Flying on the edge...

Yesterday morning, I heard a story on the radio, about Azul, a Brazilian domestic low-cost airline established on 5 May 2008 by David Neeleman, the founder and former-CEO of America's JetBlue, another low-cost carrier. What was remarkable about the story was that the business scheme Neeleman had designed was further pushing the risk envelope and blatantly playing with fire by innovating in giving the farm away.

Consider this: The airline is aiming at competing against Brazilian buses, and for its passengers that neither have the cash nor the credit card needed pay for the fare, Azul is willing to extend credit. This to me is the epitome of craziness! Not only is this “low-cost” airline already working on the edge of profitability, but it also has the audacity of thinning out its margin by selling on open, unsecured credit. This sound like the “flying sub-prime” and it makes me wonder if the human race will ever learn anything from its past mistakes!