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 The Brancatelli File

joe NEW YEAR, NEW HOPE:
A RAFT OF START-UP AIRLINES


BY JOE BRANCATELLI

January 28, 1999 -- You have to say this about the U.S. airline business. Even though the major airlines are currently functioning at their code-sharing, price-gouging, monopolistic best, there is no end of entrepreneurs looking to start new carriers.

These guys--and they are all guys--fly on a wing, a prayer, some start-up capital and the mantra of better service and lower fares on routes the big guys have ignored.

As many as six new domestic jet carriers may be flying in 1999 and they all have essentially the same vision.

"I think we're all looking to serve a niche within a niche," says Mark Sando, a Lake Tahoe-based travel agent and founder of Tahoe Air, one of 1999's rookie crop. "No one really wants to go head-to-head with the big guys. I think the thing is to go into markets that are poorly served and go with the community standing with you. The only thing worse than bad air service is no service at all."

A lot of communities are in that predicament, including Lake Tahoe, Nevada, the resort community that has been without scheduled air service for most of the 1990s. So Sando has rounded up some old airline heads, begun raising $10 million and bet his proverbial farm on Tahoe Air, which would fly between Lake Tahoe Airport and California.

Here's a brief look at some of the other new carriers hoping to take off in 1999.

ACCESS AIR
The goal of Access Air is in the name: Give travelers in sparsely served Midwestern cities such as Des Moines and Davenport, Iowa, and Peoria and Moline, Illinois, direct access to Los Angeles and New York. Fronted by Roger Ferguson, a 21-year veteran of Eastern Airlines, Access Air has been plagued by delays. Approved for service by the Federal Aviation Administration about 18 months ago, Access is now hoping for a first-quarter launch. The airline's 117-passenger 737s will be configured with 51-seat "corporate coach" cabins and 66-seat "thrift" cabins. Corporate coach seats, configured 3x3, will offer 36 inches of seat pitch and free meals and drinks. Thrift seats will be no-frills economy. Access is promising fares 30 to 40 percent below prices charged by existing carriers flying into Des Moines.

CRYSTAL AIRWAYS
Even if Crystal never gets off the ground, visit its Web site. Crystal founder Tim Rivers, who has two decades of experience with Piedmont, Air Florida and Pan Am, has built a Cyberparadise for frequent flyers. His single-class airline is promising planes configured with 2x2 seating and about 35 inches of seat pitch. Rivers also plans in-flight conference rooms, coat closets and laptop-computer outlets at every seat. He's also pitching prices about 40 percent below existing coach with no advance-purchase or Saturday-stay requirements. Crystal's proposed route network: heavy service from Midwestern cities and nonstop New York-Los Angeles flights. What's the catch? Rivers needs $325 million to launch. "I was getting no where," he admits. "That's why I launched the website, to generate grassroots support from business travelers. Now the financial people are beginning to come around."

NATIONAL AIRLINES
Money doesn't seem to be the problem at National Airlines, which hopes to link Las Vegas to New York, Miami, San Francisco and Los Angeles. Two Vegas casinos have each kicked in $15 million and several million more has come from an investment firm. Large carriers have been cutting back on Las Vegas service for years; National's goal is to make sure gamblers can find seats when they want them. Although the National Airlines name might be familiar (the original merged with Pan Am in 1980 and there was a short-lived, no-frills National earlier in the 1990s), this start-up is the brainchild of Michael Conway, one of the founders of America West.

SUN COUNTRY AIRLINES
You may also recognize the name Sun Country. That's because the company has been flying charters out of Minneapolis for 15 years. Now owned by the LaMacchia family, a major power in the package-tour business, Sun Country is planning to launch scheduled jet service on June 1. Expect the initial route network to include no-frills service from Minneapolis (Sun Country's current home) and Milwaukee (the LaMacchias base of operation) to Boston, Los Angeles, New York, San Francisco and Washington. Sun Country is sure to face ferocious resistance from Minneapolis-based Northwest, but it is well financed and well managed, and travelers and corporations have been clamoring for low-priced alternatives to Northwest.

TAHOE AIR
Tahoe Air may be the brainchild of a travel agent, but it's fronted by several well-known airline executives. Besides chairman George Warde, a veteran of American, Eastern and Continental, there's president and chief executive Bruce Wetsel. A former executive at AirCal, Wetsel brought the first jet service to Lake Tahoe in 1983. Sando hopes to use two-class MD-80s to bring leisure passengers to Lake Tahoe Airport from Los Angeles and San Jose. Projected launch date: late this year.

THE COAST AIRLINES
More than two years aborning, The Coast was once known as AirPortland and AirPDX. But with its new name and a new president, former AirCal and Pan Am chief David Banmiller, the start-up carrier wants to launch service early this year. The Coast hopes to begin with three daily A320 nonstops on the thinly served New York/Kennedy-Portland route. It promises fares priced at about half the prevailing unrestricted prices. The Coast hopes to launch a second transcontinental route later this year.

This column originally appeared at biztravel.com.

Copyright 1993-2004 by Joe Brancatelli. All rights reserved.