The Trick to Flying Cheap ft. David Neeleman | What's Your Problem? | Jacob Goldstein

Summary

In this episode of 'What's Your Problem', host Jacob Goldstein interviews David Neeleman, founder of JetBlue and Breeze, discussing the challenges of reducing airfare costs using technology. Neeleman shares his journey from ticketless travel to leveraging apps for self-service to minimize call center needs. He emphasizes the importance of direct customer communication, efficient operations, and strategic route planning to offer cheaper flights. The conversation also touches on the broader industry issues like the pilot shortage and the potential for airlines to integrate more comprehensive travel packages.

Takeaways

• 📈 Airfares have increased significantly, driven by factors such as the price of oil, staff costs, leasing or purchasing planes, and customer acquisition.
• 💡 David Neeleman, founder of JetBlue and Azul, is focused on using technology to reduce the cost of air travel through his new airline, Breeze.
• 🎟️ Neeleman revolutionized the industry by introducing ticketless travel with Morris Air, eliminating the inconvenience of paper tickets.
• ✈️ Breeze aims to utilize technology for self-service through an app, reducing the need for call centers and associated costs.
• 📲 The Breeze app is designed to handle customer service inquiries in writing within 10 minutes, improving efficiency and reducing costs.
• 🛫 Breeze offers competitive first-class fares, sometimes for just $50 more than coach, making luxury travel more accessible.
• 🌐 Neeleman emphasizes the importance of direct communication with customers through their contact information, which is mandatory for booking with Breeze.
• 🔄 The airline industry has seen a pendulum swing from consolidation to a new opportunity for airlines like Breeze to fill gaps in service.
• 📉 The COVID-19 pandemic has impacted pilot training and caused a shortage, affecting the industry's ability to scale operations quickly.
• 🛂 The DOT provides valuable data on air travel patterns, which Breeze uses to identify underserved routes with potential for growth.
• 🏆 Neeleman's vision for Breeze includes integrating air travel with other trip components like hotels and car rentals for a seamless customer experience.

Q & A

What is the main challenge that David Neeleman is trying to address in the airline industry?

David Neeleman is trying to address the challenge of using technology to drive down the price of air travel, making it more affordable for consumers.

How did David Neeleman revolutionize the ticketing process in the early days of Morris Air?

David Neeleman revolutionized the ticketing process by introducing ticketless travel. Instead of paper tickets, which were like negotiable documents, he proposed giving passengers a confirmation number and using machines to quickly process these numbers, significantly improving efficiency and convenience.

What technological innovation is David Neeleman implementing in his new airline, Breeze, to reduce costs?

David Neeleman is implementing an app-based system for Breeze that allows passengers to self-manage most of their travel needs, such as flight changes and refunds. This reduces the need for a call center, which is more cost-effective due to its asynchronous nature and the ability to handle multiple queries simultaneously.

How does Breeze's approach to customer service differ from traditional call centers?

Breeze's approach to customer service involves an app that facilitates self-service for passengers, reducing the need for live calls. Passengers can text their issues, and the goal is to resolve any issue in less than 10 minutes, which is more efficient and less costly than maintaining a traditional call center.

What is the significance of Breeze requiring customers to provide their cell phone number or email for bookings?

Requiring customers to provide their cell phone number or email allows Breeze to communicate directly with customers about flight updates, disruptions, and personalized offers. This direct communication channel is a strategic move to enhance customer experience and provide targeted marketing.

How did David Neeleman's experience with JetBlue influence his approach to starting new airlines?

David Neeleman's experience with JetBlue, particularly the decision to offer live TV instead of meals, taught him the value of offering unique and unexpected services that can significantly enhance the passenger experience and brand perception, even for a discount airline.

What was the strategic reasoning behind JetBlue's first route from JFK to Fort Lauderdale?

The strategic reasoning was that JFK was an underutilized airport with less congestion and delays, and it served a large population from Queens, Brooklyn, and Long Island. The decision countered the Manhattan-centric bias and capitalized on the availability of slots and less competition.

How does Breeze's route strategy differ from traditional airline route strategies?

Breeze's route strategy focuses on flying non-stop between secondary markets and cities that do not have direct flights, aiming to significantly reduce ticket prices and increase convenience, thus stimulating demand and market size.

