Transatlantic flights are lucrative for airlines. The London-New York route is estimated to be generate $1.4 billion annually. British Airways is the dominant incumbent (with 3,000 of total 7,000 seats per day). Virgin Atlantic is an established competitor, offering broadly similar service for a similar price. But several start-up airlines have emerged, with materially different value propositions ...
Eos Airlines, Silverjet and MAXjet have raised over $300 million of investor capital. They offer several key common attributes - (a) Less than five planes, (b) London (not Heathrow or Gatwick) to New York service, (c) Business class only flights, and (d) Ticket prices substantially lower than British Airways or Virgin Atlantic (50%+ discount). But they offer different services and target niche market segments.
Eos Airlines - Luxury service targeting executive business travelers
Founded 2004 by ex-Strategy Director of BA. US owned. VC backed (£87m).
Route between London (Stansted) & New York (JFK) & plans for 3 more.
Small planes (48 seats), cheaper than private jet. Corporate client contracts.
Silverjet - First class service at discounted price
Private terminal at UK Luton airport. 100 seat planes, business class only.
British owned. AIM listed (£50m). Launched Jan 2007. Web/phone sales.
Route between London (Luton) & New York (Newark). Second route delayed.
MAXjet - Business class service for middle management & affluent travelers
Launched Oct. 2005. US owned, AIM listed. Cost-conscious (no flatbeds).
Route between London (Stansted) & New York (JFK).
History of the firms per Wikipedia: Eos Airlines, Silverjet, MAXjet.
Silverjet is also the world's first carbon-neutral airline, exploiting current climate change popularity. All fares include a mandatory supplement to enable Silverjet to purchase appropriate carbon credits.
With small fleets; adaptive business models; entrepreneurial management; investor funding; and nimbleness to cherry-pick most profitable routes then the firms present credible threats. By attacking three distinct market segments, incumbent airlines face multiple competitive battles. Both British Airways and Virgin Atlantic have announced plans to introduce business class only flights. But discount pricing would surely cannibalise revenues from their current premium travelers.
In April 2008, EU Open Skies agreement will open historically priceless landing slots at London Heathrow airport. Hang on to your seats, strategic innovation is afoot in the luxury air travel industry.
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