Next stop on David Neeleman's itinerary: Brazil. The JetBlue (NASDAQ:JBLU) founder, who was ousted as CEO three months after a Valentine's Day 2007 ice storm that left 131,000 passengers stranded, is launching a low-cost carrier there. Neeleman was born in Brazil while his father, a journalist, was on assignment in the country. His new airline, Azul, will begin operations in January 2009. Neeleman, who has left JetBlue's board of directors to focus on the start-up, recently spoke with reporter Jason Del Rey.
I have citizenship there, so I qualify under rules that limit foreign ownership of airlines. And I think there's a huge opportunity in Brazil. It's a market with 191 million people, yet there's little nonstop service between cities. They do a lot of hub-and-spoking through São Paulo. We want to change that.
How are you financing it?
We raised $150 million of equity, and no debt. We haven't announced any of the investors yet. Some want to wait a while before they go public.
What role will you play?
They use different terminology in Brazil. What we would call the board, they call the council of administration. There's a president of the council, who is like the chairman of the board. That'll be me. I'll be hands-on in the sense that there's closer interaction between boards and management there.
Will you hire someone to run the company day to day?
I'm going to make sure we're off to the right start, and I'll be involved as much as I have to be. But if I find the right person to be president of the company, I'll hire him or her. I'm not trying to run the whole thing.
You are going to hold on to 80 percent of the voting rights. Was control a must for you?
Yeah, it was important to me, especially because of what I had to go through at JetBlue.
The beginning of the end of your time at JetBlue seemed to be that ice storm. What lessons did you learn from that experience and the fallout?
We had some operational weaknesses and I hired a COO to address them, and I think it's a much better company as a result. And personally, I would have communicated with the board a lot more. I think the board started thinking things -- some were right and some were not necessarily what I believe was correct. That led them to feel like they wanted to make an abrupt change. But, you know, every time a door closes, another one opens up. And so I'm excited to be off to the country of my birth to start something new.
Do you feel you were scapegoated at JetBlue?
No, I don't think so. I think the board just felt it was time to make a change. Maybe they thought the airline suffered from founder's syndrome. In certain companies, there does come a time when it makes sense for the founder to move on and for the process guys to come in and run the show.
How did that experience affect your plans to go into Brazil?
Well, I picked a country with no ice storms and very little snow. So I think Brazil is a much easier country to run an airline in.
What are the similarities and differences between this airline and JetBlue?
I think there are more similarities than differences. We're going to create an airline that people just really want to fly on, that's easy to make a reservation, that when you get to the airport you'll have as few hassles as possible getting on the airplane. And then leather seats, lots of legroom, and TVs. It's going to be a lot like JetBlue. I think the model at JetBlue has been a great one and there's no reason to try to improve on something that's not broken.
Have you considered launching another airline domestically?
No, I think in the U.S. there may be opportunities sometime in the future but there certainly aren't today.
Do you have any concerns over infrastructure?
There's some concern in one, in the downtown city airport in Sao Paolo and in another airport, but the rest of the airports are really underserved and have the infrastructure to handle it. So as long as we're not trying to connect people through Sao Paolo like everyone else is, then I think there's a big opportunity there.
How will this move impact your family?
The flight to Brazil is pretty easy from here. You fly overnight and are there in the morning. I'm trying to get my wife to move. I lived there when I was kid and I thought it was a great experience for my family. Hopefully we'll get the group to go with it.
How old were you when you went back as a missionary?
Nineteen. Two of the best years of my life. I was up in the northeast like in Recife. Great place. If only you could swim as a missionary. We couldn't swim because they were afraid we were going to drown. Too many kids from Idaho went down, you know?
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