“You want my number, dawg?” shouts a young man to a passing friend as he huddles in the doorway of Miniature Market, a beige-walled convenience store on the corner of 3300 South and 300 East.
Except for the neon signs boasting “Brewskis” and “Hotties” and the grizzled nature of the patrons carrying out packs of beer, this corner market appears little different from so many others in the city. According to Gary Neeleman, whose father John opened this store, along with another on 600 South and State Street long since sold, Miniature Market was one of the first convenience stores in the country. Gary says his father was lauded by Ted Wilson, then-mayor of Salt Lake City, for feeding the city’s firefighters after a big fire, and “every day going down to the soup kitchens on the west side to hand out free food.”
But these days, Miniature Market’s place in the commercial and philanthropic history of Salt Lake City has an even bigger claim to fame. This was where Gary’s son David, discount airline JetBlue’s founder and CEO, learned that serving people was, as David told Mormon missionaries this September in Temple Square, the root “to becoming happier people and making more money.?
Heralded by one journalist as the most innovative thinker in modern aviation, David Neeleman, 45, has emerged as a leading light of the discount airline business, and all by banging out his gospel of “bringing back humanity to air travel.” At a time when bigger carriers such as Delta wade knee-deep in bankruptcy hearings or report billions in losses every year, JetBlue has achieved the unthinkable'18 consecutive quarters of profit.
Some attribute JetBlue’s success to its creed that passengers were tired of being treated like extensions of their luggage to be pushed and prodded into seats. Others mark the airline’s low fees. One constant, and a JetBlue hallmark, is the satellite TV set and leg room accompanying each leather-bound seat. The airline’s “cheap-chic” style of high-end snacks and flashily dressed aircrew hasn’t hurt, either. Neeleman and his staff of 9,000, 80 percent of whom are shareholders, are doing something right'probably a whole host of things right.
Measured by air traffic, JetBlue now stands as the 10th-largest U.S. airline. Cost consciousness in the past was part of its game plan, whether renting its business headquarters in New York City’s Queens borough, or following the Southwest model of using only one type of plane, in JetBlue’s case a fleet of 80 Airbus A320s.
Now the company’s going for bigger game. Neeleman’s just taken delivery of the first four of a $3 billion order of 100 Brazilian-made Embraer 190s, smaller jetliners that serve shorter routes, which he says “make us more of a threat.” New routes are announced almost every day it seems'one of the more recent is a shuttle from Washington to Boston.
But behind business journalism’s gushing praise and tired adjectives'charismatic, energetic, maverick'Neeleman himself remains a mystery as does who or what his astonishing laugh reminds you of. He’s already an inspiration for those, like him, who suffer attention-deficit disorder (ADD). But meeting him firsthand makes it obvious there’s more driving his current string of successes.
At a lunch after his speech on the nature of service to missionaries for The Church of Jesus Christ of Latter-day Saints, Neeleman devoured four plates of food at the Grand America Hotel with an appetite that would not be denied. But it’s his staccato-bark laughter that, while seemingly unique, is also deeply familiar.
Talk to Neeleman’s family, his associates in JetBlue’s Salt Lake City offices, even a Connecticut-based couple he converted to Mormonism several years ago, and this strange dichotomy, the familiar and the unique, bordering on alien at times, comes through again and again in descriptions. It occurs to you who the laugh reminds you of: Burgess Meredith’s incarnation as The Penguin in the camp 1960s Batman series, but it is still not easy to pin down the man whom many think plays a key role in the future of U.S. aviation.
The Boy From Brazil
Neeleman’s name crops up in strange places. At a pre-Thanksgiving service in the Saint Thomas More Catholic Church in Sandy, Father Dave Massenhove, a man who works a hall of 500 parishioners with the ease of a born raconteur, ditches his planned sermon to tell the story of David Neeleman and how he worked in his grandfather’s convenience store on 600 South and State Street and how he learned the fundamentals of customer service. One of Neeleman’s younger brothers, Stephen, remembers one lesson well: “[Dave] had this grocery route for old widows and shut-ins. He taught me if you do it right, if you get them exactly what they want, then you make a nice tip.”
But the point of Father Dave bringing up Neeleman was to talk about how the CEO had donated his salary for an emergency fund for his own employees, or “crew members,” as JetBlue employees are called. “I wanted to show that it’s not only us who give to others,” says Father Dave after the service.
