Originally Posted by uncertaintraveler
JS, my business model (condensed and generically speaking) focuses on medium to long-haul domestic flights, point to point, connecting the top 10 to 15 markets in term of revenue, passengers, and need. No short-haul flights and nothing to small-market cities. Thus, no service to those cities that aren't capitals or that have a population less than 400K to 500K.
The product itself would involve all premium coach (but no middle seats!), with IFE and leather seats. Seat width would be generous and seat pitch would allow for a 6 foot tall person to feel comfortable. Free drinks (but probably no alcohol) and free food (not snack food, but real food that fills you up). With no premium levels such as first/business class, elite status grants you lounge access, free flights, and/or a seat in the otherwise-blocked off exit and first several rows of the plane. (The idea being that it should be easy as possible for frequent travelers to board and deplane.) The fare system would be very simple, with at most 4 price levels (all based on time of purchase) and all tickets refundable. Elite status would be based on a combination of the fare level purchased and/or number of flight segments flown.
I think the price point is anywhere from $10 to $50 more than a competitor's ticket price, but I think the extra service and amenities would justify the extra cost.
Anyone want to tell me where my plan has holes or problems?
A few pointers: you will have to use a regional jet in order to have coach seats with no middle seats. A DC-9/MD-80/717 size plane with no middle seats is the standard domestic First Class seat.
Having four published fares based on time of purchase is fine. The quoted fare needs to also be based on seat availability, but that doesn't really add any complexity as far as the user is concerned. For example, if you go to southwest.com and start a reservation, you see all the published fares, and the ones available to purchase are those that meet both the advance purchase and seat availability requirement.
Flying point-to-point is a good idea and may eliminate some of the Midwest Express problem, where a legacy carrier cuts the fares on all the flights out of your hub. The other carrier touts a "Kansas City sale" while putting the screws to you.
Making all tickets refundable is an interesting idea. It could result in revenue leakage (people willing to pay a little more for a refundable ticket, as on Southwest, need not do so if all tickets are refundable).
The biggest problem will be the inevitable competitive response from the legacy carriers who offer $39 fares and triple miles and things like that.
You might stand a better chance of success flying smaller city pairs in order to stay "under the radar" of the major airlines. Take Hooter's Air for example. They have a MYR hub and fly to places like LCK and GYY. They pretty much have the market to themselves. They also fly to BWI, EWR and ATL, but (aside from ATL) when you have the only non-stop service, you do a lot better.
If you try to start off flying NYC-LAX, you will need billions of start-up capital ala JetBlue (but a lot, lot, lot more now that JetBlue is successfully flying JFK-LGB).
Besides, if you do buy a regional jet, you won't need to fly huge city pairs. Fly something like ALB-BTV, JAX-CRW or CAE-DEN.