Following Your Dreams:
Bonny Simi achieved three goals she set for herself: attending a good college, working in television, and participating in the Olympics. Hayes, despite not achieving his goals of going out with a girl, making the school football team, and working in the train industry, found success in the airline industry.

Aviation Exposure:
Simi was introduced to Luge during the Olympic year, which sparked her interest in becoming a luge athlete. A weatherman at KGO-TV inspired Simi to learn how to fly, leading her to take three lessons at a general aviation airport.

Robin Hayes’ Background:
Hayes grew up fascinated by trains and worked at the Judy Free Store in Boston’s Terminal C, which is now JetBlue’s terminal. He missed out on a $50 bonus for not getting sick during his summer job due to being sick on his last day.

Working for JetBlue:
Simi and Hayes worked for legacy carriers before joining JetBlue. Simi worked as a flight attendant for United Airlines, while Hayes worked at British Airways.

People at JetBlue:
JetBlue is known for its outstanding employees and supportive culture, where the entire system is set up to support great people. The company places a strong emphasis on customer service and employee engagement.

Legacy vs. Startup Mindset:
Robin Hayes, JetBlue’s CEO, contrasts the defensive posture of legacy airlines, which focus on protecting market share, with the offensive approach of JetBlue, which seeks to gain market share by entering new markets.

Innovation at JetBlue:
Innovation is ingrained in JetBlue’s DNA, and the company continuously seeks ways to differentiate itself through technology and customer experience. Examples include free TV and Wi-Fi on flights, the introduction of Mint premium service, and the launch of Apple Pay and Apple Watch apps.

JetBlue Technology Ventures:
JetBlue Technology Ventures was created to foster innovation and stay ahead of technological advancements. The group is led by Bonny Simi, a JetBlue insider with a deep understanding of the company and the venture capital world. The goal is to make strategic investments that align with JetBlue’s objectives, focusing on increasing revenue, reducing costs, enhancing safety, and improving customer service.

Strategic vs. Financial Motivation:
JetBlue Technology Ventures balances financial returns with strategic value in its investments. While financial performance is important, the primary focus is on insights and value that benefit JetBlue’s operations and customer experience.

Portfolio Companies:
JetBlue Technology Ventures invests in companies that have potential relevance to JetBlue’s business, either for immediate deployment or as future technologies. Investments are made in both travel-related and non-travel sectors, with a focus on strategic alignment and the potential for co-innovation.

Customer-Facing Integrations:
JetBlue has integrated customer-facing technologies from its portfolio companies, such as Gladly, an omni-channel communication platform that streamlines customer interactions across multiple channels.

Cybersecurity Investments:
JetBlue is investing in cybersecurity companies and is a customer of one of its portfolio companies in this area. Cybersecurity has become a significant concern for the company, and it is actively seeking ways to strengthen its defenses.

Origins and Purpose:
JetBlue’s CVC arm was established with the goal of driving innovation in the travel industry, inspired by the airline industry’s focus on safety through rigorous processes and constant improvement. The CVC arm’s mission is to keep JetBlue’s network and customer data secure, recognizing the omnipresent threat of cyberattacks and the responsibility to protect customers.

Investment Strategy:
The CVC arm invests in early-stage startups that offer innovative solutions in travel, enterprise 2.0, call centers, and bot protection. The investment strategy includes co-innovation opportunities, allowing JetBlue to test new products before others and gain in-depth knowledge of emerging trends.

Startup Engagement and Evaluation:
JetBlue sees approximately 2,500 startups per year and selects 10 for investment. The CVC arm tracks startups over time, building a database of potential investment opportunities. The CVC arm collaborates with other travel companies, airlines, and industries to provide startups with diverse testing environments.

Challenges and Opportunities:
The CVC arm faces the challenge of managing numerous ideas and requests from JetBlue’s leaders for problem-solving solutions. The CVC arm has developed innovation sprints to address specific departmental needs, such as biometrics, benefits, and strategic sourcing. JetBlue’s CVC arm is creating an ecosystem of partners, including Air New Zealand, to facilitate startup co-location and access to multiple organizations.

