Can new airlines make it in America?

The four biggest U.S. airlines and their regional partners control about 80% of air travel in the U.S. But is there r...

Posted: Feb 14, 2018 4:39 PM
Updated: Feb 14, 2018 4:39 PM

The four biggest U.S. airlines and their regional partners control about 80% of air travel in the U.S. But is there room in the skies for new competition?

Over the past several years, airline mergers have left about 1,000 routes without service, most of them between smaller U.S. cities, according to an analysis by the Massachusetts Institute of Technology.

The Inspector General of the Department of Transportation in late January launched an audit to examine the impact of airline consolidation on air service to small and medium cities.

"Since 2014, the airline industry has become profitable due to the economic expansion and a jet fuel price collapse in that same year. However, congressional concerns persist regarding the availability of airline service at smaller airports," said Charles A. Ward, Assistant Inspector General for Audit Operations and Special Reviews.

Regional airlines carried nearly 10 million fewer passengers in 2016 than in 2010 when they flew 164.1 million people, according to the Regional Airline Association.

Western Pennsylvania, for example, was among the areas hardest hit when U.S. Airways' hub closed in Pittsburgh through corporate consolidation in the 2000s wasn't bouncing back after its merger with American Airlines. It was a scene that unfolded in cities like Cincinnati, Milwaukee, Cleveland, Columbus and Nashville.

But for the last two years, Pittsburgh has been an incubator for a new type of airline startup that was impossible a decade ago.

The airline, OneJet, was operating just two flights daily to and from Pittsburgh in 2016. That will become more than 300 a week by next month. The carrier was born directly from that MIT analysis.

Rather than squeezing its way into busy hubs dominated by the giant U.S. airlines like Delta Air Lines, American Airlines and United Airlines, OneJet caters to business travelers who want non-stop service to medium-sized cities across the Midwest and Northeast.

Restoring service between mid-sized cities is "fundamentally not something [big airlines] can serve the way those businesses are scaled," OneJet chief executive Matt McGuire said. "We can go and grow to a very meaningful size and still not be on the radar of any of the major carriers, there's just that much market open right now," he said.

And airlines like OneJet are the start of a new trend in flying.

New operations are popping up all over the country, trying to fill in the gaps left by the biggest airlines.

In California, JetSuite - whose founders started JetBlue - has been operating private charters since 2008. It's now been expanding to connect LA and the Bay Area from lesser used airports with refurbished inexpensive 30-seat ERJ135 regional jets that major carriers have been shedding.

On the other end of the spectrum, FlyOtto wants to connect charter operators with small, general aviation aircraft so people can reach airports that don't have commercial service at all.

And the U.S. may soon get its own low-cost long-haul airline.

The founder of now-defunct Eastern Airlines, Ed Wegel, wants to resurrect World Airways. The carrier wants to use Boeing 787s to take on the big U.S. carriers on international flights.

"There are a lot of under-served cities in America that would kill to have more service," says Henry Harteveldt, founder of the Atmosphere Research Group.

He also believes there's ample room for newcomers.

"But that new airline will look less and less like the airlines that are already operating," he said.

The road to success for a new airline, let alone sustainability, isn't easy. Bankruptcies and mergers have wiped out nearly every newcomer in the last twenty years. The last all-new large airline in the U.S. not swallowed up by consolidation was JetBlue Airways, which started flying in 2000.

"It's harder than I ever imagined it would be," said McGuire, OneJet's CEO.

A spokeswoman for OneJet said the carrier is profitable, but doesn't disclose its financial results because it is privately held.

Instead of using traditional passenger planes, the airline has turned eight-seat Hawker Beechjet private aircraft into tiny regional jets. The recession left a huge fleet that no one wanted. Each used Beechjet was available for 80% off their sticker price when they were new, according to McGuire.

OneJet doesn't operate weekend flights. All trips are out in the morning and back in the evening. That's a quality of life boon for its pilots, who are in short supply. The airline is reopening links from Pittsburgh partially with the help of travel contracts with the city's biggest businesses like PNC Bank and FedEx.

And OneJet is graduating beyond the tiny business jets and expanding with the same regional jets JetSuite is using, refurbished with more legroom and free wi-fi. On Tuesday it started using those planes to expand its model to Buffalo, reopening an air link to Albany. Flights between the two cities were cut in 2010. It's biggest competition is the five hour drive.

OneJet is counting on a perfect storm for its survival. The airline couldn't exist if airline consolidation or the global financial crisis hadn't happened.

"We're in a very significant restructuring period for the national air transportation system," said McGuire. "I don't think this would've worked ten years ago."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 468498

Reported Deaths: 9100
CountyCasesDeaths
Harrison31907468
Hinds30552569
DeSoto29532342
Jackson22868335
Rankin21016355
Lee14393214
Madison13961263
Jones13053215
Forrest12879231
Lauderdale11244292
Lowndes10148171
Lamar9972122
Pearl River8569208
Lafayette8008136
Hancock7110107
Oktibbeha6764117
Washington6756146
Neshoba6350200
Monroe6304156
Warren6267159
Panola6036122
Pontotoc599292
Bolivar5960143
Marshall5917115
Union558885
Pike5424133
Lincoln5192127
Alcorn509388
George454766
Scott447392
Leflore4377138
Tippah431780
Itawamba429192
Prentiss429074
Copiah423883
Simpson4238108
Wayne419663
Tate418999
Adams4174109
Yazoo411486
Sunflower4057104
Covington404891
Marion399699
Leake389784
Coahoma385996
Newton360273
Grenada3489100
Stone342657
Tishomingo320987
Attala318285
Jasper308261
Winston298191
Clay282672
Chickasaw277464
Clarke271784
Holmes257685
Calhoun256939
Smith241546
Yalobusha215447
Tallahatchie213849
Walthall203457
Lawrence202431
Greene202045
Perry195053
Amite191251
Webster191141
Noxubee173437
Montgomery168652
Jefferson Davis164041
Carroll158936
Tunica146533
Benton137531
Kemper136538
Claiborne124134
Choctaw123824
Humphreys122036
Franklin114127
Quitman100925
Wilkinson98335
Jefferson85832
Sharkey61620
Issaquena1916
Unassigned00

Alabama Coronavirus Cases

Cases: 757893

Reported Deaths: 12784
CountyCasesDeaths
Jefferson1082301712
Mobile694251158
Madison47738562
Baldwin35347420
Shelby34758281
Tuscaloosa32576495
Montgomery32249645
Lee21576200
Calhoun19621363
Morgan19061307
Etowah18363413
Marshall17028252
Houston15881337
St. Clair14724270
Limestone13908178
Elmore13812239
Cullman13756228
Lauderdale12909263
Talladega12124200
DeKalb11705220
Walker10047303
Autauga9371119
Blount9272146
Jackson8970132
Coffee8550150
Colbert8229160
Dale8162142
Escambia632298
Tallapoosa6255165
Covington6214153
Chilton6152128
Russell586753
Franklin558292
Chambers5155127
Dallas4569173
Marion4490114
Clarke447070
Pike439188
Geneva415999
Lawrence4002101
Winston399982
Bibb388975
Barbour334667
Marengo317778
Monroe306844
Butler305878
Pickens296166
Henry288550
Randolph288255
Hale282981
Cherokee275649
Fayette268569
Washington241844
Crenshaw226962
Clay219260
Macon211154
Cleburne205746
Lamar184638
Conecuh173337
Lowndes167856
Coosa160031
Wilcox153033
Bullock145642
Perry132430
Sumter122635
Greene117941
Choctaw71925
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