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: 314509

Reported Deaths: 7247
CountyCasesDeaths
DeSoto21626259
Hinds20359415
Harrison17934309
Rankin13634278
Jackson13447246
Madison10099217
Lee9980174
Jones8381163
Forrest7683152
Lauderdale7191241
Lowndes6401147
Lamar623086
Lafayette6200118
Washington5339134
Bolivar4802132
Oktibbeha462798
Panola4588107
Pearl River4512146
Marshall4443103
Warren4393121
Pontotoc420772
Monroe4113133
Union411076
Neshoba4031176
Lincoln3968110
Hancock379386
Leflore3497125
Sunflower336090
Tate334084
Pike3325105
Scott315973
Alcorn313368
Yazoo311669
Itawamba300477
Copiah297065
Coahoma295479
Simpson295288
Tippah288768
Adams286882
Prentiss279760
Marion269280
Leake268373
Wayne262641
Grenada261487
Covington259681
George248048
Newton246861
Winston227281
Tishomingo226967
Jasper221148
Attala214473
Chickasaw207857
Holmes189173
Clay185454
Stone182833
Tallahatchie178841
Clarke178080
Calhoun170832
Yalobusha164338
Smith162434
Walthall133945
Greene130633
Lawrence128624
Montgomery126942
Noxubee126734
Perry126338
Amite123142
Carroll121829
Webster114532
Jefferson Davis107133
Tunica105726
Claiborne102430
Benton99525
Humphreys96733
Kemper95828
Franklin83823
Quitman80916
Choctaw76418
Wilkinson67331
Jefferson65728
Sharkey50217
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 532895

Reported Deaths: 11001
CountyCasesDeaths
Jefferson771431528
Mobile41089808
Madison34837505
Tuscaloosa25810454
Montgomery24355588
Shelby23730249
Baldwin21191309
Lee15892171
Calhoun14522316
Morgan14324279
Etowah13861353
Marshall12250223
Houston10581281
Elmore10060205
Limestone9986151
Cullman9705194
St. Clair9702243
Lauderdale9441242
DeKalb8846187
Talladega8255176
Walker7246277
Autauga6938108
Jackson6815112
Blount6694137
Colbert6310134
Coffee5524119
Dale4850111
Russell443238
Chilton4308112
Franklin426282
Covington4136118
Tallapoosa4039152
Escambia393977
Chambers3578123
Dallas3557152
Clarke351161
Marion3130101
Pike311377
Lawrence300798
Winston275673
Bibb261564
Geneva251477
Marengo249664
Pickens234761
Barbour231756
Hale223277
Butler216469
Fayette212562
Henry189044
Cherokee184745
Randolph181742
Monroe178040
Washington167639
Macon159950
Clay156857
Crenshaw152757
Cleburne149141
Lamar142935
Lowndes139053
Wilcox127130
Bullock122841
Conecuh110629
Coosa107928
Perry107826
Sumter104832
Greene92534
Choctaw61124
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