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The Trick to Flying Cheap · What's Your Problem?

0:15
Speaker 1: Pushkin. Airfares are through the roof. You know this, and
0:24
Speaker 1: of course a key driver is the price of oil.
0:27
Speaker 1: But you know oil is not the only cost for airlines.
0:31
Speaker 1: Airlines have to pay staff and buy or lease planes
0:34
Speaker 1: and acquire customers. So it seems like right now is
0:38
Speaker 1: a great moment to take one of my favorite questions
0:41
Speaker 1: in general and apply it to the airline industry, how
0:44
Speaker 1: do you use technology to make stuff cheaper? And for
0:48
Speaker 1: today's show, I found the perfect person to answer that
0:50
Speaker 1: question for airfares. I'm Jacob Goldstein and this is What's
0:58
Speaker 1: Your Problem, the show where entrepreneurs and engineers talk about
1:01
Speaker 1: how they're going to change the world once they solve
1:03
Speaker 1: a few problems. My guest today is David Neilaman. David
1:08
Speaker 1: has founded by airlines, including most famously Jet Blue. Also,
1:13
Speaker 1: he founded a Brazilian airline called a Zool, where he
1:16
Speaker 1: is still the controlling shareholder, and most recently, David founded
1:20
Speaker 1: a new US discount airline called Breeze. David's problem is this,
1:25
Speaker 1: how do you use technology to drive down the price
1:29
Speaker 1: of air travel. Most of my conversation with David was
1:33
Speaker 1: about what he's working on at Breeze, but when I
1:36
Speaker 1: asked him about technology, he couldn't resist going back to
1:39
Speaker 1: the beginning of his career for just a minute. He
1:41
Speaker 1: started out booking package tours. Then in the early nineteen eighties,
1:45
Speaker 1: he launched an airline called Morris Air. And one of
1:48
Speaker 1: the first things he noticed was how inconvenient and inefficient
1:52
Speaker 1: paper tickets were. Tickets were like negotiable documents. They were
1:57
Speaker 1: like checks, and they would be issued and if you
2:00
Speaker 1: lost that thing, haven't forbid. Basically, they'd say, well, we'll
2:04
Speaker 1: have to wait one hundred and eighty days or longer
2:07
Speaker 1: to see if anyone uses your ticket. I don't use it,
2:10
Speaker 1: then we'll give you a refund. And so I can
2:13
Speaker 1: still remember, there's this guy named Stuart Thatcher, and he
2:16
Speaker 1: walked to my office and he said, we had all
2:17
Speaker 1: these people upstairs putting tickets in envelopes and mailing them
2:21
Speaker 1: out to people. He said, why don't we just give
2:24
Speaker 1: them a confirmation number, and then we'll put it on
2:27
Speaker 1: these little things that we can run through a machine
2:30
Speaker 1: and he can fold it quickly, and we'll just mail
2:32
Speaker 1: him a confirmation number. And then I looked at him
2:34
Speaker 1: and said, well, why would you give him a confirmation
2:36
Speaker 1: number over the phone. You sort of invented the Yeah,
2:41
Speaker 1: tickless travel, tickless travel. Yeah, I mean Southwest when they
2:45
Speaker 1: purchased Morris Aera, they didn't really realize what a great
2:49
Speaker 1: thing they did. So okay, so that's the forty years
2:51
Speaker 1: ago story. What is the thing you're doing now that
2:54
Speaker 1: forty years from now you're gonna be like, back in
2:56
Speaker 1: twenty twenty two, I was doing X. What's X? Well?
3:00
Speaker 1: I think what X is is taken a page from
3:04
Speaker 1: Amazon and from Lyft and from Airbnb. You don't ever
3:08
Speaker 1: want to talk to anybody. You want to have an
3:10
Speaker 1: app that people can do everything on and if they
3:12
Speaker 1: can't and if they get like frustrated, you want to
3:16
Speaker 1: have the ability for someone to ask you a question
3:19
Speaker 1: in writing that you can get back to them and
3:23
Speaker 1: the goal is in less than ten minutes and solve
3:25
Speaker 1: any issue they have so that you never have to
3:27
Speaker 1: have a call center. And that's cheaper for you than
3:30
Speaker 1: a call center because because it's asynchronous, because you can
3:34
Speaker 1: be talking to six people at one time. Huh. So
3:38
Speaker 1: you have six people at one time, you can be
3:40
Speaker 1: dealing their issues because not not you know, what's your
3:42
Speaker 1: confirmation number? They have to go find it or whatever
3:45
Speaker 1: that takes time. Okay, so that's a good one. So
3:48
Speaker 1: so having people basically text instead of call, that's a
3:51
Speaker 1: technological innovation that's going to lower your costs. What else,
3:53
Speaker 1: what's another one, Well, it's well, it starts with the app.
