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The Faith to Stay Sky High
Neeleman got his start in business while a student at the University of Utah, selling package trips to Hawaii. After dropping out of college in 1982, he went to work for Salt Lake City travel agent June Morris. Together they created Morris Air, a small, low-cost airline that they sold to Southwest Airlines in 1993 for more than $100 million in stock. Neeleman, by now a wealthy man, accepted a position at Southwest, but ultimately decided he was too outspoken and entrepreneurial for a place he describes as "having all kinds of rules."A non-compete clause kept him from working in the U.S. airline business for five years, so he moved to Canada and, in 1996, helped launch WestJet, another low-fare carrier. He also helped create the industry's first paperless ticket system, which he sold to Hewlett-Packard in 1998.
With a business plan he'd drawn up for JetBlue, Neeleman went to Wall Street next. Within a few months he had raised $130 million, the highest amount of capital for a start-up in aviation history.
So far, he's delivered impressive results. Early on, JetBlue reported 18 consecutive profitable quarters at a time when many airlines were hemorrhaging cash. The company went public in 2002, and in its fifth year of operation became the 15th largest airline in the United States by traffic.
As JetBlue now enters what Neeleman calls its adolescence, it is encountering some turbulence. The company reported an operating loss for the fourth quarter of 2005 and forecasts a loss for 2006. Revenues have been lower than expected, and soaring fuel prices (the CEO admits that they didn't negotiate enough long-term fixed-price fuel contracts) have taken a big chunk off the bottom line.
Looking ahead, Neeleman worries about protecting the corporate culture he has so carefully cultivated. He admits he can't connect with as many of his 10,000 employees as he'd like. He remains undaunted, though, by the prospect of rapid growth.
JetBlue currently has 189 more planes on order. To attack new markets, Neeleman is departing from his single-fleet Airbus formula and adding a short-hop plane. Wall Street is watching closely. "The brand will remain strong as long as they can stick to their basic ideals and manage the growth process the right way," says Bear Stearns analyst David Strine.
"It's time for us to really shine, and do better at the things we do," says Neeleman. Given the strength of its founder's faith, JetBlue is pretty likely to keep flying high.
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