JetBlue founder David Neeleman to start new airline

Last Updated Jul 17, 2018 2:51 PM EDT

JetBlue Airways founder David Neeleman is launching a new airline, with a startup backed by the aviation entrepreneur buying 60 Airbus A220-300 jets worth $5.4 billion. 

"After years of U.S. airline consolidation, the conditions are improving for a new generation of U.S. airline to emerge," Neeleman, the majority investor in the endeavor, said in a statement released during the Farnborough air show outside London. "The A220 will enable us to serve thinner routes in comfort without compromising cost, especially on longer-range missions."  

Deliveries will begin in 2021, according to Airbus. The sale is the second large order for the A220 in a week, and comes on the heels of a like-sized order by JetBlue.

The plan for the new airline, dubbed "Moxy" in investor presentations, comes amid an intensifying rivalry between Airbus and Boeing, which recently partnered with Brazil's Embraer on small commercial planes.

"This U.S. airline startup's decision for the A220 as the platform on which to launch their new business model is a testament to the passenger appeal and operating economics of this outstanding aircraft," Eric Schulz, chief commercial officer for Airbus, said in the release.

The news was welcomed by one airline industry analyst, who noted that the last new "mainline" airline, Virgin America, began 11 years ago.

"We're way overdue for a new airline startup," said Henry Harteveldt, president of Atmosphere Research Group, who called Neeleman "creative and clever" and the A220 "an excellent, passenger-pleasing airplane."

Neeleman is expected to target small and midsize airports in cities including New York, Chicago, San Francisco and Los Angeles. 

Neeleman founded Morris Air, which was bought by Southwest Airlines in the 1990s. He also took part in setting up Canada's WestJet Airlines and Brazil's Azul. He is no longer involved in running JetBlue.

With reporting from CBS News transportation correspondent Kris Van Cleave.