Originally Posted by USA_flyer
Clearly you haven't heard of Privatair.
However, I disagree that ALL three of these carriers will fail.
First off, none of them have the massive pension programs, staff overheads, massive tech groups so they have a huge cost advantage over the traditional carriers.
Secondly, the way we buy travel is vastly different to when MGM and PE were operating. We're no longer dependent on travel agents who recieved big kick backs from the airlines to organise our travel, we use the internet and do it ourselves. We can do our own research into the best airline and best price for our needs and buy accordingly.
Thirdly, because these companies are small they can develop a better relationship with their clients. If people are happy with the service then they're going to keep coming back.
Privatair is a completely different business model than EOS or MAXjet, so it is comparing apples to oranges.
Both EOS and MAXjet have low density seating. They need to fill the vast majority of those seats on a nightly basis at high fares to stand a chance at making a profit.
Neither airline offers frequency. Their competitors in the market do.
They only fly to one overseas and two U.S. destinations. That makes it very difficult for them to land corporate accounts, which are what provide a reliable stream of premium fares. Without this, they need to rely on ad-hoc business travelers and price sensitive premium leisure travelers. That's not a reliable base of support.
It would be hard enough for one carrier to succeed here, but there are two going head-to-head.
Fuel prices are high and one of the carriers, MAXjet, is operating particularly old equipment.