Breeze launched service on the Westchester – Los Angeles route last week, and CEO David Neeleman was onboard. I… was not, but I was able to get some time with David in LA after he landed. David is always one to give a straight answer, and that’s why I always love a chat with him. Enjoy…
Brett Snyder, Cranky Flier: You have already shifted your strategy in LA, originally with flights to Providence and Richmond. So why the change?
David Neeleman, CEO, Breeze: Just getting everyone trained was really hard and it was more than we anticipated… not the greatest planning on our part, which we fixed. And then it was also Airbus delivering airplanes late to us. They’re running about six months behind on all the deliveries because of supply chain issues. So those two things and then seasonality kind of left the window. So we’ll be back in the spring and the summer.
Cranky: In those markets, you will?
David: Yeah. Yeah.
Cranky: Is this part of… I know I’ve seen you built up Phoenix a lot lately, you’ve announced a lot there. Is that sort of the counter cyclical plan?
Cranky: So do Phoenix in the winter, bring it [to LA] in the summer that kind of thing?
Cranky: Okay. And Westchester though, that was one, I guess you had to take the opportunity, right?
David: Yeah, Westchester’s good year-round, you know? It’s a huge market between LA… it’s the largest O&D market in the country. I think that’s four or five thousand people a day that will do that route. We think the catchment area for Westchester is probably at least 20 percent of that.
Cranky: Do you think there’s more growth [in Westchester] or are you pretty maxed out at that terminal?
David: I think there’s some more growth. I think we can do some more. Right now we have a lot of destinations, not as good a frequency. We’ll probably slim down the destinations a little bit and depending on which ones do well and which ones don’t. Then we’ll focus on, you know, four or five and do them daily….
Cranky: You were gonna do San Francisco, right? And then that one didn’t, was that also an airplane thing or was that just…
David: Same thing. It was an airplane and a pilot thing.
Cranky: It’s not a demand issue?
David: I think Vegas and San Francisco will do great out of there. And you know Vero Beach is gonna do great. It’s already doing great.
Cranky: Is it?
David: Yeah. So, I think [Westchester] is an airport that demands daily service. And that’s what we’re doing at LAX, daily.
Cranky: You’ve also got this Provo… hub, I guess you’d call it? Is that more just about utilization and maintenance or something or what?
David: It’s by our headquarters and, you know, we’re doing daily San Francisco out of there. The plane goes on to San Bernardino in a relationship we have with the San Bernardino Airport. And we got two slots at Orange County.
Cranky: Oh, you did.
David: Yeah. We’re gonna be doing a daily nonstop to Provo from SNA. And at SNA we’ll be the only flight going to Orlando every day.
Cranky: Orlando? Oh that’s interesting. So not not like a Westchester. You thought it was more of a leisure play there?
David: I think it’s more leisure, but there’s a lot of people in that area. There’s a lot of affinity for Disney. Probably Disney corporate may have 20 or 30 people on there.
Cranky: You need to go back to Burbank. Didn’t you try that in a previous life?
David: Yeah, yeah. But from the amusement park.
Cranky: So, Provo. Is there a lot of demand there? Or is it flowing the aircraft?
David: No, it’s it’s a lot of money, there’s a lot of demand. That’s where Silicon Slopes and all the growth is. Salt Lake Valley is kind of maxed out, can’t grow, so it’s all moving south.
Cranky: And it’s it’s that new terminal there, so you have the opportunity there as well.
Cranky: What is your thought for LA? Is it Provo and long-haul? Is there more here? I mean I know you’ve got San Bernardino as well, but…
David: It’s pretty well served out of here short haul. San Bernardino goes to San Francisco, San Bernardino to Vegas we’re starting. And then, you know, it’s pretty well-served I think anywhere where you look east like Providence where you don’t see nonstops. Westchester. We don’t have Charleston, those kinds of flights.
Cranky: So LAX is more of an A220 station than an Embraer station.
David: Yeah, the Embraers don’t compete well on short-haul where there’s a lot of capacity.
Cranky: You’ve had the Embraers, you’ve moved them around a lot. There have been a lot of changes. I mean, how are you feeling about those now and where they belong?
