A Visit With California Pacific Airlines

Two long years ago I wrote about a proposed startup called California Pacific Airlines. At the time, I said that it was different from other startups for two reasons. “First of all, [CPAir] actually has some money and has a shot at getting off the ground. Second of all, the idea isn’t a bad one.” Here we are two years later and the airline is still plugging along, now with its own shiny new airplane. I went down to Carlsbad for a visit to see what’s been happening.

Current Headquarters

I found the airline in a small office in a business park off the eastern end of the Carlsbad Airport. The sign on the door shows the name of a previous venture. It’s certainly nothing fancy, and it shouldn’t be. Right now, the airline is in the middle of Phase 2 of the startup process with the feds. The first phase is getting all the manuals together and having those signed off. That’s done. Phase 2 is where the airline gets into much greater detail on the manuals and the feds poke and prod until they’re satisfied. The airline is in the thick of this right now.

The first submission was completed and a response was received with a mere 10 pages of notes. Apparently that’s a fairly encouraging first response. They expect to have their second round submitted by the end of this month and then it takes 30 to 45 days to hear back from the feds. That goes back and forth until they’re satisfied, so you can imagine that it’s hard to know an exact time when the airline could be in the air. If all goes well, however, we’d be in the middle of September when they get approval for Phase 2 at the latest. Then they’d move on to Phase 3.

Phase 3 starts with “tabletops” – that’s where the feds grill everyone responsible for each manual to make sure they know where to find everything and that they have adequate knowledge. This can take a few days. Then it’s time to get in the air. California Pacific will have to do up to 50 proving flights. The airline expects that it can run 2 to 3 roundtrips up to Oakland a day and be done in a couple of weeks. This process is actually pretty interesting, because the feds make the airline run as if it really had passengers. They’ll test every piece of the operation, even getting down to sending people up to the counter in order to make sure that the airline catches them if they’re on the no-fly list, for example. They’ll observe everything and make sure that CPAir knows what it’s doing.

California Pacific Shows Off Its Airplane

The airline already has its first airplane. It has leased an Embraer 170 with 76 seats from Embraer directly. The airplane was previously with now-dead Cirrus Airlines in Germany. It sat in London waiting for a new home until CPAir picked it up for what I can only assume was a bargain. The aircraft has been painted and was at the event held this week in Carlsbad. It expects to have 2 airplanes by launch and 4 by spring of next year. Launch routes are Oakland, San Jose, Sacramento, Vegas, and Phoenix. These cities should see 3 to 4 roundtrips a day. Apparently the exact order of launch will depend upon what kinds of deals the airline gets from each airport.

The aircraft interior is fairly nondescript since it looks just as it did with Cirrus. Other than a deep cleaning, it doesn’t look like the airplane needs much, but it will be getting a little makeover. One row of seats will be removed to allow for 24 premium economy seats at 36 inches of pitch and 48 coach seats at 31 inches. The original plan called for First Class as well, and that is still in the plan, but it won’t be happening right up front. (I still think that First Class is a waste for such short flights. Stick with premium economy.)

Once all the testing is done, then the FAA signs off on the operational capability while the DOT signs off on the economic fitness. The airline will need to have at least 90 days worth of funds in the bank to operate. And that would be a pretty bare minimum.

The airline then needs to decide when to start operations. The FAA apparently lets a new airline sell tickets up to 60 days before first flight, even when that’s before certification. That means the airline has to bet on getting through the process and that sounds risky. As of now, the airline is talking about flying in 2013. While it could be at the beginning of the year, there is some consideration being given to the fact that January/February in southern California is not exactly a peak travel time. It might make sense to push it further into a higher demand season.

A Little PSA

So will this airline make it? It has a shot. Carlsbad is a unique spot in that it has an insanely short runway. It’s not even 5,000 feet long so not many airplanes can get in there. United Express is the only airline currently in the market with a bunch of Brasilia turboprops up to LAX every day. None of the CRJ family aircraft can fly in there and neither can the ERJ-145 or larger E-Jets. The 737 and A320 families can’t get in here either. That means it would be very tough for any airline to have a competitive response.

