Originally Posted by USA_flyer
The airports served by EOS and MAXjet have huge O&D markets so the connectivity is much less of an issue. I'm also willing to bet both already have some decent corporate accounts from financial institutions that have no interests outside Wall Street or DC.
Sure, it's a huge O&D market, but it is also one of, if not the most, heavily competitive international market in the world. Sering only one market limits their ability to sign corporate contracts on the U.S. side. Their newness and, frankly, their precarious financial position, also impede their ability to land corporate contracts.
Competitors include AA, BA, VS, UA, CO, AI and KU.
Your assumption that they need high load factor can't be debated as we don't know what load factors they need to make a profit. It might be far lower than we think especially if you consider the low number of first and biz pax on any legacy carrier flights. Also, their fuel burn is going to be lower because they don't have as much weight onboard.
I actually have some insight into this as far as one of the two competitors in concerned. Suffice it to say they need a very high load factor to break even. All anecdotal evidence that I have heard is that they are runnign with very, very low load factors. Far less than they need. Remember, their fares are not as high as the mainstream carriers.
Even though they are lighter, their engines (well, MAXjet's, at least) are a very old model (JT9Ds) that are not very fuel efficent. That will more than eat-up any weight-related fuel savings.
It's quite possible one will exit the market but I maintain that one or two of these airlines can be successful in cherry picking routes and premium pax from the legacy carriers. Personally, if I had the choice between sharing an aircraft with a couple of hundred economy pax with screaming babies and unruly passengers and an airline that is probably out of the reach of most, I know where I'd spend my money.
I would consider using them too, but, as you point-out, most people won't. Price conscious premium travelers are a very small market and not one that produces consistent business year-round.