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Subscribe to RSSAmerican Airlines is in bankruptcy, other carriers are facing rising oil prices and millions of people rate the experience of flying right up there with root canals and IRS audits.
Sounds like the perfect time to get into the airline business, doesn’t it?
Actually, and head-scratching logic to the contrary, that’s exactly what a few entrepreneurs are proposing to do. From Newport News, Va., to Carlsbad, Calif., the allure of aviation is once again proving irresistible.
“The market periodically sees new entrants who truly believe they have a better mousetrap,” said consultant Robert Mann of R.W. Mann & Co. “But the ability to differentiate yourself against the incumbent airlines is very difficult.”
Which, of course, doesn’t stop people from trying, especially as major carriers have pulled out of smaller markets. The resulting loss of service, goes the logic, is a niche that can be filled by a smaller carrier with lower costs and a limited scope.
The newest potential entrant is PEOPLExpress, which rolled out a plan last week to offer service from Newport News/Williamsburg International Airport in Virginia to smaller East Coast airports that could include Pittsburgh, Providence and West Palm Beach.
The plan, which still requires financing and FAA approval, is to offer low-cost fares while providing free checked bags, seat assignments and other perks that have been eliminated by many carriers.
For fans of aviation history, that’s somewhat ironic, as the carrier is the successor to the original PEOPLExpress, which flew from 1981 to 1987 and which many credit as being the industry’s original bare-bones, no-frills carrier.
As such, the idea of building on the reputation of a failed carrier has raised eyebrows among some observers. “We’ve had two shots at Pan Am, two shots at Braniff and a couple of people monkeying around with Eastern,” said consultant Mike Boyd of Boyd Group International Inc.
“The name has given them a lot of rah-rah but what was PEOPLExpress 25 years ago was a failure,” he told msnbc.com.
Meanwhile, in another, albeit less direct, nod to the past, plans are progressing at California Pacific Airlines, which hopes to recapture some of the buzz and consumer loyalty of Pacific Southwest Airlines, or PSA, which serviced California from 1949 to 1988.
Based at McClellan-Palomar Airport, in Carlsbad, Calif., the airline’s main differentiator will be its ability to provide a low-cost, crowd-free alternative to San Diego International Airport. Proposed routes include Las Vegas, Phoenix and three cities in Northern California.
Earlier this month, the airline passed Phase I of the FAA’s certification process. It has also leased two Embraer 170s and expects to start training flights crews in late spring or early summer.
“If everything goes as scheduled from here on out, we’re hoping to be ‘wheels up’ by late summer or early fall,” said spokesman Tom Morrow.
At which point, the real challenge will likely begin, say industry veterans, who note that as soon as a new carrier takes off with low fares, incumbent airlines roll out their own fare sales to entice people to stick with the status quo.
“On certain routes, there’s potential for a new carrier to make inroads,” said Kent Craford, president of Alaska Seaplane Service LLC and the former CEO of Portland, Ore., startup SeaPort Airlines Inc. “But what we’ve seen happen is that the majors just lower their fares to beat them so that any comparative advantage based on price goes away the first day you begin operating.”
“Startups as a group tend to overestimate their niche and underestimate the competitive response,” added Mann. “That combination can be crushing.”
Even so, he understands the desire to try. “If someone really does have a better mousetrap, bring it on,” he told msnbc.com. “But as a practical matter, it won’t be easy.”
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Rob Lovitt is a longtime travel writer who still believes the journey is as important as the destination. Follow him at Twitter.
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I racked up a lot of miles on the original PeoplesExpress airline.
I remember lots of pandemonium during Holiday time when everyone was trying to fly on a $49 or $69 ticket and PE had overbooked the flights and there were fights breaking out about who was going to get on the plane.
Got bumped off several times and usually ended up with free tickets for 2 or 3 flights.
It was a crazy experience in the 80's on PeoplesExpress. But I would never have been able to travel so many times as I did without them.
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My only flight with people express was a booked solid flight where the only seat I could get (there were no seat assignments) was in the smoking section. I'm in the middle seat; plane takes off; no smoking sign goes off; both smokers on either side of me light up. It was a loooooong 2 hours.