It sounds like many of the airline’s target travelers now fly Southwest out of San Diego on these routes. Southwest certainly can’t go into Carlsbad but it could drop fares in San Diego to hurt the little airline (a tactic that was used against it back in Southwest’s early days in Texas). More importantly, many of the local companies that are being targeted by CPAir don’t seem to have corporate deals in place with other airlines. Southwest isn’t big on those, so there isn’t much tying the hands of the local businesses.

Sounds like it should be flying soon, right? Eh, I’m not entirely sure about that yet. On funds, the airline has about 80 percent of what it needs to get its certificate but it still needs to raise $30 to $50 million to fund the operation. The airline seems to be very confident that the funds will come in, but until that actually happens, this could all be for naught.

Still, it seems to me that we’ll probably see these guys flying next year. Now, we’ll see how long they can actually keep going. But I’m more bullish on these guys than most startups. They have an interesting niche that’s somewhat protected. Of course, that still requires flawless execution and it means the airline has to understand its limits as a boutique carrier. There are a lot of things that could go wrong, but they could also go right.

[Update: I put a slideshow up of my visit to the airline on the Conde Nast website]

39 Responses to A Visit With California Pacific Airlines

  1. Andrew says:

    Interesting…would love to see them succeed, if just for the novelty of it. One question though–you say “Carlsbad is a unique spot in that it has an insanely short runway. It?s not even 5,000 feet long so not many airplanes can get in there… None of the CRJ family aircraft can fly in there and neither can the ERJ-145 or larger E-Jets.”

    If the “larger E-Jets” can’t fly in there, how is CPA going to make this work with an E170, which is a larger E-Jet?

    • Ben says:

      I wondered the same thing. According to the always reliable wikipedia, the takeoff run at MTOW is roughly 500 ft longer than the available runway. However, I wonder if the removal of a row of seats and therefore a reduction in takeoff weigh is a result of this.

    • CF says:

      Andrew – Sorry I meant none of the E-jets larger than the E170. Actually, we talked about this. The E175 could do it but it wouldn’t be able to land with a full load on a rainy day. So that’s still possible considering we’re talking about Southern California here. But the 170 is in the sweet spot for the airline right now. They say they can fly almost 1,100 miles with that thing. That gets you Seattle and Denver but not quite Dallas.

      • Andrew says:

        Gotcha, sorry. I read it as “neither can the ERJ-145 or larger E-Jets (meaning all the E-Jets, since they’re larger than ERJ-145s). I get what you’re saying now, thanks!

    • travelnate says:

      Andrew,

      The E170 is a newer airframe than the E145, CRJs, and 737/A320s. The airplane has a high-lift wing & flaps and fairly large wheels with powerful brakes. What determines if a plane can land on small runways is the ability to stop in the worst condition – as mentioned; and on takeoff the minimum runway distance is based on the theory of “can I stop the plane if I blow something” in time or continue to take off on one engine. Embraer designed the plane to use short runways, unlike the other aircrafts mentioned.

      Republic had this very problem when they started to take over the USAirways EMB 170s – they didn’t have certain operational performances approved by the FAA, so they couldn’t do a “flaps 4 takeoff”- meaning drop the flaps lower than usual (which produces more lift) and it can take off slower, meaning it can take off on a shorter runway.

      The E175/E190/E195 are much larger & heavier – while they can use a lot less runway than their counterparts, the runway length @ Carlsbad could pose operational issues and weight restrictions.

      • Between Nate’s and CF’s comments I’m confused what can land with an economic load at Carlsbad.. I think it is the E135, E145, and E170.. Am I right or have I gotten it wrong?

        Of course I realize its weather dependent, but I’m interested in the average weather, no hurricanes or anything, the go arounds on those are brutal..

        • CF says:

          Nick – No, the E135/145 family of aircraft takes up a lot of runway. I believe it’s because they have no leading edge slats (like the CRJ-200s) and that means they have higher landing speeds.

          (Anyone, please correct me if I’m wrong on this.)

  2. Sanjeev M says:

    So the entire premise for this airline is the convenience of Carlsbad airport. Fair enough.

    It’s in a good location near a lot of people who have money, and near Camp Pendelton. I don’t know if Oakland etc is good enough as destinations. I would think some national/international feed is needed. This sounds like the perfect airport for Frontier/Republic to send a daily flight in the morning bank on an E170.

    • CF says:

      Sanjeev – The one thing I will say is that they’ve been talking closely with the top 10 to 15 businesses for them and these are the destinations they need. I asked about SFO instead, but they said the delays are so bad that they would lose an entire roundtrip on an airplane just to schedule that.

