Who the F*&@ is OneJet?

It’s been awhile since I’ve written one of these posts, because there really haven’t been many new entrants worth profiling. OneJet, however, caught my eye when it came on the scene earlier this year. This is a very different kind of airline than we’re used to seeing. Will it work? I’m not sure, but I’m glad the airlines is giving this a shot. After months of trying, I finally had the chance to speak with founder and CEO Matt McGuire to learn more about the plan.

The original idea behind OneJet was to fill in the service lost over the last several years in mid-size cities, many of which are former hubs. The weapon of choice? A 7-passenger Hawker 400 business jet. That’s right, this isn’t your low cost carrier filling the void with full flights to Florida. OneJet is trying to replace nonstop service that no longer exists in markets where there might not be enough demand to fill a 50-seater but there is, so OneJet bets, enough to fill a few seats a day. After poring over a ton of data, OneJet found plenty of airports that it felt could support the service.

OneJet Hawker

OneJet’s first route between Indianapolis and Milwaukee started earlier this year, but today with three airplanes it has grown beyond that. One airplane flies Pittsburgh to Indy and on to Memphis in the morning, returning the same way that afternoon. Another airplane goes Indy to Milwaukee to Pittsburgh and back the same way in the afternoon. The last one is scheduled to fly a simple roundtrip from Indy to Nashville now. Presumably more will be announced soon to keep that airplane in the air. All flights operate only Mondays through Thursdays (with those two days seeing the heaviest demand), but Matt says Friday flights are coming.

What’s most interesting about OneJet’s approach is that it’s not trying to make this an exclusive private experience. It’s trying to make this as much like regular commercial travel as possible. It operates from regular gates at these airports. It is even participating in TSA Pre Check to make it easy for people to get through security. Further, OneJet currently only sells tickets through the global distribution systems (GDS). Any travel agent can sell a ticket and it’s available on Expedia, but it’s not available at onejet.com or through the murky world of private brokers. Why not sell directly? I asked Matt about that. They just didn’t get that up and running very quickly. It should happen soon, but since OneJet is targeting business travelers, it found it important to be in the GDSs first.

While much of the experience is supposed to feel like that on other airlines, pricing and availability is a whole different story. When I looked last week, OneJet was only selling flights through the end of October. It’s meant for business travelers so it expects most bookings to be only a couple weeks out. Let’s look at Indy to Milwaukee to understand how pricing will work.

If I try to book a ticket toward the end of the schedule, it’s $283.10 one way right now. That’s a pretty good deal if I’m a business traveler valuing the nonstop flight. (I can only assume that fares are low to stimulate trial right now and will rise a little over time, but not too much as to be noncompetitive with existing commercial service.) If I look at the flight for tomorrow (at least when I looked last week), it showed only 2 seats left for sale at $229.10, lower than what someone booking months in advance would pay. That’s because OneJet’s model is to actually price the first tickets it sells on each flight the highest. Then once someone is booked, the fares will go down to try to fill up the rest of the aircraft.

The first ticket, however, will become more expensive as it gets closer to the date of departure. Last week I looked at a flight a day in advance and it was pricing at $339.10. I’m guessing nobody had booked that flight yet, so the price for that first ticket crept up as it got closer. If one ticket sold, I’d bet we’d see a chunk of cheaper seats become available.

This kind of model doesn’t make much sense right now, because OneJet is flying all flights whether someone is onboard or not. (OneJet says it’s rare to have an empty flight and it’s running a load factor of just about 77 percent now.) But in the longer term, it’s moving toward an on-demand model which would mean that if no ticket is sold, the flight just won’t operate.

Beyond just published pricing, OneJet has been making a big push into signing corporate deals. So far it has 8 with Fortune 500 companies alone. One that’s been written up publicly is with FedEx. FedEx, of course, has its mega hub in Memphis, but it also runs a large hub in Indianapolis. OneJet is now an approved carrier for FedEx employees, something that should make that route a success on its own.

I suppose I shouldn’t call OneJet an airline, because it doesn’t actually fly any airplanes. Currently Pentastar Aviation operates the fleet of 3 airplanes (with about 1 a month planned to arrive through the next year) dedicated to the OneJet operation. Other operators will become involved down the line. The crews are also dedicated to OneJet.

From Matt’s perspective, this is just the building of a platform. With all this infrastructure, OneJet can operate a variety of different operations. I asked about whether it could run a corporate shuttle. Sure, it can, and it has the infrastructure in place to make that easy to do. OneJet has been deliberate about building something flexible. It has a stable of advisors ranging from former DOT folks (former Transportation Secretary Ray LaHood) to former airline chiefs (Fred Reid, from Delta and Virgin America). It has built an operation that’s running well and can handle growth. Now, it’s just a matter of figuring out what’s going to work best with this model so that the company can become profitable.

Without seeing the numbers it’s hard to say whether this is going to work. But I’m certainly rooting for any airline that finds a way to profitably serve markets that seemed unlikely to return in any other model.

[Original image via OneJet]

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