Flying high

As 1984 ended, the DC-8 of Hawaiian Airlines was grounded due to Federal noise restrictions, but Morris Travel, led by the energetic David Neeleman, didn't slow down. They leased other aircraft to keep their charter flights going. Neeleman's boundless energy was evident everywhere, from handling calls to playing basketball in the office. His enthusiasm was so palpable that a friend of his father joked about leaving if Neeleman were the pilot. Known for his insatiable curiosity and creativity, Neeleman, at just 24, significantly influenced Morris

Travel, achieving a 95 percent load factor on charter flights. Inspired by the low-cost carrier People Express, Neeleman suggested focusing on short-haul destinations, leading to the transformation of Morris Travel into Morris Air. By 1990, Morris Air was operating 300 flights a week, including to Alaska, which drew complaints from Alaska Airlines and a $100,000 fine from regulators for not adhering to scheduled air service rules. Neeleman's response was swift; he transitioned Morris Air to a scheduled carrier and secured $14 million in funding from venture capitalist Michael Lazarus, who was impressed enough to join the board.

In January 1994, David Neeleman joined Southwest Airlines as an executive vice president and a member of the Executive Steering Committee. He hoped to eventually succeed Herb Kelleher as CEO, but his ambition made other executives uneasy. Neeleman expected a warm reception in Dallas, but the reality was different.

Neeleman saw Southwest as a company in need of major changes and didn't hesitate to share his views. He pushed for assigned seating, electronic ticketing, and an end to sales through travel agents. Coming from a smaller company background, he found Southwest's established management processes frustrating and would often disrupt meetings to advocate for his ideas.

However, Southwest's culture, which emphasized careful listening and learning before taking action, was at odds with Neeleman's proactive approach. He was impatient with the company's lengthy management discussions, which he found slow and unproductive, preferring quick decision-making. Neeleman realized that his entrepreneurial mindset was mismatched with the established and successful airline that didn't need a revolution. After only five-and-a-half months, Neeleman left Southwest Airlines under a noncompete agreement that barred him from the U.S. domestic airline industry for five years. Colleen Barrett from Southwest recognized his intelligence and quick thinking but felt his pace didn't fit the airline's conservative approach to growth.

After his venture capital stint in Salt Lake City, David Neeleman joined WestJet, a new regional airline based in Calgary, as a consultant and board member, investing $200,000 Canadian in 800,000 shares. Collaborating with David Evans, they established Open Skies, a ticketless reservation system, which WestJet adopted, allowing Neeleman to remain involved in the airline industry without violating his noncompete agreement.

WestJet, with a robust business plan, raised over $18 million and commenced service in February 1996, flying full planes between Calgary, Edmonton, Vancouver, Kelowna, Winnipeg, and Victoria. Neeleman's involvement in WestJet and Open Skies proved successful, with Hewlett-Packard acquiring Open Skies for $20 million in October 1998. WestJet also conducted an IPO in June 1999, and Neeleman sold his shareholding to focus on his U.S. airline venture.

David Neeleman's vision for his airline was centered around restoring humanity to air travel, which he felt had become too focused on regulations and efficiency, treating customers merely as 'passengers'. He believed that by recognizing them as customers, the airline could offer superior service. Initially, it was thought that Neeleman's New Air would operate Boeing 737s, given the management team's familiarity with them. However, after Boeing quoted a higher price, Neeleman met with Airbus and was impressed by the A320, especially after Airbus offered a financially attractive package. As a result, New Air ordered 25 jets from the A320 family, with options for 50 more, in a deal potentially worth $3.6 billion.

Choosing to base New Air at JFK International Airport in New York City, Neeleman went against the common preference for LaGuardia or Newark, citing New York's significant retail sales and its appeal as a travel hub. Despite an old TWA terminal being available at JFK, New Air needed federal approval for takeoff and landing slots. They applied for 75 slots on February 5, 1999, and filed for airline certification on April 30. The airline's name, JetBlue, was chosen after 'True Blue' was found to be unavailable.

On the morning of February 11, 2000, at 8:55 A.M., JetBlue Airways took off on its inaugural flight from JFK Airport's Terminal 6 to Fort Lauderdale, marking a significant moment in the airline industry and for its founder, David Neeleman. Despite this achievement, Neeleman's drive for excellence meant that any sense of triumph was short-lived. JetBlue, having arranged to lease eight Airbus A320s for its launch, expanded rapidly, adding services to ten more airports across various states within its first year.

The airline introduced innovative practices such as a job-sharing program for flight attendants, employed part-time workers and college students, and established its own training university. Financially, it offered a generous profit-sharing program, contributing 50 percent of its pre-tax profits to employees' 401(k) plans with dollar-for-dollar company matching from day one. Neeleman's hands-on approach included flying on JetBlue flights weekly, assisting with cabin and baggage duties, and directly engaging with customers. JetBlue achieved profitability within six months, operating 48 flights daily by August 2000 and serving over 1 million customers by the end of its first year.

In the summer of 2001, JetBlue was rapidly expanding, acquiring a new Airbus every five weeks and introducing new routes at a similar pace. By June 2001, the airline had committed to purchasing up to 48 additional Airbus A320s, bringing its total order to 131 aircraft. This growth trajectory led JetBlue to schedule a date with the SEC for a Registration Statement, aiming for a public offering.

However, the chosen date was September 11, 2001, a day that would become infamous for the terrorist attacks on the World Trade Center, leading to a temporary halt in their plans due to the FAA's closure of U.S. airspace. Despite the turmoil in the aviation industry following 9/11, JetBlue remained profitable, thanks to being well-capitalized from the start. By spring 2002, the airline was able to proceed with its IPO, becoming the first airline to do so post-9/11 and successfully selling 5.9 million new shares for $147.3 million. JetBlue's debut on the NASDAQ on April 12, 2002, was met with strong demand, doubling its share price within a month and at one point surpassing the market valuation of American, United, and Delta Airlines combined.

David Neeleman, the entrepreneurial force behind JetBlue and other successful airlines, credits his achievements to a set of fourteen fundamental principles applicable across various business sectors. His first principle emphasizes the importance of passion, as it fuels persistence and the drive to see projects through to completion. He also advocates for creative thinking, encouraging the rejection of conventional wisdom in favor of original and innovative solutions.

Learning from industry leaders is another key principle; Neeleman himself took inspiration from Southwest Airlines when creating Morris Air, which was later acquired by Southwest. He also stresses the importance of resilience, advising to move on from setbacks gracefully. Building a superior product is crucial, as offering the best at a low price can lead to success in any field.