Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: A major milestone reached by Breeze air Ways, the low
Speaker 2: cost carrier, has become the first US airline and over
Speaker 2: a decade, to be certified by the FAA as a
Speaker 2: US flag carrier. That designation allows Breeze to make international flights,
Speaker 2: unlocking new growth for the four year old company. Joining
Speaker 2: us now is David Neilaman, a name that you surely
Speaker 2: know what are familiar with because he was the CEO
Speaker 2: and the founder of Jet Blue. David, great to have
Speaker 2: you with us, Thanks so much for joining open interest.
Speaker 2: What is your plan for expansion of this airline now
Speaker 2: that you've gotten this incredibly rare allowance.
Speaker 3: Well, we're up to over fifty airplanes.
Speaker 1: We're kind of growing every We get an airplane about
Speaker 1: every three weeks. We have on firm order about ninety
Speaker 1: AIRBUSA two twenties with an option to go to one
Speaker 1: hundred and twenty. So it's just doing the same thing
Speaker 1: that we're doing. We're flying about eighty seven percent of
Speaker 1: our routes. We have no nonstoft competition, so it's a
Speaker 1: perfect airplane size. We have first class, we have extra
Speaker 1: legroom seats and this internationalist faction is going to be
Speaker 1: great for US because Saturdays are a little bit of
Speaker 1: a down day for air travel. But being able to
Speaker 1: take those airplanes and fly to Kancun and to Puta
Speaker 1: Khana and to montego Bejamaica is going to be a
Speaker 1: real great asset for US.
Speaker 4: Well, David, for anyone who's not familiar with your resume,
Speaker 4: every airline you've founded has done something to be disruptive
Speaker 4: to reshape its home market. Moris with e ticketing, Jet
Speaker 4: Blue with more comfort for reasonable prices. Youle making secondary
Speaker 4: cities in Brazil connecting them for breeze airways. What is
Speaker 4: the disruption here that you're trying to bring into the market.
Speaker 1: Well, you know, it's along the same lines of that.
Speaker 1: I always say, you never start an airline just for
Speaker 1: the heck of it. You have to start it with
Speaker 1: the reason. And when I looked at the US market,
Speaker 1: one hundred and twenty five cities had lost more than
Speaker 1: twenty five percent of their air service over the last
Speaker 1: ten years. So the big airlines were forcing people to
Speaker 1: all their hubs and cities like Charleston, South Carolina, Huntsville, Alabama,
Speaker 1: vibrant growing cities you basically had to get on a
Speaker 1: plane flight to a hub, and so we're just taking
Speaker 1: people and bypassing hubs and going NonStop, but doing it
Speaker 1: with luxury. We're not really like a ULCC. We offer
Speaker 1: first class, we offer extra leg room seats, we offer
Speaker 1: really loaf airs. We have a kind of a basic
Speaker 1: economy equivalent. But then we have these bundles that people
Speaker 1: love to buy up. And you know, we've got the
Speaker 1: highest MPs score I've ever seen a d airline I've
Speaker 1: ever run. So we were voted by tribal Leisures the
Speaker 1: third best airline in the country picks number one airlines.
Speaker 1: So it's it's working. This is combination of getting you
Speaker 1: there for always. When we started, I said, let's get
Speaker 1: you there twice as fast for half the price. That's
Speaker 1: kind of our goal, and do it with options to
Speaker 1: fly first class or extra leg room, or have free
Speaker 1: Wi Fi and a lot of things you don't see
Speaker 1: on a UOCC.
Speaker 2: What are your biggest challenges right now, David. I mean,
Speaker 2: fuel prices have come down, but I guess planes are
Speaker 2: harder to get more expensive, and labor must be the
Speaker 2: cost of labor must be rising as well.
Speaker 1: Well, you know, for a while it was the pilot situation,
Speaker 1: and that's totally been been solved. We have twelve hundred
Speaker 1: applications for we open it up, and we have we
Speaker 1: have tons of applications. You know, I think staffing at airports,
Speaker 1: we rely a lot on third party people, so we're
Speaker 1: really focused on making sure that they're they're doing a
Speaker 1: good job and they're keeping us safe. We're coming with
Speaker 1: the program where we're going to put AI cameras on
Speaker 1: all of our gates to monitor everything that's going on
Speaker 1: to make sure that the turn is efficient, but also
Speaker 1: most importantly safe, making sure that there's no damage story aircraft.
