yonikasz
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Will David Neeleman create another mediocre airline with Moxy?

Sat Feb 09, 2019 4:12 am

Having just listened to the “How I built it” podcast episode on jetBlue it made me think. Is Moxy gonna be another mediocre airline that starts off pretty strong but either grows too fast or makes the wrong desisions?

No disrespect to the guy he’s been part of the founding of Morris Air (now Southwest (great episode on Southwest on How I Built This too)), jetBlue, WestJet, and Azul. Founding any profitable airline, which jetBlue is and WestJet will likely return to being is a major success. Let’s not forget about the Independence Airs of the industry. Or the California Pacific Airline which lasted about a month.

Let’s start with Morris Air - the episode with Herb Kelleher states a different recollection of Morris Air. Didn’t a former Southwest CEO, or someone high up in Southwest found Morris Air? Morris Air was successful enough not to go under, but couldn’t survive on its own.

jetBlue - Smart idea of using JFK airport for domestic during the day because it was mainly an international airport at the time. My first question was how could they afford the slots when the first started? Also at what point in their time did they move into Boston. Howbout Ft Lauderdale? Long Beach?

They claim to “Bring the humanity back to air travel” but frankly bringing the humanity back to air travel means charging more. It seems like only Delta is getting away with it. A piece of that is their above industry average operational metrics, but the cost of PTVs in every seat and other amenities will no doubt be passed on to the customer. Today the market has proven that they care about cost most. So jetBlue has put themselves in the position where they are expected to have longer leg room (I know they are densfying the cabin now, but it’s still generous), PTVs, and free WiFi and charging lower cost fares. I wouldn’t say as cheap as Spirit or Frontier but I would say something less than American or United. Definitely less than Delta.

Their JFK and BOS are great business hubs, with good transcons. Why can’t they charge more for the Mint seats like the legacies do? Does it have to do with having a less valuable frequent flier program and smaller network?

Their FLL hub is while Florida and vacationers which brings me to another point. Their focus on bringing the Northeast to Florida. Those yields are garbage.

And lastly their LGB “hub”. While frankly it doesn’t seem like a bad idea at first it doesn’t seem like LGB really wants them there and once they started the curfews I would have gotten out.

About jetBlue’s future - they really have to get their operations down. I don’t expect them to have the on time performance of Delta overnight, but they shouldn’t be lagging significantly behind the industry average either.

WestJet - This is an interesting one because it started fairly successfully. Canada really had no LCCs besides Rouge before WestJet and it definitely filled a gap. Not to long ago Delta formed a JV with them and I think in general Delta is a good partner even though they may be overly influencing. What’s with Delta though and their partenerships with struggling airlines Jet Airways, Virgin Atlantic, WestJet? WestJet wanted to expand so they took the concervative approach with some used 767s for longer routes. Okay fine, not too risky. Last year WestJet went nuts with launching their ULCC Swoop and celebrated their delivery of their first 787 with posting a loss.

Azul - Frankly I don’t know much but it seems like a fine airline. It doesn’t seem to have a huge market share though. If you know more I would be interested.

Moxy - What gap is being filled here? From what we know about on board product it doesn’t seem much different than jetBlue, longer leg room, PTVs. So it’s gonna try to be Southwest with using secondary airports and a point to point model with a jetBlue hard product? I frankly don’t get it.
Last edited by atcsundevil on Sat Feb 09, 2019 5:35 am, edited 1 time in total.
Reason: Title updated
 
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enilria
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Re: Will Is David Neeleman gonna create another mediocre airline with Moxy?

Sat Feb 09, 2019 4:58 am

There’s a lot there you are asking in your post.

Neeleman hired Dave Barger who was CO/UA’s VP for EWR. He had a deep relationship with Cuomo. Barger convinced Cuomo to get B6 free slots. Also, JFK was only slotted for a limited portion of the day in that era. Maybe 1-6pm or something.

Neeleman was the exec who worked at WN and then founded Morris.
 
dmanonice
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Re: Will Is David Neeleman gonna create another mediocre airline with Moxy?