An eighth-generation Mormon and the second of nine children, Neeleman was born in 1959 in Brazil. His father Gary Neeleman worked as a United Press International correspondent in São Paulo. Now Brazil’s consul in Utah and an LDS bishop, the elder Neeleman is an international newspaper syndication consultant who owns his own company. He remembers his energetic and high-strung child had “a fascination for trucks and airplanes even as a toddler.” There is a much-published photograph of baby Neeleman with a birthday cake crowned by a plane.
“He was everybody’s friend, very sensitive to people. There was a little girl in church who had cerebral palsy and was in a wheelchair. David was 5 years old at the time. He’d wait out front of the church every Sunday because he felt a personal responsibility to wheel her in,” Neeleman recalls. The Good Samaritan himself says, “I don’t think her father was very thrilled.”
Returning to the United States, David Neeleman struggled at school. “We got him a tutor,” says his father, “but the teacher said, ?Don’t worry about numbers and letters. He’ll have secretaries to take care of it.’ At high school he mastered his learning disability, learned to control and focus it.” It was a problem that would shape and, in many ways, define his life.
A lack of athletic prowess seemed a bigger issue to David Neeleman personally. He hounded his younger brother Stephen to become a great football player. Stephen, who played college football at Utah State while studying in preparation for medical school, says, “He’d make me stand out in the front yard and throw balls at me. Every time I caught one, I had to take a step back. I couldn’t go in and watch TV until I’d got all the way across the yard. He’d throw the ball at me as hard as he could and I’d drop it. Mom would come out and shout at Dave: ?You leave my baby alone.’”
Their father says that David, while not athletic, wanted to be a surrogate and so coached his brother. “David never wanted to be a little boy,” he says.
An 18-month LDS missionary stint in the northeast of Brazil almost found Neeleman, who holds dual citizenship, conscripted into the Brazilian army. Flat feet got him a deferment. For Neeleman, the time in Recife, Brazil, was life changing.
“I felt so undistinguished in everything I had ever done. But being there in a leadership position, helping to administer 100 missionaries, made me realize I had talent'an ability to express myself, to synthesize complex concepts into ones easy to understand'and the intestinal fortitude to get up at 6 a.m. and knock on doors.”
The difference between the tiny ruling percentage of the rich and the rest of the country’s impoverished population galvanized his beliefs about equality. It’s one of the reasons JetBlue offers no business-class travel so that all passengers travel and are treated equally.
He says he converted hundreds of people during his time in Brazil. “They lived in such poor conditions'no running water, no electricity'but you could feel the goodness, the love, watching them change, give up bad habits as you brought a little hope into their lives,” he remembers.
Picturesque images of the poor humbly receiving religious instruction in little shantytowns, however, are far from the mark. Shortly after Neeleman left, a sister missionary walking through a “favela” (slum) in December 1980 was stopped and asked for money. After she screamed, she was shot dead.
“You can hire detail people.”
On his return to the United States, after dropping out of college and forsaking an accounting degree in his junior year, the 21-year-old set up his own travel business after learning of a hotel in Hawaii he could use to assemble a package deal. Without any business plan in hand, he leased a plane and began flights from Salt Lake City to Hawaii. He soon cornered the Hawaiian market in Utah, Wyoming and Colorado. Then, in December 1983, lawyers closed the company that owned the plane. Neeleman’s business, IFS, went with it.
“I bootstrapped it on my own,” Neeleman recalls, “but I couldn’t save it. I was thrown to the wolves.” IFS’ collapse was devastating. “I didn’t want to get out of bed.?
Since then, Neeleman has always made sure he had plenty of money to back up his ventures. For JetBlue, he raised $130 million from investors, a record in the U.S. aviation business, leading some to accuse him of overcapitalizing.
Neeleman’s success in the Hawaiian market had caught the eye of June Morris who, with her husband Mitch, owned the largest travel agency in Salt Lake City, Morris Travel. The Morrises live in a mansion high up on the Wasatch Front. A rather too-lifelike dummy of a butler greets you at the front door, while Ferocious, their black poodle, dances around your ankles. June Morris remembers calling Neeleman in. “?I hate the damned travel business,’ he said. ?I don’t want to talk about it,’” she remembers.
Morris persisted, though, and for 10 years, Neeleman, having been brought on board as executive vice president, helped build Morris Air, with Morris’ son Richard, into a 22-plane carrier with $250 million in sales.
“David’s not a detail person, but you can hire detail people,” says Morris. “He’s a good visionary, which is one of the hardest things to find in employees.” She says he needed someone to hold the reins while he was developing, a perception Neeleman agrees with.
“I knew I had weaknesses. I’d come up with all these ideas, and she’d hit every pitch I made to the fences. So I mentally had to go through each idea before I said anything,” Neeleman remembers.
