Serial airline entrepreneur David Neeleman is determined to make his next carrier stand out in a market where rivals large and small shoehorn budget-minded travelers into cramped cabins.
His proposed low-cost airline, with the working name Moxy, plans to offer passengers novel ways to customize their experience: from legroom to food to price. The founder of JetBlue Airways Corp. now wants to create a “technologically advanced’’ carrier flying a mix of short hops and longer direct routes, all in Airbus SE’s newest single-aisle jet, the A220.
“JetBlue was a customer service company that just happened to fly airplanes,’’ Neeleman said in an interview, speaking publicly of his plans for the first time. “Moxy will take that a little bit further. It will be a technology company that just happens to fly airplanes.’’
Neeleman, the majority investor in the new venture, is looking to burnish his track record for successfully starting airlines in an industry littered with failures. He co-founded Morris Air in the U.S. before selling it to Southwest Airlines Co. He also started Canada’s WestJet Airlines Ltd. and Brazil’s Azul SA, and is in a partnership that holds a 45 percent stake in Portugal’s national airline, TAP.
‘Not Austere’
Investors and competitors are watching as Neeleman’s latest airline takes shape, starting with a deal unveiled in July for 60 of the A220 jets, which were developed by Bombardier Inc. and formerly known as the C Series. The carrier will be entering a market in which the four biggest airlines are locked in a vicious battle with heavy discounters such as Spirit Airlines Inc. and Allegiant Air.
“I think there’s probably a spot for ultra-low-cost, but not austere,” said aviation consultant Robert Mann. “He won’t start out with the same old used equipment. He’ll do what he did with JetBlue: spend the money and make it fresh and new.”
Still, there are risks. Neeleman is using a new, relatively unproven, aircraft that seats about 150 travelers, smaller than the norm for budget airlines. Jammed airports, rising fuel prices and a pilot shortage are driving other airlines to order larger Airbus and Boeing Co. models in droves.
“We’re looking at a world where airlines need bigger airplanes to defray costs,” said George Ferguson, an analyst with Bloomberg Intelligence. “That’s not the A220 -- that’s the A321,” Airbus’s longest single-aisle jet.
Industry Transformation
Neeleman, 58, is returning to a U.S. industry that has been transformed by a wave of consolidation since he left JetBlue. The shares climbed 30 percent from the company’s initial public offering through Neeleman’s exit as chief executive officer in May 2007.
A Standard & Poor’s index of major U.S. carriers fell 47 percent during the same period, during which United Airlines, Delta Air Lines and US Airways filed for bankruptcy.