Sat Feb 09, 2019 5:15 am

yonikasz wrote:

WestJet - This is an interesting one because it started fairly successfully. Canada really had no LCCs besides Rouge before WestJet and it definitely filled a gap. Not to long ago Delta formed a JV with them and I think in general Delta is a good partner even though they may be overly influencing. What’s with Delta though and their partenerships with struggling airlines Jet Airways, Virgin Atlantic, WestJet? WestJet wanted to expand so they took the concervative approach with some used 767s for longer routes. Okay fine, not too risky. Last year WestJet went nuts with launching their ULCC Swoop and celebrated their delivery of their first 787 with posting a loss.



Where do i even begin with this? WestJet started in 1996 well before Rouge came along. Canadian was still in play and post merger with Air Canada in 2000 2 attempts were made and failed by AC to run an airline within and airline to compete with WestJet (Air Canada Tango and ZIP). The gap WS filled at the time was between Canadian and Air Canada, the LCC market really started with WS and then JetsGO which later failed as well. He really wasn't involved long in WS's history just enough to get them up and going then he moved on quickly to B6.

I am not sure by what definition WS is struggling? One bad quarter and some overly agressive expansion in the past couple of years sure, but i would hardly say that WS is struggling.

Yes the 787 arrived when the Q2 loss was posted (the first in 52 quarters i might add) and the 2018 Q3 and Q4 numbers were profitable as were full year 2018.
Last edited by dmanonice on Sat Feb 09, 2019 5:19 am, edited 1 time in total.
Mike
 
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Super80Fan
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Re: Will Is David Neeleman gonna create another mediocre airline with Moxy?

Sat Feb 09, 2019 5:15 am

Wow this is a winded post with lots of different topics.

Morris Air was started by a woman named June Morris who ran it as a charter operation. When Neeleman came on-board, he made it into an actual airline with their own fleet and scheduled operations. Southwest then purchased Morris Air and Neeleman became an executive while Morris went on the board of directors. Neeleman left because he had "bigger" visions that Herb and the rest of the WN team did not want.

After that, that's when he went to co-found WestJet as he had a no-compete cause as part of his resignation from WN. After that expired, that's when he went on to start B6.

Neeleman is a fantastic entrepreneur, and he has a long success list. The trouble with him and his companies seem to be not when he is there, but when he leaves. His vision is gone and management struggles to reinvent the airline and keep it afloat. That's what's going on right now at WestJet and JetBlue. Can this be attributed to him? Maybe some aspects such as building it and then leaving with no clear future, but many of these faults are on management at these companies.

None of us, including Neeleman know how Moxy is going end up. It could be a failure, it could be the greatest airline ever, or it could be another WestJet or JetBlue. Who knows.
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RWA380
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Re: Will David Neeleman create another mediocre airline with Moxy?

Sat Feb 09, 2019 7:02 am

IMHO, mediocrity is pretty much across the board with domestic carriers today. Yes a few have small sub fleets of aircraft equipped with lie flat beds for selected premium trans-con markets. Take that product away & mediocrity is the norm.

Even if it is just a minor improvement at this point & I am not sure what they could even do to break that mediocrity & remain financially responsible to shareholders. What would be an example of a service or feature they could realistically offer that really would set them apart from all other US carriers enough to sway public opinion?
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N766UA
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Re: Will David Neeleman create another mediocre airline with Moxy?

Sat Feb 09, 2019 1:17 pm

This post is too long; I got bored 1/3 of the way through!
 
spacecadet
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Re: Will David Neeleman create another mediocre airline with Moxy?

Sun Feb 10, 2019 6:55 am

There's a pretty fundamental misunderstanding of the type of airline JetBlue is in the original post. The answer to almost every question about them above is "because JetBlue is not that kind of airline." That may not be the answer you want or one you find satisfying, but it is the answer.

Essentially it would be like saying "why doesn't In-n-Out Burger have a burger like the Big Mac? Why don't they serve fish sandwiches? Why don't they have stuff already made so you don't have to wait so long?" Because they are not that kind of burger place, that's all. They do things differently from other burger places. That's how they survive and that's how they make a profit, despite being a lot smaller than other burger chains.

I don't know the answers to the other questions in the post, but my guess is that they would be similar. There's a lot about the airline business and the business models of various airlines that people just get wrong.
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