What is the potential impact of the current pilot shortage on the airline industry this summer?

The pilot shortage could lead to increased flight delays, cancellations, and overall disruptions in air travel. It may also force airlines to be more strategic with their route offerings and aircraft utilization.

What is David Neeleman's perspective on the future of airline business models?

David Neeleman believes that airlines should focus on integrating their services with other aspects of travel, such as hotels and car rentals, through automation and a la carte options. This approach could potentially increase profitability beyond just the airfare.

How does David Neeleman view the opportunity in the current airline industry?

David Neeleman sees an opportunity in the current industry due to the focus on hub connectivity and the pilot shortage affecting regional flights. This situation has created a gap in service for secondary markets, which Breeze aims to fill with non-stop flights at reduced prices.

Outlines

00:00

🚀 Airline Industry Innovations and Technology

The video script discusses the high costs of air travel, attributing them to factors like oil prices, staff wages, plane acquisition, and customer acquisition. It introduces the show's host, Jacob Goldstein, and his guest, David Neeleman, who has founded multiple airlines, including JetBlue and Azul. The central theme revolves around leveraging technology to reduce air travel costs. The conversation begins with Neeleman's early career, highlighting the inefficiency of paper tickets and the innovation of ticketless travel. The summary underscores the evolution of the airline industry and the importance of technological advancements in making air travel more affordable and efficient.

05:00

🛫 Disrupting Air Travel with Technology and Customer Engagement

This paragraph delves into David Neeleman's current endeavors with his new airline, Breeze, and his vision for the future of air travel. It emphasizes the importance of an app that allows passengers to handle all aspects of their journey without the need for human interaction, except in cases of frustration. The goal is to resolve issues quickly through text-based communication, thereby reducing the need for call centers and associated costs. The summary highlights the strategy of using technology for self-service, direct customer communication, and the potential for personalized marketing through data mining, which can enhance the customer experience and lower operational costs.

10:01

🎬 The Strategic Decisions Behind Airline Route Selections

The script explores the strategic decisions behind airline route selections, using JetBlue's launch and its first route from JFK to Fort Lauderdale as a case study. It discusses the unconventional choice of JFK due to its underutilization for domestic flights and the advantages of flying out of less busy airports. The summary explains the rationale behind choosing routes based on market demand, cost efficiency, and the potential for non-stop flights to expand the market size, which can be a game-changer for both customers and the airline's profitability.

15:02

🛬 The Impact of Pilot Shortage on Air Travel and Breeze's Response

This section addresses the current pilot shortage in the airline industry and its impact on air travel, particularly during the summer season. It mentions the challenges faced by Breeze in launching new routes due to delays in FAA certification processes and the subsequent reorganization to improve training and operational efficiency. The summary outlines the broader context of staff shortages, the effects on flight schedules, and the measures taken by Breeze to ensure smooth operations and meet the growing demand for air travel.

20:03

🤝 The Vision for Integrated Travel Solutions in the Airline Industry

The final paragraph of the script focuses on the potential for airlines to offer integrated travel solutions, going beyond just airfare. It discusses the opportunity to bundle services like hotels and car rentals, much like online travel agencies, but with a more streamlined and automated process. The summary captures Neeleman's vision of leveraging the airline's position as the starting point of a trip to offer a comprehensive package, which could significantly increase profitability and enhance customer convenience.

25:03

💼 Embracing Change and Opportunities in the Airline Business

In the concluding paragraph, David Neeleman reflects on his experiences with job loss and the opportunities it presented, leading to the creation of JetBlue and Azul. He emphasizes the importance of viewing setbacks as chances to innovate and build something new. The summary highlights Neeleman's resilience, his commitment to creating value in the airline industry, and his belief in the potential for further innovation, even after multiple successful ventures.

Keywords

💡Airfares

Airfares refer to the cost charged by airlines for transporting passengers by air. In the video's context, airfares are mentioned as being influenced by various factors, including the price of oil and operational costs. The discussion revolves around how technology can be used to reduce these costs, making air travel more affordable.

💡Oil Price

The oil price is a significant factor affecting airfares due to the high fuel costs for airlines. It is identified in the script as a key driver for the high cost of air travel, emphasizing the need for airlines to find ways to offset this expense through technology and operational efficiency.

