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Don’t let this happen to you!: Why Is JetBlue Founder David Neeleman Being Sued?

Canadian startup carrier Canada Jetlines has filed a lawsuit against David Neeleman and two of his companies after alleging that Neeleman and his companies derailed Jetlines’ financial plans when they poached Jetlines’ CEO Lukas Johnson.

In the lawsuit, Jetlines is seeking $27 million USD in damages as they believe that their business plans were interfered with and Connecticut trade laws were violated, which is where Neeleman resides.

Neeleman himself is working on another airline startup by the name of Moxy, which is only a “working title” for the carrier as the name is currently being used by Marriott for one of its hotel groups. The carrier has not commenced operations but has orders for 60 Airbus A220s and is shooting to begin flights by the summer of 2021.

Neeleman has quite the track history in founding airlines as he started Brazilian low-cost carrier Azul, Canadian low-cost carrier WestJet, and U.S. carrier JetBlue.

Johnson, who served as the Senior Vice President, Commercial, of Allegiant was hired by Jetlines in June 2018 after an investment bank supporting the airline recommended that the company hired a seasoned aviation executive.

The bank that provided the advice was helping the Vancouver-based carrier raise $80 million in funding.

Once hired, Johnson helped the airline lease Airbus A320s in order to commence operations in June 2019. Additionally, Johnson was key in developing a list of potential investors for Jetlines, which included Neeleman and one of his companies.

However, six weeks later, Johnson left Jetlines to take a commercial strategy position at Moxy.

The suit alleges that Neeleman then called the bank “to gloat over having done so,” leading to “the bank to terminate its engagement to assist Jetlines in raising the new investment capital that was and is essential to Jetlines ability to commence operations”.

Jetlines is also accusing Neeleman of persuading Johnson to participate in meetings and to sign a nondisclosure agreement, both of which were breaches of duties in Johnson’s role at Jetlines.

Neeleman has responded to the lawsuit by calling it “ridiculous” and claiming that he has no interest in the Canadian market.

Jetlines is currently trading at less than $0.75 a share and their proposed commencement date has only been pushed back further after facing intense competition from Swoop and WestJet.

Also published on Medium.

Published inStartups

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