In those days, Neeleman could be something of an acquired taste. One national magazine told of how he scouted shopping malls for Morris charter customers to Hawaii.
JetBlue’s manager of business processes, Steve Mayne, first started working with him at Morris Air and has vivid memories of that experience. “I thought he was brash, cocky'felt he needed to grow up a bit. He was all over the place'couldn’t focus on one particular area and never finished anything. He could be pretty aggravating. But as aggressive as he could be, there was something very appealing about him. You knew if you stuck with him, there’d be good things ahead,” says Mayne.
With plans to go public with a stock-market listing in 1993, the Morrises and Neeleman decided instead to sell the discount carrier to Southwest for $128 million in stock. Neeleman made $20 million on the sale. Morris was skeptical of Neeleman fitting in with Southwest’s slower culture. “He’s someone who needs a lot of latitude. I told them, ?Keep him if you can.’”
Six months after the deal was completed, Neeleman was out on the street. “I wanted to work at Southwest so much, but I drove them all crazy.” Many in Southwest thought Neeleman was being brought in as heir-apparent to CEO Herb Kelleher. “The underlings couldn’t tolerate him,” says his father.
Neeleman is first to admit he has no tolerance for minutiae. He’d sit through meeting after meeting writing “DSAW” (Don’t say a word) on notepads. Finally it got too much. “I went to them and said, ?Give me something to do, to run.’ And they said, ?Actually, no, man.’ That was it.”
Terms for his departure were agreed upon. “I went into Herb’s office and just wept.?
It was then he had another bombshell. “My mom called me up and told me my brother had been diagnosed with ADD. ?I know you’re not into reading, son,’ she said, ?but there’s a book I want you to look at.’ I read it, and it hit me like a ton of bricks.”
While ADD is often used as label for any unruly child or adult who answer only to themselves rather than the orders and expectations of others, in Neeleman’s case, he’s become a poster child for ADD sufferers who refuse medication. Neeleman believes he’s made the disability work for him.
“It drives you crazy, but it does give you an unusual ability to cut through everything. It’s hard to explain, but it gets you to the heart of the battle. It’s contradictory. On the one hand, you’re disorganized, have trouble getting started, you have chronic self-esteem issues, but then you have this hyper-focus.”
If a pill could rid him of it forever, he would not take it. “It gives me an edge, but you can’t celebrate ever, you can’t just lie down. It’s insane.”
On Sept. 11, 2001, two JetBlue executives traveled to Manhattan to file for the company’s initial public offering. They ended up walking out of the city with thousands of other people. Neeleman saw the United Airlines’ flight 175 hit the south tower of the World Trade Center looking out of his office in Queens.
“I was heartbroken for the families, but I wasn’t distraught. My faith says there is a greater purpose. It’s not what happened to you, it’s the way you react to it.”
He told the missionaries at Temple Square, “People were coming into our office coming apart as if the world was ending. They didn’t have the moorings of the gospel.” Staff who spoke to him in the ensuing days, however, recall that, at a time when no one was flying and enormous doubts hung over the airline industry, “he didn’t sound good.”
As it turned out, JetBlue’s stock market listing became one of the most successful of 2002. “We have never lost; we’ve only made money all the way through,” he says. While operating margins have dropped from the halcyon first years of double digits to company expectations of 5 percent to 7 percent for this year, Neeleman says, “ex-fuel [excluding fuel costs], we’re doing better than we’ve ever done.” With $600 million in cash in the bank, he says “We can bump along at this level for a long time. Other companies are going out of their minds.”
Except perhaps Southwest, whose margins in the second quarter of this year at 14 percent were 5 percent higher than JetBlue for the same period. Intriguingly, the best description Neeleman says he’s heard of JetBlue so far is “Southwest new and improved.” One regret he has, though, is that unlike Southwest, he did not buy oil futures or the right to buy oil in the future at a fixed price, when he set up the company. “Oil had been cheap for so long, it was not something I felt we had to do. I wish we had.”
For all the success JetBlue has had as a discount airline, what ironically put it on the map as a national business icon was live TV coverage on Sept. 22 of JetBlue flight 292 from Burbank circling because of faulty landing gear for three hours. The 140 passengers watched from the TVs at their own seats what might well been forecasting their own demise, only to have the satellite feed cut off 10 minutes before one of the most famous crash landings in aviation business history. Neeleman has said that he was less worried about the pilot landing safely than getting the passengers off the plane without injury, since a common problem with emergency landings is that, in the hurry to disembark via the inflatable slides, people often fall and break limbs.
