JetBlue Airways: David Neeleman

In the mid-90s, David Neeleman wanted to launch a new airline. He had already co-created a regional airline out of Salt Lake City that was acquired by Southwest. And despite his admiration of Southwest's business model, Neeleman felt there was a market for a different kind of budget airline. He envisioned flights to cities other budget airlines avoided and excellent customer service, with high-tech amenities. In 2000, he launched JetBlue and in its first year, the company flew over 1 million people, and cultivated a loyal customer following. Then came the 2007 Valentine's Day ice storm. PLUS in our postscript "How You Built That," how Lisa Dalton turned a relationship mishap into a game-changing braille label that solves a daily problem for blind consumers. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Speaker 00

  Herb invited me to Ruth Chris Steakhouse in Dallas and said, "This isn't going to work. You're driving everybody insane in this company." And he reached across the table and held my hands. I was crying. And he said, "Everybody, even the people that are your biggest supporters said you had to go."

• 0:28Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 0:40Guy Raz?

  I'm Guy Raz, and on the show today, how one man reinvented airline travel again and again and again to create one of the most innovative carriers in the US, JetBlue.

• 0:55Guy Raz?

  So a few days ago, I flew on a budget airline. You know, it's public radio, guys. Anyway, this was a short flight, so no big deal. I know what to expect: nonrefundable ticket, middle seat in the back of the plane. I boarded last, no recline, no legroom, no TV, no snacks. Print my ticket out at home. And it's fine. That's the trade-off. As long as I get to where I need to go safely, I'm more or less fine. But once in a while, the route I'm taking is one that JetBlue flies, and the price is the same. And with that ticket, I get a seat that does recline: a snack and a beverage, really nice flight attendants, and even a little TV.

• 1:39Guy Raz?

  Which is why when JetBlue debuted in 2000, it made such a big impact. It was a discount carrier that offered stuff the more premium airlines were already offering, or in some cases, not offering. And customers noticed pretty fast. In less than a year, JetBlue flew more than a million passengers and quickly built a super loyal following. And that was the vision of JetBlue's founder, David Neeleman, to build a more humane airline. But the thing is, David's passion for a better flying experience actually came from his own background, his own faith. David's family is Mormon, and the Mormon faith emphasizes

• 2:20Guy Raz?

  civility. And every practicing Mormon is encouraged to go on a mission when they're in their late teens or early twenties. And back in the 1950s, David's father was sent on a missionary trip to Brazil. He loved it so much, he went back as a journalist and started a family, which is why David was born in Sao Paulo in 1959. And when he turned five, David's dad moved the family back to Salt Lake City, where being a Mormon was just kind of baked into everyday life.

• 2:53Speaker 00

  It was a pretty conservative place. I mean, it was obviously a place that was founded by Brigham Young. And as they started the church, they moved across the country. And my mom said the family were pioneers. They came and covered wagons. My grandmother, seven generations back, a lady by the name of Sally Hewlett, the family stories that she was given a book, Mormon by Joseph Smith himself, who was the founder of our church. And a lot of people have those stories. I mean, almost everyone you meet in Salt Lake has a story of somebody who either crossed the plains, or crossed the ocean, or had a grandmother die on the plains. It was just kind of part of our lore of our religion and these pioneer families.

• 3:35Guy Raz?

  And as a kid, were you entrepreneurial in any way? Did you like wash cars or walk dogs or anything like that?

• 3:45Speaker 00

  My grandfather had a few grocery stores, small grocery stores. He called them miniature markets, that were like fast food. And he would make the sandwiches in the back and bring in fresh donuts, and kind of a precursor to maybe a 7-Eleven, but everything was done fresh. So when I was nine years old, I got a job there, standing on a milk crate, working the cash register, checking out people, counting money. And so that was kind of my introduction to business. And my grandfather was a really kind of old school. He was born in Salt Lake, but his whole family came from Holland. And so, you know, he paid me 50 cents an hour, which kind of made me mad because everyone else made a dollar an hour. He expected more out of me than the other kids. And he was really focused on customer service.

• 4:27Speaker 00

  If somebody, if there was something in the store that somebody wanted and we didn't have it, he'd run out the back door and run over to Safeway and buy it and bring it back for them. You know, he was, he never wanted to lose a customer. You know, I, I look back on those years and I didn't get to participate as much in high school and do things as sports as maybe as I would have wanted to do. But, you know, I, I think it probably taught me a lot about a lot of things.

• 4:49Guy Raz?

  Was church a big sort of center of life for you as a kid, going to, going to services and going on Sunday and things like that?

• 4:58Speaker 00

  Yeah, always was. I mean, it was three hours on a Sunday and it's a cultural thing, you know, I think as much as a religious thing. So you have both elements. You know your neighbors, you talk to them at church on Sunday. You have a boundary to areas in our church where if you lived in a certain geographical area, then you have to go at this church at this time. And when it was my time to serve a mission, there wasn't even a question. It was, you know, I'm going to go on a mission just like my dad did.

• 5:25Guy Raz?

  How were you as a student?

• 5:27Speaker 00

  Horrible. I was, you know, it's not that for lack of not wanting to be, I just, you know, it was something I discovered later in life, but I had a raging case of ADD and I know everyone likes to say they do today, but it was really something that was tough for me because I, you know, I was, I was gregarious and I could get my way through things, but I couldn't read. I mean, it was really hard for me to read and, you know, I would read a page in a book and I could tell you everything that I thought about while I was reading that page except for what was on that page.

• 6:01Guy Raz?

  You couldn't concentrate in the book?

• 6:02Speaker 00

  No, no, it was really hard. And I mean, if you asked me today, what was my favorite book I read in high school? I couldn't tell you because I don't recall even reading a single book in high school. You know, I got through it, you know, with pretty well decent grades, but. Did horribly on the ACT. I think I got like an 18 or something. And I think my reading was below 10. My counselor said, I don't know how you got a score this low. Had you just marked C on every answer, you would have gotten a higher score than what you did. It's like you tried to get, it's like you tried to get the lowest score possible. And this is what I learned about ADD afterwards, that if it was something I was interested in, I would devour it. But if it was just something that I wasn't interested in, I just couldn't focus on it. It was really hard.

• 6:45Guy Raz?

  I mean, this is, and this is like the 70s when people weren't really diagnosing ADD. It wasn't like a common thing that people talked about.

• 6:53Speaker 00

  No, it wasn't. And it wasn't until years later, when my little brother, I have a little brother that is 18 years younger than I am, almost 19 years, that he was diagnosed with it. And my mom, she read this book called Driven to Distraction by Dr. Halliwell. And my mom sent me the book and she said, you know, Mark's just been diagnosed with this. I think you might have this. And it was the, you know, I of course didn't read the book, but I did read, there was, there was 21 characteristics of somebody who has ADD. And I read those 21 things and I just put the book down and I just like got tears in my eyes and I go, wow, this is me.

• 7:36Guy Raz?

  So I guess you were, you were 19 when you went on your, your mission for the church. And basically you are sort of assigned to a country to go and, and do mission work, right?

• 7:50Speaker 00

  Correct. And I was so fortunate to be, to be assigned to Brazil. And I think part of the reason is because I was born there and I had a Brazilian passport. So it was just, it's just kind of random. You just put it in and you receive your call and your call says you're going, you're going to Brazil.

• 8:09Guy Raz?

  What, what was your impression of it? I mean, what, what stood out to you when you got there?

