There is plenty of discussion going on about the news that a new airline is looking to start up based in Newport News, VA. Yes, they are taking the name of the first LCC in the United States, but they promise they aren’t going to focus on ancillary fees, at least not for bags, to be profitable. But can it work?
I don’t think it has much of a chance, but that doesn’t mean it isn’t worth listening to the folks who are on the inside as to why they think their plan is sound. Here’s an interview with their VP of Operations, Brent James, conducted by Aspire Aviation. Reading some of the answers he’s got it isn’t particularly clear to me if he’s actually thinking clearly or just convinced that their approach is destined to succeed, but I suppose that’s part of the process when you buy in to a start-up operation. Among other things, James indicates that they are looking to build based on O/D traffic out of the area and to provide high frequencies to their selected destination set.
Like I said, I’m not buying it, but I give them credit for trying.
And kudos to Aspire Aviation for asking the pointed questions and getting some answers.
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If anyone would like to go long this company, please let me know … I’ll take the other side of the trade.
I know a number of groups that started up other carriers….mainly the semi-premium transatlantic carriers that were in vogue in the mid-00s. In that case, it was the alliance-wide miles programs (or their lack thereof) that was a big nail in the coffin…. Oh, and a little banking crisis, too…
Yeah it will be interesting to see how it goes, if they get off the ground. I kind of agree that WN has lost its way in my eyes – by volume I guess they’re considered major domestic carrier? but yet you have cattle car seating, no IFE, etc…and pricing that whenever I look is not at all competitive for what you give up. But, their profitability is such that despite my not liking them, they’re doing just fine!
It’s so hard to make money in the airline business, a startup has to be very careful in finding its niche. I remember SkyBus that flew out of CMH near me – it lasted less than a year I think. Although he dismisses the comparison to Allegiant, PEOPLExpress might do OK as leisure-centric carrier like that perhaps.
Southwest succeeds in a few ways from what I see.
1) The lack of assigned seats, IFE or upgrades really doesn’t matter on a short shuttle flight, and for business folks intra-Texas and intra-California thats what WN operates as. And I’m betting they make plenty of money doing so.
2) They’ve got the reputation for lower fares and they have free checked bags. Doesn’t mean much to very frequent travelers but it does for the very occasional folks.
As for PEOPLExpress making it work, I don’t think that the Allegiant model would succeed, at least not with PHF as the destination/hub. LAS works for that sort of market. MCO might, too. But not PHF.