At long last, Breeze is here. The airline has been plotting a launch very publicly for many months, and after several certification delays, the day has arrived. Breeze is now officially an airline that can sell tickets. As is expected for a David Neeleman-run airline, this is no small launch. Over the last month, I’ve spoken with both CEO David Neeleman and Chief Commercial Officer Lukas Johnson to get a sense of how the airline got here and where it’s going.
The answer to that riddle is remarkably unclear in one important sense. This is effectively two airlines being launched under the Breeze name. They will share some attributes, but they will be very different in many ways. The second airline — the original plan which will use A220-300 aircraft to fly smaller, longer routes with a solid product — is still cloaked in secrecy. All we know is that the airplane will be nice and have all the bells and whistles from a business class product (called “Nicest”) to wifi, seatback entertainment, etc. The first A220 doesn’t arrive until October, so we’ll have to wait to hear more about that. With 80 of them on order — yes, 80 — this is going to likely dwarf the operation that we learned about today.
What’s on sale now is the Breeze that uses really, really cheap airplanes to fly sub-2 hour flights around the US with a low frills product. The idea for this airline came to be for several reasons. First and probably most importantly, David’s other airline Azul had a bunch of Embraer 195s it didn’t want anymore. So it wrote them down, and then David brought them on at Breeze for almost nothing. Breeze them contracted with NAC to lease slightly-smaller unwanted Embraer 190s for cheap as well.
When you combine cheap airplanes with Lukas’s background having run Allegiant’s network previously, you get how this idea blossomed. It’s not an easy road, however. Here’s the initial route map which will be flown by 13 aircraft, ramping up from the first flight on May 27 through July. (And yes, you read that right. It will start flying in 6 days which is not ideal from a booking window perspective, but despite the delays, they stuck with the launch date they wanted.)
I hope you’re not looking for a hub, because there isn’t one. This is a spider web of connectivity, though at least initially it’s centered around 4 primary bases: Charleston (SC), New Orleans, Norfolk, and Tampa.
I was expecting to see more in the northeast to start. Instead, the focus is largely rust belt to sun belt. Even what’s in the northeast was more than I had originally been told. There were tweaks since the initial discussion that added one of those two cities you see today.
But the route map only tells a small piece of this story. This is a part-time airline. The initial batch of routes will not operate on Tuesdays or Wednesdays at all and only a couple will fly on Saturday. They’ll just shut the airline down, something that is more doable when your fixed costs (airplanes) are that cheap. Just ask Allegiant.
Of the 39 routes being launched, 33 of them will only fly Thursday/Friday/Sunday/Monday. On Saturdays, only 4 flights will operate. Here are the six routes that don’t fit the regular pattern.
- New Orleans – Akron/Canton: Thursday, Sunday
- New Orleans – Columbus: Friday, Monday
- Tampa – Akron/Canton: Saturday
- Tampa – Columbus: Saturday
- Tampa – Oklahoma City: Thursday, Saturday, Sunday
- Tampa – Tulsa: Friday, Saturday, Monday
This may sound crazy, but this is actually pretty high frequency considering the routes being chosen. And this is where we get into the mythical quest for the Goldilocks zone.
Breeze has smaller airplanes than everyone else in the “low cost” game. The Embraer 190s have 108 seats while the Embraer 195s have 118. When I spoke with David, he kept talking about how Breeze will have the lowest trip costs of anyone, 25 percent lower than on an Airbus or Boeing narrowbody. The problem is that he’ll also have a lot fewer seats so, as Lukas admitted, their unit costs will be higher than competitors. So, Breeze needs to find the right route for this model to work.
If a route is too small, even Breeze’s smaller airplanes won’t work. But if a route is too big, well, then Allegiant, Frontier, Southwest, Spirit, or Sun Country will swoop in with lower unit costs and sell all those extra seats. Breeze can still hope to win with a frequency advantage. The smallest airplane Allegiant has holds 156 seats. Spirit has a handful with 145 but most are way bigger. And Frontier has nothing lower than 180. So, maybe Breeze can find markets that are big enough for the others, but the others will have to fly it a couple times a week while Breeze can do more. Maybe. Nobody ever said that the incumbents couldn’t fly stupid routes just to put pressure on the new airline.
For the pure leisure traveler, frequency may not matter as much, but Lukas says that visiting friends and relatives (VFR) traffic is a big part of the plan. And if you can cut your visit with your family just a little bit shorter, that might be a selling point for some. Lukas expects some small business travelers as well, when convenient. In short, if the schedule matters, Breeze can likely get a leg up on others by having more flights during the week.
It’s also possible Breeze could try to win on product, but this isn’t just a JetBlue clone in that department. The cheap seats are called “Nice” class and have 29 inches of seat pitch on the 190s with 31 inches on the 195s. Nice fares are fully unbundled. Carry-ons and checked bags aren’t included, there is no food/drink, and seat assignments are extra. There is also a frequent flier “BreezePoints” program which appears to be a cash-back style offer. You book this fare and you get 2% back to spend in the future.
The “Nicer” fare sits in extra legroom seats (starting at 33 inch seat pitch on the 190 and 34 inches on the 195). It also includes a carry on, checked bag, and an advanced seat assignment. You also get 4% back in BreezePoints and a drink and a snack.
These classes are kind of curious to me since I tend to fall in between. I may not care about a checked bag or legroom, but I do want a carry-on. I do know that I can pay $20 each way to get either a carry-on or a checked bag on that fare, and if I want a seat assignment that’ll start at $10, so the extras can add up quickly. (Families with kids, by the way, get seat assignments for free.) The spread between the fare classes will make or break this structure, but I obviously wasn’t privy to that detail in advance.
Since this is a David Neeleman airline, there will be fast growth, but we don’t know what that means yet. Lukas tells me future growth will be both from these existing bases where they see plenty of opportunity and in new bases around the country. They aren’t talking about any plans with the Embraer fleet, but they do say that they will keep growing. I couldn’t get Lukas to commit to the Embraers making their way out west or not. But the A220s will when they show up. Then again, that seems like a totally different airline from the bits and pieces I’ve gleaned.
I’ll admit that I struggle with this idea. A route that’s truly successful will likely be invaded by others, and that means there’s a fairly narrow band of routes that might work, at least for the Embraer airline. But hey, this is David Neeleman. His many successes have certainly earned him the benefit of the doubt once again, and after so many times proving people wrong, it’s really hard to consider betting against him. Let’s see if lightning can strike again or if his luck has finally run out.
