Breeze Airways Sets First International Flights

Bloomberg

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00:00We're up to over 50 airplanes. We're kind of growing every, we get an airplane about every

00:05three weeks. We have on firm order about 90 Airbus A220s with an option to go to 120. So it's just

00:13doing the same thing that we're doing. We're flying about 87% of our routes. We have no

00:20nonstop competition. So it's a perfect airplane size. We have first class with extra legroom

00:25seats. And this international expansion is going to be great for us because Saturdays are a little bit

00:30of a down day for air travel. But being able to take those airplanes and fly to Cancun and to

00:37Punta Cana and to Montego Bay, Jamaica is going to be a real great asset for us. Well, David, for anyone

00:44who's not familiar with your resume, every airline you founded has done something to be disruptive,

00:52to reshape its home market. Morris with e-ticketing, JetBlue with more comfort for reasonable

00:57prices, Zul making secondary cities in Brazil, connecting them. Febreze Airways, what is the

01:04disruption here that you're trying to bring into the market? Well, you know, it's along the same

01:10lines of what we've done. I always say you never start an airline just for the heck of it. You have

01:14to start it with a reason. And when I looked at the U.S. market, 125 cities had lost more than 25%

01:22of their air service over the last 10 years. So the big airlines were forcing people to all their

01:28hubs. And cities like Charleston, South Carolina, Huntsville, Alabama, vibrant, growing cities,

01:35you basically had to get on a plane to fly to a hub. And so we're just taking people and bypassing

01:40hubs and going nonstop, but doing it with luxury. We're not really like a ULCC. We offer first class,

01:48we offer extra legroom seats. We offer really low fares. We have a kind of a basic economy

01:54equivalent, but then we have these bundles that people love to buy up. And, you know, we've got

02:01the highest NPS score I've ever seen of any airline I've ever run. So we are voted by Travel Leisure as

02:08the third best airline in the country, Apex, number one airline. So it's working. It's this combination

02:14of getting you there for, when we started, I said, let's get you there twice as fast for half the

02:20price. That's kind of our goal. And do it with options to fly first class or extra legroom or

02:26have free Wi-Fi. And a lot of things you don't see on a ULCC.

02:30What are your biggest challenges right now, David? I mean, fuel prices have come down,

02:35but I guess planes are harder to get, more expensive, and labor must be, the cost of labor

02:43must be rising as well. Well, you know, for a while it was the pilot situation, and that's

02:49totally been solved. We have 1,200 applications for, we open it up and we have tons of applications.

02:57You know, I think staffing at airports, we rely a lot on third-party people. So we're really focused

03:04on making sure that they're doing a good job and they're keeping us safe. We're coming up with a

03:12program where we're going to put AI cameras on all of our gates to monitor everything that's going on,

03:17to make sure that the turn is efficient, but also, most importantly, safe, making sure that there's

03:23no damage to our aircraft. So that's really something we're really focused on, is being efficient.

03:29And, you know, our on-time percentage has just gone through the roof. I think last month we were

03:34almost 90% on time. We haven't, we haven't, we didn't cancel a single flight all summer long

03:39because we just wanted to get our guests where they're going. So, you know, it's just really

03:45focused on the operation. I really preach if we, if we follow this operation, then people will come

03:51back and fly us more often. And that's what we're seeing these markets. You know, if we go to a market

03:56and we see there's about 15 people a day that travel between two cities, we believe we can turn

04:01that to about 100 a day. David, it does feel like an industry, though, that is split into the haves

04:06and have-nots. And in the have-nots, you have Spirit, which maybe has its own issue, but serving a

04:11lower-income market. Then the big airlines, United, Delta, talking about that they're doing well

04:17because of luxury. Ed Bashan yesterday at Atlanta Fed conference saying that you have the lower end of the

04:22consumer spectrum, it's tough. And then he goes on to say all of the other airlines are basically

04:28going to lose money or come close to losing money. Again, talking to airlines that aren't serving

04:33the ultra-luxury customer. David, do you think he's right?

04:38I think he's right to a certain degree, sure. You know, there's a, you know, you see now JetBlue's

04:42rushing to put first-class seats in their airplanes. Spirit's trying to put first-class frontiers,

04:47adding first-class. So, yeah, I mean, I think people want choice. Southwest Airlines had one product

04:55for everybody, free bags, and now they're starting to differentiate. People want to say, great for the free

05:01bags, but I don't care about free bags. I just want a lower fare. So you have to give choice to your,

05:07to our guests and along the spectrum and make them feel good about every bundle that they purchase.

05:13So I've always wondered about investing in airlines because, you know, the prices

05:19haven't really risen much since I started buying tickets for myself 30 years ago, right? I remember

05:26going to a Grateful Dead concert on the West Coast in the 90s and paying about $300 for the tickets,

05:33and I could still do the same thing today. Why invest in an airline if it's never going to make

05:40money over time? Well, you know, trading in some airline stocks is a little bit like trading

05:47like options, basically. They're up and down a lot. You know, I think there's a tremendous amount

05:53of leverage if you can get everything right. You know, we have, you know, some of the highest margins

05:59in the industry on routes where we have no nonstop competition. So, you know, I think our goal is to

06:05create something that is not akin to an airline, something that is, you know, because the challenge

06:11that Spirit ran into is that their planes got so big, they had to overlay Delta, United American,

06:16and that's a really tough business to be in because they could just create basic economy and match

06:21everything they were doing. So it's just finding those markets. We've looked at those markets that

06:26have 15 P2s, and we think there's enough market for about 400 airplanes, and we only have 50. So

06:32it's a tremendous growth opportunity, and there's a lot of leverage there if you can get it right.

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