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JetBlue’s Founder is Starting a New US Airline With $100 Million and 60 Planes

by Gary Leff on June 18, 2018

Dave Neeleman founded JetBlue after his non-compete from Southwest’s acquisition of Morris Air where he was CEO expired. During that non-compete period he was involved in the launch of Canada’s WestJet.

A citizen of Brazil as well as the U.S. (and also now of Cyprus), Neeleman launched Brazilian carrier Azul after being forced out at JetBlue. He’s also a partner in Star Alliance carrier TAP Air Portugal.

Last summer he registered the name for a new airline and announced some hiring but it turned out just to be a plan for chartering regional jets. He said at the time he wasn’t planning a new U.S. airline.

And maybe that was even true then, but it appears to no longer be true. The new airline is tentatively called ‘Moxy’ according to Airline Weekly which broke the story (subscription) but that has to be a temporary name, it’s the Marriott brand of hotels that debuted boldly declaring millenials don’t need desks and can have tiny rooms.

Moxy New York City Downtown, Credit: Marriott

Investors ponying up $100 million to start the carrier include Neeleman himself and former Air Canada CEO and United Chairman Robert Milton.

The plan is to offer point-to-point service from smaller airports outside of large cities bypassing hubs, using low costs to offer lower fares. By avoiding connections they plan to “get you there twice as fast for half the price.”

Lower cost airports like Providence instead of Boston
Will promote ease of travel through less congested terminals
Point-to-point flying means filling up planes with low fares rather than connections
Scheduling flights to avoid overnighting crews
No seat back TV

They reportedly have orders for 60 Bombardier CS300s, accepting their first aircraft in early 2020 and planning to take the rest through 2024.

They plan to fly from secondary airports in the New York (Stewart), DC (Baltimore), Chicago (Gary, Indiana), San Francisco (Oakland, San Jose), and LA (Burbank, Ontario, Orange County) areas. They’ll fly to places like Orlando Sanford and St. Petersburg, Florida.

They want to fly to Mesa, Arizona rather than Phoenix, Concord not Charlotte, and Fort Worth Meacham. Even Cleveland would be served via Burke Lakefront Airport.

The Bombardier CS300 can fly transcons and also short transatlantics from the Northeast. So the long range plan includes Providence to Ireland the U.K. as well as Spain and France. They could offer four classes of service including a lie flat premium cabin.

While a low cost carrier they plan to offer free Wifi and the CS300 supports five-across seating (fewer middle seats) and 19 inch seat width (versus 18 on an Airbus narrowbody and 17 on a Boeing narrowbody).

The only major US airline that wasn’t around 20 years ago is JetBlue — founded by Neeleman. And he has the track record to do this. Will this work?

The new carrier won’t leverage connections and secondary airports provide few opportunities for partnerships with international airlines. They may succeed by being small “flying where they ain’t” and that’s useful to passengers in the way that Allegiant is useful flying Pasco, Washington to Mesa, Arizona non-stop with non-daily service. I don’t see this as a major disruptor in the industry for many years — certainly not the way that JetBlue itself was starting out (thanks to political muscle from Chuck Schumer) with gates and slots at New York JFK.

The biggest challenge starting a new airline – beyond credibility and capital – is access to congested airports where the major airlines collude with local governments to lock up gates. This strategy largely sidesteps that.

Airport eyes second flight to Houston, direct route to Boston

 With the success of its first nonstop flight to Houston, the Dayton airport is eyeing a second trip to the Texas city, as well as a direct route to Boston.]

With the success of its first nonstop flight to Houston, the Dayton airport is eyeing a second trip to the Texas city, as well as a direct route to Boston.

Less than two weeks after the newest non-stop flight from Dayton to Houston lifted off, United Airlines is planning to upgrade its equipment with a larger aircraft to accommodate the passenger load.

And if the carrier sees success with a higher-capacity plane, it could add another flight to the Texas city.

"It's exciting that, in less than 15 days of service, this flight is already successful enough to warrant a larger aircraft," said Terry Slaybaugh, director of the Dayton International Airport. "If we can be successful and fill up this (larger aircraft), the next logical thing for them to do is get a second flight."

Currently, the Dayton-Houston route departs from Dayton at 7:08 a.m. and arrives in Houston at 8:45 a.m. If a new flight were to be added, Slaybaugh said it would likely occur in mid-day.

In discussions with Slaybaugh, United has said its automated system that tracks bookings shows the need for a more spacious plane to accommodate the number of travelers it has seen so far. Plans are in place for the new aircraft to begin serving travelers in July.

"What I'm getting from them is they're booked at about 85 percent capacity in June with about half a month remaining," Slaybaugh said. "That's higher than our average, based on the number of seats we sell in Dayton."

Next month, passengers on the Dayton-Houston flight will ride in the Embraer EMB 175, a 76-seat plane. That will increase capacity by more than 50 percent, as the current aircraft seats 50 people.

Slaybaugh said part of the flight's success is due to the strong international service at Houston’s George Bush Intercontinental Airport.

"Most of our services into hubs that have strong international service have a lot of bookings," he said, adding the Houston connection also provides easier access to the southwest and west coast.

In addition, the flight makes it more convenient for Air Force personnel stationed at Wright-Patterson to travel to the many military installations in the Texas area. Slaybaugh said this was one of the reasons he knew the flight would be successful.

"We know Dayton is a strong market, and Wright-Patt is a reason for a lot of that," he said. "We hope that will help us with our argument for more service."

One of the markets Slaybaugh is targeting next is Boston. He said there are 96 people in the Dayton region who purchase tickets to the Massachusetts city each day, but only 36 of them fly out of Dayton because there is no direct flight. The rest of these travelers are driving to the Columbus International Airport, which has carriers that fly directly to Boston.

Slaybaugh has presented a deal to Delta Air Lines, which he said would be an "ideal candidate" for the Dayton-Boston route. He said Dayton could realistically support a 50-seat aircraft due to the amount of ticket activity.

Additionally, he said Delta is losing out on customers because many of them are choosing Southwest Airlines when they fly out of Columbus.

"Our argument is, why not put a plane here and get those people they're losing," he said.

While Slaybaugh has been making a concerted effort to attract a Delta flight from Dayton to Boston, he said it will be an uphill battle. While Dayton is not a "tough sell," he said the major airlines are focusing their attention on medium- to large-sized hubs.

"The model that airlines are using does not favor Dayton, but we just got to keep fighting and arguing for service," he said. "We'll get it."