in Organizations

Flying High

Just finished James Wynbrandt’s Flying High: How JetBlue Founder and CEO David Neeleman Beats the Competition… Even in the World’s Most Turbulent Industry. I’d give it 3 stars out of 5 for being engaging enough to finish (something I rarely do anymore) and educational while a little light in critical point of view. Wynbrandt is clearly a fan, and he lays on the cheerleading a little heavy at times.

Part I of some notes:

  • Moments of Truth, a 1987 book by SAS CEO Jan Carlzon, influenced Neeleman with a tale of turning around a declining carrier by transforming the operation into a customer-focused operation, radical at the time.
  • A low-fare airline shouldn’t equal cheap operations: Neeleman bet on the low-maintainance of brand new planes to keep costs down.
  • In deciding to base operations at Kennedy airport in New York, he went against the perception that it was crowded and hard to get to via top-down market sizing, estimating that even if only they only sold within the 5 million people who live closest to Kennedy (excluding all of Manhattan) JetBlue would still be a success.
  • Learning from an early experience where his first business suddenly failed due to undercapitalization, he way overcapitalized JetBlue, raising $130 million. At the beginning all the investors and vendors were waiting for everyone else to make the first risky move, so Neeleman prodded them all into action by investing $5 million of his own money.
  • When courting investors, the management team honestly said they weren’t out to make a killing, aiming for a margin of “between 15 and 20 percent, but not more than 20 percent. If our margin is higher than that, we’re either gouging customers or not paying our staff enough.