Diane Smith, the company’s director of reservations, remembers that Neeleman was very agitated, “pulling his shirt up and down, doing that thing with his arm [a nervous tic]. He had a different demeanor. He said that he knew it was going to be OK, that the pilots were trained for this, but at the time, I didn’t get that feeling.?
CEO as Rock Star
The question Neeleman faces now is how to retain that all-important feel of a small, customer-friendly operation. “We have to figure out how to stay small as we grow,” he says.
One advantage of remaining small has been Neeleman’s cult of personality. Will such naturally photogenic activities as cleaning out the planes with all the other crew'including pilots'or shooting hoops with the baggage handlers come to an end? Neeleman serves drinks or snacks on the weekly flight he usually takes, canvassing passengers for opinions on the plane, on the service, on his latest ideas. His involvement in every aspect of the business'be it choosing a new vacuum cleaner, pilot schedules or holding-time on telephone reservations'suggests he’s in touch with every part of his business. But even Neeleman has his limits. He has said in the past that it was his goal to meet every single flight attendant. “You can’t keep up,” he says. “You can’t touch every single person.?
To work at JetBlue, says Jet Blue’s business processes manager Steve Mayne, you must be able “to go in one direction one day, the opposite the next. You have to accept change. If you think you can just go along for the ride, you don’t get it. You have to be committed.”
For Mayne, Neeleman has changed much since the early days of Morris Air. “He knew what was going on then and would get in the middle of it. He said whatever he wanted. Now he knows when to say or not, he’s much more respectful of people than then. I hate to admit it but he always knew where he was going'[he] just had a nontraditional way of getting there.?
Sometimes his ideas seem so farfetched they scare even his most stalwart allies. When Neeleman asked the airline’s vice president of reservations in Salt Lake City Frankie Littleford to set up a call center staffed mostly by housewives working from home for less than $10 an hour, she thought, “Holy sh-t, what am I doing? This is a hare-brained scheme; it’ll never fly from a management perspective. How do you control all these people? Yet it worked. He taught me never say ?don’t.’”
Of the six and a half years she’s worked for Neeleman, it took her three years before she felt confident enough to be ahead of his questions. “He’ll find ways to improve what you’re doing if you don’t. I never wanted to disappoint my parents, so I didn’t sneak out of the house at night. I have the same feeling with him, I don’t want to disappoint him; he’s like a father figure. He makes you want to please him.”
At the call center in Salt Lake City, the “res agents,” as they’re called, treat the arrival of Neeleman like being visited by their favorite rock star. “I’m really uncomfortable with all that,” he mutters.
Littleford adds, however, that she’s fortunate to live in Salt Lake City. “I might have negative things to say if he was living here, breathing down my neck every day.?
New Canaan Conversion
On the odd occasion Neeleman flies into Salt Lake City'for a Brazilian dance performance at Kingsbury Hall earlier this year, for example'he looks so dead-tired, you wonder what keeps him going. What is it that drives him?
According to Littleford, it certainly isn’t money. “I’ve known times when people have literally taken the shoes off his feet to have them repaired. He’s just not interested,” Littleford says.
Just how wealthy David Neeleman is depends in large part on the value of his 8 percent of JetBlue stock on any given day. But with the money he made from selling his interest in Morris Air, then selling his ticketless reservation system Open Skies to Hewlett-Packard for $22 million, plus the various business interests he invested in and sold before JetBlue, it’s certain that he’s as financially comfortable as the CEOs and chairpersons whose houses surround his 8,000-square-foot home in the ultra-affluent town of New Canaan, Conn. A 45-minute drive to New York'Neeleman drives himself and listens to scriptures or new books on tape'New Canaan and neighboring Wilton have the dubious distinction as the model towns for The Stepford Wives, Ira Levin’s fable on the soullessness of the rich suburbs.
Neeleman leads his 800-strong local ward, not surprising given that proselytizing for the LDS Church is one of his great passions. According to his father, he is the most aggressive of his siblings when it comes to conversion. At the speech he gave to missionaries at Temple Square, the man who introduced him said he wouldn’t be surprised if Neeleman had Martha Stewart or Donald Trump in his sights, creating a vision of Wall Street suddenly awash with bishops and elders pursuing mammon with a renewed, Old Testament vigor.
While he won’t say how many folk on Wall Street he has converted'“plenty” is as far as he will go'Neeleman senses a demand for spiritual food in the high circles he travels in. “One friend of mine keeps buying stuff, a new Jag, a Humvee, a house by the water, but he says he has this hole he can’t fill. I tell him you’ll never be able to fill that hole unless you have spiritual guidance.”