💡Technology

Technology is central to the video's theme as it discusses how it can be leveraged to reduce the cost of air travel. Examples from the script include ticketless travel, mobile apps for self-service, and data mining for targeted marketing, all aimed at making operations more efficient and costs lower.

💡Ticketless Travel

Ticketless travel is a concept introduced in the script where passengers receive a confirmation number instead of a physical ticket. This innovation eliminates the need for paper tickets, making the process more efficient and reducing the administrative costs associated with traditional ticketing.

💡Mobile App

The mobile app is highlighted as a critical tool for airlines to offer self-service options to passengers. It allows for flight changes, refunds, and other services to be managed by the user without the need for human interaction, which can significantly reduce customer service costs.

💡Customer Service

Customer service in the context of the video refers to the support provided to passengers by airlines. The script discusses how technology can reduce the need for traditional call centers by enabling passengers to resolve issues through text-based communication within a mobile app, thus lowering operational costs.

💡Data Mining

Data mining is the process of analyzing large sets of data to discover patterns and extract useful information. In the script, it is mentioned as a way for airlines to understand customer preferences and send targeted offers, making marketing efforts more efficient and relevant.

💡Pilot Shortage

The pilot shortage discussed in the script refers to the current challenge faced by airlines in hiring and retaining qualified pilots. This shortage can lead to operational disruptions and increased costs, which the video suggests technology and strategic planning can help mitigate.

💡Route Strategy

Route strategy involves the planning and selection of flight paths by airlines. The script mentions the strategic choice of flying to underserved markets and non-stop routes to increase convenience for passengers and potentially expand the market size for the airline.

💡First-Class

First-class refers to the premium class of air travel offering more comfort and amenities than economy class. The video discusses how airlines like Breeze can offer first-class tickets at a relatively low cost, making it an attractive option for passengers and a strategic move to differentiate their service.

💡Consolidation

Consolidation in the airline industry refers to the process where multiple airlines merge or are acquired, leading to fewer competitors. The script touches on how this has historically affected route offerings and service quality, creating opportunities for new airlines like Breeze to enter the market.

Highlights

Airline industry is facing high costs due to factors beyond fuel prices, such as staff salaries, plane acquisition, and customer acquisition.

David Neeleman shares his experience in founding multiple airlines, including JetBlue and Breeze, focusing on using technology to reduce air travel costs.

The introduction of ticketless travel by Morris Air in the 1980s revolutionized the industry by simplifying the ticketing process.

Breeze aims to utilize technology similar to Amazon, Lyft, and Airbnb to provide an app-based service that minimizes the need for human interaction.

Asynchronous communication through an app can reduce operational costs as compared to traditional call centers.

Breeze's app allows for self-service functionalities, such as flight changes and refunds, enhancing customer convenience.

Direct communication with customers through their contact information is a strategic move for airlines to provide updates and personalized offers.

The trade-off strategy of offering live TV instead of meals on JetBlue flights was a game-changer in the industry.

Breeze focuses on providing affordable first-class options, challenging the traditional airline pricing models.

Efficient use of technology and streamlined operations can significantly reduce overhead costs in the airline industry.

Strategic route selection, such as flying out of less congested airports, can provide competitive advantages for airlines.

The pilot shortage and its impact on air travel, including the grounding of regional flights, creating opportunities for new airlines.

Breeze's approach to flying non-stop routes between secondary markets addresses the gap left by traditional airlines' focus on hub connectivity.

The importance of starting with a clean slate when building an airline, allowing for the integration of modern technologies and practices from the ground up.

The potential for airlines to integrate with other travel services, such as hotels and car rentals, to create a comprehensive travel package.

David Neeleman's perspective on using failures or dismissals as opportunities to innovate and create new ventures.

The future of Breeze and its potential to disrupt the airline industry with its technology-driven and customer-centric approach.

