Air Transport World

Let's start an airline. (small startup airlines appearing in several markets)

They're back. Those start-up airlines that caused so much excitement during the 1980s are returning once more to bedevil the U.S. industry with low fares, new services and offbeatsounding names. Each claims to have found a distinctive comer of the sky; all say they have learned from the mistakes that doomed nearly all of their Predecessors. They know the odds of survival are not good. They are entering at the very bottom of an economic cycle and are coming into a business dominated by a few large carriers as never before.

But adversity breeds opportunity. The big airlines have been staggered by losses of die last 2 1/2 years. They are confused by their apparent inability to contain Southwest Airlines, which refuses to play by big airline rules. Their hub systems have proved to be double-edged swords, allowing access to every market but turning every airline into a competitor.

Adversity also breeds pilots and airplanes. Hundreds of jets are parked, while the unemployment lines are bulging with experienced airline people cast adrift by the failures of Eastern, Pan Am and Midway, and the downsizing taking place among the survivors. "You have very experienced people out there," agrees Russell Thayer, a principal of Airline Capital Associates, who has worked on the start-up of Kiwi International.

"Plenty of planes are around, plenty of pilots are around, plenty of mechanics are around al die bottom of a cycle.... That part of it leads to airlines being formed," says John Eichner, chairman of Simat, Helliesen & Eichner. "The reason Southwest got started is because Lamar Muse was able to talk Boeing into giving him four whitetails," he recalls.

There is a real opportunity here," says Joan K. Strahler, director-aviation consulting for Reston, Va.-based Avitas Aviation. Strahler and Vice President-information Services George Pearson estimate that they have been asked to review 50 different proposals for new carriers. Although no more than a half-dozen have any real potential, Strahler and Pearson agree that maybe the times are right. There are planes and crews aplenty, while the presence of what Pearson calls "distressed financial sources"-the banks and financial institutions that are eager to get their aircraft back in the air-helps obviate the need for Wall Street's seed money. …

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