On June 21, 2002, David and Tom Gardner interviewed JetBlue CEO David Neeleman on The Motley Fool Radio Show on NPR. JetBlue is a low-fare, low-cost passenger airline with a market cap hovering around $2 billion. Find out why the future looks bright for the high-flying airline, what sets it apart from its competitors, and why you will never see the name JetBlue Yankee Stadium.

TMF: In an industry not known for its profitability, there is a new airline that's already in the black, or maybe, we should say in this case, in the blue. JetBlue Airways(Nasdaq: JBLU) took to the air in February 2000 and now serves a variety of cities around the country, with new aircraft outfitted with all-leather seats and DirecTV. All seats are assigned, all travel is ticketless, all fares are one-way, and a Saturday-night stay is never required.

Now, JetBlue went public in April and already has a market cap of around $2 billion, which, for comparison's sake, is more than three times the market cap of United Airlines(NYSE: UAL), which may, actually, when I come to think of it, say more about United Airlines than it does JetBlue. Now David Neeleman is the CEO of JetBlue. He joins us from the JetBlue offices in Darien, Connecticut. David, welcome to the Motley Fool Radio Show.

DN: Thank you, Tom and Dave.

TMF: Now, you're offering low fares and yet you're looking to grow profits. How do you do that in the airline industry?

DN: Well, you know, we didn't invent the model. Southwest Airlines(NYSE: LUV) started this over 30 years ago. And they've done great by using an efficiency model, by doing more with less and utilizing their people and their planes better, and by having a better experience with the customers.

TMF: When you say you're doing more with less, as an average air traveler, what does that mean to me? When I'm getting on a United flight or on a JetBlue flight...How are you using your resources differently than a company like United?

DN: There are two things. Because we have a common fleet -- every one of our aircraft is exactly the same -- we don't have to have reserve crews for 10 different aircraft types. We can focus on that; our technicians work on only one aircraft. Our gates are all configured for one type of aircraft, so it's much more efficient.

And then we use technology to a great degree. We have the highest percentage of bookings on the Internet of any U.S. carrier. Well over 60% of our bookings are done online.

TMF: You mentioned earlier that Southwest is such an influential airline for you. In your thinking, and obviously for such a successful company, a lot of people may liken JetBlue to a young Southwest. What would you do differently than Southwest?

DN: Well, what we do differently than Southwest today is we give seat assignments, number one -- they don't do that, it's a bit of a scramble seating. We also fly the Airbus airplane, which I think is a much more comfortable airplane. It has a wider cabin, and just gives customers a little better personal space with the wider overhead bins. And then something we get a lot of notoriety for is we have live television in every single seatback. Everybody gets to choose their own channel. We have 24 channels of live TV on board.

TMF: David Neeleman is the CEO of JetBlue Airways. David, when did you first get the idea for JetBlue?

DN: I had an airline in Salt Lake that kind of sprouted from a travel agency called Morris Air. I did that with Jim Morris. It was real successful, and we sold the airline to Southwest -- I was actually with Southwest for several months. And then I had a "non-compete" with Southwest. After I left there, I couldn't compete there for five years. And so I got into the software business and helped found a company called Open Skies, which did computer reservation systems. And then I went up to WestJet and helped them found that airline up there, served on their board and gave them some advice. And then my "non-compete" was up, so we launched JetBlue.

TMF: A BusinessWeek article that came out in late April of this year concluded, as far as I can tell, that you have a wonderful business, but questioned whether or not the valuation for the company was unrealistically high given that you will have increasing maintenance costs for your new fleet of airlines, and that you are somewhat getting cash from the 9/11 compensation that came in from the government, and from a one-time tax benefit last year. Is that an accurate portrayal of where your business is, from a cash-flow standpoint, or do you think BusinessWeek was understating your present success and future opportunity?

DN: Well, I think that as a relation to maintenance costs, there's no doubt we're going to have higher maintenance costs going forward, but we've projected these costs out for the next five, six, seven years out into the future. We see them increasing our costs about three-tenths of a cent. That doesn't mean much to you, but we believe that, as we get bigger economies of scale -- and I don't get more salary every time we get a new airplane -- our corporate overhead will spread out over time. Our costs will continue to go down and then level off over time.

As far as the government...we made a profit in the third and fourth quarters of last year without the government aid money. We were one of only, I think, a couple of airlines that were able to pull that off.

The underlying strength of our company is our repeat customers and our great employees. And the one-time tax benefit -- obviously, we had a loss carry-forward. But, I think, going forward we have a lot of analysts covering the company, and there's a lot of optimism, if we could just keep doing a great job with our customers.

TMF: It's time to close with our game, "Buy, Sell, or Hold," where we present you with a theme, a person, or an event. We ask you if it were a stock, would you be buying, selling, or holding, and why. Are you ready to play?

DN: Yes.

TMF: OK, buy, sell, or hold...window seats?

DN: Ah, I think I'd be buying those -- beats being in the middle, and you get the great view as you go across the country, and you can either watch your TV or you can look out the window.

TMF: Next one up... Buy, sell, or hold the future of Amtrak? A lot of people are wondering what role the government should play.

DN: Well, I'm a big supporter of Amtrak, or at least of trains. I'd be buying that. If you could figure a way to make it work...I think what happens in Amtrak is you have so many politicians trying to get them to serve their smaller communities that it drains off all of their profits. If they could just focus on the routes that really make 'em money, then it could be a very successful venture.

TMF: It's a topic that seems to blow through the media from time to time...Buy, sell, or hold allowing pilots to carry firearms in the cockpit?

DN: Oh, sell. I'm a big seller of that. It's not a good idea. We should only focus on fortifying the cockpit doors. We've not only fortified the cockpit doors, but we have bulletproof substances, titanium locks, and Kevlar on the door. We have cameras in the cabin, and the pilots can see what's going on.

There's no reason they should open that door, and they shouldn't be playing around with firearms in the cockpit -- it could damage the skin of the airplane. Take care of the pilots, and keep them isolated from the people, and you don't need to have guns in the cockpit.

TMF: Last one. Buy, sell, or hold. It's all the rage these days -- JetBlue buying the naming rights to a stadium like so many other companies?

DN: Sell it. If we did that, then sell the stock, because we're wasting our money. Obviously, they've done studies on people that did that, and their stocks have all gone down, so it'd be a sell.

TMF: So no JetBlue Yankee Stadium?

DN: Absolutely no way. Not in a million years. Not while I'm CEO.

TMF: David Neeleman is still the CEO of JetBlue, so you can expect not to see their name on a stadium. David Neeleman, thanks for joining us on the Motley Fool Radio Show.

DN: OK.

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