• 8:14Speaker 00

  You know, I had been there several times and I was, but my dad, being a journalist and being a foreign correspondent and, you know, he knew all the rich and famous. And so every time we would go visit Brazil, we were hanging out in sports clubs, we were hanging out at the beach, we're going to the best restaurants and, you know, everything was just like, wow, Brazil is a cool place. Everything's so amazing. But, you know, when you're a missionary, you don't hang out with those rich people. They've, they've already got their gods, you know, it's their money or, you know, or whatever. They don't, they're not humble enough to change. It's really the people that are really downtrodden and really down on their luck, those that have virtually nothing that listen to your message. And so I spent all my time with those people

• 8:56Speaker 00

  and, and wow, it was an eye opener for me. I, you know, obviously in the United States, we have disparity of income and classes, but at least you have an ability to move from one class to another if you work hard and you're like, you know, you have some luck and, you know, you do certain things. You have student loans and other things. In Brazil, it's virtually impossible to do that. And it made me very resentful. And, you know, I really, in that, you know, I got tucked away in my mind that I wanted to come back to Brazil and I wanted to do something to help these people at some point in time in my life and kind of make my contribution.

• 9:33Guy Raz?

  And did you, cause I, I'm just trying to remember my experience seeing young, young missionaries. Like, did you wear a black tie and a white shirt and like go around on a bike?

• 9:43Speaker 00

  Just like the guys in the play in New York City in the Book of Mormon. We didn't have a bike, but we had white shirts, short sleeve white shirts, you know, just a tie, not necessarily a black tie and slacks. But I also, I was very successful in kind of, you know, being a leader and the first time I had ever done that before. And then, you know, also just learning discipline and kind of overcoming my ADD, being able to read scriptures and to learn a language. And when I came back from my mission, I was able to go back to university and where I left getting Cs and Ds, I was home getting straight As.

• 10:19Guy Raz?

  Wow.

• 10:20Speaker 00

  You know, it made me, I grew up a lot and it taught me discipline, which is something that I hadn't learned in my, in my childhood, you know, because of my ADD.

• 10:29Guy Raz?

  I mean, it might, it might be kind of a stretch, but I mean, in some, in like a weird way, it's, it's almost as if your experience as a missionary, cause I mean, you are essentially pitching. Something to people. You're pitching, in this case, the word of God, right? You're pitching your faith and you're trying to convince people about what it's done for you and how it's fulfilled your life. It's like business, right? You're pitching to people something you believe in.

• 10:57Speaker 00

  Yeah, I mean, it's, there's a lot of companies that are in Provo, Utah, that do door-to-door sales of alarm systems and pest control and whatever. And, you know, they take all these, all these guys that have come and gals that have come up from missions that are kind of fearless now. And then they say, "Go sell alarm system or go sell pest control."

• 11:17Guy Raz?

  That's so interesting, yeah.

• 11:19Speaker 00

  Some people go out for the summer and make $50,000 just, you know, selling pest control or selling alarm systems door-to-door.

• 11:26Guy Raz?

  So when you got back to, to the US, were you, were you single at the time?

• 11:31Speaker 00

  I was and, you know, got married right away and started having kids and went to work.

• 11:35Guy Raz?

  Even while you were in college?

• 11:37Speaker 00

  Yeah, yeah, it's kind of what you do, you know? It's the way it works in the church. You get home and you're encouraged to get married.

• 11:45Guy Raz?

  Yeah.

• 11:45Speaker 00

  We got married in December and our first child was born on November 1st. So we didn't, kind of 11 months later. And it was just kind of off to the races from there.

• 11:57Guy Raz?

  When you were, when you got back and you started up at college again, the University of Utah, I guess you, you started a business, right, as, while you were a student?

• 12:05Speaker 00

  I did. I was sitting in my accounting class one day and I was talking to someone who was seated behind me and her name was Lily Ronag, I can still remember. And she told me about this guy who, this man who was a friend of her mother's that owned some timeshares in Hawaii at this place called the Imperial Hawaii Resort. And he was having difficulty selling the timeshares. And so I got this idea to go talk to him. I said, "Give me his name and I'll call him up." And his name was Al Lieber. And so I called him up and I went down to meet with him and I said, "Hey, how about if I just rent your timeshares out?" Because he was paying a weekly maintenance fee on all of them and it was kind of draining him. And I said, "Let me, let me fill him up." And he said, "Okay."

• 12:51Speaker 00

  So I, under the resort accommodation section of their local newspaper at the time. I would just run little wand ads and say, hey Hawaii condo for $75 a night, or whatever, 50 bucks a night, sleep six. And so I'd started getting phone calls and I'd book him and I'd pay him 135 bucks. I'd collect 400 bucks and then I would just keep the difference. So I was doing a couple of days a day and next thing you know, I was making some pretty good money just filling up these condominiums. And then I started getting other ones and one day I heard about an airline. It was right after deregulation.

• 13:27Guy Raz?

  This is like the early 80s?

• 13:28Speaker 00

  Yeah, the early 80s. 78 was deregulation. So there were airlines that were kind of sprouting up. So there was an airline called Pacific East. And I called the guy that was running it in LA and I said, hey, I'm not a travel agent or anything, but if I send you some money, will you, can you send me some airline tickets? And he said, sure. So I would send him the money, he'd send me the tickets. And then I would package them with these hotels. And then I would say, $2.99 you can fly to Hawaii, but you gotta drive to LA. So people would say, oh, we love Hawaii.

• 13:56Guy Raz?

  Wow.

• 13:57Speaker 00

  You know, Utahns have always loved Hawaii. So they'd jump in their cars and they'd drive down to LA, hop on this Pacific East old DC8 and fly over to Hawaii.

• 14:05Guy Raz?

  You did this while you were a college student? You would just like create packaged holidays for people?

• 14:10Speaker 00

  Yeah, that's how I did it. And I eventually dropped out of college. The company was doing $6 million a year.

• 14:17Guy Raz?

  Wait, your company was doing $6 million a year?

• 14:20Speaker 00

  Yeah, and it was, I had a whole staff of people and we were salespeople. People would come in and sit down, would show them brochures of different hotels that we had or different condos. Cause then I would call in over to other places and say, hey, could I buy a block of rooms for 20 bucks a night? And they'd say, okay. And so I just started packaging them.

• 14:39Guy Raz?

  Wow.

• 14:40Speaker 00

  And that was all working well until there was a new airline that started. And I was a little enamored with this because it was Hawaii Express and they had a big pineapple on the tail and they flew 747s. So I said, well, I'm gonna switch to these guys. So I started buying tickets from them. And then, right before Christmas, I think it was 1982, or maybe 1983, they called me up and said, you know, hey, we're ceasing operations tomorrow. And I said, no, you can't cease operations tomorrow. They said, well, we don't have any money. And I said, well, I've prepaid all these people. It was right before Christmas. People had paid for their hotels, but I had no way of getting them over there. Of course, all the airplane tickets were full. I didn't have money to send everybody over there. And so it was kind of a disastrous time.

• 15:25Speaker 00

  And I learned a huge lesson from that that suited me well through the years. But it was obviously very difficult to go from a point where I had this thriving business to from one day to the next, I virtually had nothing.

• 15:37Guy Raz?

  Wait, that wiped the business out?

• 15:40Speaker 00

  It did, because I had prepaid, you know, every single ticket. And it was about a half a million dollars. And, you know, I probably had, you know, a couple hundred thousand that I had of my own money. And, you know, I should have, at the time, just called everybody up and said, look, I could just give you half your money back. But of course, you know, you filed for bankruptcy, not personally, but it was the business. And then the lawyers ended up getting most everything. So I was, at the time, I was in my early twenties. I think I was 20, 23 or 24, something like that. I really didn't know anything about business or how this all worked.

• 16:13Guy Raz?

  Wow. So you were like a living, you were probably like thinking, I'm set, like, this is gonna be, like, I'm gonna be a millionaire.

• 16:22Speaker 00

  Yeah, I was. I, you know, went out and bought myself a BMW. I thought I was, you know, things were great. You know, I never, I never bought another one again after that, because I learned, I learned my lesson. You know, you're young, things are coming easy, it's good, the money. I mean, you can imagine, you, you know, your first condo you sell, you get to make 350 bucks on it. You're like, wow, that could last me for, for two weeks, just for that one sale, that one phone call. So it started up fast, it was very successful, and then boom.

• 16:51Guy Raz?