Transcripts

[Music]

pushkin

airfares are through the roof you know

this and of course a key driver is the

price of oil but you know oil is not the

only cost for airlines airlines have to

pay staff and buy or lease planes and

acquire customers so it seems like right

now is a great moment to take one of my

favorite questions in general and apply

it to the airline industry

how do you use technology to make stuff

cheaper and for today's show i found the

perfect person to answer that question

for airfares

[Music]

i'm jacob goldstein and this is what's

your problem the show where

entrepreneurs and engineers talk about

how they're going to change the world

once they solve a few problems my guest

today is david neileman david has

founded five airlines including most

famously jet blue

also he founded a brazilian airline

called azul where he is still the

controlling shareholder and most

recently david founded a new us discount

airline called breeze

david's problem is this how do you use

technology to drive down the price of

air travel

most of my conversation with david was

about what he's working on at breeze

but when i asked him about technology he

couldn't resist going back to the

beginning of his career for just a

minute he started out booking package

tours then in the early 1980s he

launched an airline called morris air

and one of the first things he noticed

was how inconvenient and inefficient

paper tickets were

tickets were

um like negotiable documents they were

like checks

and they would be issued and if you lost

that thing heaven forbid basically

they'd say well we'll have to wait 180

days or

longer to see if anyone uses your ticket

and if they don't use it

then we'll give you a refund

and so i can still remember there was

this guy named stuart thatcher and he

walked in my office and he said we had

all these people upstairs

putting tickets in envelopes and mailing

them out to people he said why don't we

just give them a confirmation number and

then we'll we'll put it on these little

things that we can run through a machine

and they can fold it quickly and we'll

just mail them a confirmation number and

then i looked down and said well why

would you give him a confirmation number

over the phone

you sort of invented the

uh yeah ticketless travel taylor's

travel yeah i mean southwest when they

purchased morris error they didn't

really realize what a great thing they

did so okay so that's the 40 years ago

story what is the thing you're doing now

that 40 years from now you're going to

be like back in 2022 i was doing x

what's x

well i think

what what x is is taking a page from

amazon and from lyft and from airbnb you

don't ever want to talk to anybody you

want to have an app that people can do

everything on and if they can't and if

they get like frustrated you want to

have the ability for someone to ask you

a question

in writing

that you can give back to them and the

goal is in less than 10 minutes and

solve any issue they have so that you

never have to have a call center and

that's

cheaper for you than a call center

because what because it's asynchronous

because you can be talking to six people

at one time

uh-huh uh-huh so you have

six people at one time you can be

dealing their issues because not not you

know what's your confirmation number

they have to go find it or whatever that

takes time okay so that's a good one so

so having people basically text instead

a call that's a technological innovation

that's going to lower your cost what

else what's another one well it's well

it starts with the app you know you have

to have an app that's completely

functional so you can self help so if we

said you know you want to change a

flight change your own flight you want

to you know if we we've canceled flight

on you because of whatever reason you

know we can send you the option push

this button to book on the other flight

we have you on or push this button to

get a full refund and credit for your

next flight it's all the self-help

things where you're taking care of

yourself and you don't need to talk to

one of us to do anything and only when

you get frustrated then you actually

text us but having a functional app that

does all the stuff that an uber app does

or

an amazon app does yeah so right so in

the same way that amazon say makes it

really easy to return things right so i

don't have to call if i want to return

something i just click a couple buttons

print out the thing and it's done i

don't have to call them it's like that

if i want to change my flight or

anything like that an app with full

functionality as much as possible and

then we can add on to that and one more

thing i want to mention you know if you

book if you book through

expedia or you book through

you know one of these other online

travel agencies we don't have your

information they keep it because they

guard it

you can't book a reservation with us

unless you give us your cell phone

number or your email

you have to give it to us

so that way

if there is a disruption or when there's

boarding time and all that stuff we can

communicate directly with you all the

time interesting and usually airlines

about 40 or more they don't have that

information with it for their customers

and we have that

so that that's another important factor

that we just decided to start it's hard

to change that once you're going but

once you start from a clean white piece

of paper you can do that and so

presumably that not only allows you to

whatever text me updates about my flight

