Angela Vargo is VP of Marketing of Breeze Airways, which calls itself America’s newest and nicest airline. With a focus on leisure travel, Breeze offers affordable nonstop flights to underserved routes.

A start up airline is, of course, rare enough that it’s probably worth a conversation for that reason alone. But I especially wanted to talk with Angela about Breeze because of its technology first approach. The heavy reliance on technology provides us with an instructive example of what experience driven disruption can look like even in long established industries.

Richard Owen
I’d like to start by talking a little bit about what it means to create a new airline, because obviously the airline industry has been around a long time, Breeze is now what, getting on four years old, and trying to do anything innovative and differential in the airline industry has got to be quite challenging. So how do you think about creating new and better customer experiences with a new airline?

Angela Vargo
Well, when Breeze was first born, it was about four years ago, but we’ve only been flying for two because COVID entered the picture kind of right in the middle and threw a wrench. So, the launch was originally planned for much earlier than what it was. And as a result, I guess you could say that Breeze is really one of the only airlines in the world that was actually created and positioned to survive and thrive in a post -COVID world. Because in this industry, there have been several major milestones that have changed the trajectory of this industry, starting from deregulation to 9/11 to now COVID. And COVID has been one of those where no one could have predicted the impact that it would have on not only the industry, but on people’s lives simply because we were all shuttered at home.

Business travel came to a complete halt. Breeze was always concepted as a leisure -based airline, but that became even more poignant for us as we started to develop on the business plan and realized that we actually were kind of sitting on a pretty big opportunity. And once people started to really get out of the house, the one thing they wanted to go do more than anything was get on a plane, but not go on a plane across the ocean. They wanted to get on a plane and go to their backyard and explore some close-in destinations. And so, we launched in May of 2021 and took off like a rocket ship, you know, with no awareness and people didn’t even know what Breeze was. But we had two advantages. One, people wanted to travel. Two, we were providing nonstop service to locations that did not have it. So, we are primarily targeted towards the secondary markets that are kind of overlooked by the major carriers.

Richard Owen
So, I’m interested in you say sort of post-COVID. I mean, you’ve been in the industry long enough to learn the lessons pre COVID. What do you think is different post COVID in terms of either travelers, their desires, their expectations? I mean, have we all changed? And do you think it’s an enduring change?

Angela Vargo
A lot changed actually. And I think two of the biggest changes were, one, how people spend and value their time. And we all became more tech savvy. And the combination of those two things means that maybe you don’t go to every business meeting. Maybe you combine four or five because you know that it can be done over video chat or it can be done in person, but you save those opportunities for in person when they’re truly meaningful.

And two, just the appreciation of being able to get on an aircraft and go somewhere and experience new things, I think has just shifted people more towards experiences than ever before. I think when we look to gift-giving and to what we want on our bucket list for the coming year or whatever that might look like, it all includes travel to some degree for many, many people.

Richard Owen
Yeah, so at some level, it’s just something that once you take it away, you start to appreciate it more, right? And so, missing out, we want to get it back. But there’s also been, I mean, there’s been a lot of really good research supporting the idea that experiences convey more overall gratitude and utility to people than items do, you know, at the end of the day. And you could argue that’s just a developed society. At some point, you sort of reach peak stuff, and you say, I’ve got enough stuff.

Angela Vargo
Mm -hmm.

Richard Owen
Where do I want to put my resources? So COVID was a big reminder. And it’d be interesting to see how long that affects lasts right? It could be that over time, we start to revert back to traditional ideas. I do agree with you that I think on the business conferencing, I think that genie won’t go back in the bottle. And also, just general digital tools, right? I think you had a generation of people that had to function entirely digitally. And they’re not going back. So, I think our expectations have changed permanently for the better.

Angela Vargo
Yeah, I couldn’t agree more. And I think that, you know, generationally, because of COVID, this obviously elevated that, you know, experience means everything to a younger generation, you know, much sooner than maybe it hit, you know, the older generations. And I also think that even the older generations that weren’t particularly tech savvy had no choice. You know, they were ordering groceries online. They were Door Dashing for the first time.

And because of that, it elevated their entire perception of what can be done from their phone. For us, for Breeze, we do not have a traditional call center. And that, you know, when we first announced that out the gate, even before COVID happened, it was seen as controversial. But, you know, in today’s day, you really just don’t need one. You don’t need those people that are sitting there on the phone for 10 minutes trying to solve one person’s problem when that same individual could be solving five people’s problems much quicker and on my time versus theirs.