The only thing I remember about PE airlines is the plane that went down into the everglades and the recovery team was fighting alligators to try and get some evidence of cause.
WilliamOfRites, I believe you're referring to the ValuJet Flight 592 that crashed into the Everglades in 1996.
I don't remember there being any Everglades crashes in the 1980's.
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The thing I remember about PeoplesExpress is getting stranded trying to get back to NY from Portland, ME by them. Unlike with the other airlines, they were not part of the group where if one airline had to cancel a flight they could move you to another airline (I believe it was called rule 60 in those days). As a result, if PeoplesExpress cancelled a flight, you were out of luck. Since they had limited flights on many routes, this could often leave you stuck until the next day. They had no back up planes, even at their hubs, so if one of their planes had a mechanical problem all flights that the aircraft was supposed to make were cancelled until they got it fixed. With some problems this could be days of that planes schedule cancelled. Your choices were to either go buy a ticket on another airline, often at very high, last minute fares, or wait until their next flight. They had great fares, but in the end it was their unreliability that brought them down.
Flying PeoplesExpress was a hoot - sort of like backpacking through Europe. Not suitable for most business travel, but who can afford to fly on "suitable for business travel" airlines these days anyway?
Yep, PeoplesExpress was like trekking. You just kind of took your chances. If you got on the plane you were good. If you got bumped it could be a while. A morning bump might only mean waiting until an afternoon flight (previous bumpees had first dibbs). But if you got bumped from that evening flight you could usually count on sleeping in the airport.
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I think you are confusing PE with ValueJet.
People's Express was great, but I'd have to think the original no-frills airline moniker belongs to Freddie Laker's ventures.
Just what the world needs, another commercial airliner.
Actually, the timing may be excellent. As an AirTran Elite flyer, I shudder knowing that this great airline has been bought by Southwest and will soon be ripping out all the great features of AirTran (Business Class, assigned seating, XM radio, premium drinks for BC) and turning it into cattle call boarding, one-size-fits-all Southwest. The day the transition completes is the day I find a new airline.
With any luck, PEOPLExpress will have Business Class on short hauls and run a promotion to welcome AirTran Elites into their fold. We'll be looking for the right airline, because I guarantee none of us are sticking with Southwest.
Get rid of TSA and this company (along with the current carriers) will flourish.
Bob, I think you're on to something here.
The TSA and it's fake security have just ruined the flying experience completely.
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Bob, why does getting rid of the TSA cause commercial airlines to flourish? It would certainly make the passenger experience better, but does nothing for the root cause of the financial problems of the airlines.
TSA has nothing to do with the cost of running an airline, cost of fuel etc. Your statement just shows a lack of business understanding in general.
Just looked for airfares this morning to Charlotte, NC. It is SO much cheaper to fly into Atlanta, but there is no cheap connecting flight from Atlanta to Charlotte! These cites are only 8 hours apart by car, but a ticket from Atlanta to Charlotte will cost you almost $300!!!!
I think there is room for these smaller airlines to create some competition. A flight that is maybe 1.5 hours long, should not cost $300. Ridiculous.
If you have the time just take a bus connection.
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That's still the same crowd. ;) Trains are still nice if you have the time.
Atlanta to Greensboro is about $180 and it's under 2 hours from Greensboro to Charlotte... it's how I get around... smaller airport connections and a little driving. :)
It's only a 4-hour drive between Atlanta and Charlotte, if that. It's definitely not 8 hours.
Check how much it costs to fly to Greensboro, NC or Greenville, SC. Both of those cities are only a 90-minute drive from Charlotte. The reason it costs so much to fly to Charlotte is Charlotte is a U.S. Airways hub, and U.S. Airways nearly has a monopoly on that airport.
Rick: Your comment reminds me of my past impressions when moving to "hub" cities and thinking "Oh good we will have reliable service"............Yeah, reliably very EXPENSIVE! Airlines make out like bandits when they take over an airport with their hubs.