  Collapsed.

• 16:52Speaker 00

  Collapsed, yeah.

• 16:55Guy Raz?

  All right, so you are a college dropout with a failed business. And by that point, you had at least one kid, I guess.

• 17:02Speaker 00

  Two kids by then.

• 17:03Guy Raz?

  Two kids. So what did you do? What did you do for work?

• 17:09Speaker 00

  Well, my father-in-law had a drapery business. And I was kind of working the back room, kind of doing the counting and stuff. So I went back to doing that. And my grandfather's grocery store, I went back to work at my grandfather's grocery store, just like I did when I was nine years old.

• 17:25Guy Raz?

  Without the crate? Without standing on the crate, I guess.

• 17:27Speaker 00

  No, I didn't. I lost the milk crate. I could stand up the cash register. But yeah, it was pretty devastating. I mean, you thought, maybe I don't want to get out of bed and do anything. But you know, I just kind of like said, I got to keep going. And so, and then I got a call from my uncle Stan, who just happened to be the estate lawyer for the Morris family, June and Mitch Morris. And June ran a very successful travel agency in Salt Lake City. It was dealing with mainly corporate travel at the time. And so Michael Stan called up and said, June Morris wants to talk to you about doing some of the things that you were doing on your own for her company.

• 18:08Guy Raz?

  She was older than you, I guess, right?

• 18:10Speaker 00

  Oh, yeah. She's about the age of my parents. And so, we sat down and she gave me a big smile and she said, you know, if you come to work for me, I'll make sure you get a piece of the company. You know, we can do this together. And I really like what you did. And so she convinced me. She convinced me to do that. And so I kept a job at the store at night. And I would go there during the day and called up all those hotels and said, hey, I'm back. And then I called up Hawaiian Airlines. And I had this contract in my drawer at my old office. It was a charter contract to fly at Hawaiian Airlines chartered from Hawaii to Salt Lake

• 18:54Speaker 00

  directly, bypassing the drive to LA. And I just didn't have, I was just getting together the bond. You needed a $250,000 bond because it was a public charter. And I was just trying to arrange that when the other airline failed. So I went back to the drawer. I got the contract out. I went to June and I said, if Mitch, your husband can can help with this bond, we can launch these flights directly from Salt Lake City.

• 19:17Guy Raz?

  A Hawaiian Airlines flight direct from Salt Lake to Honolulu or wherever?

• 19:22Speaker 00

  Yeah, it was a it was a what we called a reverse rotation. The plane would on a Friday night would start in Honolulu and it would fly nonstop to Salt Lake and then it would turn around Saturday morning and fly back. So that was the flight. You'd spend, you know, basically seven days, six nights in Hawaii and then fly direct and the whole package was $399 because we were buying the charter flight. And so we started this company called Morris Air Charters and that was kind of the hallmark of our of our trip was this DC8 that would that would make this trip. And so Hawaiian called me after one season and said, hey, this plane is going to be going back in about six months. Can we come and base the plane in Salt Lake and so you can fly straight to Hawaii and back, but for the other six days a week, is there anything you want to do with this airplane?

• 20:07Speaker 00

  And I said, yeah, I want to fly to LA. You know, there's lots of lots of Mormons in LA and lots of family interests between the two. My grandparents were there and you know, I kind of spent my whole life in the backseat, you know, back of a station wagon, driving Death Valley between Salt Lake and LA. And I thought if I could sell those tickets for cheap and I had read up a lot on Southwest Airlines, you know, Herb was my Herb Kelleher, who was my was my hero and I had read every annual report ever on those guys. It was kind of my dream to to be like them. So I put flights on to Los Angeles for $69 using this old airplane, flying into the old West Imperial Terminal.

• 20:43Guy Raz?

  So this was a Hawaiian Airlines plane that was just parked in Salt Lake for six days a week because it was going to Honolulu once a week. And and those and they said, look, you can lease this from us and do whatever you want with it for for those other days.

• 20:57Speaker 00

  Right. So I said, let's fly to LA three days a week. And so we ran an ad in the newspaper and the first day I didn't get many calls. And then I remember coming in the next day at work and I heard Verla, who is our receptionist, saying, I have 24 Los Angeles calls on hold. Will somebody please help me?

• 21:18Speaker 00

  And so I went running in there and started answering the phones myself and booking people on pieces of paper. And it was funny because there was a glitch in the system. So we were basically overbooking every flight by 100 people. As we were booking everyone, we lost a little bit of money on that. But, you know, it was, it was a kind of a big success from the very get go.

• 21:39Guy Raz?

  So June, I mean, June Morris had set up a travel agency, which then kind of focused on package tours and chartering planes. And that seems manageable. But, but then you become, you essentially become an airline. Did you and June sit down, did you ever sit down with June and say, hey, let's become an airline? Or did it just, did it just kind of happen that way?

• 21:57Speaker 00

  Well, it was about that time that Steve Hozie, who's a well-known entrepreneur in aircraft leasing business, he called up and said, hey, my wife's from Utah, you know, my relatives come flying on you guys all the time. You need to get legitimate. You know, I have some, I have some airplanes. I will lease you, but I want you to get your own airplane certificate.

• 22:16Guy Raz?

  At this point, this is what, like 80, mid 80s, something like that?

• 22:19Speaker 00

  Yeah, it was probably late 80s.

• 22:21Guy Raz?

  So Steve Uvar Hozie, famous guy, he's made tons of money in aviation and funded a, one of the air and space museums outside of Washington DC.

• 22:30Speaker 00

  Right.

• 22:31Guy Raz?

  He comes to you, he says, hey, you should start your own airline with your own name on it?

• 22:37Speaker 00

  Right. And he said, I got a guy that can help you. And it was a guy named Yusto Schultz. And Yusto was an old FAA guy. So I called Yusto and he was living up in Idaho and he came down and said, okay, let's certify this airline. He's still alive. He's in his mid 90s, this guy. And called me up recently and said, if you got a little something for me to do, I'm still here. So, but he did, went through the certification and, and June was really funny. She, she wanted a compass rose on the tail because that was a logo of her travel business. So we put a compass rose and then she wanted it. To be magenta, that was her color. And so we made these planes with a blue tail with a magenta compass rose. And it was called Morris Air.

• 23:20Guy Raz?

  Who financed this? I mean, did June Morris and her husband finance this? Did you get investors to? Because you had to buy planes, I guess, or lease them.

• 23:29Speaker 00

  Well, initially, we were just making enough cash flow. We were just using that. And, you know, you aren't buying airplanes. You're just, you know, agreeing to pay them like a monthly rent payment on the airplanes with leasing. And then they take a certain amount per hour in reserves for maintenance. And then when the plane's going for maintenance, they use that money to do it. So it doesn't require a lot of capital from the very beginning. And so we were, we were just kind of bootstrapping it. And that's who we got. Mitch was really funny, though, because during those years where we were making money, Mitch wasn't a Mormon.

• 24:00Guy Raz?

  And Mitch was June's husband.

• 24:01Speaker 00

  Yeah, he was really a great guy, one of the most, you know, amazing men I've ever met. And he was a great mentor. But he'd say, OK, this is what we're going to do, guys. We're going to do a third, a third, and a third. A third's going to the government, a third is staying in the company, and a third is going to be whiskey drinking money. That's our whiskey drinking money. So it's OK. So that was our term for what we distributed. So, so one, one year I got my, I was in my, maybe 26 or 27, and I got my whiskey drinking money. And it was enough for me to pay off my house. And so I went, the first thing I did is I went down to the bank where my family had done business forever.

• 24:43Speaker 00

  And, you know, where this banker was kind of knowing that my dad was always, he was always covering my dad's overdraft checks and my grandpa's overdraft checks, kind of knew that these Neeleman, you know, didn't have a lot of money. So I walked in there with, I think it was $165,000 check, and I said, I just want to pay off my house.

• 25:01Guy Raz?

  Wow.

