New airline, new ideas

At a time when the airline industry still is struggling to pull out of a tailspin induced by the attacks of Sept. 11, 2001, a soft economy and poor management, do we really need a new carrier?

You could almost hear a collective groan from the airline industry’s talking heads when former travel executives Edward Beauvais and Travis Tanner last month unveiled Project Roam, a yet-unnamed discount airline based in Pittsburgh.

This is hardly the time to start a new airline, some said.

Or is it the perfect time?

It is if you’re Jim Roddey, Allegheny County, Pa.’s chief executive, who is eager for a new airport tenant. “There’s a big demand for a discount airline here,” he said.

Maybe that’s because Pittsburgh’s fares are about 20% higher than average, according to airfare analyst Bob Harrell. “It’s an expensive airport,” said Jake Haulk, president of the Allegheny Institute, a public policy research organization in Pittsburgh. He blames the sky-high fares on US Airways’ monopolistic pricing.

But Project Roam promises to be more than a boost to Pittsburgh, and more than a feisty rival to a lumbering legacy airline. The new ideas it brings with it could change the way we think about an airline — and the way airlines think about us. That would benefit all travelers and possibly create a stronger, more customer-friendly airline industry. Here’s how:

- By offering low fares without making customers suffer. The fledgling carrier said it plans to price its tickets up to 70% below competitors while putting passengers in leather seats similar to JetBlue’s. There will be 32 inches of space between the seats, complimentary wine, free live TV, a library of digital music and a selection of microbrew beers “rotated on a seasonal basis.” Beauvais, who founded America West Airlines, said it’s a simple philosophy: “We want the quality to exceed the price of the product.” That’s a dramatic change from the “less-is-more” attitude air travelers normally confront. For people accustomed to austere economy-class seating and no-food flights, being treated like people is novel, indeed.

- By keeping its costs down. One way is by flying a fleet of all-new Boeing 737-700 jets, a more fuel-efficient aircraft than the older airplanes, a strategy already used by Southwest and JetBlue. But the new airline’s timing is also prescient: A large pool of skilled airline workers is at its disposal because of layoffs at other airlines. That ensures it can hire high-quality employees at competitive rates. The new airline also will be able to negotiate gate leases on more favorable terms than if it were taking off during the past decade’s go-go days. Beauvais believes his cost structure will allow it to turn a profit, even with the deep discounts and more generous amenities. Controlling expenses isn’t a new idea, of course. The entire airline industry has been trying to do that for years. But not asking your customers and employees to make sacrifices in order to keep costs down is a relatively fresh concept in this business.

- By creating a new market. The new airline won’t just rely on Pittsburgh’s exploited airline passengers for business. Officials estimate there’s also pent-up demand for lower fares that are lost to other, less-expensive airports. Roddey estimates that about 700,000 passengers skip Pittsburgh every year because of its high fares, but they’d fly if they could afford to. Mainline carriers, however, generally don’t ask themselves how to encourage new passengers to fly, but only how to get existing passengers to pay more for their tickets.

- By not following the flock. Project Roam is scrapping airline policies that don’t make sense to travelers. For example, if you want to fly in business class on most airlines, you have to pay a premium for a good seat. On the new airline, getting into the front of the cabin could cost as little as an extra $25. If you want to change the dates on your ticket before you travel on the big old carriers, you’re billed another $100 or more. On Project Roam, it’s free. Beauvais said he’s even considering making tickets completely transferable, meaning travelers could allow others to use their tickets if they can’t make a flight. The new airline also will sell tickets without Saturday night stay requirements. Such truly radical ideas would win the airline instant friends, especially among frequent business travelers.

This looks appealing on paper, but that’s the problem: It’s largely still on paper. Beauvais expects to close a round of financing by the end of the year, with the first plane not expected to take off until next summer. Anything could happen between then and now. If Project Roam gets off the ground, success is not guaranteed. But even if it fails, Beauvais’ concept already has brought new ideas to an industry mired in old thinking.

Remember Freddie Laker’s Skytrains? That low-cost service between London and New York, started in 1977, was the first operation of its kind. It went bust in 1982, but Laker’s ideas about affordability affected an entire generation of air travelers for the better because major carriers lowered prices in response.

Project Roam already has given the airline industry plenty to think about. Passengers should be thankful for that.

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