3:56
Speaker 1: You know, you have to have an app that's completely
3:58
Speaker 1: functional so you can self help. So if we said,
4:01
Speaker 1: you know, you want to change a flight, change your
4:03
Speaker 1: own flight you want to. You know, if we we've
4:06
Speaker 1: canceled flight on you because of whatever reason, you know,
4:08
Speaker 1: we can send you the option push this button to
4:10
Speaker 1: book on the other flight we have you on, or
4:12
Speaker 1: push this bent to get a full refund and credit
4:14
Speaker 1: for your next flight. It's all the self help things
4:17
Speaker 1: where you're taking care of yourself and you don't need
4:20
Speaker 1: to talk to one of us to do anything, and
4:22
Speaker 1: only when you get frustrated then you actually text us.
4:25
Speaker 1: But having a functional app that does all the stuff
4:28
Speaker 1: that an Uber app does or an Amazon app does. Yeah,
4:31
Speaker 1: so right, So in the same way that Amazon, say,
4:33
Speaker 1: makes it really easy to return things. Right, So I
4:35
Speaker 1: don't have to call if I want to return something,
4:37
Speaker 1: I just click a couple of buttons, print out the thing.
4:39
Speaker 1: And it's done. I don't have to call them. It's
4:41
Speaker 1: like that. If I want to change my flight or
4:43
Speaker 1: anything like that, an app with full functionality as much
4:46
Speaker 1: as possible, and then we can add on to that.
4:48
Speaker 1: And one more thing I want to mention. You know,
4:50
Speaker 1: if you book, if you book through Expedia or you
4:53
Speaker 1: book through one of these other online travel agencies, we
4:58
Speaker 1: don't have your information. They keep it because they guard it.
5:02
Speaker 1: You can't book a reservation with us unless you give
5:04
Speaker 1: us your cell phone number or your email. You have
5:07
Speaker 1: to give it to us. So that way, if there
5:09
Speaker 1: is a disruption or when there's boarding time and all
5:12
Speaker 1: that stuff, we can communicate directly with you all the time.
5:15
Speaker 1: Interesting and usually airlines about forty or more, they don't
5:19
Speaker 1: have that information for their customers and we have that.
5:22
Speaker 1: So that that's another important factor that we just decide
5:25
Speaker 1: to start. It's hard to change that once you're going,
5:28
Speaker 1: but once you start from a clean white piece of paper,
5:30
Speaker 1: you can do that. And so presumably that not only
5:32
Speaker 1: allows you to whatever, text me updates about my flight,
5:35
Speaker 1: but it also allows you to text me updates if
5:39
Speaker 1: you have a discount on that flight in six months
5:41
Speaker 1: or whatever. Right now, I'm in the system. Yeah, you're
5:44
Speaker 1: in our database. We can do some data mining and
5:47
Speaker 1: figure out, you know, what you like, what you don't like,
5:49
Speaker 1: and make sure that we target market instead of just
5:52
Speaker 1: blast out crap that you don't want to read. Everything's
5:54
Speaker 1: relevant to you. So there's this there's this trade off
5:58
Speaker 1: I've heard you describe from when you were launching jet
6:02
Speaker 1: Blue that was super interesting to me, and I'm curious
6:06
Speaker 1: to hear you talk about that, and then I'm curious
6:08
Speaker 1: to learn whether there's any kind of analog in launching Breeze.
6:12
Speaker 1: And the trade off for Jet Blue was having live
6:15
Speaker 1: TV and not having meals. And this was a time when, ay,
6:21
Speaker 1: you pretty much always got a meal on a long flight,
6:23
Speaker 1: and b live TV on an airplane was like science fiction. Right,
6:27
Speaker 1: It's twenty years ago. Netflix was DVDs in the mail.
6:31
Speaker 1: You couldn't watch TV on your computer. So I remember
6:33
Speaker 1: it was wild having live TV. So tell me about
6:36
Speaker 1: launching an airline at that time that had live TV
6:40
Speaker 1: but non meals. You know, it was a simple mathematical equation,
6:43
Speaker 1: you know, I have It's well known that I have
6:45
Speaker 1: add and I just get I used to hate to
6:49
Speaker 1: travel on airplanes. Because it was hard for me to
6:50
Speaker 1: read a book. It was hard to just sit there,
6:54
Speaker 1: and I just wanted to be entertained. I didn't have
6:57
Speaker 1: I didn't have a smartphone, I didn't have an iPhone,
6:59
Speaker 1: and I was kind of going crazy at the time.