but it also allows you to

text me updates if you have a discount

on that flight in six months or whatever

right now i'm in the system yeah you

you're in our database we can do some

data mining and figure out you know what

you like what you don't like and make

sure that we target market instead of

just blast out crap that you don't want

to read this everything's relevant to

you so there's this there's this

trade-off i've heard you describe

from when you were launching jetblue

that was super interesting to me and i'm

curious to hear you talk about that and

then i'm curious to learn whether

there's any kind of analog in in

launching breeze and the trade-off for

jetblue was

having live tv

and not having meals

and this was a time when a you pretty

much always got a meal on a long flight

and b

live tv on an airplane was like science

fiction right it's 20 years ago netflix

was dvds in the mail you couldn't watch

tv on your computer so i remember it was

wild having live tv so tell me about

launching an airline at that time that

had

live tv but not meals you know it was a

simple mathematical equation you know i

i have it's well known that i have 80d

um

and i just get i used to hate to travel

on airplanes because it was hard for me

to read a book

it was you know hard to just sit there

and i just wanted to be entertained i

didn't have i didn't have a smartphone i

didn't have an iphone and i was kind of

going crazy the whole time and so i was

sitting in my office and i was trying to

figure out if we could have movies in

the seat backs and and there was a

couple of different outfits that were

doing that and then you know one of our

people walked in with this brochure and

said hey there's live television on

these are on these private jets why

don't we put that on our airplanes and

it was just like boom that light went on

and

we talked to them and it was about a

dollar a passenger per flight and

the other guys were paying about five

bucks for meals i thought hmm for meals

uh-huh yeah it's like five bucks for

meals or one buck for live tv

you know and i can just have baskets of

snacks that cost less than a dollar

what's going to be more impactful with

my brand new airplanes and it just kind

of blew everybody away it was it was

something that was so new and so

exciting

and and it changed flying right it was

so unexpected especially for what was

basically a discount airline at launch

like so

you got to move like that now what is

that but febreze you know i think i

think just getting on and flying first

class for 50 more than coach having

streaming you know internet being served

a flamingo sandwich so first class first

class for about how much like give me an

example of a first-class fare on a route

well because the configuration in the

airplane we only have to get 50 more for

the ticket so if we have a ticket for

200 bucks for an extra hundred dollars

you can go first class so people right

now are flying what what's a

transcontinental route you have going

right now um we fly to charleston san

francisco so are people right now flying

from charleston to san francisco first

class for 300 yeah 300 bucks each way

okay 600 bucks round trip still very

good i i will admit i'm i'm going to

california and i paid 600 bucks more to

fly coach so i find that a compelling

offer so the cheap cheap relatively

speaking first class ticket is a big

move how do you do that how do you get

the cost down so you can do that well we

have you know fuel-efficient airplanes

that are per seat the most

fuel-efficient airplanes in the sky

you know having less overhead and less

not thousands of i.t people but you know

tens of i.t people and just trying to

you know be efficient and use technology

every step of the way

so is the place where your costs are

lower than

other airlines not so much

the on the plane part not so much the

pilots and the flight attendants but

rather having fewer i.t people fewer

fewer customer service people that's

where you're hoping to really drive down

costs yes but it's really technology

that that drives um all that and if you

start with a clean white sheet of paper

it's just a lot easier to do that than

if you you know stuck with a bunch of

legacy systems um i want to talk about

routes

now uh i feel like routes are like kind

of part of like fun inside baseball of

how what's actually going on with

airlines you know we get dazzled by a tv

in the seats but there's these weird

route choices that seem to make a big

difference and that's another one where

maybe it's worth just briefly to talk

about jetblue because i feel like that

was also clearly one of the big moves

there and in particular was the first

route at jetblue uh

flying out of jfk to

fort lauderdale like that that was a

clever strategic move right tell me

about that choice well you know jfk it

was interesting because jfk was pretty

much an abandoned airport so you'd go to

you'd go jfk to la you'd go to london

paris all around the world

but you wouldn't fly to miami from jfk

and like why not

it was funny because when i was running

my i was raising money for jetblue in

new york city i'd meet these people and

say and they'd say i live in manhattan

i'm never going to go to jfk to go to

florida because it's so much farther

than laguardia because it's an hour

instead of a half hour right laguardia

is a half hour at jfk is an hour hour

and a half yeah it depends on where you

live in manhattan but it was it's eight

miles well eight miles in new york city

it could be a luxury miles yeah yeah it

