1 00:00:02,520 --> 00:00:07,560 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,920 --> 00:00:11,440 Speaker 2: A major milestone reached by Breeze air Ways, the low 3 00:00:11,480 --> 00:00:15,200 Speaker 2: cost carrier, has become the first US airline and over 4 00:00:15,280 --> 00:00:17,840 Speaker 2: a decade, to be certified by the FAA as a 5 00:00:17,960 --> 00:00:23,239 Speaker 2: US flag carrier. That designation allows Breeze to make international flights, 6 00:00:23,320 --> 00:00:26,320 Speaker 2: unlocking new growth for the four year old company. Joining 7 00:00:26,400 --> 00:00:30,080 Speaker 2: us now is David Neilaman, a name that you surely 8 00:00:30,320 --> 00:00:33,440 Speaker 2: know what are familiar with because he was the CEO 9 00:00:33,560 --> 00:00:35,919 Speaker 2: and the founder of Jet Blue. David, great to have 10 00:00:36,000 --> 00:00:39,519 Speaker 2: you with us, Thanks so much for joining open interest. 11 00:00:39,200 --> 00:00:43,159 Speaker 2: What is your plan for expansion of this airline now 12 00:00:43,200 --> 00:00:47,560 Speaker 2: that you've gotten this incredibly rare allowance. 13 00:00:49,080 --> 00:00:51,199 Speaker 3: Well, we're up to over fifty airplanes. 14 00:00:51,600 --> 00:00:54,120 Speaker 1: We're kind of growing every We get an airplane about 15 00:00:54,160 --> 00:00:58,080 Speaker 1: every three weeks. We have on firm order about ninety 16 00:00:58,280 --> 00:01:01,440 Speaker 1: AIRBUSA two twenties with an option to go to one 17 00:01:01,480 --> 00:01:04,240 Speaker 1: hundred and twenty. So it's just doing the same thing 18 00:01:04,280 --> 00:01:08,880 Speaker 1: that we're doing. We're flying about eighty seven percent of 19 00:01:08,920 --> 00:01:11,280 Speaker 1: our routes. We have no nonstoft competition, so it's a 20 00:01:11,319 --> 00:01:14,400 Speaker 1: perfect airplane size. We have first class, we have extra 21 00:01:14,440 --> 00:01:17,800 Speaker 1: legroom seats and this internationalist faction is going to be 22 00:01:17,800 --> 00:01:20,160 Speaker 1: great for US because Saturdays are a little bit of 23 00:01:20,200 --> 00:01:24,120 Speaker 1: a down day for air travel. But being able to 24 00:01:24,120 --> 00:01:26,560 Speaker 1: take those airplanes and fly to Kancun and to Puta 25 00:01:26,640 --> 00:01:31,240 Speaker 1: Khana and to montego Bejamaica is going to be a 26 00:01:31,240 --> 00:01:32,800 Speaker 1: real great asset for US. 27 00:01:32,959 --> 00:01:36,720 Speaker 4: Well, David, for anyone who's not familiar with your resume, 28 00:01:37,160 --> 00:01:41,440 Speaker 4: every airline you've founded has done something to be disruptive 29 00:01:41,480 --> 00:01:44,160 Speaker 4: to reshape its home market. Moris with e ticketing, Jet 30 00:01:44,200 --> 00:01:48,440 Speaker 4: Blue with more comfort for reasonable prices. Youle making secondary 31 00:01:48,840 --> 00:01:53,240 Speaker 4: cities in Brazil connecting them for breeze airways. What is 32 00:01:53,280 --> 00:01:56,000 Speaker 4: the disruption here that you're trying to bring into the market. 