7:01
Speaker 1: And so I was sitting in my office and I
7:03
Speaker 1: was trying to figure out if we could have movies
7:05
Speaker 1: in the seatbacks, and there was a couple of different
7:08
Speaker 1: outfits that were doing that. And then you know, one
7:10
Speaker 1: of our people walked in with this brochure and said, Hey,
7:13
Speaker 1: there's live television on these are on these private jets.
7:16
Speaker 1: Why don't we put that on our airplanes? And it
7:17
Speaker 1: was just like boom, that light went on and we
7:21
Speaker 1: talked to them and it was about a dollar a
7:24
Speaker 1: passenger per flight, and the other guys were paying about
7:27
Speaker 1: five bucks for mills for meals. Yeah, it's like five
7:31
Speaker 1: bucks for mills or one buck for live TV, you know.
7:34
Speaker 1: And I can just have baskets to snacks that cost
7:36
Speaker 1: less than a dollar. What's going to be more impactful
7:39
Speaker 1: with my brand new airplanes? And it just kind of
7:41
Speaker 1: blew everybody away. It was it was something that was
7:44
Speaker 1: so new and so exciting and it changed flying right.
7:48
Speaker 1: It was so unexpected, especially for what was basically a
7:51
Speaker 1: discount airline at launch, Like so you gotta move like that? Now,
7:57
Speaker 1: what is that? But for Breeze, you know, I think
7:59
Speaker 1: I think just getting on and flying first class for
8:02
Speaker 1: fifty percent more than coach, having streaming, you know, internet
8:05
Speaker 1: being served at flemingon Sandwich. So first class first class
8:09
Speaker 1: for about how much? Like give me an example of
8:11
Speaker 1: a first class fair on a route. Well, because the
8:15
Speaker 1: configuration the airplane, we only have to get fifty percent
8:17
Speaker 1: more for the ticket. So if we have a ticket
8:19
Speaker 1: for two hundred bucks, for an next one hundred dollars,
8:21
Speaker 1: you can go first class. So people right now are
8:23
Speaker 1: flying what's a transcontinental route you have going? Right now?
8:27
Speaker 1: We fly to Charleston, San Francisco. So are people right
8:29
Speaker 1: now flying from Charleston to San Francisco first class for
8:32
Speaker 1: three hundred dollars? Yeah, three hundred bucks each way? Okay,
8:35
Speaker 1: six hundred bucks round trip? Still very good. I will
8:38
Speaker 1: admit I'm going to California and I paid six hundred
8:41
Speaker 1: bucks more to fly coach, So I find that a
8:44
Speaker 1: compelling offer. So the cheap, cheap, relatively speaking, first class
8:47
Speaker 1: ticket is a big move. How do you do that?
8:49
Speaker 1: How do you get the cost down so you can
8:51
Speaker 1: do that? Well, we have you know, fuel fishing airplanes
8:53
Speaker 1: that are perceied, the most fuel fishing airplanes in the sky,
8:58
Speaker 1: you know, having less overhead and less not thousands of
9:01
Speaker 1: IT people, but you know, tens of IT people, and
9:05
Speaker 1: just trying to you know, be efficient and use technology
9:08
Speaker 1: every step of the way. So is the place where
9:11
Speaker 1: your costs are lower than other airlines? Not so much
9:15
Speaker 1: the on the plane part, not so much the pilots
9:19
Speaker 1: and the flight attendants, but rather having fewer IT people,
9:22
Speaker 1: fewer fewer customer service people. That's where you're hoping to
9:25
Speaker 1: really drive down costs. Yes, but it's really technology that
9:30
Speaker 1: the drives all that. And if you start with a clean,
9:32
Speaker 1: right sheet of paper, it's just a lot easier to
9:34
Speaker 1: do that than if you stuck with a bunch of
9:37
Speaker 1: legacy systems. I want to talk about routes now. I
9:42
Speaker 1: feel like routes are like kind of part of the
9:44
Speaker 1: like fun inside baseball of how what's actually going on
9:47
Speaker 1: with airlines? You know, we get dazzled by a TV
9:49
Speaker 1: in the seats, but there's these weird route choices that
9:52
Speaker 1: seem to make a big difference. That's another one where
9:54
Speaker 1: maybe it's worth just briefly to talk about Jet Blue
9:57
Speaker 1: because I feel like that was also clearly one of
10:00
Speaker 1: the big moves there, and in particular was the first
10:03
Speaker 1: route at Jet Blue flying out at JFK to Fort Lauderdale.