can be a lot

so i said i don't care because people

leave from their homes and i got five

million people that live in queens and

brooklyn and long island that are closer

or as close as laguardia and i'll take

care of those people i don't need anyone

from manhattan

but you know obviously when we had the

live tvs and leather seats the

manhattanites spent that extra 30

minutes coming out today

so was the idea that it was

cheaper to get a gate

at jfk in the middle of the day than it

was at laguardia because nobody was

flying out of there then i mean was that

the core

sort of

thing well laguardia was slot controlled

so we couldn't fly to there if we wanted

to at the time so it was all full so

it's okay awful the national growth and

air traffic was

exponentially more than new york was new

york was being held down by really high

fares because nobody was adding service

out of jfk and that airport was pretty

well during the day you could shoot a

cannon down the runway and not hit

anything so

you know that that was available and it

was less delayed flights at the time and

all of that stuff that made it such a

compelling story not to mention all the

people that lived closer to jeff k then

lived closer to laguardia

yeah

so it was really manhattan

manhattan-centric bias that you were

overcoming that was the real move there

yeah

well i noticed so so let's talk about

breeze now and the routes you've chosen

for breeze right in terms of new york

where i live i noticed you fly into

westchester which is the suburbs north

of new york and islip which is basically

the suburbs east of new york but you

don't fly into laguardia or jfk or

newark

your inaugural flight was tampa florida

to charleston south carolina which

is unexpected to me so like

tell me what's going on well like tell

me about the route strategy for for

breeze well uh it's a little on fact

that every airline has to put all of

their data into and send it to the dot

and the dot puts it in a database to the

department of transportation

transportation so we we know who flies

between what routes

on an annual basis quarterly and what

they paid or they paid for their ticket

oh great so it's like complete

competitive intelligence is available to

anybody wants to mine it so we look at

it we say what's the largest market from

from richmond virginia

that's an unserved non-stop and what's

the average person paying and it was san

francisco so all these people were

flying whatever richmond to

salt lake city to san francisco or

richmond to charlotte to san francisco

but there was no direct flight yes no

direct flights

and so we have our own little special

sauce that we use in our little formula

that if we say if we can take someone

non-stop if we can you know the fare is

down 30 and we go non-stop

we can x times the size of the market we

can make it four times bigger five times

bigger in some cases 20 times bigger so

you're saying if you make it cheaper

because you're cheaper and more

convenient because it's non-stop lots

more people will do it

yes

we'll do it and it's more convenient and

they just go more often

and so i mean the core move you're

making is flying

non-stop

out of and off in between kind of

second-tier cities markets right i mean

that's the core thing you're doing

flying between cities that don't have

non-stop service basically and it you

know

those are would most more likely be a

secondary market and so is this i mean

why wasn't anybody doing this before

like it seems like very straightforward

when you put it that way like there's

just money on the table is it well if

you don't have to do it and you can make

people drive down to jfk

you know from connecticut where i lived

or you can make them drive down and you

don't have to do it why do it you know

it just splits up your market

is some part of this like it seems like

there's a pendulum there's been this

pendulum in

american commercial air over the last i

don't know 20 years or something where

first there was this period of

consolidation

where airlines were going bankrupt

getting acquired there was less and less

competition

and now it seems like we're going back

the other way there are lots of new

airlines doing things like you're doing

i mean is that is this that story is

this like

you know sort of the market working as

intended where people go to business and

there's opportunity and then you come

and start an airline and be like oh

there's an opportunity to fly from

westchester to las vegas i mean is that

a way of framing the story i think it's

more that you know kind of as the

airlines got

um

you know higher costs and and you know

after their bankruptcies and then they

started building costs back up again

they they started saying well we can

make a lot more money if we just

fly um to our hubs so if we can take

everyone to our hubs and we can connect

them and if we can go up to a 200 seat

airplane instead of a 130 seat airplane

that works better

and you know what what's happening today

with the pilot shortage you know

regional airlines can't hire pilots

enough pilots to and there's about 300

of those airplanes

that are grounded

so cities like richmond and

and charleston used to always have these

little spokes that would go to the hubs

a lot of those are not they're they're

canceling service to those cities so

it's a combination of the focus on the

hubs not being able to fly the regional

flights

um that have has really created a really

great opportunity for us

in a minute speaking of the pilot

shortage what's going on with air travel

