Originally Posted by flysooner9

How bout virgin America, jet blue, and spirit?

Originally Posted by TurboDVR42

just a cocky statement john....thats all i was implying. if a company finds a right market they will make money in a 727....they just have to find it. hope it works out for these guys.

Originally Posted by johnso29

JetBlue started at a much more opportunistic time.

Originally Posted by flydog431

JetBlue had barely been flying for 18 months when 9/11 happened. It's hard to conceive a less opportunistic time to start an airline, yet JetBlue was the only airline to turn a profit in the downturn.

JetBlue, Exception Among Airlines, Is Likely to Post a Profit - NYTimes.com

While the airline industry has historically never been a cash cow for investors, good management and sound business plan go a long way.

Originally Posted by flydog431

JetBlue had barely been flying for 18 months when 9/11 happened. It's hard to conceive a less opportunistic time to start an airline, yet JetBlue was the only airline to turn a profit in the downturn.

JetBlue, Exception Among Airlines, Is Likely to Post a Profit - NYTimes.com

While the airline industry has historically never been a cash cow for investors, good management and sound business plan go a long way.

Originally Posted by flydog431

JetBlue had barely been flying for 18 months when 9/11 happened. It's hard to conceive a less opportunistic time to start an airline, yet JetBlue was the only airline to turn a profit in the downturn.

JetBlue, Exception Among Airlines, Is Likely to Post a Profit - NYTimes.com

While the airline industry has historically never been a cash cow for investors, good management and sound business plan go a long way.

Originally Posted by Golden Bear

Presidential

Founded by a another former partner of Frank Lorenzo. (Lorenzo apparently had more clones than the Stepford Wives.) Presidential attempted a hub at Washington/Dulles. It depended on the same simple template as many other start-ups, i.e., low fares intended to stimulate the market and generate high revenues, which meant that the chances of survival were neck-and-neck with a chunk of steak in a shark tank.

In the 1984 election, candidate Walter Mondale leased a Presidential jet, thinking the name was a cool marketing play. As it turns out, Mondale and Presidential had a lot in common. Losers. (Also as it turned out, Mondale couldn't afford the jet and spent the last weeks of the campaign when he was back East wallowing across the skies in a clapped-out Convair 600 chartered from a small airline in Maine.)

Over its short lifetime, it took a scorecard to figure out Presidential's business plan, which seemed to change at a whim. It changed fleets from 737s to BAe-146s. Bought a commuter partner. Became a Continental code-sharer, commuter partner and all. Then became a United code-sharer, commuter partner and all.

Presidential ended up sleeping with the financial fishes 1989, commuter partner and all.

Pride Air

Founded in 1984 by a group of former Continental pilots, Pride Air operated three ex-Braniff 727s between Florida and western destinations, with a hub - so to speak - at New Orleans.

One of these aircraft, N408BN, probably had at least something to do with Pride Air's fate. This 727 had actually been the famous Braniff airliner with the 1976 bicentennial paint scheme, Flying Colors of The US, designed by Calder. Quite a history. As close as we can tell, it may have been one of the 727s ordered by Mohawk Airlines of Utica, New York in 1968. It was taken by Frontier, and later traded to Braniff. It was also one of the most egregiously unreliable hangar queens ever to leave the Boeing factory. The story at Braniff was that it never flew through a station. It flew in, broke, and eventually flew out. A dog airplane was a real issue for a start-up airline like Pride Air with just three planes.

In any event, Pride Air didn't last much longer than the NFL pre-season. Had insufficient capitalization to compete, and it shut down in 1986.

Regent Air

Covered above in the MGM Grand Air review. Regent tried ultra first class New York-Los Angeles service with 33-seat 727s (these were the same aircraft later operated by MGM Grand Air, with similar results). Problem was that most high rollers were quite happy with the first class service offered by American, United, and other airlines, even if they didn't offer on-board manicures. Gone by 1983.

Reno Air

Originally planned to have a hub at Reno, the carrier played route-system bingo with several major market re-alignments after beginning service in 1992.

Purchased for murky reasons by American Airlines in 1998. Reno provided no synergies to American, including a number of orphan MD-90s. The purchase trampled all over the agreement AA had in place with its pilots union, resulting in some nasty labor confrontations, costing AA well over the reported $134 million it spent - to get zero from a strategic point of view - to buy Reno.

Skybus

Breathtaking in scope. Daring in concept. Houdini would have been impressed at how long Skybus defied financial and rational gravity.

Truly one of the most crackpot schemes ever to take to the air, Skybus was successful in attracting a potload of investment dollars from entities where the concept of "due diligence" apparently didn't go too far beyond a powerpoint slide deck. Even had a hard order placed at Airbus for 65 airliners.

The concept was to fly A-320s into Columbus, Ohio from small airports in the east and from the west. Not passengers east and west, mind you. Just to CMH, where they could use another ticket (maybe the next day) if they wanted to go on to the opposite coast. The Director of Revenue at Skybus, apparently, was enamored with the Monty Hall school of pricing - started at $10 bucks and went up. And you could buy merchandise on board, too.

For investors, the Skybus business plan and route system should have sent up more red flags than May Day in Moscow. Chicopee, Portsmouth. St. Augustine, and other centers of culture and excitement. See, that's the Ryan Air model - go to airports near big cities. Unfortunately, what works in Europe doesn't always fit in the US. It sure didn't in the case of Skybus.

Sure, some of the flights were full - which is testament to the concept of selling way below cost and trying to make it up on either volume or perhaps selling kitsch on-board. Flight attendants were paid $9 an hour, but could supposedly make big commissions hawking watches and cologne.

