"Remaining all-business class airlines see sunny skies"

Sunday, January 6, 2008

Remaining all-business class airlines see sunny skies
The New York (NY) Times


MAXjet Airways, which pioneered as a discount all-business-class airline,
failed on Dec. 24. Is the concept that it helped invent two years ago fated
to die as well?

Judging from what the competition is planning, the answer is no. For one
thing, the remaining three start-up carriers still flying discount-fare,
all-business-class routes across the Atlantic - Eos Airlines, Silverjet, and
l'Avion - are all looking to expand.

Meanwhile, both British Airways and Virgin Atlantic Airways are planning to
experiment with their own all-premium-class discount airlines on
trans-Atlantic routes.

Much of the attention will be focused on British Airways, which is expected
to introduce a "miniairline" on Wednesday. The discount start-up, developed
under the code name "Project Lauren," plans to begin service in May, flying
a Boeing 757 configured mostly with premium-class seats between a European
city (Paris and Brussels are the leading candidates) and New York (either
Kennedy International Airport or Newark Liberty International Airport).

People involved with Project Lauren said the name of the new airline is
likely to be Open Skies, a nod to an agreement that takes effect in March
and greatly expands the ability of international airlines to choose new
routes between Europe and the United States.

However British Air's initiative evolves, and whatever the effect of an
anticipated entry by Virgin Atlantic in 2008 or early 2009 in the boutique
premium market, the remaining players insist they are on solid financial
footing, despite surging oil prices and the prospect of an economic downturn
this year.

Part of the reason for optimism at Eos Airlines, which like MAXjet began
operations in late 2005, is that its average fare - about $4,000 round-trip
between New York and London when corporate and advance-purchase discounts
are taken into account - generates more revenue than MAXjet but is still
considerably less than its major airline competitors.

Given that some corporations will never fly their most valuable business
travelers in coach seats on long-haul routes, Eos stands to gain even if
travel budgets shrink, said Adam J. Komack, whose title at Eos is "chief
lifestyle officer," and whose job it is to market the airline.

"We know of at least one large bank that's starting to cut down on air
travel," he said. "They've mandated necessary travel only. But they've also
mandated that if you have to fly to London, you have to fly on Eos because
our fares are better than the network carriers."

In contrast to MAXjet, which flew long-range 767s and expanded
trans-Atlantic nonstop routes rapidly beyond New York to Los Angeles and Las
Vegas, Eos has limited itself to flying between Kennedy and London's
Stansted Airport, which is more convenient to the financial district, than
Heathrow.

Eos also went more squarely after the corporate customer than MAXjet, which
offered some of the lowest fares but whose cabins were outfitted with 102
business-class seats that only partially reclined. Eos flies smaller 757s,
but they are configured with just 48 seats that fold into flat beds, which
are now the business-class quality standard.


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