• 25:02Speaker 00

  And he said, OK, took the, took the money. And so I, by the time I got back to the office, June called me in and said, hey, your banker called and said that he had to inform me this, but someone in your company is embezzling money.

• 25:20Speaker 00

  She got the biggest kick out of that, so I went back and closed my account and moved on to another bank. But it was, she couldn't imagine that somebody that my age, kind of a Neeleman, that, you know, always hardworking people, but didn't have that kind of mind that could walk in and pay off their house when they were in their, you know, mid twenties.

• 25:38Guy Raz?

  And then, just a few years after you launch Morris Air, Southwest in 1993 buys the company for $130 million. I mean, this must have been incredible to have that happen.

• 25:52Speaker 00

  Well, a couple, a couple, you know, really incredible things happened around that time. I idolized Southwest. And, you know, I kind of, I just like, I can't even tell you how I felt about that company, you know, when I was building. I would pattern everything we did after Southwest. You know, there was a few things that we did at Morris Air that Southwest wasn't doing. One of them is that we invented e-ticket travel. I mean, the first ticketless travel was done at Morris Air in the world. And it all came about because a guy who worked for me at the time named Stuart Thatcher came into my office and he goes, "Yeah, you know, I just went up to the fourth floor. We have like 50 people up there printing tickets and stuffing them and mailing them out. Why don't we just come

• 26:36Speaker 00

  up with a computer-driven form that we can just go through it, you know, automatically gets done, has a confirmation number on it. We just mail people that way and we just accept their confirmation number." And I said, "Well, why don't we just give it to them over the phone? And why do we have to mail them anything?" He goes, "Well, people want to have something in their hands." So I said, "Well, let's get a fax number. We can still mail it to them, but we don't really need it at the airport. You know, rental cars don't have it." And so, we didn't have a repository for that information. So, I had a young guy that was backing up the computers and he kept telling me he could write us a new reservation system. So, I said, "Why don't you write us a reservation system?" And he said, "I don't know if I can do it." And I said, "Well, I'll give

• 27:17Speaker 00

  you $20,000 and you can buy yourself a Jeep if you can do it." And so, he, he went out and, and wrote the system and got it all done. And we were, we launched this thing as the first e-ticket airline. Well, Southwest didn't know what a great thing they were buying. That was really kind of the best thing that they were buying from that. They were, and have credit today in the Smithsonian as being the first ticketless airline. But it was really our system that did it.

• 27:46Guy Raz?

  Wow.

• 27:46Speaker 00

  But, but kind of going back a little bit. So Herb called me up and, and, you know, said, hey, you know, I hear you might be interested in, in selling and then.

• 27:54Guy Raz?

  This is Herb Kelleher, your, your idol.

• 27:57Speaker 00

  Yeah, I couldn't believe it. When he was on the phone, I can still remember hearing his voice. I'm like, hi Herb, would you want to come down and meet with us? And so I went down and met with him and smoke filled room with all these guys in there that I had idolized over all the years. And then I found, then I came home and then we found out that June had a very serious form of cancer. It was a, it was called inflammatory breast cancer. And so I went to my office and I was just sitting there staring at my phone and it rang and I picked it up and it was a guy named Jim Weickert. And I was, he said, how you doing? I go, oh, I'm just sick. He, he's the guy we had chartered planes from. I said, I'm just sick. I just found out June has this terminal breast cancer, inflammatory breast cancer. I don't know what, what am I going to do? And he said, get her on the airplane

• 28:41Speaker 00

  now. And I said, what do you mean? I said, she's scheduled for surgery. No, no, don't let her have the surgery. We know this doctor, Blumenstein, that is, is, is having amazing success with this. So I called up June. I said, June, I just booked you two tickets on American Airlines. You need to get on the airplane. So she raced out to the airport, got on the airplane.

• 29:00Guy Raz?

  But he said, get her on a plane for what?

• 29:02Speaker 00

  Because when they, what they found is if you had the surgery, it, it spread the cancer through your body and they needed to, to zap it and get rid of it first. So she got on the plane and he convinced her to go into the treatment and they just took her almost, you know, to, to death. I mean, bone marrow transplant, everything. And she lived and she's still alive today.

• 29:24Guy Raz?

  Wow.

• 29:24Speaker 00

  She and I have a very special relationship from this day because of that, of that. It was a, it was a, it was a miracle. And so she was going through this treatment and Herb's there. And so I'm saying, I assume, assume June, you want to sell this company? She said, yes, I do.

• 29:40Guy Raz?

  You see, you're like, in your early 30s, you've got a decent amount of cash, like, at least 20 million bucks, and all of a sudden, you become an employee of Southwest Airlines, I guess.

• 29:53Speaker 00

  Yeah, well, Herb, he always tells the story that I had my Book of Mormon, my Bible, and my Southwest Airlines annual report in my car. That was my scriptures.

• 30:05Speaker 00

  And it was not too far from the truth. So, we were, you know, close, and he said, "Look, I want to put you on the Executive Planning Committee, which is our top steering committee." And I would just sit in this meeting, and I would just watch these guys, and they would just go on and on. And every time I would say something, they'd look at me like, "What does this guy know? He's this young punk, he doesn't know anything, he's never been here." And so, I used to just, I used to just write, "Don't say a word, don't say a word." Just keep, like, writing, and I'd just blurt out something else. They asked me to take two years to integrate Morris into Southwest. And within six months, I had it all done.

• 30:44Speaker 00

  I basically, joint fuel purchase, joint ground handling, you know, joint, everything was all done. And Southwest had this, had this deal where they were charging off-peak fares on Saturdays and Sundays, and after, like, 8:00 PM at night. And I went to them, and I said, "Guys, my highest fares are on Sunday, and you just switched them all to off-peak. I'm losing, like, millions of dollars every month because you're charging off-peak. Let me charge peak on these flights." And so, I sat down with, you know, Keith Taylor at the time, who was the head of revenue management. I showed him all the numbers, and it was during that time, they switched, you know, and started charging peak for Sundays. And they, you know, Southwest has made profit for 43 years in a row, or whatever it was.

• 31:29Speaker 00

  And they, they were so successful, you know, they didn't really need to find, and I was just absolutely paranoid all the time, and I had to keep tweaking everything all the time. And so I was pressing all that stuff with them. And finally, Herb invited me to Ruth Chris Steakhouse in Dallas and said, this isn't going to work. You're driving everybody insane in this company. And I said, well, you're paying more for long distance per minute than we are. I'm just trying to get them to take our contract instead of your contract. And Herb, I got the peak fares and I got the thing integrated and I got this. He said, I know, David, but that's five months. It should have taken you longer to do all that stuff. And I said, all right, I'm out of here. I was in tears, you know?

• 32:11Guy Raz?

  So you were supposed to stay at Southwest for at least two years. And within six months?

• 32:18Speaker 00

  I mean, he kind of led me to believe that if I just minded my Ps and Qs, that I would be a successor one day, you know, that I could follow in his footsteps. And, you know, obviously, there were other people that wanted that job. And I was young and, you know, but I was completely didn't fit into the corporate culture. My ADD was just raging.

• 32:36Guy Raz?

  So you were supposed to, I mean, this was going to be your employer and maybe you would have succeeded Herb Kelleher as the head of Southwest. And you were, basically, were fired after like five or six months.

• 32:47Speaker 00

  Yeah, in May. So I started in December and they fired me in May.

• 32:51Guy Raz?

  Because he's a nice guy. He's been on our show, like, I can't imagine him yelling at you and saying, get out of my office. Did he let you down gently?

• 32:59Speaker 00

  Oh, yeah, yeah. He reached across the table and held my hands. I was crying and he just said, you know, it's just not going to work. He said, everybody, even the people that were your biggest supporters said you had to go.

• 33:14Guy Raz?

  David Neeleman may have been out of a job, but not for long. When we come back, how he built the framework that would become JetBlue. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

• 33:35Guy Raz?