10:08
Speaker 1: Like that, it was a clever strategic move, right, tell
10:11
Speaker 1: me about that choice. Well, you know, JEK was interesting
10:15
Speaker 1: because jeff K was pretty much an abandoned airport. So
10:18
Speaker 1: you'd you'd go JFK to LA, you'd go to London
10:21
Speaker 1: and Paris, all around the world, but you wouldn't fly
10:23
Speaker 1: to Miami from JFK. I like, why not? It was
10:27
Speaker 1: funny because when I was running, I was raising money
10:29
Speaker 1: for jeff Blue in New York City. I'd meet these
10:32
Speaker 1: people and say and they'd say, I live in Manhattan.
10:34
Speaker 1: I'm never going to go to jeff K to go
10:36
Speaker 1: to Florida because it's so much farther than LaGuardia because
10:38
Speaker 1: it's an hour instead of a half hour. Right, LaGuardia
10:41
Speaker 1: is a half hour at jfk' is an hour hour
10:43
Speaker 1: and a half. Yeah, it depends on where you live
10:44
Speaker 1: in Manhattan. But it was it's eight miles. Well, hey,
10:46
Speaker 1: miles in New York City could be a lot miles. Yeah, yeah,
10:49
Speaker 1: it could be a lot. So I said, I don't
10:52
Speaker 1: care because people leave from their homes. And I got
10:55
Speaker 1: five million people that live in Queens and Brooklyn and
10:58
Speaker 1: Long Island that are closer or as close as LaGuardia,
11:02
Speaker 1: and I'll take care of those people. I don't need
11:04
Speaker 1: anyone from Manhattan. But you know, obviously, when we had
11:07
Speaker 1: the light TVs and leather seats, Manhattan Night's spent that
11:10
Speaker 1: extra thirty minutes coming out to JFK. So was the
11:13
Speaker 1: idea that it was cheaper to get a gate at
11:17
Speaker 1: JFK in the middle of the day than it was
11:20
Speaker 1: at LaGuardia because nobody was flying out of there then,
11:22
Speaker 1: I mean, was that the core sort of thing. Well,
11:25
Speaker 1: LaGuardia was slow controlled, so we couldn't fly to there
11:27
Speaker 1: if we wanted to at the time. So it was
11:29
Speaker 1: all full. So it's okay, all full. The national growth
11:33
Speaker 1: and air traffic was exponentially more than New York was.
11:37
Speaker 1: New York was being held down by really high fares
11:40
Speaker 1: because nobody was adding service out of JFK, and that
11:43
Speaker 1: airport was pretty well during the day, you could shoot
11:45
Speaker 1: a cannon down the runway and not hit anything, So
11:47
Speaker 1: you know that was available, and it was less delayed
11:52
Speaker 1: flights at the time, and all of that stuff that
11:54
Speaker 1: made it such a compelling story, not to mention all
11:57
Speaker 1: the people that lived closer to JFK than lived closer
12:00
Speaker 1: to LaGuardia. Yeah, so it's really Manhattan centric bias that
12:05
Speaker 1: you were overcoming. That was the real move there. Yeah, well,
12:09
Speaker 1: I notice. So, so let's talk about Breeze now and
12:12
Speaker 1: the routes you've chosen for Breeze. Right, in terms of
12:15
Speaker 1: New York where I live. I noticed you fly into Westchester,
12:19
Speaker 1: which is the suburbs north of New York, and I Slip,
12:21
Speaker 1: which is basically the suburbs east of New York. But
12:23
Speaker 1: you don't fly into Laguardi or JFK or New Work.
12:26
Speaker 1: Your inaugural flight was Tampa, Florida to Charleston, South Carolina,
12:30
Speaker 1: which is unexpected to me. So, like, tell me what's
12:35
Speaker 1: going on, Well, like, tell me about the route strategy
12:37
Speaker 1: for Breeze. Well, in so at long fact that every
12:41
Speaker 1: airline has to put all of their data into and
12:44
Speaker 1: send it to the DOT, and the Dot puts it
12:46
Speaker 1: in a database to the Department of Transportation Transportation, so
12:49
Speaker 1: we know who flies between what routes an annual basis quarterly,
12:56
Speaker 1: and what they paid or they paid for their ticket.
12:58
Speaker 1: Oh great, So it's like complete competitive intelligence is available
13:02
Speaker 1: to anybody wants to mind it. So we look at
13:05
Speaker 1: it and and we say, what's the largest market from Richmond, GA.
13:10
Speaker 1: That's an unserved NonStop and what's the average person paying?