Investor Awareness and Impact:
Investors are generally aware of JetBlue’s CVC arm but view it as less material compared to capital-intensive expenditures like aircraft purchases. The CVC arm’s impact on the bottom line is expected to take time to materialize as it is still in its early stages. There is growing curiosity and interest from other companies, with senior leaders and boards visiting JetBlue’s office to learn about the CVC arm’s practices.

Competition and Location:
JetBlue’s CVC arm faces minimal competition in the US, with only a few other airlines having similar investment units. The CVC arm is located in Silicon Valley to foster creativity, independence, and access to a significant portion of the startups they evaluate.

Silicon Valley Ecosystem:
50% of startups come to Silicon Valley for pitch competitions due to the thriving ecosystem. Bonny Simi’s venture capital firm is located strategically in San Carlos, California, enabling easy access to startups.

Deal Flow:
10% of startups require scouting efforts outside Silicon Valley. San Carlos’ reputation for being founder and startup-friendly attracts a steady stream of investment opportunities.

Flying Routes:
Bonny Simi is a pilot with 30 years of experience. She flies an Embraer 190, a 100-seater aircraft, for various routes up and down the East and West Coasts. She often flies several times a month, coordinating with crew services to determine her schedule.

Integration of Startup Ideas:
Bonny Simi has observed the integration of startup ideas into the flying experience. One example is a startup focused on improving the passenger experience through innovative technology.

In-flight Turbulence Prediction:
JetBlue collaborates closely with technology partners, particularly Apple, to test and implement innovative solutions. They have recently discovered ClimaCell, a startup that predicts in-flight turbulence, enabling pilots to use iPads for testing. The company is dedicated to reducing turbulence, especially clear air turbulence, which is difficult to detect.

Blockchain Technology:
JetBlue is actively seeking a blockchain startup with a viable and useful application for their business. They believe blockchain is a promising platform, like the internet, but require specific applications to utilize it effectively. Cryptocurrency is recognized as an application of blockchain, but they are searching for a transformative blockchain-based solution.

JetBlue Travel Products:
The company launched a sister company called JetBlue Travel Products, focusing on opportunities beyond air travel. They aim to create new products and services to address poorly served segments of the travel industry. JetBlue Technology Ventures will support startups that can disrupt the travel space and complement the core airline business.

Travel-Related Investments:
JetBlue Technology Ventures may invest in non-airline but travel-related startups. Andres Berry, the president of JetBlue Travel Products, collaborates with Bonny Simi to explore innovative ideas. These investments signal JetBlue’s expansion into a broader travel experience.

Revenue Generation Strategies:
JetBlue disrupted the airline industry with seatback TVs and free Wi-Fi, which have become standard practices. The company is exploring innovative ways to increase revenue beyond simply raising checked bag fees.

Background:
* JetBlue operates in a capital-intensive industry with tight margins, and they prioritize delivering a great customer experience.
* The airline focuses on specific areas where they can provide the best experience, rather than trying to offer the best in every area.

Key Focus Areas:
* Crew Members: JetBlue emphasizes service and hospitality among their crew members to create a welcoming and pleasant travel experience.
* Legroom: The airline offers the most legroom in their aircraft, which is a significant advantage in the industry.
* Entertainment Platform: JetBlue invests in upgrading its TV systems and providing high-speed Wi-Fi to enhance the entertainment experience for passengers.
* Choice of Fares: JetBlue offers a range of fares, including options that include a checked bag and options that do not. This allows customers to choose the fare that best suits their needs and budget.

Competitive Pricing:
* JetBlue aims to be competitive in areas like bag fees to stay in line with industry standards and appear on comparison websites.
* The airline recognizes that offering certain amenities and services comes at a cost, and they balance these costs with their focus on providing a great customer experience.

