Morris Air sale built up trust in JetBlue founder

Editor's note: A chance conversation about his Mormon faith with a friend in the publishing business led to an offer for Jeff Benedict to write about "The Mormon Way of Doing Business." For his book, Benedict interviewed eight prominent CEOs who are members of The Church of Jesus Christ of Latter-day Saints. The Deseret Morning News will share six short excerpts from the book on Sundays, concluding Dec. 31. For more information about the book, go online to www.jeffbenedict.com.

If you treat people fairly and honestly the first time, they will trust you and want to do business with you the next time. ... David Neeleman took this same entrepreneurial approach to the airline industry. Long before founding JetBlue, Neeleman helped create Morris Air, a privately owned, regional airline based out of Salt Lake City. Neeleman was 23 at the time and had just dropped out of college. He ran Morris Air successfully for 10 years. While Neeleman was president of the company, the airline decided to go public and engaged the services of Weston Presidio Capital, a venture capital firm. Weston Presidio projected that Morris Air was worth $200 million. But before Morris Air could go public, its owner decided to sell the airline to Southwest Airlines for $130 million. The owner entrusted Neeleman with the sale of the airline to Southwest.

By that point, Weston Presidio had invested $15 million in Morris Air. Neeleman and Morris Air were prepared to return $30 million to Weston Presidio upon sale to Southwest, essentially enabling Weston Presidio to double its money.

When Neeleman proposed this plan to Weston Presidio, however, the venture capital firm took the position that bringing the airline public would generate more money than selling to Southwest. Weston Presidio was prepared to hold Morris Air to its initial promise to take the company public.

Neeleman asked Weston Presidio what they wanted. The answer was simple: Rather than doubling its return on the initial investment of $15 million, Presidio wanted $45 million. ...

Neeleman asked if they would feel as though they had been treated fairly if Morris Air agreed to these terms.

The firm indicated it would.

"There is plenty of money for everybody here," Neeleman recalled telling them.

This approach averted potentially costly litigation. More important, it established a relationship of trust that paid big dividends for Neeleman down the road. When Neeleman decided to form JetBlue, he turned to Weston Presidio and asked if they would invest. "They said, 'With you, anytime, anyplace, anywhere,"' Neeleman recalled.