13:13
Speaker 1: And it was San Francisco. So all these people were
13:16
Speaker 1: flying whatever Richmond to Salt Lake City to San Francisco,
13:20
Speaker 1: or Richmond to Charlotte to San Francisco. But there was
13:23
Speaker 1: no direct flight, Yes, no direct flights. And so we
13:27
Speaker 1: have our own little special sauce that we use in
13:30
Speaker 1: our little formula that if we say, if we can
13:33
Speaker 1: take someone NonStop, if we can, you know, the fair
13:35
Speaker 1: is down thirty percent and we go NonStop, we can
13:39
Speaker 1: x times the size of the market. We can make
13:41
Speaker 1: it four times bigger, five times biggers, in some cases
13:44
Speaker 1: twenty times bigger. So you're saying, if you make it
13:47
Speaker 1: cheaper because you're cheaper and more convenient because it's NonStop,
13:51
Speaker 1: lots more people will do it. Yes, we'll do it.
13:55
Speaker 1: And it's more convenient and they just go more often.
13:58
Speaker 1: And so I mean the core move you're making is
14:01
Speaker 1: flying NonStop out of and often between kind of second
14:07
Speaker 1: tier cities market, right, I mean that's the core thin
14:10
Speaker 1: you're doing, flying between cities that don't have NonStop service basically,
14:14
Speaker 1: and it you know, those are would more likely be
14:17
Speaker 1: a secondary market. And so is this I mean, why
14:22
Speaker 1: wasn't anybody doing this before? Like it seems like very
14:25
Speaker 1: straightforward when you put it that way, like there's just
14:27
Speaker 1: money on the table, is it. Well, if you don't
14:29
Speaker 1: have to do it and you can make people drive
14:31
Speaker 1: down to JFK, you know, from Connecticut where I lived,
14:35
Speaker 1: or you can make them drive down and you have
14:37
Speaker 1: to do it, why do it? You know it just
14:39
Speaker 1: splits up your market? Is some part of this? Like
14:43
Speaker 1: it seems like there's a pendulum. There's been this pendulum
14:46
Speaker 1: in American commercial air over the last I don't know,
14:49
Speaker 1: twenty years or something, where first there was this period
14:52
Speaker 1: of consolidation where airlines were going bankrupt getting acquired, there
14:56
Speaker 1: was less and less competition, and now it seems like
14:59
Speaker 1: we're going back the other way. There are lots of
15:00
Speaker 1: new airlines doing things like you're doing. I mean, is
15:03
Speaker 1: that is this that story? Is this like you know,
15:06
Speaker 1: sort of the market working as intended, where people go
15:09
Speaker 1: to business and there's opportunity, and then you come and
15:11
Speaker 1: start an airline and be like, oh, there's an opportunity
15:13
Speaker 1: to fly from Westchester to Las Vegas. I mean, it's
15:16
Speaker 1: that a way of framing the story. I think it's
15:18
Speaker 1: more that, you know, kind of as the airlines got
15:24
Speaker 1: higher costs, and you know, after their bankrupt season, then
15:27
Speaker 1: they started building costs back up again. They started saying, well,
15:31
Speaker 1: we can make a lot more money if we just
15:33
Speaker 1: fly to our hubs. So if we can take everyone
15:37
Speaker 1: to our hubs and we can connect them, and if
15:39
Speaker 1: we can go up to a two hundred seed air
15:42
Speaker 1: plane instead of one hundred and thirty seed airplane, that
15:44
Speaker 1: works better. And you know what's happening today with the
15:49
Speaker 1: pilot shortage. You know, regional airlines can't hire pilots, enough
15:53
Speaker 1: pilots stuff, And there's about three hundred of those airplanes
15:56
Speaker 1: that are grounded. So cities like Richmond and Charleston and
16:02
Speaker 1: used to always have these little spokes that would go
16:04
Speaker 1: to the hubs. A lot of those are not they're
16:06
Speaker 1: canceling service to those cities. So it's a combination of
16:09
Speaker 1: the focus on the hubs not being able to fly
16:11
Speaker 1: the regional flights that has really created a really great
16:16
Speaker 1: opportunity for us. In a minute, speaking of the pilot shortage,
16:23
Speaker 1: what's going on with air travel this summer? Why is
16:26
Speaker 1: everybody suddenly warning us that flying is just going to
16:29
Speaker 1: be one problem after another. That's the end of the ads.
16:39
Speaker 1: Now we're going back to the show. Let's talk about
16:42
Speaker 1: the pilot shortage and staffing more generally. I know you
16:47
Speaker 1: had to postpone launching some new routes. It seemed like
16:51
Speaker 1: kind of at the last minute recently. Is that partly
16:53
Speaker 1: because you can't hire enough people fast enough. No, it
16:57
Speaker 1: has nothing to do with that. We have plenty of
16:59
Speaker 1: people that we've hired, and it was more an issue
17:03
Speaker 1: of training and had a little bit to do with
17:06
Speaker 1: the FAA. We had a certification process for our new
17:10
Speaker 1: aircraft that was supposed to take six months. It's always
17:13
Speaker 1: taking six months. This took eight months, you know, because
17:16
Speaker 1: of COVID and all that. You know, the staffing issues
17:18
Speaker 1: at the FAA. So we ran into that two month
17:21
Speaker 1: delay and we finally just ran out of runway, had
17:24
Speaker 1: to push it back and now we're we're we're in
17:26
Speaker 1: good shape now. But you know, it was painful, and
17:29
Speaker 1: you know it's it's never gonna happen again, for sure.