33 00:01:57,400 --> 00:02:00,240 Speaker 1: Well, you know, it's along the same lines of that. 34 00:02:00,960 --> 00:02:02,920 Speaker 1: I always say, you never start an airline just for 35 00:02:02,920 --> 00:02:04,400 Speaker 1: the heck of it. You have to start it with 36 00:02:05,280 --> 00:02:07,880 Speaker 1: the reason. And when I looked at the US market, 37 00:02:08,520 --> 00:02:10,640 Speaker 1: one hundred and twenty five cities had lost more than 38 00:02:10,680 --> 00:02:12,799 Speaker 1: twenty five percent of their air service over the last 39 00:02:12,880 --> 00:02:17,240 Speaker 1: ten years. So the big airlines were forcing people to 40 00:02:17,280 --> 00:02:22,240 Speaker 1: all their hubs and cities like Charleston, South Carolina, Huntsville, Alabama, 41 00:02:22,800 --> 00:02:25,760 Speaker 1: vibrant growing cities you basically had to get on a 42 00:02:25,760 --> 00:02:28,320 Speaker 1: plane flight to a hub, and so we're just taking 43 00:02:28,360 --> 00:02:32,200 Speaker 1: people and bypassing hubs and going NonStop, but doing it 44 00:02:32,240 --> 00:02:37,000 Speaker 1: with luxury. We're not really like a ULCC. We offer 45 00:02:37,080 --> 00:02:40,760 Speaker 1: first class, we offer extra leg room seats, we offer 46 00:02:40,880 --> 00:02:43,639 Speaker 1: really loaf airs. We have a kind of a basic 47 00:02:43,680 --> 00:02:46,880 Speaker 1: economy equivalent. But then we have these bundles that people 48 00:02:46,960 --> 00:02:50,639 Speaker 1: love to buy up. And you know, we've got the 49 00:02:50,720 --> 00:02:53,440 Speaker 1: highest MPs score I've ever seen a d airline I've 50 00:02:53,440 --> 00:02:57,639 Speaker 1: ever run. So we were voted by tribal Leisures the 51 00:02:57,680 --> 00:03:01,720 Speaker 1: third best airline in the country picks number one airlines. 52 00:03:01,760 --> 00:03:05,000 Speaker 1: So it's it's working. This is combination of getting you 53 00:03:05,080 --> 00:03:08,520 Speaker 1: there for always. When we started, I said, let's get 54 00:03:08,560 --> 00:03:10,639 Speaker 1: you there twice as fast for half the price. That's 55 00:03:10,680 --> 00:03:13,200 Speaker 1: kind of our goal, and do it with options to 56 00:03:13,280 --> 00:03:15,920 Speaker 1: fly first class or extra leg room, or have free 57 00:03:15,960 --> 00:03:18,519 Speaker 1: Wi Fi and a lot of things you don't see 58 00:03:18,520 --> 00:03:19,200 Speaker 1: on a UOCC. 59 00:03:19,840 --> 00:03:22,280 Speaker 2: What are your biggest challenges right now, David. I mean, 60 00:03:22,639 --> 00:03:27,880 Speaker 2: fuel prices have come down, but I guess planes are 61 00:03:28,240 --> 00:03:32,240 Speaker 2: harder to get more expensive, and labor must be the 62 00:03:32,240 --> 00:03:33,960 Speaker 2: cost of labor must be rising as well. 63 00:03:35,280 --> 00:03:37,640 Speaker 1: Well, you know, for a while it was the pilot situation, 64 00:03:37,760 --> 00:03:41,400 Speaker 1: and that's totally been been solved. We have twelve hundred 65 00:03:41,400 --> 00:03:44,280 Speaker 1: applications for we open it up, and we have we 66 00:03:44,320 --> 00:03:48,080 Speaker 1: have tons of applications. You know, I think staffing at airports, 67 00:03:48,920 --> 00:03:53,160 Speaker 1: we rely a lot on third party people, so we're 68 00:03:53,240 --> 00:03:57,080 Speaker 1: really focused on making sure that they're they're doing a 69 00:03:57,080 --> 00:04:01,240 Speaker 1: good job and they're keeping us safe. We're coming with 70 00:04:01,240 --> 00:04:03,360 Speaker 1: the program where we're going to put AI cameras on 71 00:04:03,440 --> 00:04:06,760 Speaker 1: all of our gates to monitor everything that's going on 72 00:04:07,240 --> 00:04:09,720 Speaker 1: to make sure that the turn is efficient, but also 73 00:04:10,080 --> 00:04:14,000 Speaker 1: most importantly safe, making sure that there's no damage story aircraft. 