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March 28, 2022 On The Record | Q&A

Despite challenges from pandemic and high oil prices, serial airline entrepreneur David Neeleman is bullish on Bradley Airport

PHOTO | CONTRIBUTED Breeze Airways CEO David Neeleman.

David Neeleman knows a good opportunity when he sees it.

Just look at his track record.

Neeleman is the legendary aviation industry entrepreneur who co-founded five airlines, including one — Morris Air — that was sold to Southwest Airlines for $130 million.

His latest venture, Breeze Airways, launched last year amid the pandemic and is making a big bet on Bradley International Airport.

Earlier this month, Breeze announced it will be adding six new nonstop flights at Bradley starting in June to: Nashville, Tennessee; Akron/Canton, Ohio; Savannah, Georgia; Richmond, Virginia; Jacksonville, Florida; and Sarasota/Bradenton, Florida.

That’s on top of four Bradley flights it launched last May to Columbus, Ohio; Norfolk, Virginia; Pittsburgh; and Charleston, South Carolina.

And in February Breeze Airways announced plans to set up an operations base at the Windsor Locks-based airfield. The state is supporting the expansion with a grant of up to $1.3 million, contingent upon the company creating and retaining 212 full-time jobs at the site.

In a recent interview with the Hartford Business Journal, Neeleman said he founded the Salt Lake City-based company with a focus on lower-cost fares in underserved markets. Breeze positions itself as a tech-driven airline that offers nonstop flights and scheduling flexibility. For example, he says it charges no fees for flights that are changed or canceled up to 15 minutes before scheduled departure.

It also targets routes not being served by other airlines.

“We don’t have any competitors because no one serves the markets that we serve,” Neeleman said.

So far, Neeleman said he likes what he sees out of his company’s Bradley Airport business, despite challenges the airline industry in general faces coming out of the pandemic and with high oil prices.

While Bradley nearly doubled its passenger traffic in 2021 to 4.6 million passengers, that number was still down 31.6% from the pre-pandemic year of 2019.

From May 2021 through January 2022, Breeze Airways recorded 57,575 flights in and out of Bradley, according to data from the Connecticut Airport Authority.

Neeleman said there is pent-up demand for travel coming out of the pandemic.

“It’s gone well [at Bradley], that’s why we are expanding there,” he said. “It’s probably the only city we serve where we’ve actually added more destinations than we had originally.”

Here’s what else Neeleman had to say:

Q. Why open an operations base at Bradley Airport?

A. We find cities that are underserved and have populations that deserve more nonstop service. Bradley is our fifth base. The other ones are in New Orleans, Tampa, Charleston and Norfolk.

We went into Bradley, expanded some services and did well there, and we see a lot of potential for the airport and region.

Q. What is a base of operations?

A. It’s where we base our crews, maintenance, and where we originate our flights everyday, so we will have lots of airplanes that will be overnighting there.

Pilots usually wake up in the morning, fly out of these places and come back at night, so it’s convenient for our crews to live there because they don’t necessarily have to stay in hotel rooms. It’s an efficient way to run an operation.

Q. Are all your flights nonstop?

A. Yes, and primarily to destinations where we have no nonstop competition.

Q. How important was the $1.3 million in potential economic incentives the state offered to support your new base at Bradley?

A. It’s certainly helpful. We have lots of airports throwing incentives at us and they are usually in the form of reduced terminal rents and so on for a period of time.

When you launch a market you lose money until the word gets out. It usually takes six to 12 months for a market to become mature and profitable. The incentives help stem those losses.

Q. What’s your focus in terms of leisure travelers vs. business travelers?

A. We are mainly targeting leisure travelers, although flying to places like Columbus and Akron, Ohio, and Pittsburgh, we’ve been surprised by the small-business people who want to go to those destinations.

But we are mainly focused on leisure to places like Savannah, Georgia, Richmond, Jacksonville, Sarasota and Nashville.