Speaker 1: So that's that's really something we're really focused on, is
Speaker 1: being efficient. And you know, our on time percentage has
Speaker 1: just gone through the roof. I think I think last
Speaker 1: month we were almost ninety percent on time.
Speaker 3: We haven't we haven't.
Speaker 1: We didn't cancel a single flight all summer long because
Speaker 1: we just wanted to get our guests where they're going.
Speaker 3: So, you know, it's just really focused on the operation.
Speaker 1: I really preach if we if we all less operation,
Speaker 1: then people will come back and fly some more often,
Speaker 1: and that's what we're seeing these markets you know, if
Speaker 1: we go to a market and we see there's about
Speaker 1: fifteen people a day that travel between two cities, we
Speaker 1: believe we can turn that to about one hundred a day.
Speaker 4: David, it doesn't feel like an industry though, that is
Speaker 4: split into the haves and have nots and the have nots.
Speaker 4: You have Spirit, which maybe has its own issue, but
Speaker 4: serving a lower income market. Then the big airlines United
Speaker 4: Delta talking about that they're doing well because of luxury
Speaker 4: at Bashing yesterday at Atlanta FED conference, saying that you
Speaker 4: have the lower end of the consumer spectrum, it's tough,
Speaker 4: and then he goes on to say all of the
Speaker 4: other airlines are basically going to lose money or come
Speaker 4: close to losing money again talking to airlines that aren't
Speaker 4: serving the ultra luxury customer. David, do you think he's right?
Speaker 3: I think he's right to a certain degree.
Speaker 1: Sure, you know there's a you know, you see now
Speaker 1: you have Blues rushing to put first class seats in
Speaker 1: their airplanes, Spirits trying to put first class frontiers adding
Speaker 1: first class.
Speaker 3: So yeah, I mean, I think people want choice.
Speaker 1: Southwest Airlines had one product for everybody, free bags, and
Speaker 1: now they're starting to differentiate. People want to say, great
Speaker 1: for the free bags, but I don't care about free bags.
Speaker 3: I just want to lower fare.
Speaker 1: So you have to give choice to your to our
Speaker 1: guests and along the spectrum and make you feel good
Speaker 1: about every every bundle that they purchase.
Speaker 2: So I've always wondered about investing in airlines because you know,
Speaker 2: the prices haven't really risen much since I started buying
Speaker 2: tickets for myself thirty years ago. Right. I remember going
Speaker 2: to a Grateful Dead concert on the West Coast in
Speaker 2: the nineties and paying about three hundred dollars for the tickets,
Speaker 2: and I could still do the same thing today. Why
Speaker 2: invest in an airline if it's never going to make
Speaker 2: money over over time.
Speaker 1: Well, you know, trading some airlines stocks is a little
Speaker 1: bit like trading like options.
Speaker 3: Basically they're up and down a line.
Speaker 1: You know, I think there's a tremendous amount of leverage
Speaker 1: if you can get everything right. You know, we have,
Speaker 1: you know, some of the heightst margins in the industry
Speaker 1: on routes where we have no NonStop competition. So you know,
Speaker 1: I think our goal is to create something that is
Speaker 1: not a kin do an airline something that is, you know,
Speaker 1: because the challenge that Speamenting too is that their planes
Speaker 1: got so big they had to overlay Delta United American
Speaker 1: and that's a really tough business to be in because
Speaker 1: they can just create basic economy and match everything they
Speaker 1: were doing. So it's just finding those markets. We've looked
Speaker 1: at those markets that have fifteen p ts and we
Speaker 1: think there's enough market for about four hundred airplanes and
Speaker 1: we only have fifty. So it's a tremendous growth opportunity
Speaker 1: and there's a lot of leverage here if you can
Speaker 1: get it right.
Speaker 4: Well, David, you've done it before. We're looking forward to
Speaker 4: following along your journey with Breeze. David Nielman of Breeze Airways,
Speaker 4: thank you so much for joining us this morning.