FlyASAGuy2005
Topic Author
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I Smell More U.S. Startups In The Future. Do You?

Wed Oct 20, 2010 6:19 pm

With the impressive numbers being reported by DL and AA managing to turn a profit on the heels of their situation that always seems to be played-up on a.net and US reporting a record Q, I am beginning to think that investors out there are going to try and get their hands on a piece of the pie.

Consolidation is truly at it's head with DL/NW finally combined, CO/UA getting things going, soon to be in full swing and the announcement of the WN acquisition of FL. How do you feel about above? MY personal feeling is that we may very well see new entrants between now and 2012 as the market recovers. The name of the game truly seems to be running a lean airline maximizing on a/c usage and LF. We are seeing carriers post in the high 80s to low 90% which no doubt is helping to contribute to DL surge in yield. In the investor call, they did make it clear that they are focusing on better controlling fare inventory, ensuring that there is available capacity for last minute business travelers.

I say all of that to say this. Maybe the likes of Sky Bus (although it was made clear the model was broken) and Independence Air may have been bad timing. That among many other factors of course.

Your thoughts and opinions, please.
What gets measured gets done.
 
LAXintl
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RE: I Smell More U.S. Startups In The Future. Do

Thu Oct 21, 2010 12:01 am

Not really.
The capital markets such as banks are still rather tight, and venture capitalist (rightfully) seem to be shy and staying away from air transportation especially in the US.

It will take a good string of years of strong economic numbers before people are willing to risk monies like they did in the 1980s on domestic airlines imo.
From the desert to the sea, to all of Southern California
 
SurfandSnow
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RE: I Smell More U.S. Startups In The Future. Do

Thu Oct 21, 2010 1:58 am

Quoting FlyASAGuy2005 (Thread starter):
Maybe the likes of Sky Bus (although it was made clear the model was broken)

Contrary to a.net consensus I think SkyBus in and of itself was a great idea. The problem? They only flew to Columbus and Greensboro, places nobody wants or needs to go to. I think they were finally starting to get that when they were adding stuff like PSM/SWF-Florida towards the end.

I think Allegiant has most of the viable leisure-type p2p routes covered, but you could always start an airline flying routes like SWF-GYY (New York-Chicago) or SCK-IWA (Sacramento-Phoenix). Leave LAS and SFB alone until you get established in your outlying metro airports like PSM/SWF/GYY/etc., then you can start going after the vacation traffic that takes G4...

Quoting FlyASAGuy2005 (Thread starter):
Independence Air

Poor management. Plain and simple. They should have never bought the A319s until they had established their entire CRJ network.
Flying in the middle seat of coach is much better than not flying at all!
 
dl767captain
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RE: I Smell More U.S. Startups In The Future. Do

Thu Oct 21, 2010 4:14 am

I don't think so. It's still very difficult for companies to get loans from banks which a new airline will need. Maybe some extremely small startups like California Pacific Air but I don't think we'll see anything like VX for a while.
 
PlymSpotter
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RE: I Smell More U.S. Startups In The Future. Do

Thu Oct 21, 2010 2:56 pm

Quoting SurfandSnow (Reply 2):
Contrary to a.net consensus I think SkyBus in and of itself was a great idea. The problem? They only flew to Columbus and Greensboro, places nobody wants or needs to go to. I think they were finally starting to get that when they were adding stuff like PSM/SWF-Florida towards the end.

The American market just wasn't ready for them. Give it another few years, by which time the legacy carriers will presumably be charging for even more things separately, and I can see it working.


Dan  
...love is just a camouflage for what resembles rage again...
 
RamblinMan
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RE: I Smell More U.S. Startups In The Future. Do

Fri Oct 22, 2010 4:06 am

Maybe not by 2012, but yes, I do see this happening. This is part of the reason I was in favor of all of the recent consolidation- it may have "cleared the way" so to speak. Capacity gets cut, and a new entrant could have a chance. When the legacies have too much capacity, they can afford to give away seats at junk fares in order to crush new competition.

Quoting SurfandSnow (Reply 2):
Contrary to a.net consensus I think SkyBus in and of itself was a great idea.

I agree. The U.S. definitely could use an Ultra-low-cost airline- RyanAmerica, so to speak. Skybus just wasn't it. Allegiant and Spirit kind of fit the bill, but they only really connect people to the big leisure destinations.
 
burnsie28
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RE: I Smell More U.S. Startups In The Future. Do

Sat Oct 23, 2010 10:35 pm

Quoting SurfandSnow (Reply 2):
Poor management. Plain and simple. They should have never bought the A319s until they had established their entire CRJ network.

Actually they should have never tried to establish that kind of airline with a CRJ anyway....
 
DesertAir
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RE: I Smell More U.S. Startups In The Future. Do

Sat Oct 23, 2010 11:59 pm

Small communities need reliable, low cost service to their major airport. User friendly airlines, that can let people buy tickets last minute, without costing an arm and a leg. How to do this is the question. Before deregulation their were a host of colorful local airlines that provided service to small community airports. I can see small nitch players with cost effective aircraft and low overhead costs. We seem to be living in the age of big is better.
 
mtnwest1979
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RE: I Smell More U.S. Startups In The Future. Do

Sun Oct 24, 2010 3:42 am

Quoting DesertAir (Reply 7):
Before deregulation their were a host of colorful local airlines that provided service to small community airports.

Exactly. They are EAS locations now lol. And fuel was way less then as well. What was once a potentially viable stop isn't anymore.

I enjoyed the time of many small airlines and some of the not-so-well-known places they flew to.
Looked at an old Hughes Airwest schedule and liked how you could fly Seattle-Eugene with one connection, and 5 enroute stops! Would have liked to fly trips like that. ( Went SEA-TIW-OLM-HQM-AST-PDX, then connect to NONSTOP to EUG.)
"If it ain't broke, don't fix it!"
 
DfwRevolution
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RE: I Smell More U.S. Startups In The Future. Do

Sun Oct 24, 2010 12:55 pm

Quoting DesertAir (Reply 7):
Small communities need reliable, low cost service to their major airport

Then they should drive to one. If you want to live in a small community, you are making certain trade-offs. In return for a quiet life and cheap land, you don't get every modern convenience you would get in the big city.
 
RamblinMan
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RE: I Smell More U.S. Startups In The Future. Do

Sun Oct 24, 2010 2:23 pm

Quoting DfwRevolution (Reply 9):
Then they should drive to one. If you want to live in a small community, you are making certain trade-offs. In return for a quiet life and cheap land, you don't get every modern convenience you would get in the big city.

Exactly. My parents live in a fairly sleepy town of 30,000 down south, I live in Chicago. There are big advantages and disadvantages to either location, but neither of us would be willing to switch. They have to drive over an hour to BNA, and they're fine with that.
For the most part, if the service can't make money, it shouldn't exist. I'm ok with limited subsidies for communities so isolated that getting to another airport would involve driving all day.

That being said, I DO think there's room for some small carriers flying Caravans to smaller places.

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