Q. How is leisure travel bouncing back from the pandemic?

A. Travel is strong, it really is. Obviously we’ve got this fuel issue we are dealing with, but the demand is very strong and I think there is a lot of pent-up demand and people are looking forward to getting out there.

The [Transportation Security Administration] extended the mask mandate for another 30 days but I’m hopeful that is the last one, and by April 18, the mandate is lifted so just those who are really concerned can wear a good, tight-fitting N95 mask, and everyone else can sit there with our HEPA filters and know they are safe.

Q. Do you think the mask mandate impacts ridership on planes?

A. Yes I think it does, especially since it’s just about the only place on earth where people have to wear a mask. I think it’s made some people decide they don’t want to travel. On the margins, I think lifting the mask mandate is going to help.

Q. So, you are in favor of getting rid of the mask mandate on airplanes at this point?

A. Absolutely, there is no reason to have them anymore. If someone is concerned and they have an immune issue or something else, N95 masks have been proven effective.

The cloth masks have not been proven effective and 90% of the people are not even wearing N95 masks on airplanes anyways, so it’s kind of a ruse.

One of the safest places on earth to be, because of the air circulation, is an airplane. Air circulates every 20 seconds and we have these great filters, the same thing you have in surgical rooms. There is absolutely no reason to be wearing cloth masks on airplanes.

We welcome people to wear N95 masks if they want to.

Q. How are surging oil prices in the wake of Russia’s invasion of Ukraine impacting the airline? Will that slow travel this spring and summer and potentially the rest of 2022?

A. It’s having an impact.

Fuel is a big percentage of our costs but thankfully our flights are relatively short out of Bradley, so it’s a smaller percentage price increase.

For every $50 increase in a barrel of oil, we have to charge another $5 per hour of flight. So if it’s a two-hour flight we have to charge another $10.

And every time you raise fares, it affects demand. You can’t just charge whatever price you want because people are price sensitive.

It’s obviously tragic to watch what’s happening in Ukraine, and we are hopeful things there will be resolved, mainly for the sake of the people living there.

We’ve increased ticket prices by about $10 on average so far. It’s not going to keep anyone from traveling, but anytime you raise a fare it hurts demand.

Q. You said earlier in February that Breeze Airways planned to add eight new destinations at Bradley. You announced six in March. Was it your plan to only announce six of eight new flights, or did rising fuel prices change your mind?

A. Yes, rising fuel prices did impact the number of flights we were going to announce recently. We did pull back some things while we wait for the price of oil to be more reasonable.

There will be more routes added at Bradley eventually. For now we are adding these six flights and seeing how it goes.

Q. How do you determine which new routes to add?

A. There is a Department of Transportation database that tracks all the passengers that fly between every city and country. We have access to that as well as every other airline.

We look at these markets, see how many people are flying to destinations on a daily basis and determine if we can offer a low price.

We also look at mutual interests between cities.

Q. I saw in one article you described Breeze Airways as a technology company that flies airplanes. Can you explain what that means?

A. We have really easy-to-use apps that allow passengers to change or cancel a flight and do all that stuff . You can send us text messages and we usually respond in less than 10 minutes.

We try to make it as easy as humanly possible to make a reservation, change it, cancel it, check in. All that stuff is done using the Amazon or Uber approach, instead of the old ways of doing business.

Q. How are you able to charge lower fares than your competitors?

A. Technology is one way to do it. We don’t have big call centers. You can message us and if you want us to call you, we’ll call you. At every turn we try to use technology to be more efficient.

Q. You have an order of 80 Airbus A220-300 jets. Can you talk about the significance of that order and what it means for your fleet?

A. It’s going to increase our fleet size. It’s an airplane that’s really fuel efficient and does well with long distances.

I think in the future it will allow us to roll out more longer-distance flights. [Los Angeles], San Francisco and Las Vegas are all destinations served out of Hartford [by other airlines], so we chose not to fly to those markets.

But there are other West Coast markets that we can fly to that don’t have nonstop service, like Seattle, and that would be a hop, skip and jump for that airplane.

The way we have the [A220] configured today, it has 36 first-class seats.

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