Wednesday, May 27, 2009

Charters Will Fill In Air Service Gaps

I wouldn't make too much out of the announcement that a small start-up with one leased 737 plans to fly rounds among Newark, several Midwest cities and Vero Beach, Florida -- except that I think it represents what we will see as a trend.

A company called JetAmerica will announce today that it plans to start flying in July, with very low prices on some seats (like the defunct Skybus, which is in its lineage) and low prices on others. The company starts off with a single leased 737-800.

Here's some background from the St. Petersburg Times newspaper today. Though it's lacking in context about the niche that is so obviously open.

JetAmerica also starts off to razzing from the sidelines, primarily because of its Skybus connection, and more pointedly because of its shaky genesis. Originally, it seems, the company planned on using the name Air Azul and dropped it. The usual suspects said it was because JetBlue would sue over trademark infringement (Azul=-blue?), but it's pretty obvious to me that Air Azul in fact sounds like something that might be based somewhere in the Persian Gulf region. Duh.

Besides the Skybus connection (JetAmerica's chief executive officer, John Weikle, was the Skybus founder, though he left Skybus shortly after it started up), there is a connection to a very interesting niche in charter air travel -- supplying lift to areas with casinos that are underserved (or have been abandoned) by commercial carriers. The JetAmerica founder is Steven Schoen, an airline dilettante (and I use the word not necessarily in its negative sense) who used to run a company that flew charter flights between the Tampa Bay area and the Mississippi Gulf Coast casino towns.

I've been long predicting that as commercial airlines abandon or greatly reduce service to come cities, charter start-ups will appear to fill in gaps. My hunch is that they will be modeled more along the hybrid-charter lines of the sidelined air-taxi business, though on longer routes with bigger planes than the very-light jets the air-taxi model hoped to use.

Casino charter link? Hmmm, which big city with a lot of casinos is languishing partly because commercial carriers -- culling cheap-fare routes -- have cut 20 percent of its air service? That would be Las Vegas.

I'd watch this trend carefully. JetAmerica might go nowhere, but there are a lot of perfectly good used airplanes on the market right now, including many parked in the desert waiting for some dreamer to come along and kick the tires.

And air travel has always attracted dreamers. Sometimes, like the well-financed JetBlue in 1999, they actually pull off the seemingly impossible.

So I say good luck to JetAmerica. The charter hybrid model may well be about to redefine a segment of the air travel market. Let there be more competition. Just hope they all have deep pockets and understand that they're going to get roughed up by what remains of the competition on whichever markets they choose.


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