Now I am starting to like driving again and even with $4-$5/gallon gas it is becoming an economical way to travel compared to the cattle car, money grubbing, TSA groping experience of flying. And you actually get to see parts of the country you didn't know existed.
I remember what they did to Frontier Airlines.
Airlines need to actually give us a reason to fly again. I don't ever fly unless I have to. We get charged for everything under the sun now. We should let the airline industry go under so that a new era in avation transportation can start that is more focused on customer satisfaction and not as much the profit motive.
I used to fly People from Newark to Buffalo....lived in NYC and had family in Buffalo. Loved it, it was sooooo cheap, one weekend it was only 13 bucks to go there!!
Half the fun of flying Peoples Express was getting a group of friends together. Packing a picnic lunch and going somewhere really cheap for the weekend! Where we went was determined by the cheapest ticket prices on Friday morning.
We had a good, small, feeder airline operating out through our local airport, until the politicians got involved. This company gave us good service, good prices, and direct flights, faster, (even with a twin engined recip prop plane, and a spare aircraft at our local airport, just in case it was needed,) than the feeder airline, with its bigger airplane (twin engined turboprop,) and fewer flights, at a higher cost, that replaced them. (And they just increased the ticket cost again.)
The previous company had agreements with another relatively new airline, (Jet Blue,) whereas their replacement has an agreement with United and Delta.
Bean counters at work again, just looking at the corporate profits, instead of customer service, to earn those profits. Sounds like our government, their own interests prior to the interests of the people they are supposed to serve.
I hope these new airlines work out, but I have serious doubts, as there is still a lot of competition left, and it is getting to be a very cutthroat business, even moreso nowadays.
It takes a while before the earnings from these start up airlines take off. They hope to get some lift from the marketing professionals. The advantage is the startups don't have the baggage of the older airlines. Startups understand that advertising will be the ticket to success. They also understand that not all their ideas will fly. If their strategy is wrong, their situation could be terminal. They need to steer clear of any fly-by-night ideas. It's important their accounting departments hire a good controller. Their executives must not see themselves in an ivory tower. They must keep their strategies secret or their ideas could get hijacked.
I cannot recall the exact name(could use help). There was an airline american ------- airlines that I believed started up late '80s or early '90. It was doing fledging business-we at that time lived in Estes Park, Colo and tey were flying out of Colorado Springs. They were getting so much business and ticket prices were so reasonable that many like us was driving and BYPASSING Denver's International . Colorado Springs was getting so much increase that they went on a major expansion to build covered parking, new wings, etc. And what did the airline comp do???? They hired the idiot that ran Braniff air into the ground-then they hired him to take over-the day he did I told my wife that he will kill this airline. Sure enough, he was so stupid that he was telling news that people will not come to Colorado Springs. THEY MUST be at Denver International in order to compete!!!!. YOU WERE doing pretty dang well there before YOU came alone. So, yes you came along with your bankrupcty mentality and literally did exactly what you did with Braniff=nosedived it into the ground! Sure enough, you moved a great thing to Denver after Colorado Springs was laying out literally a GOLDEN carpet just for you and anyother airline that would follow. We met people while waiting on a flight to Orlando, Florida. There were people from Cheyene, WY(bypassing Denver), people literally all over that were flocking as when we added all the fees, parking(yes at this time it was dirt-but airline was working to pave it(we did not care-the ticket price and the cheaper everything Still BEATED any airlines flying out of Denver!) Yes, this executive apparently was in an ivory tower-did I mentioned that he GOT millions in severence pay as a bonus for nosediving this company!! I believe to this day and in my heart he was hired by a rival with idea that you run this into ground we will bonus you also and even after a period of time to not draw attention was possible hired to another air lin company. ALso to the start up company---go to Abilene, Texas Regional Texas airport---American Airlines have 20-30 jet and Props planes just sitting there as an eyesore. They are not doing anything except writing then off for taxes. You might can get them cheap if American Airlines is really in bankruptcy an need to sell them. Also Abilene would be a great place to fly in and out of-they only fly to DFW-a small airline that covers several small towns and go to Midland/Odessa or Lubbock, Houston, I think you will garner business! My opinion!