With Avelo Airlines having launched operations yesterday, Breeze Airways is expected to be the next US airline startup to begin flying. The airline is expected to start selling tickets any day now, and I know many of us are curious about what the Salt Lake City-based carrier’s first routes will be.
Ahead of the launch, Forbes has an interesting story about the airline, after having spent some time with founder David Neeleman. Neeleman is no doubt a bright guy, having founded several airlines, including JetBlue.
In this post I wanted to cover a few of the highlights of this story, because there are some really surprising tidbits in here.
Breeze Airways views flight attendants as interns
I’ve written in the past about Breeze’s controversial approach to hiring flight attendants, which requires being enrolled in college and living in company housing. In other words, the airline is trying to exclude anyone who has a family, a college degree, or is looking to build a career.
Well, there are some more details about how this will work. The role of flight attendant will be more like an internship than a career, because Neeleman believes flight attendants don’t improve much with years of experience, and that they can get trapped in a dead-end job due to the seniority system we see at other airlines:
“It’s not something politically correct but it’s something David wholeheartedly believes in,” says Trey Urbahn, a Breeze board member who’s worked with Neeleman at several of his other airlines.
How will Breeze compensate flight attendants?
- They’ll be paid a fixed $1,200 per month
- They’ll receive $6,000 towards tuition for online coursework
- They’ll receive company housing
It’s stated that the role of flight attendants will be “part time,” as they’ll work 15 days per month. However, in reality that’s not hugely different than the schedules that flight attendants work at other airlines full time.
As you’d expect, existing flight attendant unions will no doubt be targeting Breeze:
The largest U.S. flight attendants union says it looks like an attempt to abuse federal work-study subsidies to hold down labor costs. “We’re going to work hard to make sure this doesn’t get off the ground,” says Sara Nelson, president of the Association of Flight Attendants-CWA.
Breeze wants you to buy a filet mignon sandwich
Neeleman hopes to cut costs by designing the airline around technology, including a smartphone app that he hopes will handle all customer interactions until the day of travel, and also generate a lot of ancillary revenue. As the app is described:
That app, Neeleman says, is designed to convince customers to shell out for upgrades and extras, from food to rental cars, which Breeze is depending on to turn a profit. “[We’ll] flash someone a message, ‘Hey, we see you’re flying today. Would you like to buy a filet mignon sandwich that we can hand deliver to you in your seat?’ Just add all these fun little add-ons where you can just click ‘yes, yes, yes.’ And we can just keep dinging the credit card.”
Breeze will have low fares, no change fees
Breeze will be a low cost carrier primarily operating point-to-point routes that aren’t currently served. Here’s what we can expect from pricing and fees in general:
- Expect most Breeze tickets this summer to cost well under $100 one-way
- When Breeze takes delivery of A220s later this year the airline will offer a first class, and expect those tickets to cost an extra $50-100 one-way
- Breeze will charge $20 for checked bags on flights under three hours
- Breeze won’t charge change or cancelation fees
Breeze has a huge cost advantage over competitors
Breeze is launching operations with Embraer 190/195 aircraft, which the airline is leasing for very little. According to Neeleman:
- Breeze’s trip costs will be 25-30% lower than for competitors with A320s or 737s
- While Breeze’s Embraer aircraft will have 108-118 seats, the airline will be able to break even when selling just 60 seats
- Since the lease costs on Breeze’s planes are so low, the airline can afford to keep the planes parked during the week when demand is low, and fly them primarily on weekends, when demand is much higher
My take on Breeze
I’ve shared my general thoughts on Breeze in the past, though based on these updates I have a few more things to add:
- It sounds like Breeze is going to have an unheard of cost structure that will put virtually any other airline to shame; if the airline can really break even with a 50-55% load factor all while operating fairly small planes (that are easy to fill), Breeze will be a force to be reckoned with
- Breeze is claiming that technology will be a true point of differentiation, though I feel like virtually every airline executive claims that about their own airline; only time will tell if this is all talk, or if Breeze has done something that no other airline has successfully done
- It’s so strange to me how Neeleman is known for building airlines with incredible corporate cultures and employee morale, where employees are able to grow with the airline, while he’s seemingly taking a different approach with Breeze; I wonder how Breeze will evolve over time
Breeze should be launching operations shortly, becoming the second new US airline to launch in a matter of weeks. Neeleman has a track record of success in the industry, so I’m curious to see how this venture works out.
Even with the limited details we know, it’s clear Breeze will be different than other airlines, from its approach to hiring flight attendants, to its cost structure, to its fleet.
What do you make of these Breeze insights?