      Frontier isn’t doing the E170s anymore. It’s just the E190 in the fleet. The rest as flying as express with legacy carriers.

      • Surprised to see OAK and SJC on the list of five destinations, thought it would be one or the other at the outset. 3-4x to SMF also seems a bit high but I guess you can’t underestimate the value of access to the state capital.

        • Todd says:

          Sacramento is a larger region than most people realize. The metro area’s population is around 2.5 million (roughly the size of Pittsburgh, Charlotte, or Portland). Obviously state government is huge, but there is other stuff going on in Sacramento as well.

  3. It would be nice to see a small airline succeeding but most often the biggns just do a little price fixing to kill off the competition!

  4. MD says:

    IIRC, USX/Mesa briefly flew PHXCLD on CRJ200 equipment, maybe from 2006-07?

    • CF says:

      MD – That is surprising if true. When I was there, it was always the Dash-8 on the route. If they flew a CRJ, then I imagine they had to take a pretty good payload hit.

    • travelnate says:

      USAirways ended service when Mesa/USAirways started dwindling down the Dash 8 fleet. I believe the last flight was in 2010.

  5. Zack Rules says:

    I always wondered why United hasn’t sent their Q400′s or other prop planes to San Francisco out of this airport. I guess their old management was fairly conservative. Should be interesting to watch!

    • CF says:

      Zack – Those Q400s were with Continental before the merger so United never had the option until recently. I don’t know if they would even want to move them west since they don’t have that many and see to like them in the Northeast a lot.

    • Todd says:

      Speaking of Q400s, I wonder if Alaska (i.e., Horizon) would consider moving in? It already has an extensive west-coast network, and unlike this startup, it could offer more extensive connections on partner airlines. It has been successful at Santa Rosa, a similar sort of airport: short runway, on the fringes of a larger metro area.

  6. I like the ‘wave’ logo and the shades of blue, it just screams Southern California. I hope they stick with short hour-ish flights within California and to/from Nevada and Arizona since so many people do travel in those markets, which will get the airline a chance to be known and used. I think of Virgin America would have done that in the beginning things might be better for them by now.

    But for CP it will depend on the locals and the local business market. People in the bay area will tend to hop in the car to drive south for a vacation then to fly since they most likely would need a car anyway. But if the local transportation system offers easy access from airport to hotel to Legoland and the prices are good, they they might get the tourists business.

    The Las Vegas flights should to well since that is a short market people will fly instead of drive since they can get to the strip from the airport and that is the only area they will be in.

    • Jason H says:

      Selfishly I’d like to see them eventually add Denver to their service once they have stabilized using those shorter routes. Anything to put some downward pressure on SoCal fares would be nice.

      • Tracy says:

        I agree! Denver would be a great hub. We need more DEN-to-So-Cal service. BTW, the E-170 is a great jet. I’ve worked as a flight attendant on this aircraft and love it.

  7. Michael R says:

    Key West is shorter than Carlsbad by about 100′ and they get ATR-72′s (for a few more months anyway), CRJ-700′s (ASA I think), and 737-700′s from both Delta and AirTran. I don’t think that they should be banking on the runway length keeping competitors out of the market.

    • CF says:

      ATR-72s wouldn’t be an issue. But it’s not just runway length itself that’s a factor. There are a lot of things that go into determining what can and can’t fly into these airports. Carlsbad also has a wingspan issue among other things.

    • travelnate says:

      KEYW is also a flat runway… Carlsbad isn’t. Airplanes in Key West also take a penalty (weight, and its strictly a paperwork penalty) when they take off on 27, depending on the wind/runway condition/temperature.

      There were many days when I’d watch Delta Connection land in EYW while waiting for our E170/CRJ200 to come in and these guys would blow past the taxiway with full brakes/spoilers/reverse and wonder if they were going off the end & go for a swim on Roosevelt Blvd, or heaven forbid, end up in the ocean. The EMB 145s would particularly take up the entire runway on landing.

  8. Mark says:

    I wonder if any individuals or community groups would stand in their way? I suspect that someone will have a problem with a larger jet and a higher volume of air traffic coming into Carlsbad. This is the greater San Diego area after all, where everyone has a problem with something.

