Airline Plots Routes Around Its Competitors

Two planes might be better than none, but they're not enough to put Great Plains Airlines Inc. in the black.

Its March acquisition of money-losing Ozark Air Lines netted the tiny carrier its first two planes. While the 32-seat Fairchild Dorniers are too small to achieve Great Plains' goal of nonstop service between Oklahoma and the East and West coasts, its co-founders have concluded that they need to lease another three -- quickly.

"Great Plains has to achieve a minimum economy of scale," says James Swartz, chief executive. "Under the regulatory environment the airline operates in, the [Fairchild] 328s are the easiest and shortest route to that minimum economy of scale."

It amounts to making a second big bet -- on a handful of the jets, which carry a price tag of $11 million each, for short-haul routes. And this will require more financing, the founders say, beyond the $30 million already raised by a combination of public and private funds. The Tulsa-based startup is still working on getting the planes and landing slots it needs to fulfill its mission: to fly 50-seat regional jets to Washington, D.C., New York City, Seattle and elsewhere, bypassing the hub airports of the major airlines.
http://startup.wsj.com/columnists/ch...0-wysocki.html