  Hey, welcome back to How I Built This from NPR. So it's 1995, and David Neeleman was just fired from Southwest Airlines. Southwest, the company he idolized. Oh, and he cannot work for a domestic airline for five years because of Southwest's non-compete clause. So, David, he went home.

• 33:56Speaker 00

  I went home, and I spent a couple of days at home. And I felt, I can't do this. I'm not gonna, I'm not gonna retire. And so I went down and I rented a little office and started going to work every day in Salt Lake. And by this time, Dave Evans, who was my partner, had been going back and forth to Texas.

• 34:15Guy Raz?

  And Dave Evans, I'm guessing, you guys worked together at Morris Air?

• 34:18Speaker 00

  Yeah. And he came to me and he said, look, ticketless is the future. Why don't we build a system and sell it to all the airlines? So I said, well, how much money do you think it'll take? And he said, oh, a million dollars. So I said, OK, let's do it.

• 34:30Guy Raz?

  Yeah, it's hard to remember, but like, even in the mid-'90s, when you were running this company, like, an airline ticket was a, was like a booklet with carbon copy pages in it. Like, you would bring this physical booklet to get onto a plane.

• 34:44Speaker 00

  And have it help you if you lost it. You know, you were, you were in trouble. If you lost it, you had to fill out big forms, lost-ticket forms. And then they had these big auditing departments who would look for them. And you'd have to keep calling them back every three months to see if they're, if anyone ever claimed your ticket. And if not, then, you know, maybe they would give you a refund at the end of the time. So it was a, it was a real pain.

• 35:04Guy Raz?

  So, OK, you guys, I guess you guys wanted to build a reservation system that you could essentially then sell to the airlines. But why wouldn't, why wouldn't airlines just, just do it themselves?

• 35:15Speaker 00

  Well, they didn't, airlines had these big mainframe computer systems that they were using at the time, and everything was done on a flat file. So there was no relational databases. The actual, the database was actually the ticket. So if you lost your ticket and, you know, it became a negotiable document and they didn't have any other way of tracking anything. And then they would look at things in the rearview mirror that happened three or four months ago. They had no forward looking ability at the time. And so by us building the system, we allowed people to have real time information and all their reservations that were coming in. You know, we could tell them, you know, what the average fare was, what the, what the load factor was on each flight, all this stuff that they never had before.

• 35:58Speaker 00

  And so it was a huge, it was a revolutionary change for the airline business at the time. And so, you know, did that during this period of the non-compete. And about halfway through the non-compete, I called, or a couple, maybe a year and a half into it, I called Herb and I say, hey Herb, you know, I've consulted, you know, legal counsel, this thing is not really enforceable. I mean, I didn't get any consideration. He said, David, you're the last person I want to see in the airline business. So I will fight you tooth and nail. I do not want to see you in the airline business. And I said, all right, fair enough. You know, I signed it. That's, I'll live by my word.

• 36:33Guy Raz?

  You ended up selling this company to HP Hewlett Packard in 1998. And, and that's when you kind of, I guess, put your head down on this, the JetBlue idea. But even before then, my understanding is that you actually started to think of the JetBlue idea like within a year after leaving Southwest. Is that right?

• 36:55Speaker 00

  Yeah. I mean, I knew I had four years. You know, I had the reservation system, so I knew exactly what the reservation system would be. You know, I just, I just kind of bided my time.

• 37:06Guy Raz?

  What I'm trying to understand is why, I mean, the graveyard of airline, like failed airlines is huge, right? Like Trump and Laker and People Movers, whatever it was called, TWA, Pan Am. People Express, yeah. Like, what did you think the world needed? Like, there were a bunch of airlines. Southwest was thriving. Like, what was it that you thought you could contribute to that, to that industry?

• 37:33Speaker 00

  Well, I thought that a couple of things. Southwest had a rulebook that they didn't really violate at the time. One of them that they never flew into kind of congested airports. They didn't want, because on time percentage and, you know, turning airplanes in 10 minutes was just so important to them, that they didn't want to go to New York, for example. Boston, they weren't in Boston. They weren't in Providence. And so they kind of skirted around airports. They never went into SFO. They were in Oakland. And so they didn't really, you know, go into these east coast congested airports. And, you know, Don Burr, who was the founder of People Express, came to see me one time.

• 38:16Speaker 00

  And I remember he was looking at starting an airline and he wanted to do it in JFK. And he was saying, you know, during the middle of the day, you could run a bowling ball down the middle of the runways at JFK. They're only busy at night. There's nothing in the day and there's a lot of people there. So I just kind of filed that away and, you know, his airline didn't materialize. So when it came time for me to found, you know, JetBlue, I wanted to find a place that I could start in an area where I knew there was a lot of people. I studied the New York travel market. And so I thought, well, this is a perfect place to put an airline.

• 38:51Guy Raz?

  You thought you could do a discount airline that would fly to places that discount airlines were not flying to?

• 38:57Speaker 00

  Yeah, where Southwest Airlines wasn't. And, you know, you've got to remember at the time, too, that all the carriers, these legacy carriers, had accumulated so much stuff, pension programs and, you know, the customer service at that time wasn't very good.

• 39:14Guy Raz?

  Yeah.

• 39:15Speaker 00

  And we wanted to bring humanity back to air travel. You know, and this is something that I've kind of learned over the years. Number one is you don't just go start an airline for the sake of starting it. You have to have a reason for being. But also, just because you're in a place where no one else flies or can fly, doesn't mean that, you know, you can treat people poorly. So let's treat people awesome. Let's find a place that nobody else flies. Let's fly between routes. And so layering all this, I say to my team, guys, too much overkill is never enough. Let's just keep layering it on, make it better and better and better.

• 39:49Guy Raz?

  What did you want? I mean... Did you have a vision of what you wanted JetBlue to be? I mean, traveling in the 1990s, like, there were some, I mean, Virgin, for example, like, that was revel- I remember going on a Virgin Airlines flight in the 90s. You got little TVs and great food, and it was just, it was very different. It felt completely different from any other airline.

• 40:13Speaker 00

  Yeah, and I, you know, I was talking to Richard Branson early on. JetBlue was going to be called Virgin America. You know, kind of a funny story. You know, I'm still a little bit off the turnip truck coming from Utah, you know? So, Richard invites me to fly over to it, and I go to his house, and, of course, he's there with his wife and speaking in this suave British accent, and I'm completely enamored. And then he says, "Let's go eat Indian food." And I'd never eaten Indian food before, if you can believe that. I love Indian food. Then he said, "Let's go watch a movie." And he took me to his Virgin Theater, and he and his wife and I, and we saw The Full Monty, which was, for a Mormon guy, was completely, you know, a little off-color for me.

• 40:55Speaker 00

  But I came home, kind of chuckled about that movie, but loving chicken curry, which I had that night, which I haven't been able to stop eating ever since. But Richard, at the time, then, he wanted a franchise fee, and he wanted to maybe change, go to, he had gone to Washington, and they had convinced him that maybe he could change the laws on foreign ownership so he could control it. And I just said, "No, Richard, it's not going to work."

• 41:17Guy Raz?

  So, there was a moment where you may have, instead of launching JetBlue, would have launched Virgin's US domestic airline?

• 41:24Speaker 00

  Yeah, I mean, I thought having a brand was important. I flew on Virgin, I saw those little TVs, I, you know, saw that whole service, and I thought, "Wow, you know, if I could create this, this would be amazing."

• 41:36Guy Raz?

  So, that five-year, like, period of that, like, non-compete, ended, I guess, around 98. At that point, like, right when it ended, is that when you announced that you were founding JetBlue? Did you announce that publicly?

• 41:50Speaker 00

  Yeah, I mean, I couldn't sell a ticket, but I could do everything but. So, you know, I had the reservation system ready to go.

• 41:57Guy Raz?

  Oh, so you were already ready to go. You could start working on it even before this non-compete ended?

