A Brand New Budget Airline Is Launching This Year—Can It Succeed?

The odds might be against Breeze Airways, but we love rooting for an underdog

Breeze Airways

Courtesy of Breeze Airways

Amidst the doom and gloom of the airline industry, one little airline is attempting to take off. Literally. New U.S. budget carrier Breeze Airways plans on flying its first passengers sometime in 2021—it took its first delivery of leased Embraer 190s and 195s in December, while the first of its 60 new Airbus A220s are due to arrive later this year.

While it might seem ludicrous to launch a new airline during a period of extremely low travel (thanks, COVID-19), the company's founder, David Neeleman, has a pretty impressive history in the industry. He's launched five successful airlines so far, including JetBlue and WestJet, so if anyone could do it right now, it'd be him. "I’d never bet against David Neeleman, one of the most prolific—and successful—entrepreneurs in the industry," said Ben Mutzabaugh, senior aviation editor at The Points Guy. "His track record is fantastic."

But Neeleman is facing enormous challenges. Right now, domestic passenger traffic is down about 43 percent as compared to pre-pandemic times. "I think the big question is how soon a rebound comes," said Mutzabaugh, "If the pandemic is brought under control by the year’s end, that's the best-case scenario for Breeze. If it lingers longer than expected and demand remains down through the end of the year, then Breeze will have its work cut out for it."

Pandemic notwithstanding, Breeze's business model is actually a pretty sound one. With the mergers of the major U.S. airlines over the last few decades, the country operates air travel with a hub-and-spoke model: passengers from smaller cities must fly to a major airline hub before continuing to their destination (or to another hub, then to their final destination). The hubs are, well, the hubs, and the smaller cities are the spokes.

But Breeze plans on filling a gap in the market by directly connecting those smaller cities—say, Concord, North Carolina, and Trenton, New Jersey—thereby making air travel far less of a hassle for passengers in those markets. "From those types of cities, Breeze could fly nonstop routes between medium-sized markets that could have enough local demand, but not so much that it would tempt the big airlines to come in and chase them away," Mutzabaugh said.

Neeleman also intends to make Breeze a technology-driven airline, using apps and kiosks for customer service, therefore reducing the number of staff the airline needs to hire. Theoretically, it's not a bad idea—as long as that tech works. "If there’s a glitch or unforeseen problem, customers will become frustrated if they can’t speak to a live person if they can’t resolve their issue on an app," said Mutzabaugh. "Again, I wouldn’t bet against Neeleman, but they’ll need to get that technology bit right if they don’t want a reputation as a no-frills airline with uneven customer service."

In principle, Breeze Airways' journey to success should be...a breeze. But with the pandemic creating all sorts of chaos in the aviation industry, we'll just have to wait and see what happens.

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