June 08, 2007

Upstart airlines are catering to business travelers

Outside the Silverjet airport lounge in Newark Liberty International's Terminal B, a bleary-eyed man in a dark blazer, who had just flown in from England, bumped into a middle-aged New Jersey couple. They were pushing a wheelcart stacked with suitcases and golf clubs to check in for their overnight flight to Luton Airport near London, on the same plane the man in the blazer had just arrived on.

He gave them a cordial welcome, grabbed two of their suitcases and led them to the baggage check. The couple had no idea he was the upstart airline's chief executive officer, Lawrence Hunt.

Hunt, a 41-year-old Englishman and serial entrepreneur who has started and sold a couple of software companies, is the hands-on head of one of several new airlines carving out niches in a surging trans-Atlantic travel market.

So far, his latest venture is doing pretty well. The early success of these premium travel ventures underscores the belief that many business travelers are looking for lower-cost alternatives to business-class seating on large network airlines. The New York-to-Europe travel market is where new airlines want to be.

"The trend for growth today is in international rather than domestic markets, and the battle will be London to New York and London to other big cities,'' said Dr. Alan Bender, an airline economist at Embry-Riddle Aeronautical University in Daytona Beach, Fla.

Bender cited globalization and newer agreements such as the recent "Open Skies'' accord behind the jump in business travel. The Open Skies agreement loosens some of the restrictions that countries have on foreign carriers next year.

Silverjet Plc began offering daily flights in January between Newark and Luton, which is about a 30-minute drive from the center of London. The British carrier is offering round trips for a little more than $2,000 on average on a plane with 100 seats that can recline to lie flat. That's less than half of what Continental Airlines, British Airways and Virgin Atlantic typically charge for similar accommodations.

"What we set out to do is drastically reduce fares for premium travelers," Hunt said in an interview.

In April, its third full month of operation, the plane ran about 62 percent full on average. A second flight will begin this summer.

Meanwhile, a French business-class-only carrier, L'Avion, started service in January between Newark and Paris' Orly Airport, and reports that it has been achieving "better-than-expected" load factors -- the proportion of seats filled -- exceeding 60 percent.

At John F. Kennedy International Airport, Eos Airlines and MAXjet Airways have been running business-class-only service to London Stansted Airport since late 2005.

According to the latest statistics from the Port Authority of New York and New Jersey, trans-Atlantic traffic has already grown at Newark by nearly 40 percent to about 6.4 million passengers coming and going in the 12-month period that ended Feb. 28. Traffic overall grew 22 percent to 35.7 million.

Continental, which handles more than two-thirds of the passengers at Newark, is largely responsible for the surge, adding routes to nine European cities in the past three years, including destinations such as Edinburgh, Scotland; Barcelona, Spain; and Belfast, Northern Ireland, cities the carrier believes are underserved.

This year, Continental from Newark is adding flights on its Madrid, Lisbon and Edinburgh routes, just for the summer travel season. But it is also adding a third daily year-round non-stop to Paris, and a new year-round route to Athens that begins Friday.

In the fall Continental expects to start a daily non-stop to Mumbai, India -- following a launch by Indian carrier Jet Airways of flights from Newark to Mumbai with a stop in Brussels, starting Aug. 5.

"It's a strong market right now, which gives us the motivation to add the capacity," said David Messing, Continental spokesman. "It's not a market where capacity is not being absorbed."

Continental forecast that its second-quarter seating capacity will have increased by 11.4 percent on trans-Atlantic routes. In addition, to adding the route to Greece, and the increased frequencies, the Houston-based airline is using larger aircraft on some routes.

By RICHARD NEWMAN. E-mail: newman@northjersey.com
Staff Writer Carol Fletcher contributed to this report.
Read more from the source: NorthJersey.com

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