JetBlue CEO Delivers Baruch’s Second Annual Burton Kossoff Business Leadership Lecture
David Neeleman, founder, chairman & CEO
March 7, 2006. The Second Annual Burton Kossoff Business Leadership Lecture took place before a capacity crowd of students, faculty, staff, administrators, alumni, invited guests, and members of the public in the William and Anita Newman Vertical Campus. Presented by Mrs. Phyllis L. Kossoff and Baruch’s Executives-on-Campus program, the lecture was delivered by David Neeleman, founder, chairman & CEO of JetBlue Airways, led in conversation by John Elliot, vice president and dean of the Zicklin School of Business.
President KathleenWaldron thanked the Kossoff family for their generous support in honor of the late Burton Kossoff (’46), whom she described as “the embodiment of the balance of professionalism and philanthropy we promote here at Baruch College.” Introducing Neeleman, Waldron noted his successful launch of three aviation businesses and his goal to “bring humanity back to air travel.” When a majority of hands went up after she asked how many people have ever flown JetBlue, Waldron remarked: “We have a friendly audience.”
Elliot initiated the conversation by asking Neeleman to explain his passion for the airline industry. “I think it was insanity,” began Neeleman, before suggesting it had something to do with a childhood picture in which his birthday cake was decorated with an airplane design. It was “a drive to do it better,” he then said, that made him start JetBlue, and it was “a drive to innovation” that kept him there.
Neeleman said his efforts to “shake up the organization” resulted in his being asked to leave Southwest Airlines, where he had formerly been an executive. Before launching JetBlue in February 2000, Neeleman had helped launch the Canadian low-fare carrier, WestJet, and developed Open Skies, a ticketless reservation and check-in system. “The best thing that ever happened to me was being fired by Southwest Airlines,” he declared.
It was after leaving Southwest that Neeleman was diagnosed with Attention Deficit Disorder. “I grew up thinking I was not intelligent,” said Neeleman, admitting to having had trouble scholastically and to his “mind wandering off.” He said his mother had sent him a book about ADD, along with a note saying: “I think you might have this.” Neeleman joked: “I didn’t read the book because I didn’t have enough attention to do it,” but called the book “eye-opening” in that it helped him realize: “I’m not stupid. I just think differently than other people think.”
Neeleman displayed both business savvy and ethics when asked about his purchase of Airbus A320 planes for his new JetBlue fleet. He first went to Boeing, he said, but they failed to reach a deal. For leverage, he went to Airbus, where he was asked: “Are you just here to use us for foil, or are you serious about buying our airplanes?” Neeleman diplomatically replied: “Have you ever had anyone come in here using you for foil and you convinced them your airplane was so good that they actually bought your product?” They convinced him. Neeleman honored his agreement with Airbus when later approached by Boeing, stating he had “already shook on the deal.”
Neeleman conceded that the airline industry was “highly sensitive to fuel costs,” and that this posed challenges to staying profitable. Lamenting the conventional preoccupation with how a public company is performing financially from one quarter to the next, Neeleman focused on what he values: “The essence of JetBlue is having the best people in the industry,” he said, “that’s what gets us past the next quarter.” To cut fuel costs, he proposed finding “the right mix” of flight scheduling and route planning to fill more seats per plane. Characteristically positive, he concluded: “It’s a lot of fun running a company, even in bad times, when you treat people well.”
In the ensuing Q&A, Neeleman was asked what advice he would give Baruch College on training entrepreneurs. He recommended holding business plan competitions and stressed the importance of learning from life-experiences, including the experiences of others. Why don’t low-fare airlines such as JetBlue work with discount travel Web sites such as Orbitz? “We want our customers to know if they want JetBlue, they should go directly to JetBlue,” replied Neeleman, though he remained open to the idea, stating that business is a “changing dynamic,” and that one shouldn’t “stick to a formula.”
Referring to JetBlue’s successful response to a landing gear incident in Los Angeles last summer, an audience member thanked Neeleman: “My husband was on that flight, a week-and-a-half before we were married,” she said, adding that: “the crew was wonderful.” Neeleman noted that the crew gave passengers the choice of whether or not to watch TV—and news coverage—on the plane. “It was important to give them that choice.”
When asked why JetBlue is not unionized, Neeleman said he appreciated the role of unions in this country by studying history, before clarifying that instead of reading, he listens to audio books: “ADD people learn differently than the rest of you bookish types,” he remarked. Preferring to work with people directly as a team, Neeleman said: “If you don’t trust management, and you need to go outside the company to hire someone else to represent you, then I think I’ve failed as a CEO.”
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