• 42:02Speaker 00

  Yeah, I mean, we started flying in February of the year 2000, so we were working hot and heavy. We moved, I moved the family to Connecticut in July of 99, and we were, you know, full bore, had raised $135 million, and so we were ready to go.

• 42:20Guy Raz?

  One of the things that Southwest revolutionized was they just, you know, they'd never served food, right? They was peanuts or pretzels and free drinks and a very friendly service. And they also only flew, and they still do, only fly 737s, Boeing 737s. So, did you kind of look at that and say, "Yeah, that's the model that we should go for. We should get the same exact plane, because then you only have to maintain one kind of plane and not worry about food and all that stuff."

• 42:48Speaker 00

  Yeah, that was it. I hired to be my CFO at JetBlue, a man by the name of John Owen, and he was the treasurer at Southwest. And so, he knew all the financial stuff about Southwest. They were buying their airplanes from Boeing from, and they had Boeing 737s. And we tried to go to Boeing. We wanted the 737, and we really wanted it. And we just said, "Look, how about giving us this price?" And they said, "Ah, too low, can't do that." I'm like, "We're gonna go see Airbus." And they said, "Well, go ahead." So, flew back to Washington DC where their North American offices were for Airbus. And Henri Coupin walked in, he's a good friend of mine today, and he said-

• 43:29Guy Raz?

  He was the CEO of, the head of Airbus?

• 43:32Speaker 00

  Yeah, CEO of North America for Airbus at the time. He walks in and he says, "You know, are you just here using us as foil? Or are you really interested in buying our airplanes?" And I said, "I'm just here using you as foil, but convince me you have a better airplane." So, he started selling us in kind of the wider cabin, the fly-by-wire, all this stuff, the more seats, because we could go to 162 seats on an airplane. And so, I completely got converted. And Boeing ended up coming below that number, which I would have shaken with them on the first day. But we went with Airbus and we've had a great relationship with them ever since.

• 44:09Guy Raz?

  And you got the A320s, is that what you-

• 44:11Speaker 00

  Yeah, the A320s, yeah.

• 44:12Guy Raz?

  So, and that's their version, I mean, the 737, A320s, they're the competing- Planes, you go with the Airbus A320s and put TVs in the back and free TV and nice seats.

• 44:26Speaker 00

  Snacks.

• 44:27Guy Raz?

  Snacks. I remember, I read somewhere a quote of yours. You said, "Look, JetBlue is a customer service company," or you described it as a customer service company that happens to fly airplanes, which reminded me a lot of Tony Shane in Zappos because he describes, "We were a customer service company that happens to sell shoes."

• 44:46Speaker 00

  Yeah.

• 44:46Guy Raz?

  Is that, is that how you saw the company?

• 44:48Speaker 00

  I plagiarized that with not even knowing. I don't know when he started, when I started, but that was my thought. I just, I just wanted to do everything. And maybe it was because I came up with this whole notion of servant, servant leadership. You know, maybe I learned that on my mission of serving others and just saw how Southwest had built their culture. And, you know, I just developed this thing that, you know, we're going to go out and we're going to take care of our people and the people are going to take care of our customers. And it was funny because when I was talking to the investors in New York, they said, "Hey dude, you're in New York. You're not going to find friendly people in New York." And I said, "Well, I've got a lot, lot to choose from. So there's, there's 15 million people there. I'm sure I'll find some nice people." And we sure did.

• 45:27Guy Raz?

  You guys were profitable pretty quickly, I think, and at a difficult time after 9/11. And one of the things that you did a lot, you'd fly in the planes all the time. You'd make an announcement that you were the, the head of the company and then you would sit on the planes and serve snacks and help clean the planes. Was that a shtick or was that real? I mean, what was that about?

• 45:51Speaker 00

  No, I just really wanted to stay in touch with our customers. I really wanted to hear from them. You know, not only would I get up and introduce myself, but I would also say, "I'm going to come by and serve snacks, but I also want to hear from your experience with our company. I want to know what we did good, what we did bad, you know, what we can improve on, you know, any ideas you have for us." And then I had, you know, other people in our company doing the same. I just think, it's just incredible to stay in touch with your, with your people. And then, you know, those working the flight see that you care.

• 46:23Guy Raz?

  One of the things, I mean, Southwest, their staff is unionized and you did not have a union staff. Why? I mean, did you feel like, I don't want to deal with unions, that's going to just drag us down? Was there a reason behind that?

• 46:38Speaker 00

  You know, I always thought if our people need someone else to come tell us how to treat them, then that would be pretty tragic. If I thought I didn't treat our people well enough, that they needed somebody else, then, you know, that's not the company I wanted to run. So by not being unionized, you know, I could chip in and, you know, pick up trash on the airplane and there wouldn't be a grievance filed, for example. Or, you know, one of the questions we ask in the interview process is, you know, in your career, in your life, can you give us some examples of where you left your area of responsibility and helped somebody else out in another area? Because that was really something that we thought of. And you would, it's amazing how many people couldn't come up with one single example

• 47:21Speaker 00

  of how they could, you know, chip in and help out. You know, we didn't hire a pilot that had 15,000 hours, and he was called me up screaming, I can't believe you wouldn't hire me, I'm an experienced pilot. So I went to the interviewers and they said, well, he couldn't come up with one single excuse of anything he's ever done to help anyone other than himself. So, you know, it was, it was a cultural thing and building the culture was important.

• 47:44Guy Raz?

  David, one of the things about, about the airline industry is that it's volatile, right? Like, the price of oil is, is a huge factor. You've got recessions, security scares, 9/11, right? When people traveled a lot less. So, I mean, my understanding is that in general, the margins, you know, even though we think of these airlines as hugely profitable, they're generally, the margins are generally pretty thin, right?

• 48:10Speaker 00

  They can be, yeah. I mean, it's, it's a business that you can make a lot of money and you can lose a lot of money.

• 48:15Guy Raz?

  Yeah. So what is it that you guys, I mean, how were you able to be profitable so fast and for so long compared to the other airlines?

• 48:24Speaker 00

  Well, I think it was just, we were a differentiator. I mean, people saw us and, you know, we had the word of mouth and people loved flying us. But it's just building a better mousetrap and building a better company. And, you know, I became enamored with this whole thing when I was running the company. And I, I read this article called The Constant Customer. They said, look, some companies just grow quicker, they're more successful, you know, and they did a lot of research into what, what it was about these companies that differentiated them from, from other companies. And there was actually United Airlines and Southwest in the article and it talked about the differences between the two and how they ran their businesses. And the three things they named was, you know, number one is having people who work

• 49:08Speaker 00

  for you that are ambassadors for your brand, that adore your company, that feel valued and feel loved in the company. Number one. Number two was flawless execution. On every single level, you need to be completely flawless. And so we have dashboards every day where I can tell you everything that's going on at my companies, you know, from on-time percentage, when the last bag made it to the carousel on the most delayed flight, everything about that experience. So you need to be flawless. And then the third thing is you need to make it right with the customer. If you have a, make a mistake, or you treat someone poorly, or whatever, you need to make them more loyal having had an issue with your company than if they had not had an issue in the first place.

• 49:49Guy Raz?

  So JetBlue is like riding high, it's profitable, it's darling of Wall Street, customers love it. And then comes Valentine's Day 2007, the biggest ice storm in the Northeast in like decades. And what happens?

• 50:07Speaker 00

  Well, it wasn't just an ice storm. It was, the FAA had come out with this regulation that, it was only that year. You know, it was only in 2007 where they said if there's what they called ice pellets in the air, then you can't take off. They reversed it the next year, they didn't have it any time before that and they haven't had it any time since. So it was just one of these convergence of events where our planes got out to the runway to take off, they called ice pellets, planes were stuck, planes were landing, and then this storm moved in, we had people stranded on airplanes, we couldn't get them back to the gate because-

• 50:46Guy Raz?

  For like eight hours, right? People were seeing the planes?

