Sunday, January 26, 2014

The need for a few more new entrant Airlines

If you had asked me a decade ago if the US needed or could support more new startup carriers, you would have heard a resounding "Yes!".  Now, after about 15 years of watching the upheaval and shake out of my most beloved industry, I'm more cautious and trepidatious about new carriers and their chances of survival.  There are very few reasons for new entrants to join the rat race in flying passengers from point A to point B.

That being said, there's a few markets out there that still could use a few new entrants.  I'm not talking about the new fad in new airlines, the ULCC (Ultra Low Cost Carrier) concept, where everything down to your carry-on is an extra charge before you get on board.  That concept, to a LOT of travelers, sucks.  It's good for those once-a-year leisure travelers just looking for a cheap(ish) way to get to Disney World, but hardly efficient for the everyday business travel road-warrior.  Airlines like jetBlue Airways and Virgin America are great concepts, and I would LOVE to see this concept expanded in the US, especially in the Midwest and Southern states.

Cities that used to be hubs in the 1980's and 1990's could be great places to start.  Especially places like St. Louis, Nashville, Raleigh/Durham, New Orleans, Milwaukee, hell, even San Antonio, Las Vegas and Salt Lake City could all benefit from a new hometown airline in this niche of higher service levels and moderately priced routes with brand-new equipment.

Speaking of St. Louis, there have been rumors of a new carrier out of there with either Boeing or Airbus narrowbodies serving the major business centers in the US, ala the old Air1 concept of the 1980's.  What killed that carrier off was intense competition from TWA, now gone, leaving St. Louis' Lambert Field almost a ghost town of what it once was. I could most definitely see the need for a fleet of 10-15 A320's or 737's hitting places like New York LaGuardia or JFK, Los Angeles, San Francisco, Houston, Denver, Seattle, Boston, and Washington D.C., along with a smattering of regional routes and a few leisure routes to keep the planes flying on weekends.  Do it right, with enough funding and a helluva PR team and you'll have the Midwest's version of Virgin America.

Las Vegas could also do with an all leisure airline along the likes of jetBlue.  Yes, Allegiant Air is based out of there, and they are definitely a build-your-own package type of airline, BUT, there's also a LOT of conventions and other events going on in Las Vegas that draw the business crowd.  Several airlines have tried to startup in Vegas and have failed or have never even gotten off the ground due to various reasons such as, lack of funding, the wrong equipment used (National Airlines and their hodgepodge fleet of Boeing 757's come to mind), to just being the wrong time to start have all contributed to these failures.

That being said, I also love the consolidation that's happening with existing carriers.  Y'all know I'm a huge fan of the US Airways/American Airlines merger.  Same with the now completed Delta/Northwest merger.  Southwest/AirTran destroyed a very good airline for the sake of a worse airline, as did the almost botched Continental/United mashup.  Will we see any more mergers with these megacarriers?  Probably not.  Will we see more regional niche carriers (i.e. Hawaiian, Alaska) tie up in code-shares with the megacarriers?  More than likely.  With the soap opera that's going on in Seattle between Alaska Airlines and Delta Air Lines, I can most definitely see Alaska team up with their other code-share partner, American, and possibly even join the OneWorld Alliance.

Time will tell, and we will see.