MIAMI — David Neeleman is the CEO of Azul Airlines. He co-founded Morris Air, a low-fare charter carrier that was acquired by Southwest Airlines in 1993. After leaving Southwest, he became CEO of Open Skies, an airline reservation systems company and helped found Canada’s WestJet. He founded JetBlue in 1999 and served as CEO until May 2007 and as chairman until May 2008. In March 2008, he unveiled his plan to launch Azul, a new domestic airline based in Brazil. Since its launch, it has become the country’s third-biggest airline. He spoke to AirwaysNews about the importance of culture within an airline, the challenges and opportunities in Brazil and what the future holds for his carrier.
Airways: How did you originally get into the airline business?
David Neeleman: I was in college and met someone in my accounting class. His mother knew a guy who had timeshares in Hawaii that he couldn’t sell. So I started running classified ads for the condos. I then started including airfare and making vacation packages after airline deregulation. Then June Morris called and wanted me to work for her. I started Morris Air charters with packages to Hawaii. After Morris Air was sold to Southwest Airlines, I worked as a consultant for the carrier for five months. I then founded the Open Skies reservation system, helped start WestJet and founded JetBlue.
In each airline you’ve been part of, culture has been very important. Why do you put so much emphasis on that?
Airlines have always been seen as commodity businesses. I learned lessons about culture during my time at Southwest Airlines. That was taken with me when I went to WestJet, because I learned a lot at Southwest about the importance of culture. You want to get people excited about their company, like what [former Southwest Airlines Chairman] Herb Kelleher did.
Those lessons were evolved and taken to WestJet, then JetBlue and are now at Azul. People always say that those airlines were the best job they ever had because we treated them well. And our customers always say it was the best flight they’ve ever had, and that they will fly us again.
When you decided on your next move after JetBlue, why did you decide to start an airline in Brazil?
My dad did a Mormon missionary in Brazil and fell in love with the people and the culture. He returned home, got married, had a baby then moved back to Brazil to be a correspondent for the Associated Press. I was born there and also did a mission there. I also have an affinity for Brazil’s people and culture. I also looked at Brazil and saw they had a need for air service, so I started Azul.
What are some of the differences between starting up an airline in the U.S. and starting one in Brazil?
In Brazil, the challenges are big, but the opportunities are bigger. Infrastructure is an issue in Brazil. When Azul started flying in 2008, the country had 50 million domestic travelers a year, and I thought it should be 150 million. We’re now at 110 million passengers a year in the domestic market. When you’re doubling the market in cities where others don’t serve, getting proper infrastructure is key. So we’ve created a better route system at fares that are as cheap as the bus to stimulate travel.
Since you started Azul in 2008, it’s become the third-largest carrier in the country. Why do you think that Azul has become so accepted in the market?
When you have a duopoly of airlines like we did in Brazil, the two carriers don’t offer service and flights as good as they could be or should be. Between them, they only have service to 40 cities. With Azul, we’re providing great service, flights and all the things you saw on JetBlue. We serve 105 cities, twice as many cities as TAM and Gol. Before Azul, many travelers had to make a four-hour drive to catch a flight, so we came in and stimulated the market.
Azul started service to the U.S. in December. Why did you choose Fort Lauderdale and Orlando as your first U.S. destinations?
Brazilians love America, they really love south Florida and they love to travel. There are more than 300,000 Brazilians living in South Florida. They consider it a second home and love Disney World. The flights have been doing well so far. We started with daily service, and that will go up to two flights a day by this summer.
What are the next U.S. destinations you hope will get Azul service?
We’ve announced that we’re starting Newark Liberty later this year or early next year. After that, we’re looking at somewhere in the west, but we haven’t decided yet.
To fuel this growth, you’ve ordered five Airbus A350s. What other aircraft did you consider and why did you choose the A350?
Obviously, the competing aircraft was the Boeing 787-9. As we looked at both aircraft, and given all the economics, we felt the A350 was better suited to what we wanted to do. It has a bit more range and it’s bigger. In the interim, we have A330s. We’re operating five A330s and have two more being delivered.
How do things look for the airline in 2015?
The Brazilian economy has been tough. But the good news for Americans is that the exchange rates have devalued 30 percent over the past six months so airfare is pretty cheap roundtrip. Hotels are cheaper too, so Americans should think about going to Brazil.