David Neeleman, Founder and CEO of Breeze Airways, discusses US travel demand and their focus on underserved markets. He explores the concept of trip cost versus per seat cost in the airline industry and talks about airline fees and skepticism about sustainable aviation fuel. Neeleman also discusses marketing promises, carbon offsetting, challenges faced by discount airlines like Breeze, and the difficulties in naming the airline.
Trip cost is more important than seat count for profitability in airlines, achieved by using smaller aircraft with lower operating costs.
Breeze Airways focuses on catering to underserved markets and offers convenience and time-saving advantages through nonstop flights to popular destinations.
Deep dives
Focus on Trip Cost Instead of Seat Count
David Neelman emphasizes the importance of focusing on trip cost as opposed to seat count. He argues that larger airlines prioritize filling more seats on their flights, but he believes that trip cost is a more significant factor. By utilizing smaller aircraft with lower operating costs, airlines can achieve profitability even with fewer seats filled. Neelman's experience in Brazil taught him the value of trip cost, and he applies this principle in Breeze Airways.
Breeze Airways' Unique Positioning
Breeze Airways aims to cater to underserved markets by flying to destinations that other airlines overlook. Neelman believes that there is a significant opportunity in areas where air service has been reduced, leaving travelers with limited options. By providing nonstop flights to popular destinations, Breeze Airways offers convenience and time-saving advantages to customers. The airline's focus on customer satisfaction and flexible policies, such as no cancellation fees and family seating options, contribute to its high NPS (Net Promoter Score) ratings.
Sustainable Aviation Fuel (SAF) and Breeze's Stance
Neelman expresses skepticism towards the concept of Sustainable Aviation Fuel (SAF). While acknowledging the importance of environmental concerns, Neelman believes that investing in SAF is a wasteful approach. He argues that the resources invested in producing SAF should instead be utilized to improve transportation infrastructure and explore alternative sources of energy, such as natural gas and nuclear power. Neelman suggests focusing on reducing carbon emissions from other sectors and engaging in more practical initiatives to address environmental challenges.
Breeze Airways founder and CEO, and perennial airline entrepreneur, David Neeleman sat down for a wide ranging conversation with Brian Sumers at the Skift Global Forum in New York this week. On stage, Neeleman spoke of everything from soft fall travel demand to Breeze's international plans, and his views of sustainable aviation fuels.