• 50:49Speaker 00

  Yeah, eight, actually more, I think one of them even 10 hours. And so it was, you know, it was a disaster and it was something that, and then, you know, Humpty Dumpty was all over the place and it took us a long time to recover.

• 51:01Guy Raz?

  But what happened? What-

• 51:03Speaker 00

  Our operational team failed the airline, you know, it was, it was just simply that simple. I mean, it was- You know, they just didn't do a good job of handling the situation. And, you know, as I was, I was in the command center for four straight days after, you know, obviously, we got people off the airplane and, you know, after the first day, but when we had, the whole place was scrambled and there was all kinds of bad publicity, you know, to the airline, which was, you know, devastating for me personally, because we had pride in ourselves in running such a great airline. I think I set a record on that day where I started on the Today Show and I ended up on the Letterman Show.

• 51:38Guy Raz?

  You were just, you were apologizing?

• 51:40Speaker 00

  Apologies, explaining what happened, 27 live interviews on, you know, all kinds of TV. But I came up with this list of things that, you know, we were going to do and a bill of rights saying, if this ever happens again, this is how you be compensated.

• 51:56Guy Raz?

  But how did it, I mean, how did it happen? Like, I think there were 1,200 flights that were canceled over the next couple of days. Like, why did it, did this winter storm hit JetBlue harder than other airlines? Like, was it just a failure of management?

• 52:10Speaker 00

  Well, ironically, I think the others may have recovered better, but Delta had planes out there, you know, for about the same amount of time. You know, everybody was affected by it. It wasn't just us. Took us longer to recover, but also people expected more from us. I mean, I think sometimes the media likes to build you up and then they like to tear you down. You know, it's kind of like, if you're flying too high, you know, we're going to come after you. If you, if you're an amazing story, we're going to tell about you, but you mess up even just this much. And I was, you know, well on the way to fixing it and making sure that it would never happen again when, and a couple of months later, the board asked me if I would just step up

• 52:51Speaker 00

  to be chairman and, you know, kind of let the COO at the time be the CEO.

• 52:56Guy Raz?

  How did you feel about that?

• 52:58Speaker 00

  It was, here we go again, you know, and now it was Herb and this, but it was different with this time, obviously. This was my baby.

• 53:05Guy Raz?

  This was your, this was your baby?

• 53:07Speaker 00

  I know. It was, I killed myself for this company.

• 53:10Guy Raz?

  And the board, because you didn't, it was a public company and now you work for the shareholders. They said, we don't want you to run it anymore. I can't imagine that wouldn't be devastating.

• 53:22Speaker 00

  Yeah, it was. It was, it was not only devastating, but it was, it was just absolutely the wrong decision. That was the worst part. I mean, if I... Maybe I was, you know, my perception is better than what I actually was. My persona has taken on a much bigger role. But we had a couple of guys on the board that were, had developed this thing about founder syndrome and thought, hey, maybe it's better to turn it over to someone that can run the company without the passion and just, you know, kind of run it like a regular business.

• 53:55Guy Raz?

  I mean, they felt that you had to be held accountable, fair or not, for the blizzard fiasco, I guess.

• 54:02Speaker 00

  Absolutely. I mean, I had to be held accountable and, you know, and I was taking responsibility of it. I mean, one of the board members kept saying to me, quit apologizing. You know, we don't like you to apologize. I go, why not? And he said, because you don't, it shows a sign of weakness, you know, or whatever. So.

• 54:17Guy Raz?

  Were you blindsided by it?

• 54:19Speaker 00

  Completely. I mean, it was the most shocking thing in the world. I couldn't believe it.

• 54:23Guy Raz?

  How did they break the news to you?

• 54:26Speaker 00

  I was, my office was just off the boardroom and, you know, two, two of the board members came in and said, you know, this is what we're going to do. And then they all got up and left, got on airplanes and flew away.

• 54:39Guy Raz?

  Were you personally hurt?

• 54:41Speaker 00

  Oh, yeah, totally. For years, as I would land in JFK, it would be hard to even look over, you know, at JetBlue because it was hard to even see my airline, you know. And I wrote a letter to the crew members when I left and I still had access to everyone's emails. So I sent it out and I just said, you know, I've always taught you that it's not really what happens to you is how you deal with it. And so, you know, I've always had this lifetime dream to return to Brazil and make a difference in the country of my birth. And I'm going to do it. So I'm going to leave the board and, you know, I just want you to remember all those values and, you know, treat each other well and I'll miss you terribly and, you know, nothing I'd

• 55:24Speaker 00

  like more to be back as your CEO, but, you know, that's not the way life is sometimes. You don't get to make all the decisions and wished everyone the best and I was gone.

• 55:35Guy Raz?

  We can stop this podcast now and like, end of story. You start another airline. You start a brand new airline in 2008 called Azul in Brazil. By the way, which means blue. Was that deliberate? Did you call it Azul deliberately?

• 55:52Speaker 00

  Yeah, I did.

• 55:55Speaker 00

  It was, I think, you know, I obviously have great affection for JetBlue and Azul is the closest thing. And Azul's, you know, blue in Portuguese and in Spanish. So I had made some trips down there and, you know, I had this thing tucked away in the back of my head about going back to Brazil and making a difference and that I had when I was a 19-year-old boy. And one of the things that was amazing to me is how few people were traveling in Brazil. And I determined that there were two major reasons. Number one, the service just wasn't good as far as non-stops between cities. The 25 largest cities in Brazil only had non-stops about 20% of the time. But then there were like 50 cities that had no service that needed service. No one flew to these cities.

• 56:40Speaker 00

  They were making people drive four hours.

• 56:41Guy Raz?

  And Brazil makes airplanes. It's a major aircraft manufacturer.

• 56:46Speaker 00

  Yeah, they had, you know, during the military rule, the military had done a nice job of building airports, but nobody flew to them. And then fares were really high. They were about double where they were in the United States. So I thought, well, I'll go to Brazil, I'll buy Brazilian-made airplanes, which are a little bit smaller, have a lower trip cost, and then I'll start flying to all these cities that nobody flies to and will be a big success.

• 57:09Guy Raz?

  And it happened. I think it's the third largest airline in Brazil today.

• 57:14Speaker 00

  It's the number one airline in terms of daily departures. Number one airline in numbers of cities serves. We serve over 100 cities in Brazil. We have 800 flights a day. We fly about 80,000 people every single day.

• 57:27Guy Raz?

  Wow. That's 10 years. 10 years after you launched.

• 57:31Speaker 00

  Yeah, in just 10 years.

• 57:32Guy Raz?

  Did you, I mean, you must have learned so many lessons along the way. Right at Southwest, you were... You know, they fired you after five months and you couldn't do anything about it. And then, you know, JetBlue, obviously, the board decided that they wanted somebody new there. When you structured Azul, did you make sure that that could not happen to you again?

• 57:50Speaker 00

  Absolutely. Absolutely. I can't be fired at Azul.

• 57:54Guy Raz?

  It's privately owned.

• 57:55Speaker 00

  No, it's public. It's on the New York Stock Exchange. But I have a voting control, yeah.

• 58:00Guy Raz?

  So you made sure that that could not happen again. Fair enough. Which is part of like, learning lessons along the way.

• 58:06Speaker 00

  Absolutely.

• 58:09Guy Raz?

  David, you have 10 kids, right?

• 58:11Speaker 00

  Yes.

• 58:12Guy Raz?

  How were you able to do all this stuff? Like, fly all over the place and go to board meetings and run these companies and also raise kids? Like, how were you able to make time for them? Were you? Did you have to make sacrifices?

• 58:27Speaker 00

  Well, I had a couple of rules. And number one is I always was home on weekends. I never, since I don't golf, and I hate people who golf, no, it's kind of a joke I have, but no matter where I was in the world, I would make sure I was home on, you know, either Friday morning or Saturday morning and stay till either Sunday night or Monday night. So that was really important to me. I needed to be home. I needed to be recharged with my kids and I needed to be with them and, you know. And if my daughters were dancing or my sons were playing football or lacrosse, I always tried to make sure I worked my schedule around it so I would always be there for them if they needed me. And I, you know, tried to be the best father I could.

