A group of Florida investors feels a recession is the perfect time to resurrect the Skybus model of serving secondary air travel markets with extremely cheap flights.
Clearwater-based SunAmerica is counting on a new public charter operator, JetAmerica, to do just that. The group is backing JetAmerica’s plan to launch an extensive pattern of charter flights in domestic leisure and business markets starting July 13, using aircraft chartered from Miami Air International.
From Newark, JetAmerica proposes six weekly flights to Toledo, Ohio; three a week to Lansing, Mich., and to Melbourne, Fla.; plus two weekly flights to South Bend, Ind. Toledo and Lansing would also have service to Melbourne. On Aug. 14, JetAmerica plans to add service linking Toledo and Minneapolis-St. Paul.
The company’s website features one-way fares starting at $9 and going as high as $199. The $9 price applies to the first nine to 19 seats filled on each flight. Passengers will pay a $15 bag check-in fee and other fees for extras such as food, drinks and in-flight TV.
JetAmerica will charge an additional $20 for a roundtrip with an assigned seat, $20 to buy a ticket by phone and $10 to book on the Web. It will not try to generate traffic through travel agents or online travel search sites.
The company estimates it sold 12,000 seats by the end of last week, just days after the deals were made public.
Skybus architect takes another shot
The CEO of JetAmerica is John Weikle, the architect of Skybus, which lasted nearly a year before ceasing operations in April 2008.
Whereas Skybus was certificated as a scheduled airline, JetAmerica is assuming the role of public charter operator. The air carrier, Miami Air International, is committing a 189-seat 737-800 to the program.
JetAmerica is subcontracting ticket counter, gate personnel and ground service crews at all airports and will station a company manager at each airport.
Toledo, Lansing, South Bend and Melbourne have waived airport fees and agreed to help out with marketing and advertising to help subsidize JetAmerica.
The chairman of SunAmerica is Steven Schoen, who ran Casino Airlink, which arranged casino charters between St. Petersburg-Clearwater and Mississippi’s Gulf Coast casinos before selling the company in 1996. He had invested in other carriers, including bankrupt Southeast Airlines of Largo, Fla.
Like Weikle, SunAmerica has unsuccessfully tried before to break into the cheap, secondary markets. Doing business as Air Azul, SunAmerica signed a one-year charter contract March 9 with Minnesota-based Sun Country Airlines as a direct carrier.
Air Azul was scheduled to start this month with flights to many of the same cities JetAmerica plans to serve, according to a company filing with the Transportation Department.
It appears that the Air Azul deal had been structured along the same lines as the JetAmerica plan, with Sun Country providing the same type of plane as well as full cockpit and cabin crews. SunAmerica had secured a $200,000 surety bond to start the service. But that deal fell through, said Jet-America spokesman Bryan Glazer.
"As SunAmerica reviewed the Air Azul business model, questions were raised," he said. Reports saying JetAmerica is simply a revamped Air Azul are not true, he said: "They are two completely different companies."
Not inspiring much confidence
The JetAmerica service plan has many analysts shaking their heads. They acknowledge recent airline capacity cuts have created service holes that a company such as JetAmerica could fill, and industry mavens also say there’s a surplus of cheap aircraft there for the leasing.
But they question the wisdom of starting an airline service now when so many carriers are cutting their own fares and still struggling to fill planes.
"I’ve looked at a lot of upstarts like this," said Vaughn Cordle of AirlineForecasts. "What we’ve found is that most of them were not fit for investment. And that’s especially true now. The whole industry is going to shrink 8% to 10% this year, after shrinking 5% last year."
"They are on a shoestring," he added. "There’s a glut in the supply of aircraft right now, so they can get one easily. If they don’t have the capital and talent, they’re rolling the dice."
JetAmerica hasn’t revealed much in the way of capital resources, but the company says that with Weikle at the controls, the flight service provider does indeed have the talent. Weikle’s resume includes stints as technical purchasing director for US Airways Express, director of field operations for Airborne Express, operations manager for Emery Worldwide and an FAA air traffic controller.
But Weikle is most known as the front man for Skybus, a discount airline that featured $10 fares and focused on small Midwest markets like Columbus, Ohio.
"I always intended to move forward with other projects after the first Skybus revenue flight," Weikle said. "I left the company on May 23, 2007, the day following the airline’s first revenue flight. I had nothing to do with the board of managers’ decision to cease operations in April 2008."
Weikle has maintained the Skybus strategy is sound, but poor execution, rising oil prices and a hefty overhead of 65 new Airbus A319s grounded operations.