History of Jetblue Airways Corporation

History of JetBlue Airways Corporation

JetBlue Airways Corporation was created by Utah entrepreneur David Neeleman to "bring the humanity back to air travel." It was also a good way to add another chapter to a successful career in budget air travel. Jet Blue was launched with a huge amount capital, brand new planes, and expert personnel in key positions. It grew rapidly as customers flocked to it to escape the steep fares and frequent delays of the major airlines.

Origins

Many small start-up airlines tried the low fare formula in the 1990s. Most, like Kiwi Air Lines and People Express, failed in the face of direct competition from the majors, which were able to withstand fare wars. (In fact, 87 airlines failed between deregulation in 1978 and the end of the century.) Insufficient capital and insufficient management talent were other factors that grounded many of the fledglings.

David Neeleman grew up in Salt Lake City with seven siblings. According toTime,a red airplane on his second birthday cake first attracted him to aviation. As a young man, he served in Brazil as a Latter-Day Saints missionary, then studied accounting at the University of Utah. But he dropped out of school before graduating in favor of entrepreneurial pursuits.

Before long, Neeleman was running Morris Air, an innovative, successful low-fare carrier that was the first to offer ticketless reservations. He reportedly earned $20 million when he sold it toSouthwest Airlinesin 1993. He was just 33 years old at the time. Bound by a five-year non-competition agreement, in 1995 he went left the U.S. to help launch Canadian startup WestJet Airlines.

Neeleman toldSales and Marketing Managementthat it took 30 months of planning to get his next project, dubbed "New Air," in the skies. It also took quite a bit of money. Neeleman raised $130.2 million in start-up capital, an unprecedented amount for a start-up airline, from backers that includedChase Capital Partners($20 million); two George Soros...