Richard Owen
Experience.

Angela Vargo
How good you are at what you do. And people don’t necessarily give you a bad rap for being a few minutes delayed, but they can be pretty unforgiving in certain situations and understanding what those are and being able to head those off quickly and with empathy is just a key part of it. And it’s whether it’s in your control or not, you have to be ready to step up and apologize and make it right.

Richard Owen
So, I think that’s a great insight for the business you’re in. And last time you and I talked; I remember you put a lot of emphasis on human factors in your business. This notion that you could essentially engineer a really good culture in the business. And you’ve experienced obviously at Southwest, which in some ways was the first, I think you can make a case for the first culturally engineered airline. In some ways,

It had this culture writ very large, and it was one of the things people really liked about the airline. You can’t control weather, you can’t control airport delays, but what you can do is put well-trained human beings in a position where they have the skills to be able to handle customers. And it seems to me that gets you an awful long way. I think that’s the point you’re making, that that’s a controllable element.

Angela Vargo
What we’ve essentially done is we created this technology for our airline. So, we’re putting the tools in the guest’s hand to be able to take care of themselves and solve their own problems. At the end of the day, we want them to be able to solve 98 % of the issues that they run into. And so, what that means for the human element of the business is suddenly, instead of hiring people who are constantly having to solve problems and be on the front end of, you know, doing all of the kind of the ugly stuff. They’re there to just be the human interaction, right? To be the good person, to help out, to make sure the person’s having a good experience, to ensure that, you know, that they can smooth over the rough edges. But it’s very far from the days when you would have to stand behind a counter as a guest agent, as an agent, and click, you know, the keys for 15 minutes for one small change.

Now it’s on my phone, it’s in the palm of my hand, I can make those changes and the person that’s standing there for me is just there to just provide a good experience. That alone helps drive culture because your people aren’t just sitting there having to be the bad guy.

Richard Owen
So, the technology makes people look better, essentially, or at least takes away some of the things that have created friction between passengers and customers and the business. Because I think that it’s a tough job, right? I mean, at the end of the day, as a passenger, we often don’t feel a lot of sympathy for employees of the airline, because at the end of the day, we feel like things go wrong, it disrupts our lives, and that’s a stress point, and we all get pretty wound up about it. I mean, if you fly as much as I do, at some point you become extremely fatalistic about it, and just sort of go with the flow. But that’s, in some ways, that’s an acquired skill. We have to practice getting there. A lot of people get very stressed. And it sounds to me like you’re making an argument that better technology actually can take away a lot of the friction points that traditionally exist and actually improve the relationship between your team and your guests.

Angela Vargo
The one thing that guests look for from humans in the airport, people in the airport is answers. They want answers because it’s a very uncomfortable and very stressful time for a lot of people, especially when things aren’t going right. And so that lack of information can create the most friction and can create, you know, that, that static electricity in the air that no one wants to feel.

The key to a great customer experience inside of the airline is information. It’s notification. It’s staying, five steps ahead of them and, you know, giving them the intel that they need to know when they need to know it so they can make decisions for themselves. And that may even be as far as this flight is looking like it’s going to be four hours delayed. Do you still want to go today? You know, we don’t charge change or cancellation fees up to 15 minutes prior to your flight. We want you to have the flexibility to go and make those decisions to control. what you would, maybe that you’re just going for the weekend, and it doesn’t mean that much to you, and you don’t mind, you know, banking up your points and going another weekend. Um, so, you know, giving people the control over the decision-making process and over the problem-solving process is, you know, the number one thing that I think we can do better than anyone else, um, to help smooth out that experience.

Richard Owen
Changing topics for a second, so when you think about the competitive dimensions of your industry now, for a long period of time, post deregulation, the industry seemed to be descending into a single dimensional competitive space, which is price. At the end of the day, I think that it was.

Angela Vargo
Mm -hmm.

Richard Owen
The CEO of Ryanair that said that people would drag themselves naked over broken glass for cheaper prices. Rather colorful way of expressing it. But Ryanair grew to be a very, very successful business on this theory that at the end of the day, it really was just about providing the cheapest possible product. How do you see competition now, so dimensions of competition? I mean, obviously, choice of routes is a factor.