  9. Mika says:

    I’d love to see them succeed too, but every start-up after 2 years should start earning money, otherwise…

  10. Cook says:

    A wonderful post and discussion, Cranky. Like the others, I would love to see CPAir become a success. If their market homework is spot-on, I suspect that they can at least get off the ground. Still, it comes back to the tiny Carlsbad airportand the severe aircraft limitations that it imposes. I guess my greatest concern is howw those same factors will affect the ability to grow.If the start-up goes OK for them, I wonder where they expect to be in, say, their third or fourth year of flying. I wonder about the long term viability of a small airline with only four routes, all served by ver small airplanes.

  11. SAN Greg says:

    Great write up Brett. It’s very true about what you stated about starting in Jan/Feb, but there is a unique opportunity that presents itself right now. Parking at SAN is horrible (and will be for about a year) due to the construction of a new parking structure associated with the expansion of Terminal 2. It’s especially acute during holiday periods. Until construction is finished, it would be very desireable to have a local option for those who would be flying to one of CP’s destinations. It could give them a bit of valuable time for people to experience what they have to offer before this advantage dries up.

  12. There are very few runways that are so short that you cannot operate out of. All of the mentioned aircraft are in fact capable of operating out of Carlsbad. It is all a question of engines and takeoff weight. The question isn’t whether you can fly in and out, it is whether you can make any money doing so. Can you fly to a commercially viable destination with a commerciably viable load. That’s not quite the same as saying you cannot fly there. QANTAS used to operate 747SP’s out of WEL for SYD. The 747 is not exactly a short field aircraft, but between the very low operating eight for the mission (compared to availble MGTOW), and the big RR engines, it was actually pretty easy to operate the aircraft out WEL. AT very low operating weight, the 747SP with RR D4X engines had incredible short field performance.

    Keep in mind that a unit of BA flies an A318 out of LCY, whose runway length is almost identical to Carlsbad. However they have a very limited number of seats, and they don’t fly very far. A 737-500 with 3C1 engines could carry a reasonable payload a reasonable range with a 4900 foot runway. However the 737-500 with 3C1 engines is a ‘hot rod’ even by today’s standards.

    No argument that oversize engines are expensive to buy and expensive to own, and that clearly impacts the bottom line.

    • George says:

      BA’s 318′s are set up with nothing but bussiness class seats. I think it’s something like 40 seats. They fly LCY-Shannon(Fuel stop)-JFK. Coming back, it’s JFK-LCY. They did this to capture the finance types traveling between Canary Wharf/The City and Wall Street and wanted to save time by not having to travel to/from LHR, along with the hassle of the crowds, and delays. Looks to be sucessful-BA does this rotation twice a day.

  13. CF says:

    For those who want to see more photos, my slideshow is up on the Conde Nast website:
    http://www.cntraveler.com/daily-traveler/2012/07/california-pacific-new-airline-flights-airport-terminal#slide=1

  14. Mike says:

    Didnt they get bought by Mesa Airlines once?

  15. Jim says:

    Lets get California pacific off the ground..cool paint job!! Can’t stand the big major airlines anymore..

  16. Crys says:

    Anyone have an idea of what their fares are going to be?

  17. Glauda says:

    I have heard Bud Sittig has resigned? Any idea who new one is and what that means to the certification process??

  18. Tracy says:

    As a former Pacific Southwest Airlines (PSA) flight attendant, I’d love to see a Southern California-based airline put smiles back in the air. If this company can walk their talk, they’ll be a winner!

    I don’t agree though, with the theory that California Pacific should wait until the busiest time of the year to start carrying passengers. The people operating the flights, including above and below the wings, will need time to train and come up to speed so things can run smoothly when the busy season hits.

    I’ll keep my eye on this carrier and maybe send in an application! ;-)

  19. johnsf says:

    I’ve found this discussion fascinating. Can anyone comment on why aircrafts as large as B757 can operate from SNA’s short runway at 5,701 feet? I believe United (Continental) operates B737 to Hawaiian destinations from SNA.

    I have a particular fascination with my former hometown airport Tweed New Haven Airport (HVN). One of the argument I have repeatedly heard to explain a lack of commercial air service is runway length (5,600 ft). Apparently airlines are reluctant to initiate mainline (or regional service, for that matter) because of the short runway.

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