• 59:07Speaker 00

  I mean, obviously, I wasn't there at 5 o'clock every night to have dinner with them. But, you know, I had a lot of support from, you know, my wife and the kids, you know, really helped each other. I mean, my oldest daughter was amazing, and then the second daughter, and then the third daughter, and then finally got a son, number four, and so they helped with each other and they chipped in. And then when the first one got the driver's license, they were, you know, helping haul the kids around to their lessons. And so it was really a family effort. It's a great family. And I, you know, you didn't mention that I have 18 grandkids and three on the way.

• 59:48Guy Raz?

  What is your sort of like guiding principle as a leader? Like now that you've made mistakes and you've, you know, driven people crazy and kind of had time to reflect on the kind of person you are and the kind of leader you are, what do you aspire, like how do you aspire to lead? What do you want people to say about you and they're like, oh yeah, David, he is?

• 1:00:09Speaker 00

  He made my life better. You know, we have this thing at Azul where I tell everyone, I want this to be the best job you've ever had. I want you to look forward to coming to work every day. And so I walk around the company saying, is this the best job you ever had? Is this the best job you've had? If not, why not? Because I think if you do that, you know, if you matter, if your company matters, then you're going to be more successful. You know, if you were plucked from the face of the earth, would anybody care? Who would show up at your memorial service? And how many lives have you touched? Because I think the more people you touch and the more good that you do and the more people you serve and the more lives that you change, the happier you are too. So all those things all work together.

• 1:00:51Guy Raz?

  At 22, 23, you were totally broke. You like reached these heights and then you were broke and then back to working at your grandfather's store. And then all these amazing things happened to you in your life. How much of that do you think is because you were really smart and hardworking and how much because of luck?

• 1:01:12Speaker 00

  Well, I think obviously you have points of luck, but I think you make your own luck to a great degree. You know, ADD, people's, and I tell people this, have ADD, embrace it. It's you and it's who you are and take all the good from it. And my form of ADD has an, I have an ability to just look at a situation that's very complex and simplify it and say, let's just do it this way. And it drives my teams crazy because they're like, no, it's not that simple. I'm saying, yes, it is. Just go do this, this, and this, and we'll have it solved. And so, you know, sometimes it's not that simple. But, you know, that's just who I am. And that's how I'm wired. I can look at a situation and, you know, I can,

• 1:01:57Speaker 00

  I can see solutions. And so, whether if it was in the airline business or any other business, I think I would have probably had that skill. And but, you know, certainly the airline business has been my ticket to a lot of exciting times in my life. And there's, you know, there's nothing like sitting in a cockpit, landing an airplane, and a 4,800 foot runway in Rio de Janeiro to give you a thrill. And knowing that that's your plane, and your people, and your happy customers onboard, it's, it's quite a thrill.

• 1:02:28Guy Raz?

  That's David Neeleman, founder of JetBlue. On top of building one of the most successful airlines in Brazil, David now wants to launch another airline here in the US. It's still in the planning phase, but the project has a name that kind of fits David himself. Moxie. Oh, and you probably noticed how Southwest founder Herb Kelleher played a huge role in David's life. Well, Herb actually passed away soon after we recorded this interview, but I was lucky enough to talk with him a few years ago. And he told an amazing story. And you can find that episode on our podcast feed.

• 1:03:08Guy Raz?

  Hey, thanks so much for sticking around because it's time now for How You Built That. And today's story starts in May of 2018, in Queen Creek, Arizona. Lisa Dalton was dating a software engineer named Brian. And Brian is blind. And one day, Lisa was at his house, looking through his pantry and making a shopping list.

• 1:03:29Speaker 02

  He had 18 cans of refried beans and didn't know it.

• 1:03:32Guy Raz?

  So Lisa decided to reorganize. A nice gesture, but also a big mistake.

• 1:03:38Speaker 02

  He had used a memorization based system to organize what he had in his pantry. And in my manhandling the goods, I had completely messed them up.

• 1:03:47Guy Raz?

  But Brian was You said, "It's OK. You didn't know." But really, it wasn't OK. Because Brian's personalized pantry, something he relied on every day, was gone. And now he had to reorganize and rememorize. And Lisa, she felt awful.

• 1:04:07Speaker 02

  I felt like melting into the floor.

• 1:04:08Guy Raz?

  But she also thought, there has to be a better system for Brian's pantry. So she started to research. And she found a few solutions, like putting braille on an index card and then wrapping it around a can with a rubber band. But that seemed wrong for a guy like Brian.

• 1:04:23Speaker 02

  I just thought, this is not the level of household. He's a stylish dude. I wouldn't want him to have to do that.

• 1:04:29Guy Raz?

  OK, something to know about Lisa. She actually sells customized and commemorative bricks using stamps she makes with a 3D printer. And as she tried to figure out how to solve a problem like Brian's pantry, she thought, what about using my printer to make reusable labels? And so she did. She came up with something that's kind of like those Livestrong wristbands, but with braille on the outside, something you might slip around a container.

• 1:04:56Speaker 02

  It's a rigid plastic. It has a little bit of give in it where you can just slide it on, and then they pop right off.

• 1:05:02Guy Raz?

  Now Lisa had kept all of this a secret. So when she gave Brian the labels...

• 1:05:06Speaker 02

  He kind of cracked up, and his face changed. And he's like, "That's weird, but that's really cool."

• 1:05:11Guy Raz?

  And the next thing he said was, "Hey, you should really sell these." So Lisa started working on more braille labels for all sorts of cans and jars. And after a few months, she packed up her prototypes, and she went to a convention hosted by the National Federation of the Blind. She didn't really have any expectations. She just wanted a little feedback. But instead, people kept coming to her booth. And then they'd come back with friends and say, "Hey, check these out." And one woman asked Lisa if she would sell her a few of the prototypes.

• 1:05:42Speaker 02

  She had packed her husband's lunch and grabbed the wrong container. She packed him a beer. I mean, I know how mortifying that is. And to know that you potentially made a job-ending mistake over something so simple, that's got to be terrifying. She said that she didn't pack his lunch anymore.

• 1:06:00Guy Raz?

  And that day, talking to the people at the convention, it was a revelation.

• 1:06:05Speaker 02

  I got to the car that day, and I totally cried. It was ridiculously moving, the stories, how they've been trying to solve that problem, and how they wish that this had come out 20 years ago.

• 1:06:17Guy Raz?

  So Lisa went home, and she built a website. It went live in October of 2018. And now, she sells her Braille labels for $2 each. She also sells them in starter packs. And the name of the product? Well, it comes from a kind of mantra she had four years ago while she was recovering from a stroke she had when she was just 30.

• 1:06:37Speaker 02

  There's a lot of things that I thought, you know, I can do that. I can do that.

• 1:06:41Guy Raz?

  So Lisa Dalton calls her products "can-do" labels.

• 1:06:45Speaker 02

  I just thought this would bring a lot of independence to people who are also wanting to be able to do their own things. I thought, these are yes-can-do things.

• 1:06:54Guy Raz?

  And Lisa Dalton's business is can-do-able. This year, she's planning to make it her full-time job. If you want to find out more about Lisa or hear previous episodes, head to our podcast page, howibuiltthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. Thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. And while you're there, please do give us a review. You can also write to us at [email protected]. And if you want to send a tweet, it's at howibuiltthis. Our show was produced this week by James Delahoussaye, with music composed by Rameen Arablouei. Thanks also to Mia Venkat, J.C.

• 1:07:36Guy Raz?

  Howard, Noor Kutsi, Neva Grant, Melissa Gray, Sanaz Meshkhanpour, and Jeff Rogers. Our intern is Candace Lim. I'm Guy Raz, and you've been listening to How I Built This from NPR.