this summer

why is everybody suddenly warning us

that flying is just going to be one

problem after another

that's the end of the ads now we're

going back to the show

let's talk about the pilot shortage and

staffing more generally i know you

uh

had to postpone launching some new

routes it seemed like kind of at the

last minute recently

is that partly because you can't hire

enough people fast enough no it's it has

nothing to do with that

we have plenty of people that we've

hired and and it was more an issue of

training and it had a little bit to do

with the faa we had a

a certification process for our new

aircraft that was supposed to take uh

six months it's always taken six months

this took eight months

you know because of covet and all that

you know the staffing issues at the faa

so we ran into that two-month delay and

we finally just ran out of runway

had to push it back and now we're we're

in good shape now but it yeah it was

painful and

you know it's it's never going to happen

again for sure it's just for us it's the

training pipeline and now

we got a lot more analytics and

we brought in a whole new team a new co

a new president and you know new chief

people officer and

and they're you know doing a heck of a

lot better so did you just reorganize

the company a year after you started it

yeah uh what went wrong you know because

you know we weren't doing a good enough

job of you know anticipating and doing

the analytics and making sure that you

know the communication between

operations and and our commercial side

making sure that it was just you know

flawless and you know we just can't

disappoint our our guests anymore you

know we have to run we have to be

flawless on everything we can control

there's enough that we can't control

but we need to be perfect on what we

can't control there is it happened in

this broader context right everybody's

saying like if you could not fly this

summer don't fly this summer and there's

too many people and not enough pilots is

that

not the case for you do you think that's

not the case for anybody like help me

understand that sort of broader context

of the way people are talking about air

travel right now i don't ever remember

people talking about it quite like they

are right now well you know i think

covid really put a dent in the in the

industry from a training perspective

because

what the first thing that happened was

you know the airlines got paid 53

billion dollars

you know to kind of keep people on staff

but what they decided to do

was to use some of that money to retire

pilots the most expensive pilots

so there was about seven thousand pilots

that left huh so they left the industry

seven thousand give me i don't have any

contacts what's the denominator how many

are how do i parse that number i would

guess probably

at the big airline you know 50 000

pilots or less okay so it was a big

chunk of of what they had but it created

this trickle-down effect because

you know when you have to train someone

it takes two months to train someone for

a new airplane and then they have this

initial operating experience

and if you've got five or six aircraft

types you're really just doing a lot of

training to backfill for those seven

thousand and then you pull from your

regional airlines you caught you know

you go to sky west and you go to

republic and hire all their pilots away

and then you put them in and everyone's

changing airplanes and the whole process

is just is very time consuming and uh

you know they they just

saw the demand coming back and put

flights on as we did and you know the

the training is really what um was the

hiccup the training is get that in in a

similar way to getting you it's getting

everybody yeah are there things you've

tried to figure out either at brees or

at previous airlines you've started or

run that you haven't figured out yet

that you're still kind of working on is

there some sort of you know problem

you're still trying to solve that you

haven't quite got right yet that you

that you're returning to or you want to

return to

i think the you know the challenge is

you've got and i'm not i haven't looked

at it recently but you have a company

like priceline that has booking.com and

they you know that one time they were

worth 100 billion dollars going to book

a hotel

and they're worth more than all the

airlines combined if you add them all up

they're worth more than one company so

well airlines are famously a really bad

business right like you gotta you gotta

pay for the planes you gotta buy gas

you've got all this regulation like it's

a hard business

it is but nobody books a hotel before

they book an airline ticket

they always book the airline ticket

first

and so there's no reason why

we can't put that together using

automation

to be able to give them everything and

do it better than they can be done if

you a la carte and piecemeal it so i

think that's kind of the holy grail of

being able to kind of put a concert

ticket with a rental car or a

transportation in a hotel

but doing it through automation not the

old tour operator style but something

where you can you know create that and

do it because i think being able to

profit from that trip

all the way through it as opposed to

just the airfare i think that's really

kind of where we need to be yeah i mean

it's like you're building the business

that's most essential but the least

profitable piece of the trip right

exactly right so we you know we got to

do we got to do better at that and we

