And Now the Hard Part

At that moment, JetBlue still feels truly intimate. But then, as Neeleman heads down the jetway, the pilot of the plane teases, "So you really do exist." Turns out, it has taken him two-and-a-half years to finally meet the CEO. It's the hint of danger, the serpent in the garden. JetBlue isn't even that big, and already there's a pilot who has worked here since 2001 and can joke that Neeleman is just a myth.

For all his hands-on entrepreneurial brio, it's clear that Neeleman has been thinking big since the very beginning. For one thing, the bench of executives he's assembled to run the airline every day has depth that would be the envy of any other young company. And Neeleman and his team have carefully laid the groundwork for growth. Some things that startups usually wrestle with, like sophisticated technology, are already in place, years ahead of schedule. Pilots, for example, store their flight manual on laptops, so it can be updated instantly. It's the industry's first paperless cockpit. And Neeleman has other resources that will come in handy -- like money in the bank, about $600 million in cash and cash equivalents.

He'll need it, because this is one vicious business. A new airline hasn't managed to join the ranks of the real majors in a long time. Since deregulation in 1978, in fact, only a handful of startups (such as AirTran and America West) have survived out of the more than 100 launched. For good reason. Planes are damn expensive, and it takes a lot of people to run them.

And Neeleman's startup has gotten big enough to draw serious competitive fire: In just the last year, two major airlines have started their own versions of JetBlue, Delta's Song, and United's Ted. In December, JetBlue pulled out of Atlanta, its first retreat, after Delta and AirTran flooded the market with new cheap flights. And in January, JetBlue announced that its usually stellar profit margin had dipped three percentage points to 13.3% in the fourth quarter of 2003, largely due to price-cutting by the majors.

Then there are the inevitable growing pains -- pains that, in this business, can be lethal. For now, JetBlue enjoys the lowest costs in the industry, just over six cents per passenger seat mile. But any startup with new planes would have lower costs. The jets don't need major maintenance yet. They will. And none of the staff have worked at the airline more than a few years, so the pay scale is fairly low. It will rise. The point is, large airlines fork over more money to run their business, and the reason why isn't just unimaginative management. That's another price of being big.

Before JetBlue has to worry about the problems of bigness, of course, it has to last long enough and grow fast enough to face them. And Neeleman, 44, has one hole in his resume: He has never run a large company, or even worked at one for very long.

His forte has been launching businesses. While at the University of Utah, he started a travel business and dropped out to run it. Later, he teamed up with the owner of a local travel agency to launch Morris Air, a regional airline, which was eventually purchased by Southwest Airlines, a company he had long admired. Neeleman went along to take his dream job, executive vice president, but lasted less than six months before he was fired. "David didn't understand the nuance of the organization," says Ann Rhoades, a Southwest vice president at the time. "He needed to walk, not run." He went on to help create the company that developed Open Skies, the software for e-tickets, and started and departed from his second airline, WestJet, a thriving low-cost carrier in Canada, by the time he started JetBlue.

But if he's not a big-company guy, Neeleman knows how to attract and adapt mature talent to an immature company. Dave Barger, president and COO, ran Continental's Newark, New Jersey, hub. John Owen, CFO, was treasurer at Southwest. And the head of HR was none other than Rhoades, who had helped show Neeleman the door at Southwest. He has learned a lot since then, she says -- including how to practice the sort of restraint that can come hard to strong-willed company founders. "He realized that if you hire A-players, you don't have to sit on them and tell them what to do," she says.

Neeleman and Barger are an impressive duo and a bit of an odd couple, the excitable entrepreneur and the detail-oriented, highly organized, even-tempered son of a United pilot. "They're yin and yang," says Dave Bushy, who recently joined JetBlue as vice president of flight operations and who once held the same title at Delta.

Neeleman doesn't dwell on minutiae, doesn't dissect problems; Barger spends hours poring over operational matters, ironing out glitches such as too few wheelchairs at a gate. Neeleman skims business books, looking for nuggets; Barger reads them cover to cover. While Neeleman can't leave the office until a half hour before a flight from JFK, Barger leaves an hour-and-a-half early. They're alike in the ways that matter most, though. They share the same down-to-earth style and unrelenting work ethic (read: 12-hour days). They believe the best bosses practice "servant leadership," helping others do their jobs better.