Branson's move doesn't make sense, it seems to me, *unless* he expects a big new market hole to open up by a shutdown, as Speedport says. It's hard to imagine the Northeast-Florida corridor needing any more capacity, what with Song coming online, as a couple of people have noted. And it is very possible that miracle-worker Siegel is going to get US Airways through, so Branson shouldn't count on that carrier collapsing. All three big US LCC's would already be poised to jump should that happen anyway.
Doesn't US law require >25 percent foreign ownership of airlines, or did that change? In any event, figure Branson will match whatever he raises to the extent allowed by law. Which means from a $15 mil base, $22.5 mil or $30 mil. Which as PSU noted is peanuts compared to JetBlue, and a recipe for failure.
The only remaining gap in US LCC coverage that I can think of, that might support a whole new carrier, is the upper Midwest. Right now, that wouldn't work. Chicago is the natural base for such an operation, and WN
and ATA have claim on the new gates opening up at MDW
. ATA can fill a lot of Upper Midwest gaps with Saabs, to markets that couldn't support 73G's to Chicago today with UA
regional affiliates around. The city is trying to wring a handful of gates out of UA
, but that's not enough to get a whole new airline going. And we all know what a delay nightmare O'Hare's runway pattern is.
Only a network-carrier shutdown, most likely UA
, would change the Midwest market situation enough to support a whole new narrowbody LCC. That would immediately make an operation using, say 73G's like Virgin Blue, viable from ORD
to medium-size regional markets like GRR, MKE
, and of course major business centers around the country. But WN
's credit is excellent, and they could probably get enough 733's out of the desert--and some out of UA
colors--fast enough to enter several of those markets at once, faster than Branson could set up a new airline.
Overll this is a VERY risky bet for Branson to make. Unless he knows something we don't.