17:32
Speaker 1: It's just for us. It's a training pipeline. And now
17:35
Speaker 1: we got a lot more analytics, and we brought in
17:38
Speaker 1: a whole new team, a new CEO, a new president,
17:41
Speaker 1: you know, new chief people officer, and they're you know,
17:45
Speaker 1: doing a heck of a lot better. So did you
17:47
Speaker 1: just reorganize the company a year after you started it? Yeah? Uh?
17:50
Speaker 1: What went wrong? You know, because you know, we weren't
17:53
Speaker 1: doing a good enough job of you know, anticipating and
17:56
Speaker 1: doing the analytics and making sure that you know, the
17:59
Speaker 1: communication between operations and our commercial side, making sure that
18:03
Speaker 1: it was just you know, flawless. And you know, we
18:06
Speaker 1: just can't disappoint our guests anymore. You know, we have
18:09
Speaker 1: to run. We have to be flawless on everything we
18:11
Speaker 1: can control. There's enough that we can't control, but we
18:14
Speaker 1: need to be perfect on on what we can't control.
18:16
Speaker 1: There is it happened in this broader context, right, everybody's saying,
18:19
Speaker 1: like if you could not fly the summer, don't fly
18:21
Speaker 1: this summer and there's too many people and not enough pilots.
18:23
Speaker 1: Is that not the case for you? Do you think
18:26
Speaker 1: that's not the case for anybody? Like, help me understand
18:28
Speaker 1: that sort of broader context of the way people are
18:30
Speaker 1: talking about air travel right now. I don't ever remember
18:32
Speaker 1: people talking about it quite like they are right now. Well,
18:35
Speaker 1: you know, I think COVID really put a dent in
18:37
Speaker 1: the in the industry from a training perspective, because the
18:40
Speaker 1: first thing that happened was, you know, the airline's got
18:43
Speaker 1: paid fifty three billion dollars, you know, to kind of
18:46
Speaker 1: keep people on staff. But what they decided to do
18:50
Speaker 1: was to use some of that money to retire pilots,
18:53
Speaker 1: the most expensive pilots. So there was about seven thousand
18:57
Speaker 1: pilots that left. So they left the industry seven thousand.
19:01
Speaker 1: Give me, I don't have any context. What's the denominator
19:03
Speaker 1: to how many or how do I parse that number?
19:05
Speaker 1: I would guess probably at the big airlines, you know,
19:08
Speaker 1: fifty and pilots or less. So it was a big
19:12
Speaker 1: chunk of what they had. But it created this trickle
19:15
Speaker 1: that effect because you know, when you have to train someone,
19:18
Speaker 1: it takes two months to train someone for a new airplane,
19:21
Speaker 1: and then they have this initial operating experience and if
19:24
Speaker 1: you've got five or six aircraft types, you're you're really
19:26
Speaker 1: just doing a lot of training to backfield for those
19:29
Speaker 1: seven thousand and then you pull from your regional airlines,
19:32
Speaker 1: you call, you know, you go to SkyWest and you
19:34
Speaker 1: go to Republican Higher, all their pilots away and then
19:38
Speaker 1: you put them in and everyone's changing airplanes and the
19:40
Speaker 1: whole process is just is very time consuming. And you know,
19:44
Speaker 1: they just saw the demand coming back and put flights
19:48
Speaker 1: on as we did. And you know, the training is
19:52
Speaker 1: really what was the hiccup? The training is get that
19:55
Speaker 1: in a similar way to getting you, it's getting everybody. Yeah,
19:59
Speaker 1: are there things you've tried to figure out either at
20:01
Speaker 1: Breeze or at previous airlines you've started or run that
20:04
Speaker 1: you haven't figured out yet that you're still kind of
20:07
Speaker 1: working on. Is there some sort of you know, problem
20:09
Speaker 1: you're still trying to solve that you haven't quite got
20:11
Speaker 1: right yet that you that you're returning to or you
20:13
Speaker 1: want to return to. I think you know the challenges
20:18
Speaker 1: you've got, and I'm not I haven't looked at it recently.
