New low cost transatlantic carrier

[non sched]

I just heard on CNBC that a new low cost carrier will start up in the US next year. The name used was Airlink. The news reader said the proposed fares would undercut current fares by 60-75%. Anyone have any ideas who's behind this?

[moo]

haven't heard about it non sched, but i've always been of the opinion that transatlantic travel does not suit the low cost model. You have to provide accomodation and costs for flight and cabin crew, you have to operate bigger and more expensive aeroplanes that cannot be cleaned by your cabin crew alone, turnaround times are greater due to increased catering/fuel/baggage/servicing, you cannot fly to the smaller, cheaper airports because of runway length issues (especially when operating a one class, max take-off weight aeroplane) not to mention if one of your aerplanes goes tech, you are truly up **** creek.
I would guess you would have to provide some form of inflight food at least too (if only for the crews)

When you think about how many transatlanic carriers there are, operating for reasonable fares (a friend recently went to new york with air india (I think) for £230 which is hardly excessive - I have seen even cheaper flights too.

[Holer Moler]

Hay- Moo, should'nt that be Baaaa & do you prefer to keep your wellies on?

[Waggon rut]

This is why the low cost model works because people believe you can get somewhere for nothing!

Just a few seats here and there thats all.

[Kalium Chloride]

I think the name is actually SkyLink - read about it starting from BWI.

[hobie]

or maybe this ...............

http://www.airlink.com.pg/

cheers .....

[non sched]

Kalium Chloride

Thanks for the correction. It is indeed skylink. I'm curious who's behind the airline as there's been considerable talk in the US among CEO's of ATA, World and others about starting a low cost connector on the Atlantic code sharing with carriers such as AirTran and Jet Blue in the US and Ryan Air or another low cost carrier in Europe.

[runawayedge]

I think it is possibly Skynet currently operating 73s out of Shannon and Dublin to Amsterdam and Moscow. Heard recent rumour they were aligning with Aeroflot to operate a 767 across the pond....

[Pembo330]

I really want something like this to come off but don't think it ever will unfortunately.

[non sched]

http://dms.dot.gov/general/orders/summaries/0408.pdf

Here's the link to the DOT application. It's actually Skylink Airways.

[moo]

holer moler, I resent that comment hehe (but its true :D ) you need the wellies to get their back legs in them to keep them from wandering off - WWW will tell you :ok:

[non sched]

More info

SkyLink Airways, a Low-Fare Airline Startup, Seeks to Enter Market on Trans-Atlantic Flights


WASHINGTON (AP) -- A new low-fare airline wants to strike the major carriers in a market they have had safely to themselves: trans-Atlantic flights.
Led by Southwest and JetBlue, low-fare carriers have taken domestic market share -- and profits -- from the big guys and forced them to change the way they do business. Now a proposed startup called SkyLink Airways aims to replicate that success on flights to Europe


SkyLink, the brainchild of an industry veteran and neophyte, seeks to fly scheduled and charter service, beginning in May 2005, from Baltimore to London and Paris. Average ticket prices would be 15 percent to 70 percent below those offered by major airlines, the Dulles, Va.-based company said in a business plan filed with the Transportation Department on Feb. 20.

Several industry experts said it was only a matter of time and predicted others will follow SkyLink's lead. At least one existing U.S.-based budget carrier, ATA Airlines, has expressed informal interest in trans-Atlantic service.

"You have established, well-funded domestic low-cost carriers that are starting to sniff out the Atlantic," said Jon Ash, managing director of Global Aviation Associates, a Washington aviation consulting firm. "While it is an incredibly tough environment, it probably has a little more growth potential than the U.S."

But he had serious doubts about the startup's viability.

"You can't give these things very good odds of success," Ash said, referring to all new airlines.

The DOT has already expressed concerns about SkyLink's flight certification application, calling the description of its financial plan "materially deficient."

Still, few would have guessed when JetBlue Airways was launched in February 2000 that four years later it would be the No. 1 carrier out of New York's JFK International Airport -- ahead of American Airlines, the world's largest airline. JetBlue no doubt benefited from strong financial backing from big investors, including Western Presidio and J.P. Morgan Chase.

While JetBlue started with domestic service only, it now flies to the Dominican Republic and plans to eventually expand into Canada, Mexico and Jamaica. Spirit Airlines, Frontier Airlines, America West Airlines and other low-cost carriers also serve nearby international destinations.

