market like NYC, SFO, LAX, etc.
2. Fly to Hawaii from some places Southwest can’t until they have the MAX, or where Southwest won’t fly from because they can’t fill a MAX 7 anyway.
3. Maybe fly NE US to Europe or Florida to South America.
Basically, fly the long-hauls that are too thin for anyone else to fly economically.
I think #1 has a bunch of promising candidates. As one example, SAN-ORF has an average of ~91 passengers a day from the federal government GSA program alone (not counting contractor business travel, VFR traffic, etc.), and the government is paying between $386 and $772 per round-trip. There are caveats – getting included in the GSA program is complicated, requires minimum frequency, etc. but this is just one example of transcons with significant demand that are currently only served via hub connections.
I’m much more skeptical of #3, because the Delta/LATAM situation seems to have triggered an arms race between Delta and American for traffic between Florida and South America, and I wouldn’t want to step into that as an upstart, even if I was an upstart with deep connections to Brazil.
Thank you for organizing the interview notes.
The name Breeze doesn’t surprise me.
Did you discuss technology? Was there mention of the ‘reservations’ system? My assumption is Navitaire/Amadeus.
PF – Nope, didn’t get into those details, but I just assume it’ll be Navitaire. He’s a loyal guy in that sense.
Great interview. Looking forward to an airline that’s a bit more enlightened about things like fees.
Speaking of enlightenment, can we talk about the Across The Aisle graphic?
1. Smoking? It’s 2020.
2. Leering across the aisle. #MeToo is still ascendant.
2.a. Her body language indicates that she obviously finds him repugnant.
3. Location of his left hand.
I’m hardly a prude but this graphic is a mid-century relic. Let’s update.
Run a contest!
I hope he lands in Memphis. I can see MEM -MSY/SAT/CVG/MKE/CLE/RSW/RDU/TYS/IND/JAX just to name a few for the E195s. In fact, I know he said he didn’t want connecting flights but he should really look at the old milk run routes to sell direct, next stops without a plane change. From my perspective something like MKE-MEM-MSY or SAT-MEM-SDF/CVG-BUF.
The A223s can do MEM-BOS/SEA/SAN/OAK/CUN/NAS
Not convinced that there is much leisure demand on this routes, but then again Allegiant thinks they can make CVG-MEM, DSM-MEM, and PIT-MEM work in the summer, so what do I know.
MEM-RSW would take longer than their 2:15 target max flight time, but MEM-ECP would be workable.
But when can pilots apply?!
Now, apparently: https://jobs.flybreeze.com/
I really hope they have Orange County SNA / NYC (any airport) and SNA Hawaii on their transcon list. They are the two of the flights that you have to either go through LAX Hell or take lots of extra time connecting to get to when you live in OC.
The one question I had wasn’t really touched on – where’s he getting all these pilots? Im assuming a quicker path to flying a 220 is to be CRJ 700/900 proficient from a flight deck perspective – but those pilots wont be overwater ready anytime soon. Where are all these E-jet guys coming from, and do they have any experience?
Steve – Great question. This is why I had previously suggested buying Compass, that would get the airline pilots. We’ll see if he can attract people without paying an absurd amount of money.
This is a guy I would love to work for, especially in network planning.