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March 4, 2004
Independence Air: Low Fares and High Unit Costs?
Independence Air, the new name for Atlantic Coast Airlines, is taking a different tact from most of the other low cost carriers. It is flying regional jets which means it needs fewer passengers to break even but also that it will have higher unit costs.
Ben Mutzabaugh says they are "trying a business plan that's never been tested before." He apparently forgets about Midway Airlines -- something that's easy to do because it's no longer in business.
Midway Airlines was so named because it started out at Midway airport in Chicago. In its second incarnation, it was a regional jet carrier based at Raleigh.
Midway shut down after September 11th but restarted service once federal payments arrived. After struggling some more, they tried to convert themselves into a USAirways Express carrier but that didn't last and now they're out of business.
Midway may or may not be an analogous case, but it's certainly incorrect to say that an independent regional jet carrier is a business model that has never been tried before...
Posted by gleff at March 4, 2004 4:06 AM
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