74 00:04:14,040 --> 00:04:17,000 Speaker 1: So that's that's really something we're really focused on, is 75 00:04:17,560 --> 00:04:20,320 Speaker 1: being efficient. And you know, our on time percentage has 76 00:04:20,400 --> 00:04:23,240 Speaker 1: just gone through the roof. I think I think last 77 00:04:23,240 --> 00:04:25,200 Speaker 1: month we were almost ninety percent on time. 78 00:04:25,839 --> 00:04:26,799 Speaker 3: We haven't we haven't. 79 00:04:26,960 --> 00:04:30,479 Speaker 1: We didn't cancel a single flight all summer long because 80 00:04:30,520 --> 00:04:32,839 Speaker 1: we just wanted to get our guests where they're going. 81 00:04:32,960 --> 00:04:35,480 Speaker 3: So, you know, it's just really focused on the operation. 82 00:04:35,680 --> 00:04:39,240 Speaker 1: I really preach if we if we all less operation, 83 00:04:39,800 --> 00:04:41,760 Speaker 1: then people will come back and fly some more often, 84 00:04:41,880 --> 00:04:44,640 Speaker 1: and that's what we're seeing these markets you know, if 85 00:04:44,640 --> 00:04:46,240 Speaker 1: we go to a market and we see there's about 86 00:04:46,279 --> 00:04:49,240 Speaker 1: fifteen people a day that travel between two cities, we 87 00:04:49,600 --> 00:04:51,960 Speaker 1: believe we can turn that to about one hundred a day. 88 00:04:52,000 --> 00:04:54,560 Speaker 4: David, it doesn't feel like an industry though, that is 89 00:04:54,600 --> 00:04:57,279 Speaker 4: split into the haves and have nots and the have nots. 90 00:04:57,320 --> 00:04:59,760 Speaker 4: You have Spirit, which maybe has its own issue, but 91 00:05:00,080 --> 00:05:04,159 Speaker 4: serving a lower income market. Then the big airlines United 92 00:05:04,400 --> 00:05:07,240 Speaker 4: Delta talking about that they're doing well because of luxury 93 00:05:07,279 --> 00:05:10,520 Speaker 4: at Bashing yesterday at Atlanta FED conference, saying that you 94 00:05:10,560 --> 00:05:13,280 Speaker 4: have the lower end of the consumer spectrum, it's tough, 95 00:05:13,520 --> 00:05:15,640 Speaker 4: and then he goes on to say all of the 96 00:05:15,720 --> 00:05:19,360 Speaker 4: other airlines are basically going to lose money or come 97 00:05:19,440 --> 00:05:22,360 Speaker 4: close to losing money again talking to airlines that aren't 98 00:05:22,360 --> 00:05:26,120 Speaker 4: serving the ultra luxury customer. David, do you think he's right? 99 00:05:27,560 --> 00:05:28,919 Speaker 3: I think he's right to a certain degree. 100 00:05:29,000 --> 00:05:31,520 Speaker 1: Sure, you know there's a you know, you see now 101 00:05:31,640 --> 00:05:33,400 Speaker 1: you have Blues rushing to put first class seats in 102 00:05:33,440 --> 00:05:37,000 Speaker 1: their airplanes, Spirits trying to put first class frontiers adding 103 00:05:37,000 --> 00:05:37,600 Speaker 1: first class. 104 00:05:38,000 --> 00:05:41,160 Speaker 3: So yeah, I mean, I think people want choice. 