Risk-Reward of Differentiation:
* Robin Hayes acknowledges that airlines often move in lockstep when it comes to ancillary fees due to the need to remain competitive in the market.
* There is a risk that differentiating oneself from the pack with unique fees or services may result in lower visibility on comparison websites and reduced bookings.
* The reward, however, could be a stronger brand image and a loyal customer base that values the airline’s unique offerings.

Conclusion:
JetBlue’s approach is to focus on providing a great customer experience by prioritizing specific areas such as crew service, legroom, entertainment, and choice of fares. The airline recognizes the need to balance costs and remain competitive in the industry, while also considering the potential benefits of differentiation.

Pricing Competition:
Airlines compete fiercely to appear on the first page of search results for flights. Lowering fares is a common strategy to attract customers and stay competitive.

Fuel Price Volatility:
JetBlue plans conservatively for fuel costs, avoiding drastic changes in operations due to price fluctuations. Hedging, once common, is less prevalent as airlines anticipate fare adjustments to offset fuel price changes.

Biofuel Initiatives:
JetBlue Technology Ventures invests in biofuel companies and startups. The company has explored sustainable fuel options through its partnership with Sophia Mendelson, Head of Sustainability at JetBlue.

Cost Management:
JetBlue focuses on keeping costs low, excluding fuel, regardless of oil price fluctuations. The company resists expanding operations or increasing headcount solely based on favorable fuel prices.

Ripe Areas for Disruption:
Robin Hayes sees potential for disruption in regional travel and business flights between the U.S. and Europe.

JetBlue’s Creation of Mint and Its Impact on the Premium Transcon Market:
Mint, JetBlue’s premium Transcon experience, was launched in 2014, causing controversy due to its departure from the company’s egalitarian culture and brand identity. The decision was based on the opportunity to cater to the underserved Transcon market with high fares and poor service. Mint’s goal was to provide the best premium Transcon experience at significantly lower fares, resulting in a substantial reduction in average fares.

JetBlue’s Plans to Expand Mint to Europe and Its Potential Impact:
JetBlue sees an opportunity to offer a better premium cabin experience at a lower fare on transatlantic flights to Europe. The company aims to stimulate the market and make premium travel more accessible. However, the lead time required for planning and execution raises concerns about coinciding with a potential economic slowdown.

JetBlue’s Resilience During Economic Downturns:
JetBlue’s value-oriented approach has proven resilient during economic downturns. In times of economic uncertainty, customers tend to seek out products with the lowest fares, benefiting JetBlue’s business model.

Bonny Simi’s Perspective on the Future of the Airline Industry:
Simi believes that airlines will still exist in 50 years, but regional travel and air taxi services may disrupt the industry. Regional airlines are consolidating, leading to fewer airports served and increased congestion at major hubs. Electric propulsion and air taxis (electric vertical takeoff and landing vehicles) are expected to have a significant impact on the industry by 2023-2024.

JetBlue’s Investment in JFK Airport:
Robin Hayes acknowledges the challenges of accessing JFK Airport from Manhattan. JetBlue is in exclusive lease negotiations with the Port Authority to build a new terminal next to Terminal 5. The goal is to create a world-class facility and improve access to JFK.

Transforming JFK Airport:
Robin Hayes, CEO of JetBlue, emphasizes the potential of transforming JFK Airport by establishing a one-stop train connection to Manhattan. This connectivity would revolutionize travel, making JFK a more convenient and efficient gateway for travelers.

Log Cabin Dream:
Scarlet Fu inquires about Bonnie Simi’s childhood aspiration to build a log cabin, which remains unfulfilled. Simi expresses her fondness for log cabins and her desire to build one in a ski area, despite her husband’s skepticism. Simi’s determination to pursue her dream is highlighted, given her success in achieving four out of her five childhood goals.

Gratitude:
The moderator thanks both Robin Hayes and Bonnie Simi for their participation in the discussion.