David: The 195s do great in scheduled service. The 190s are charter. We’re doing all kinds of charters.
Cranky: Oh, are they all? Sports charters?
David: Sports, head of state, you know, rock bands, you name it, we’re doing it. We’re getting to the point where we’re doing… first quarter, we’ll be doing 300+ flights a month, so 10 charter flights a day. It’s a big untapped business.
Cranky: So that’s the E90s and then the E95s are scheduled.
David: We’ll have 11 of those, by mid next year.
Cranky: Are you looking to grow that at all?
David: Yeah. Azul’s got a bunch of them.
Cranky: Is that something that you would bring west at all? Or is it really the density of the Southeast?
David: It’s really the density. We do have the 190s flying to San Francisco in summer from San Bernardino, but that’s on a special arrangement
Cranky: That’s a deal with San Bernardino. So I’m sure I’m sure that succeeds no matter what happens.
David: That’ll probably be a 195 over time as the traffic builds.
Cranky: Oh so that’s a 190. So is that the only 190 that’s not in charter service?
David: We have a couple right now and there’s also a charter plane based in Provo because we do anchor schools like BYU, Florida, Notre Dame, University of Nebraska University of Arkansas and then we base them there so we don’t have to do ferries and then we fill the white space with other charters.
Cranky: Is all the A220 teething worked out now?
David: It’s still going, there are still delays from Airbus. We’re supposed to have 30 airplanes by the end of next year and there’s 20 gonna be 25.
Cranky: But at least the schedule you have now…
David: Yeah, the pilot training pipeline, we had a big, we had a difficult problem with.
Cranky: And you worked through that?
David: We’ve worked through that. We’re pretty much there. We got like 20 pilots to go, but we’ve got about a hundred now in training, so…
Cranky: You were looking at Australia for a bit there. Did that ever happen?
David: Yeah. We got a bunch. We got some good guys. But it’s changed a lot. We upped our pay and people are now floating seniority, and they’re liking their lifes. Our attrition has gone way down.
Cranky: Do you have crew base in Provo?
David: We do. A 220 and E-jet base.
Cranky: And the other bases, are those the original cities?
David: Yeah, we have Charleston, Tampa, Hartford. Okay, we’re gonna co-base that probably with [Westchester] and move them back and forth. And then Norfolk. Norfolks pulls down in the winter but it’s good in the summer.
Cranky: What about New Orleans? That looked like you went big early there and then it pulled back a lot,
David: We had the hurricane there and pulled back, but it’s done well. It’s just getting planes back there.
Cranky: Charleston seems like it’s been one of the best performers is that…?
David: We’re spread a little out. I like to… we’re gonna focus on what we have now for awhile.
Cranky: With the launch of Breeze, it’s been over a year now. Is there anything that you look at and say, oh wait, maybe we should have done that a little differently?
David: A lot. You always want to do things differently. Nothing’s perfect.
Cranky: I don’t suppose you want to share any of this things though do you?
David: I think just better planning on the pilots. And you know, the proving runs were difficult, the whole process of getting the certificate…. But like I said, we’re there now. We’ve got over 80 through the pipeline. You know, we’ve got 9 airplanes and we’re only really flying 5 of them, 4 and a half.
Cranky: Is that right?
David: Because of pilots. That’ll be done by the end of the year.
Cranky: How’s A220 reliability been?
David: It’s good.
Cranky: No teething issues?
David: No, no.
Cranky: Not like the Embraers, those are a little longer in the tooth.
David: Yeah, a little, and you know there are engine issues and stuff, you have to do an engine change more often. But it doesn’t affect the day to day operation.
Cranky: So, you used to love Long Beach. I know the slots are gone, but would you ever come back?
David: We got 1. But we got the SNA slots. I told our guys they had to go to Long Beach, and they said “what happens if we get 3 SNA slots?” And I go, “ok.”
I edited this down for clarity, but if you’ve ever talked to David you know you’re going to skip around a fair bit in the conversation. I didn’t want to alter it too much to take that away.