105 00:05:41,760 --> 00:05:46,400 Speaker 1: Southwest Airlines had one product for everybody, free bags, and 106 00:05:46,440 --> 00:05:49,760 Speaker 1: now they're starting to differentiate. People want to say, great 107 00:05:49,839 --> 00:05:52,880 Speaker 1: for the free bags, but I don't care about free bags. 108 00:05:52,920 --> 00:05:54,120 Speaker 3: I just want to lower fare. 109 00:05:54,440 --> 00:05:57,560 Speaker 1: So you have to give choice to your to our 110 00:05:57,600 --> 00:06:00,800 Speaker 1: guests and along the spectrum and make you feel good 111 00:06:00,800 --> 00:06:03,120 Speaker 1: about every every bundle that they purchase. 112 00:06:03,760 --> 00:06:08,200 Speaker 2: So I've always wondered about investing in airlines because you know, 113 00:06:08,240 --> 00:06:12,839 Speaker 2: the prices haven't really risen much since I started buying 114 00:06:12,880 --> 00:06:16,200 Speaker 2: tickets for myself thirty years ago. Right. I remember going 115 00:06:16,240 --> 00:06:19,080 Speaker 2: to a Grateful Dead concert on the West Coast in 116 00:06:19,120 --> 00:06:22,840 Speaker 2: the nineties and paying about three hundred dollars for the tickets, 117 00:06:22,839 --> 00:06:27,120 Speaker 2: and I could still do the same thing today. Why 118 00:06:27,320 --> 00:06:29,560 Speaker 2: invest in an airline if it's never going to make 119 00:06:29,600 --> 00:06:30,880 Speaker 2: money over over time. 120 00:06:32,560 --> 00:06:36,360 Speaker 1: Well, you know, trading some airlines stocks is a little 121 00:06:36,400 --> 00:06:37,799 Speaker 1: bit like trading like options. 122 00:06:37,960 --> 00:06:39,599 Speaker 3: Basically they're up and down a line. 123 00:06:40,000 --> 00:06:42,919 Speaker 1: You know, I think there's a tremendous amount of leverage 124 00:06:43,040 --> 00:06:45,680 Speaker 1: if you can get everything right. You know, we have, 125 00:06:47,680 --> 00:06:49,560 Speaker 1: you know, some of the heightst margins in the industry 126 00:06:49,600 --> 00:06:53,400 Speaker 1: on routes where we have no NonStop competition. So you know, 127 00:06:53,560 --> 00:06:56,480 Speaker 1: I think our goal is to create something that is 128 00:06:56,520 --> 00:06:59,680 Speaker 1: not a kin do an airline something that is, you know, 129 00:06:59,720 --> 00:07:02,400 Speaker 1: because the challenge that Speamenting too is that their planes 130 00:07:02,440 --> 00:07:05,240 Speaker 1: got so big they had to overlay Delta United American 131 00:07:05,960 --> 00:07:08,080 Speaker 1: and that's a really tough business to be in because 132 00:07:08,279 --> 00:07:10,960 Speaker 1: they can just create basic economy and match everything they 133 00:07:11,040 --> 00:07:14,360 Speaker 1: were doing. So it's just finding those markets. We've looked 134 00:07:14,360 --> 00:07:16,480 Speaker 1: at those markets that have fifteen p ts and we 135 00:07:16,520 --> 00:07:20,480 Speaker 1: think there's enough market for about four hundred airplanes and 136 00:07:20,520 --> 00:07:24,600 Speaker 1: we only have fifty. So it's a tremendous growth opportunity 137 00:07:24,640 --> 00:07:26,680 Speaker 1: and there's a lot of leverage here if you can 138 00:07:26,680 --> 00:07:27,120 Speaker 1: get it right. 139 00:07:27,320 --> 00:07:29,440 Speaker 4: Well, David, you've done it before. We're looking forward to 140 00:07:29,520 --> 00:07:32,760 Speaker 4: following along your journey with Breeze. David Nielman of Breeze Airways, 141 00:07:32,760 --> 00:07:34,520 Speaker 4: thank you so much for joining us this morning.