Because if you’re offering services that weren’t previously available, you’re in some ways reducing the competition in just that strategy. But at the end of the day, people always have choices, right? So perhaps you’ll talk about how you see the competitive landscape and how Breeze plays into that.

Angela Vargo
So yeah, I mean, the old adage is that, you know, customers looked at airlines, airline flights on three factors, price, price, and price. And, you know, if that were the case, then you wouldn’t see airlines spending billions of dollars on improving the customer experience. So obviously, the data there is to tell you that, you know, that’s not the case. In terms of Breeze, we are serving the secondary markets with nonstop flights that 98% we don’t have direct competition on, meaning we’re the only nonstop game in town. That allows us to go into a market like a Charleston or a Richmond or a Hartford and essentially become not only just the best option, the most efficient option, but also kind of the hometown airline. This is a little bit out of the old Southwest book of these point-to-point, very efficient flights.

And although we do have low fares, what we’re finding, especially going back to an earlier point is that time is everything. And, you know, people will actually look at schedule a lot more, a lot more, they’ll scrutinize the schedules a lot more because their time is worth that. And so, for us to be able to provide them the most efficient, you know, an affordable option automatically puts us at the top of the list. And as we gain competition over time, we want to still make sure that we are that efficient option and that we are, you know, threading that needle for them so that they’re not going and sitting in a hub for, you know, four or five hours in between flights. That is, you know, one of the things about air travel that absolutely everyone can agree on. No one enjoys having to connect and get off the plane and, you know, sit in a crowded airport. And so, if we can eliminate that for, you know, the majority of our guests who are used to flying that way and they experience it. Then they’re going to be willing to pay more for that experience, even if we’re not the lowest price.

Richard Owen
I think that one of the most interesting things about your airline and what you’re doing is this combination of technology, innovation, being very technology first, and culture of the team and the employees and the interaction between these things. Because at the end of the day, an Airbus is an Airbus, a Boeing is a Boeing. I mean, there’s not much you can do about the physical hardware, you can always make choices, of course, about configuration, legroom there within the remit. But the economics of the industry are such that at some point, a lot of that gets constrained, right? There’s only so much you can do to make the bird fly profitably.

But these other variables, the information technology investments, the information you talked about, I think that’s where there’s a tremendous opportunity for differentiation because I do agree with you strongly that customers at the end of the day are more understanding of the realities of this than we give them credit for. They are very forgiving about issues of weather, not universally. There’s always somebody who will get upset, but people understand the nature of weather. And of course, it’s safety first, so nobody wants to be taking off into poor conditions. But I think what they’re unforgiving about is poor information. That’s something that in this information age, they expect of every business to be exceptional at communication and information flow. And so, if Breeze can be at the front of that, can be an airline that has a reputation for being extremely good communicator and extremely good information flow, seems to me like that puts you in a really good position for building relationships.

Angela Vargo
I think it’s just about transparency. I mean, people are, you said they’re used to getting information the way that they want it and when they want it. And, you know, that doesn’t stop at airlines. And I think that, you know, airlines have done a really good job over the years of having the wizard behind the curtain and, you know, having those pieces that are out of the control of the consumer where, you know, you can’t touch that. But at the end of the day, you know, they can because the information is there. It’s just a matter of understanding, you know, what is going on in this moment. And, you know, if you walk through an airport and you can tell, you know, kind of which airlines get it right and which don’t just by looking at the cues, you know, in a weather delay. And that alone will signal to you who has, you know, done a better job at communicating with guests.

Richard Owen
Well, congratulations on building a very modern airline. You know, this is, I think, I mean, a lot of people would say startups, they don’t tend to think of airlines, right? It’s, you know, the term startup tends to be more synonymous with tech and Silicon Valley. And there haven’t been that many new airlines. There’s been a consolidation in the industry going on for the last 20 years. So, I think it’s really important that there is innovation and usually that gets driven by new startups.

So, congratulations on your progress to date. I think your observations are applicable to just about anyone running any kind of business. I don’t think it’s just about the airline industry, but I think we’re all rooting for businesses like yours to be successful because we’re all customers one way or another. And if you can drive innovation in the industry and better customer experience, then it’s better for us all in the end. So, thank you very much, Angela. Really appreciated your comments and good luck with Breeze.

Angela Vargo
Absolutely. Yeah. Thank you so much. Appreciate it.