have our database of people so

i'm trying to think is there a model

like who's come closest to that well

there's package companies that you know

sell packages but a pure a la carte you

pull out a cart where you can just go

click click click click this is what you

want and you change the click and it

changes the amount and you click click

you know you go three star four star

five star yeah but now you're just back

to kayak or something right like it's

not obvious why the airline should be at

the center of that well it's because

we're if without us nothing happens sort

of but like why should it be that the

airline is fixed and the hotel is

variable like why not have them all be

variable right in brazil

you know take my airline brazil i have

the largest airline in brazil it's

called azul

and i was pushing i hired all these

people there were airline people to help

me start the airline i started as a

package tour operator that's how i

started way back so i'm pushing them

pushing and pushing them pushing them we

got to do this we got to do this and

we're we we're do a lot of business

traffic down there so saturdays we have

a bunch of airplanes laying around not

doing anything and sunday mornings we

don't fly and i said it's perfect we got

all these planes laying around

and so it took years and it took a lot

of work

but today we fly on the weekends

we have like 250 flights that take off

on saturday morning and go between areas

out to these leisure destinations for a

week stay that we don't fly to during

the week and we're utilizing those

airplanes

and that is a 400 million dollar

business that we have so it's it's com

you know and it's very profitable

because we have the hotels we have the

airfare we have all that so people in

brazil are more accustomed to buying

those types of packages than they are in

the us but you know it's it's an idea

that you know i i think um we could use

a lot of that up here and even today we

don't fly our planes a lot on saturday

so we could do the same type of flying

to cancun or something you started off

as doing package tours when you were

basically a kid right when you were in

your early 20s and then you went on

started all these airlines

worth you lots of money and that did

interesting things and basically it

sounds like you're just trying to get

back to book and package tours again

that's right i mean airline people don't

think that way they don't think about

the whole revenue picture

it's just not what they do they think

about operating an airline and choosing

a route and pricing the route and

maintaining the airplanes and training

the pilots and it's like what about

making money and all this other stuff

we're just busy doing this you know you

have to kind of

think on it on a different plane to be

able to pull that off and even we're

guilty of it too you know we had

anticipated doing that but we're so

focused on what we're doing we haven't

done it ourselves

we'll be back in a minute with the

lightning round

now let's get back to the show

i want to ask you just a few

quick lightning round questions to close

um

what's one piece of advice you'd give to

someone trying to solve a hard problem

uh simplify it

my team is always like it's not that

simple why isn't it proof to me it's not

that simple i think sometimes it's it

looks harder than it is but you have to

put some creativity in it and that's

kind of my i think gift is to be able to

look at really complicated things and

simplify it how long before departure

time do you get to the airport

my wife checks a bag so we always try

and get there at least an hour before

because i don't want to get cut off on

the uh checking the bag thing

uh if i didn't it would be less than an

hour

i had this i always have this saying

that if you you don't miss a flight

every now and then um you spend too much

time in airports um so you've been fired

twice that i'm aware of and i'm curious

what's your advice for

you know the most important thing say

someone should do when they get fired

they should

look at it as an opportunity and say

okay what can i create and when i got

fired from southwest i created jetblue

when i got demoted from the ceo to the

chairman

at jetblue i went and started as azul

and azul is the most important thing

i've ever done really we fly 80 000

people a day and we have a logistics

company that's on par with fedex or ups

in brazil that can deliver to 4800 zip

codes used to be a two weeks to do that

now we can do it in two days

and that's that business is huge for us

so

you know i it's if had i never been

you know fired a job blue from the ceo

job the zulu wouldn't exist and that is

the most important thing i've done thus

far um peanuts or pretzels

uh peanuts of course more protein

um favorite airport to be stuck at well

my terminal five jetblue in jfk it's got

a lot of options a great place still

though you still still you you still

like it there yeah sure it's it's my

baby

what's the next airline you're gonna

start i think this is it i'm good uh

i've done enough and i think uh freeze

is gonna be great and

then i'm just going to enjoy it

david nieleman is the founder and ceo of

breeze

today's show was produced by edith

ruslow engineered by amanda k wong and

edited by robert smith

i'm jacob goldstein and i would love to

know who else you think we should book

for the show

you can email us at problem

pushkin.fm that's problem pushkin.fm or

you can find me on twitter i'm at jacob

goldstein we'll be back next week with

another episode of what's your problem