20:20
Speaker 1: But you have a company like Priceline that has booking
20:23
Speaker 1: dot Com and they, you know, at one time they
20:25
Speaker 1: were worth one hundred billion dollars. You go on to
20:28
Speaker 1: book a hotel and they're worth more than all the
20:31
Speaker 1: airlines combine. If you add them all up, they're worth
20:34
Speaker 1: more than one company. So well, airlines are famously a
20:37
Speaker 1: really bad business, right like you got to you gotta
20:40
Speaker 1: pay for the planes, you got to buy gas, you
20:42
Speaker 1: got all this regulation, like it's a hard business. It is,
20:46
Speaker 1: But nobody books a hotel before they book an airline ticket.
20:50
Speaker 1: They always book the airline ticket first, and so there's
20:53
Speaker 1: no reason why we can't put that together using automation
20:57
Speaker 1: to be able to give them everything and do it
21:00
Speaker 1: better than can be done if you alocrt it and
21:03
Speaker 1: pe smell it. So I think that's kind of the
21:05
Speaker 1: holy grill of being able to kind of put a
21:07
Speaker 1: concert ticket with a rental car or a transportation in
21:10
Speaker 1: a hotel, but doing it through automation, not the old
21:14
Speaker 1: tour operator style, but something where you can you know,
21:17
Speaker 1: create that and do it because I think being able
21:20
Speaker 1: to profit from that trip all the way through it
21:23
Speaker 1: as opposed to just the airfare. I think that's really
21:26
Speaker 1: kind of where we need to be. Yeah, I mean
21:28
Speaker 1: it's like you're building the business that's most essential, but
21:31
Speaker 1: the least profitable piece of the trip, right exactly, right,
21:34
Speaker 1: So we you know, we got to do we got
21:36
Speaker 1: to do better at that, and we have our database
21:38
Speaker 1: of people. So I'm trying to think, is there a
21:41
Speaker 1: model like who's come closest to that? Well, there's package
21:45
Speaker 1: companies that's you know, sell packages. But a pure ala cart,
21:49
Speaker 1: you pluy ala cart where you can just go click, click, click, click,
21:51
Speaker 1: this is what you want and you change the click
21:53
Speaker 1: and it changes the amount and you click click click,
21:55
Speaker 1: you know, you go three star, four star, five star. Yeah,
21:58
Speaker 1: but now you're just back to kayak or something, right, Like,
22:00
Speaker 1: it's not obvious why the airline should be at the
22:02
Speaker 1: center of that. Well, it's because we're if without us,
22:05
Speaker 1: nothing happens sort of, But like why should it be
22:08
Speaker 1: that the air airline is fixed and the hotel is variable?
22:11
Speaker 1: Like why not have them all be variable? Right? In Brazil?
22:15
Speaker 1: You know, taking my airline Brazil, I have the largest
22:16
Speaker 1: airline in Brazil. It's called a Zool And I was pushing.
22:21
Speaker 1: I hired all these people, the were airline people to
22:23
Speaker 1: help me start the airline. I started as a package
22:26
Speaker 1: tour operator. That's how I started way back. So I'm
22:28
Speaker 1: pushing them, pushing them, pushing them, pushing them. We got
22:31
Speaker 1: to do this, we got to do this, and we'll
22:33
Speaker 1: do a lot of business traffic down there. So Saturdays
22:35
Speaker 1: we have a bunch of airplanes laying around, not doing anything,
22:38
Speaker 1: and Sunday mornings we don't fly. And I said, it's perfect.
22:41
Speaker 1: We got these planes laying around. And so it took
22:43
Speaker 1: years and it took a lot of work. But today
22:47
Speaker 1: we fly on the weekends. We have like two hundred
22:51
Speaker 1: and fifty flights that take off on Saturday morning and
22:53
Speaker 1: go between areas out to these leisure destinations for a
22:56
Speaker 1: week's stay that we don't fly to during the week
22:59
Speaker 1: and we're utilizing those airplanes. And that is a four
23:03
Speaker 1: hundred million dollar business that we have. So it's it's
23:06
Speaker 1: you know, and it's very profitable because we have the hotels,
23:09
Speaker 1: we have the airfare, we have all that. So people
23:11
Speaker 1: in Brazil are more accustomed to buying those types of
23:14
Speaker 1: packages than they are in the US. But you know,
23:16
Speaker 1: it's it's an idea that you know, I think we
23:20
Speaker 1: could use a lot of that up here. And even
23:22
Speaker 1: today we don't flyer planes a lot on Saturday, so
23:24
Speaker 1: we could do the same type of flying to Camcoon
23:26
Speaker 1: or something. You started off as doing package tours when
23:30
Speaker 1: you are basically a kid, right when you were in
23:32
Speaker 1: your early twenties, and then you went on started all
23:34
Speaker 1: these airlines worth lots of money, and that did interesting things,
23:38
Speaker 1: and basically it sounds like you're just trying to get
23:40
Speaker 1: back to booking package tours again. That's right. I mean,
23:43
Speaker 1: airline people don't think that way. They don't think about
23:46
Speaker 1: the whole revenue Pitcher. It's just not what they do.