On trans-Atlantic routes, however, the major carriers have not faced any recent challenges from low-fare carriers. Trans-Atlantic flying requires larger long-haul aircraft, which are more expensive to buy and maintain and which, by definition, do not make as many flights per day as shorter-range aircraft, adding another layer of complexity since many aircraft would be needed to offer a convenient schedule.

SkyLink proposes two classes of service on wide-body 200-400 seat jets that would fly to Stansted Airport in London and Charles de Gaulle Airport in Paris.

The advantage of big aircraft is that the hefty up-front costs can be spread among many passengers. "But it means they have to find more people to put into the airplanes," said Michael E. Levine, a former airline executive who teaches law at Yale University.

Levine said he was "skeptical" that a startup could attract large volumes of passengers quickly enough to make the venture work.

SkyLink chose BWI Airport because it currently offers limited service to Europe and because its two busiest tenants, Southwest Airlines and AirTran Airways, already carry loads of budget-conscious fliers to and from Baltimore.

"It's really a new business model," Josh Marks, SkyLink's 27-year-old president and co-founder, said. While conceding that cheap trans-Atlantic tickets are already sold by the major carriers, Marks countered that this low-priced inventory is scant and largely unavailable to last-minute business travelers -- a constituency SkyLink will target.

Marks, a Harvard Business School graduate who lectures at Embry-Riddle Aeronautical University, is partnering with chief executive Kenneth Carlson, 59, an industry veteran who has run a couple of small airlines, including Jet Express and Midway Airlines.

Jet Express, which provided regional service for US Airways in the 1980s, acquired the name Midway Airlines in 1993. In 1994 Carlson left Midway, which filed for bankruptcy in 2001 and recently liquidated.

SkyLink is still negotiating aircraft agreements with Boeing and Airbus and is "close to announcing a deal," Marks said.

If SkyLink gets the OK from federal regulators to begin service, they should expect a fierce counterattack in the form of lots of cheap fares from well-established carriers seeking to defend their turf.

"We have a lot of experience competing with low cost carriers in our domestic markets and we think that we are positioned to compete in any market with any carrier," American Airlines spokesman Tim Wagner said.

In order to seriously contend against carriers such as American and British Airways, analysts said SkyLink will need deep pockets. Marks said SkyLink is attempting to line up more than $130 million in financing from venture capitalists, though he would not name potential investors.

The uncertainty surrounding SkyLink's financing is no small problem: it could actually lead to the demise of the young venture before the end of April.

Last month the Transportation Department threatened to dismiss SkyLink's application outright without more "evidence" of who its financial backers are and how much they will commit. In a March 18 letter, the chief of the agency's air carrier fitness division, Patricia Thomas, gave SkyLink 30 days to "demonstrate" its financial plan.

Marks said he is "confident that the funding process is moving on track."

A spokesman at BWI, Jonathan Dean, said the airport fully supports SkyLink's proposal. "It is very early in the process, but SkyLink does offer great potential," Dean said.

[PAXboy]

"It's really a new business model," Josh Marks, SkyLink's 27-year-old president and co-founder, said. Actually, I think it was Freddie Laker who said that in 1977. OK, this time the big boys will have a very much more difficult time to take him down, not least because short haul LCCs and the internet but chance of success and still being airborne in three years from first revenue flight? Sorry but I think it will be slim and for a variety of reasons.

Is there a 'smiley' for yawning?

[iceman51]

Actually, I think it was Freddie Laker who said that in 1977

I agree with you. It was the legendary Sir Freddie Laker (he was knighted by Queen Elizabeth II for his contribution to commercial aviation and the British economy) in the late '70s, and his "SKYTRAIN" service, which revolutionized the airline industry by offering the first no-reservation, low-cost air service, carried by 1981 over 2 million passengers, and all that without the Internet!

The end of the "SKYTRAIN" is history and this business case might be studied at the University. But now the market is completely different, and I believe to be successful a new long haul airline should have simultaneously all the following elements:

- an absolute right product
- immediate high "visibility" in the market (the Web is helping a lot, but is not enough)
- high "placing power" in the market (the Web is helping a lot, but is not enough)
- very deep pockets (i.e. money, money) to survive the start-up and beyond

You need also an efficient organization, a first class marketing team, a top quality sales dept. (every airline is talking about yield, but how many are really understanding what are they talking about and what actions are they taking if a specific route is not performing well, months after months, even years after years or their business model is not working anymore?), efficient operations both on the groung and in the "air", etc.

Will SkyLink Airways have all these elements set-up and ready on day one? If the answer is yes, they will have some (slim) chances of success, otherwise ...


I wish SkyLink Airways all the best.