JetBlue Airways’ founder David Neeleman has hired Lukas Johnson, who chose routes and set pricing for Allegiant Air until he left in May, to lead commercial strategy for his new U.S. airline, which could begin flying as soon as 2021.
Johnson, 36, joined Neeleman about three weeks ago, after working briefly as CEO of Jetlines, a proposed Canadian ultra-low-cost carrier. Johnson is crafting the pricing and network philosophy for Neeleman’s startup, along with technology strategy, though he does not have a title, as the airline as an official entity does not exist yet.
Allegiant is known for its bare-bones product, but in an interview, Johnson, who was the discounter’s senior vice president for commercial, said he’s not interested in making Neeleman’s unnamed airline an Allegiant clone.
While Neeleman wants to create an airline with some of the lowest costs in the industry, he has said it will have decent legroom, comfortable seats, friendly employees and reasonable fees. Two other Neeleman airlines — he controls Tap Air Portugal and Brazil’s Azul Airlines — have a similar ethos.
“It is going to be more in the mold of a low-cost carrier that has higher levels of service,” Johnson said. “It is not going to be 28-inch pitch (squeeze for legroom).”
It’s the airline’s network strategy that could have an Allegiant flair. At Allegiant, Johnson turned a bunch of small, underserved, air markets into major profit-makers — exactly the strategy Neeleman has set for his new airline.
“People kind of have to dissociate with the Allegiant brand,” Johnson said. “It more about, can you take the concept of stimulating traffic and bring it to something new?”
At Allegiant, where he worked for eight years, Johnson choose routes no other airline would try, like Orlando to Gulfport, Mississippi, Los Angeles to Ogden, Utah and Ogdensburg, New York to St. Petersburg, Florida.
His biggest successes likely came at Punta Gorda, Florida, a sleepy airport about 30 minutes north of Fort Myers. No other airline flies there, but Johnson calculated value-seeking customers from the Midwest and Northeast United States would go, if sold cheap fares. They have, and Allegiant flies to Punta Gorda from about 40 destinations, according to the airport. Allegiant management likes the market so much, it’s building a hotel nearby.
At Allegiant, Johnson was limited by two factors: The airline didn’t fly outside of the United States, and many of its aircraft had poor performance capabilities. He couldn’t schedule some of Allegiant’s fleet on long routes, nor use some of the planes at hot-and-high airports, or at airports with short runways.
He won’t have such limits with Neeleman. The serial airline entrepreneur has committed to adding 60 Airbus A220-300s, the most capable narrow-body aircraft around. With between 130-150 passengers, Johnson estimates the aircraft can fly as long as nine hours.
“This is a plane that can do seven or eight types of different network missions,” he said. “It’s super economical. It is also smaller than a 320 or 737, and it also has better runway performance. You basically have the most flexible narrow-body plane out there.”
Johnson said it can fly from Hawaii to the Midwest, or from Florida to Brazil, or from the East Coast to Portugal. And while long-range aircraft usually don’t make sense to fly on shorter stage lengths, the A220 is efficient even on quick flights, he said.
“You could fly one hour into an Allegiant city into Florida and it would still be the most economical,” he said.
Allegiant flies many of its routes a couple of times each week, rather than daily. The new airline probably will vary its service patterns, he said, flying some routes as little as twice per week and others as much as twice per day.
Still, it’ll probably avoid routes where business travelers expect more frequency, he said.
“I would think it would be unlikely that you would be serving stuff with so much business demand because that invites competition,” he said. “But not everything will have to be two a week like Allegiant.”
Allegiant has never had much of a focus on mobile or digital strategy. But Neeleman is obsessed with it, and the new airline will offer as many self-service options as possible.
“We are not the next Google or Apple but we are looking at the way that Amazon or Google interface with customers and seeing what we can learn in terms of self-service options,” Johnson said.
Irregular operations will be a focus, Johnson said. If a flight is canceled or delayed, a customer might be shown a couple of options on a mobile device — rebook, or cancel the flight with a full refund.
“You want it to be easy as possible without as many legacies systems at possible,” he said.
Neeleman has also said he plans to have few telephone agents, preferring to handle most queries through chat.