Strict, 25-minute turns were scheduled. One diversion around a weather front, or a go-around, or an ATC slow-down, the Skybus system was bound for delay-city all day.

Skybus was a failure from the gitgo. It was dead within a year, despite the reported rosy financing support from entities such as Morgan Stanley and Tiger Financial.

UltrAir

Intended as an all-first class airline serving New York and Los Angeles from Houston, UltrAir began service in 1991.

An amateur act from the start, its basic product was a confused mix of a high-priced 2+2 "premium" cabin, and a 5-abreast "first class" cabin on the carrier's fleet of 727s. (Nobody bothered to tell these guys that in the US, nothing on a narrowbody airliner with a dreaded middle seat is considered by consumers as "first class.")

UltrAir started out of the box with a crude marketing program that clumsily attacked rival Continental, to the point of making UltrAir look like it was run by roving bands of rookies. Based on how successful UltrAir was, that turned out to be a fairly accurate assessment.

The airline apparently believed that the way to passenger loyalty was via the gastro-intestinal tract - lavishing lots of expensive food on passengers would somehow do the trick to fill seats. One interesting issue was that the menus were so extensive, the galley couldn't hold enough meals for a full load of passengers. It was a situation that UltrAir didn't run into much, anyway.

The premium service experiment ceased operations in 1993. It briefly re-surfaced as a high-density, low-cost carrier between Newark and Florida. Gone completely in 1994.

Pan Am II

No connection with the earlier airline of the same name. Investors bought the rights to the name "Pan Am" and assumed there was huge residual brand equity that would have consumers flooding onto flights, just on the strength of the name alone. They neglected to consider the fact that after an airline goes glub-glub, on-going consumer brand loyalty lasts about as long as the attention span of a spider monkey.

The investors got some visionary East Coast advisors to conjure up a plan and, voila! the perfect program was announced. Hey! We'll provide US connections for all those second tier international airlines at JFK and MIA. Like, all those folks on Air Nowhere-istan and Royal Jordanian and Estonian Inter-Global who are hankerin' to connect to Chicago.

Physically, logistically and economically, the plan was several zip codes from operational reality. Lost millions. Pan Am II went bankrupt in February 1998.

Pan Am III

More proof-of-concept activity. Still believing the blue meatball logo had great market value, the Pan Am name was subsequently purchased by a railroad company in Maine.

Spinning the intrigue of the old Pan Am - like, the China Clipper island-hopping across the Pacific, huge Boeing flying boats across the Atlantic, majestic Stratocruisers on round-the-world flights stopping at exotic locations such as Fiji, Bali, and Bombay, etc, the new owners of the name started 727 service to a place in southern Illinois it called "St.Louis" and to an airport in New Hampshire it called "Boston."* So much for knowledge of geography. And so much for consumers rushing to the brand.

After buying some old 727s from United, which it reportedly agreed not to fly in the US, (nor, as it turns out, anywhere else) the company operated the Pan Am name with a couple of 19-seat J-31s in a smattering of small markets on the East Coast, before that, too, was shut down.*

But the Pan Am identity lives on. The railroad that bought the rights has taken the name. Today, there are boxcars all over Maine with the big blue Pan American logo on the side.

Juan Trippe would be thrilled.

Vanguard

Established at Kansas City in 1994, Vanguard revised its route system repeatedly, tossing airplanes in disparate markets that not only made no sense, but built no brand-loyalty whatsoever.

In 1995, Vanguard had an initial stock offering that provided the airline approximately $14 million. However, much of this got immediately gobbled up to pay overdue bills and fund aircraft maintenance reserves. In its last days, it tossed MD-80s on a route system that nobody could figure out. Gone by 2002.

Pro Air

Attempted service at Detroit City Airport. There are approximately 1.2 million passenger trips generated annually in the immediate service area of that airport. But the problems were many: special interest opposition to service at that airport, a huge NW hub at DTW, and the fact that building a route system is enormously expensive.

While Michigan entities such as General Motors, Chrysler and even the United Auto Workers came out and officially supported the airline, it found difficulty in building a core route system. The special interest opposition - mostly the anti-noise types - had the support of prominent politicians, including Senator Carl Levin (D-MI), who emphatically urged the DOT to deny Pro Air slots at LaGuardia.* (Heck of a Michigan supporter, that Levin.)

In 2000, the FAA used ProAir as a media tool, shutting it down with great fanfare. Months later, the FAA agreed to essentially rescind its bogus and publicity-motivated revocation of ProAir's operating certificate, in exchange for ProAir agreeing not to take any legal action against the FAA. Says volumes about the management of the FAA. But Pro Air was out of business later that year.

Eastwind

A 737 operator that started with service from Trenton, where there was no competition. No traffic, either. It then became an airline nomad - moving from place to place trying to find a reason to exist.

Moved offices to Greensboro. No success there. Tried service at Rochester, NY, an airport in a region screaming about a need for low fare carriers. The noise must have come from a rent-a-mob, because Eastwind couldn't find enough passengers to fill a VW Microbus and pulled the Rochester plug. After thrashing around various routes from Greensboro, the airline finally shut down.

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Common Theme: It's Not Our Fault*

These are just some of the ways people have found to lose money with flying machines. Not to worry, there's more innovation on the way. Boyd Group International gets airline start-up proposals several times a year. In the vast majority of cases, they are mostly pipedreams, and our advice is free, but extremely valuable: don't do it.

(c) 2012 Boyd Group International, Inc.