Categories Earnings

Airline start-up led by JetBlue founder Neeleman orders 60 Airbus jets

Indicating the entry of one more airline company into the American aviation industry, European aircraft maker Airbus received a massive order from a start-up at the Farnborough Airshow this week. The US-based entity, headed by JetBlue founder David Neeleman, placed orders valued around $5.4 billion for 60 Airbus jets. It is believed that the move is aimed at filling the vacuum created by the recent consolidations in the sector, which has left passengers to deal with limited options and high prices.

According to sources, Neeleman is launching the new venture with external funding from a group of investors. The low-cost airline will likely conduct service in the not-so-busy routes, connecting medium-sized airports in cities like New York and Los Angeles.

Industry experts are bullish about the development, which according to them is the first airline launch in the mainline category in more than a decade. Airbus plans to start delivery in 2021. The narrow-body A220-300 jets, previously known as Bombardier CSeries, is finding many takers at the air show, including JetBlue.

Neeleman is launching the new venture with external funding from a group of investors

In a statement issued on the sidelines of the air show, Neeleman said, “After years of U.S. airline consolidation, the conditions are improving for a new generation of U.S. airline to emerge. The A220 will enable us to serve thinner routes in comfort without compromising cost, especially on longer-range missions.”

RELATED: JetBlue Q1 earnings beat estimates

Last month, media reports stated that Neeleman was in talks with regulators to start a new airline to be named Moxy. Since then, speculations were rife about the scale and nature of the venture. It was widely expected that Neeleman would place the order for a fleet of aircraft either with Airbus or its American rival Boeing (BA).

Neeleman, a veteran in the airline industry, has played a vital role in launching several airlines in the past, including JetBlue, Morris Air, Canada-based WestJet and Azul of Brazi. Neeleman founded Azul in 2008 after leaving JetBlue.

Meanwhile, the high-value orders from the leading players in the industry have brightened the prospects of the A220-300 series, which Airbus recently incorporated into its fold by acquiring the CSeries aircraft family from Canadian aircraft-maker Bombardier.

RELATED: Low-cost flights in high demand

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