David Neeleman, the founder of JetBlue Airways Corp., registered a new aviation business this summer in Connecticut, sparking immediate speculation in the airline industry that he might be starting a new U.S. airline.
He is—sort of.
Neeleman, 57, is joining a plan to launch a charter air enterprise, tentatively called Azura Airways Corp., using two Bombardier CRJ-200 regional jets with as few as 16 seats, said Trey Urbahn, an industry veteran and longtime adviser to Neeleman.
Small jets with 50 seats or fewer have fallen out of favor among U.S. carriers, which have turned to larger regional jets and more mainline flying in recent years. The venture by Neeleman and Urbahn is targeting what they see as an underserved portion of the charter market for companies with regular movements of employees among corporate locations, university sports teams and wealthy people who don’t have private jets.
“I’m not starting an airline,” Neeleman said in an interview Tuesday. “I’m helping out a couple of friends. It’s not like David Neeleman sees a great opportunity here. We’ll do a couple of planes and see how it goes.” The endeavor’s first flights could occur as soon as October, he said. The effort already has a couple of companies as customers.Neeleman has a long track record in aviation, having founded or co-founded four successful airlines, including Brazilian low-cost carrier Azul SA and more famously, JetBlue, which he left in 2007. Neeleman, who was born in Brazil and speaks Portuguese, recently took control of Portugal’s former flag carrier, TAP Air Portugal, and is attempting to restructure it as a low-cost airline. He also serves as a director of JetSuite, a California-based charter company using Embraer regional jets with premium amenities. JetBlue took an undisclosed financial stake in that company last year.
In coming years, roughly 1,000 of the 50-seat models from Bombardier Inc. and Embraer SA will probably be dropped from commercial fleets, said Urbahn, a former finance executive at JetBlue who also serves as TAP’s chief commercial officer. His new service with Neeleman may start picking some of them up.
“We think it’s an interesting platform to start exploring what’s doable in this space,” said Urbahn, who spoke Monday at the International Aviation Forecast Summit in Las Vegas.
The starup chose the CRJ-200 because it has greater range than the rival Embraer model and allows for nonstop flights from the New York metro area to U.S. ski destinations, Urbahn said. All the regional jets they may acquire will fly with only about 24 seats, at most. (In mid-July, the group registered Azura Airways Corp. with the Connecticut Secretary of State but quickly rescinded the filing. There was also a brief internet appearance for a site called flyazura.com. )
“The fundamental thought here is there’s an asset play”
Azura, whose name was chosen as a “placeholder,” has signed several contracts. It’s focused on “programmed movements of people,” such as college basketball teams and the year-round heavy traffic between the Northeast and Florida, Urbahn said. The aircraft, which can be purchased used for as little as $2 million, are also useful to transport affluent people who travel among multiple homes but wouldn’t acquire a large private jet such as a Gulfstream or Bombardier’s Challenger, he said. Neeleman will also use the aircraft personally, Urbahn added.
The company wants to make one thing clear: Azura, which is internally dubbed “Acme Rocket Co.,” isn’t an airline and never will be. “The fundamental thought here is there’s an asset play,” Urbahn said of the inexpensive regional jets. “We don’t know yet where this can go. But it’s a worthwhile little experiment.”
This article was provided by Bloomberg News.
