JetBlue's co-founder and former CEO sells 2.5 million shares

NEW YORK — David Neeleman, who was removed from his post as JetBlue chief executive by the company's board last month, sold 2.5 million JetBlue shares, or 23.2 percent of his holdings, the first time the airline's founder and chairman has ever sold company stock.

The open market sale took place on Tuesday. Neeleman fetched $10.87 a share, or nearly $27.2 million.

JetBlue did not make Neeleman available for comment.

"This was David making some personal decisions for his personal financial goals," JetBlue spokesman Bryan Baldwin said. "He's still very involved in JetBlue and has confidence in the company."

Joel Peterson, a JetBlue director since 1999, said he does not view Neeleman's sale as a sign the chairman is angry with the board for removing him from the CEO seat, which was given to company President Dave Barger. Neeleman has long been urged by friends to diversify his personal portfolio by selling some of his JetBlue shares, Peterson said.

After the sale, Neeleman remains JetBlue's largest shareholder with nearly 8.3 million shares.

Neeleman was asked to step down just months after storms on Valentine's Day and St. Patrick's Day hammered the airline, effectively shutting it down and forcing the cancellation of nearly 1,700 flights that left thousands of travelers stranded throughout the Northeast.

To prevent a recurrence, JetBlue introduced a "customer bill of rights," under which the company now issues vouchers to some customers who experience delays.

The canceled flights and vouchers cost JetBlue $41 million, contributing to the company's first-quarter loss of $22 million, or 12 cents a share. That was an improvement over the previous year, but was worse than analysts had initially expected.

The incident underscored what both Neeleman has said, and Peterson concurred, was the CEO's weakness: operations.

"David is a visionary, and he is a genius," Peterson said. "I don't think he enjoyed particularly the nuts and bolts of operating an airline."

Peterson said the board had been talking to Neeleman about succession for a year before reaching its decision. Neeleman had been CEO for nearly a decade, he said.

"That's a brutal job," Peterson said. "I think the timing (of the board's decision) may have been a momentary surprise."

"I think it was more the timing of that change" that caught Neeleman off-guard, Baldwin said. "I think he understood the wisdom in it, but was maybe not prepared for it to happen when it did."

Now that he is free of the CEO job, Neeleman is also more free to sell shares, Baldwin said. As CEO, Neeleman was subject to stricter insider selling rules, Baldwin said.

"Given his concentrated position, he's been interested in diversifying his position for some time," Baldwin said.