Asked what he would do if he had to choose between running JetBlue and proselytizing, he says only, “I can do both. I don’t have to choose.”
Those who’ve said, “Yes” to the Mormon faith under Neeleman’s guidance since he moved to New Canaan include Wall Street lawyer Steven Waterman and his wife, Diane, who live near the Neelemans in Stepford Wife-country. Waterman, who has written opinions for the State of New York, describes himself as a “huge capitalist” before he converted. A Notre Dame graduate, he and Diane both hail from devout Catholic families and the rough-and-tumble industrial belt of New York state.
Eight months after converting, Waterman was diagnosed with renal cancer. “I was fighting for my life. I would have been dead by now if it weren’t for the church.”
Friends and colleagues, he says, cut him off after his diagnosis. He ended up setting up a new business on his own. “People don’t want to face their own mortality. But David really kicked in. He even came to my appointment with an oncologist at Sloan-Kettering [cancer center] at two in the afternoon. What other CEO would ever find the time?” This is an oft-repeated question among JetBlue staff. Neeleman’s stentorian personal assistant Carol Archer tells of how her boss spent several hours with her mother in a long-term care facility. Diane Smith lost her father recently. “For the three months after his death, he rang me every week to see how I was.?
What’s it like to be on the receiving end of David Neeleman'missionary? “He doesn’t try to debate substance with you” says Waterman. He leaves you to learn that yourself. He’s a very vividly relatable person. He loves to talk about scripture; his level of knowledge about Christ and the gospels is unparalleled. But he becomes your friend first. Whether he does that with everybody, I don’t know.”
Waterman dragged his wife to church, but she would have nothing to do with it until standing in the lobby one Sunday after a secular meeting, according to her husband, “she felt the Holy Spirit move through her like a bolt of lightning.” They were baptized the following day in Boston’s LDS Temple, Waterman by Neeleman, followed by Waterman’s baptism of his wife.
Waterman says that Neeleman has his work cut out for him in Connecticut. “Only 10 percent of the population in New Canaan goes to church on a regular basis. They are highly educated, materially wealthy and disdain religion.”
But then for Neeleman perhaps that is the point. “If you’re going to convert,” he told his Temple audience, “go where there are nonmembers, right?” He recalled baptizing a 6-foot-6 tall black man who had quit smoking and drinking. For his baptismal gown, “He wore triple extra large,” he said, “and when he came out of the baptismal fount he was smiling like no one I had ever seen before.” Baptizing the Watermans, “There was no feeling better,” he said. As for the Waterman’s three children, he added, “We’re working on them.?
Fueled by ADD
“David’s always juggling a thousand balls in the air at the same time,” says his admiring father, Gary. Now, it would seem, more than ever. Interviews for this piece were conducted over the phone while Neeleman was driving to a lunch with one of the three vice chairmen of General Electric to discuss his ideas about energy and the future, and then to lecture at an Ivy League school on family values and entrepreneurs'“They’d have laughed at me if I’d applied to them 20 years ago,” he says. Sometimes you have the feeling Neeleman’s mind is expanding ever outwards, refusing any limits. It’s an oddly frightening thought.
Brother Stephen says, “David is a genius at sales.” Looking at his track record so far, it’s hard to disagree. However, in several profiles, business journalists note a degree of hubris in Neeleman. While Neeleman’s detail man is President Dave Barger, a ferociously regimented worker by all accounts'and thus the antithesis of Neeleman'JetBlue’s CEO remains ever the entrepreneur, ever searching for the new idea, and runs a course utterly his own. It’s a course he seems to make up as he goes along.
He says he relishes making the impossible possible, whether taking hold of the tiger by the tail, as June Morris describes running an airline, and never letting go or converting the doyens of Wall Street to his faith. While the idea of service may well lie at the hearts of his values and personality, his peculiar genius, fuelled by ADD and his near-constant run of success, makes you wonder if and when he will stop, and what could stop him.
Among his charitable interests, education is one that appears particularly important to him. He was involved with some LDS friends in setting up the Perpetual Education Fund in Brazil which helps 3,000 students from impoverished backgrounds pursue an education. “I like civic organizations that are about teaching kids how to be themselves,” he says.
That particular lesson was one Neeleman finally could only teach himself. Which leads to one last question: Imagine it is 1964. A 5-year-old boy stands patiently outside a church, waiting for a little girl in a wheelchair. He glances up at an airplane slicing through the crisp-blue Brazilian sky. If you had asked that little boy what he was thinking at that moment, what would he have said?