23:48
Speaker 1: They think about operating an airline and choosing a route
23:51
Speaker 1: and pricing the route and maintaining the airplanes and training
23:54
Speaker 1: the pilots, and it's like, well, what about making money
23:57
Speaker 1: and all this other stuff. We're just busy doing this.
23:59
Speaker 1: You know, you have to kind of think on a
24:02
Speaker 1: different plane to be able to pull that off and
24:04
Speaker 1: even work guildea of it too. You know, we had
24:07
Speaker 1: anticipated doing that, but we're so folks on what we're doing.
24:10
Speaker 1: We haven't done it ourselves. We'll be back in a
24:14
Speaker 1: minute with the Lightning round. Now, let's get back to
24:22
Speaker 1: the show. I want to ask you just a few
24:25
Speaker 1: quick lightning round questions to close. What's one piece of
24:30
Speaker 1: advice you'd give to someone trying to solve a hard problem?
24:34
Speaker 1: Simplify it. My team is always like, it's not that simple.
24:38
Speaker 1: I mean, why isn't it proved to me it's not
24:39
Speaker 1: that simple. I think sometimes it looks harder than it is,
24:43
Speaker 1: but you have to put some creativity in it, and
24:46
Speaker 1: that's kind of my I think gift is to be
24:47
Speaker 1: able to look at really complicated things and simplify it.
24:50
Speaker 1: How long before departs your time do you get to
24:52
Speaker 1: the airport? My wife checks a bag, so we always
24:55
Speaker 1: try and get there at least an hour before because
24:58
Speaker 1: I don't want to get cut off on the checking
25:00
Speaker 1: the bag thing. If I didn't, it would be less
25:03
Speaker 1: than an hour. I had this, I always have this
25:05
Speaker 1: saying that if you don't miss a flight every now
25:08
Speaker 1: and then, you spend too much time in airports. So
25:11
Speaker 1: you've been fired twice that I'm aware of, And I'm curious,
25:15
Speaker 1: what's your advice for you know, the most important things
25:19
Speaker 1: say someone should do when they get fired, they should
25:24
Speaker 1: look at it as an opportunity and say, okay, what
25:27
Speaker 1: can I create? And when I got fired from Southwest,
25:29
Speaker 1: I created jet Blue. When I got demoted from the
25:32
Speaker 1: CEO to the chairman at JEB Blue, I went and
25:35
Speaker 1: started at Zul and a Zul is the most important
25:37
Speaker 1: thing I've ever done. Really. We fly eighty thousand people
25:40
Speaker 1: a day, and we have a logistics company that's on
25:43
Speaker 1: par with FedEx or ups in Brazil that can deliver
25:46
Speaker 1: to forty hundred ZIP codes. Used to be two weeks
25:49
Speaker 1: to do that, now we can do it in two days.
25:51
Speaker 1: And that's that business is huge for us. So you know,
25:55
Speaker 1: if had I never been fired at JEB Blue from
25:59
Speaker 1: the CEO job, Zoo wouldn't exist. And that is the
26:02
Speaker 1: most important thing I've done thus far. Peanuts are pretzels,
26:07
Speaker 1: Peanuts of course. More favorite airport to be stuck at
26:12
Speaker 1: with my terminal five Jeff Blue in JFK. It's got
26:15
Speaker 1: a lot of options, a great place still though you
26:17
Speaker 1: still still you still like it there? Yeah, sure, it's
26:21
Speaker 1: my baby. What's the next airline you're going to start?
26:24
Speaker 1: I think this is it. I'm good, I've done enough
26:28
Speaker 1: and I think Breeze is gonna be great, and then
26:31
Speaker 1: I'm just gonna enjoy it. David Neilman is the founder
26:37
Speaker 1: and CEO of Breeze. Today's show was produced by Edith Russolo,
26:41
Speaker 1: engineered by Amanda ka Wong, and edited by Robert Smith.
26:45
Speaker 1: I'm Jacob Goldstein, and I would love to know who
26:48
Speaker 1: else you think we should book for the show. You
26:51
Speaker 1: can email us at problem at pushkin dot fm. It's
26:55
Speaker 1: problem at Pushkin dot fm, or you can find me
26:58
Speaker 1: on Twitter. I'm at Jacob Goldstein. We'll be back next
27:01
Speaker 1: week with another episode of What's Your Problem