In news that will surprise absolutely no one, the DOT has sent a letter to Family Airlines saying that it needs to get its act together if it actually wants to fly. Riiight. That’ll happen. You have to read the request and Family’s completely inadequate response for maximum enjoyment. (Here’s a brief refresher on their silly plan for domestic 747s based in Vegas.)

You can read the letter from the DOT to Family Airlines (pdf) yourself, but in short, they aren’t happy. (FAI = Family Airlines, Inc)

Although a substantial amount of time has elapsed since FAI’s initial filing and FAI has submitted certain supplemental information to its application to the Department, FAI has to date failed sufficiently to meet its burden of demonstrating its fitness to allow us to continue processing its application. We remain concerned about FAI’s fitness in every area: managerial competence, finances, and compliance disposition.

The rest of the letter is a scathing rebuke of every single aspect of the airline. It is some fun-filled reading, but not nearly as much fun as the response from the “airline.” You can read that here (.doc).

The response was dated August 4, the same day the letter came from the DOT. Yeah, sure. It had three parts.

1. This was simply a change of address. (It’s still wrong on the website.)




2. This was a list of bios for all the new proposed officers without justifying how any of them are qualified. In particular, it didn’t address the DOT’s concern about having Dan Eikleberry as VP of Flight Ops. It also never even touched the concern that DOT had about Barry Michaels continued involvement.




3. Finally, they addressed the DOT’s concern that they didn’t have enough money to run this operation. This is probably justified since the company’s balance sheet at the time of its previous submission showed $30 in assets. Seriously. The DOT says the airline would need $185 million to begin. The response? They are going to issue 22 million shares of preferred stock to institutional investors at $7.50 each for a total $165 million. Even a non-math whiz could figure out that’s still $20 million below what the DOT says they need. But what’s the chance they can even raise that? The only institutional investor that would be interested in this is one that is institutionalized.

I thought it would be fun to try to get Family Airlines’ take on this letter, so I called the number on the website. I was informed that “due to technical difficulties” my call could not be completed as dialed. Would the technical difficulty be that they don’t actually have any phones? I also sent them an email on Tuesday, August 11 but I haven’t heard back.

Methinks Family should look at an alternative business. If their website is any indication, they may be trying to get in on the healthcare game. Take a look:

You may have a vague memory in the back of your head about Family Airlines. Not ringing a bell? Think back to the early 1990s. Ok, this is probably a stretch. In the early 90s, there was an attempt to start Family Airlines with low fares and family-friendly service. You might have guessed that it never got off the ground . . . yet. They’re now back 15 years later trying it once again. Only this time, the market conditions are far worse, and their plan seems much more ridiculous.

I know I usually try to focus on customer-facing issues, but I’m pretty sure we’ll never see this one get to the point where they actually get to serve customers. Instead, let me indulge myself with some of the funnier things you’ll find with these guys and their recently filed application with the DOT.

When I first heard about their resurgence last week, they had a 1995-era website with a cheesy YouTube video from a pilot saying how great they’re going to be. A day or two later, that changed, and they switched to a site created by WordPress (the free software I use for my blog). Yesterday, all you saw was this message:

We are experiencing technical difficulties with Content Management System.

We are trying to fix this issue.

We apologize for the inconvenience.

Please check back soon.

Oh sweet. But now they’re back to a regular website that it slightly more professional looking. (And I do mean “slightly”) Here are some gems on there proving that they really just recycled old material from 15 years ago. How about this one from the Q&A . . .

Why start an airline today?

The timing could not be better! With the traditional “pre-deregulation” airlines about to go bankrupt and the newer ones unable to fill their vacancy (mainly due to higher operating cost and lack of capacity), the Family Airlines way is a sure success. No airline today can compete on a fare basis, in the markets proposed to be serviced by Family Airlines.

Riiiiight. It must be nice to have such blind optimism.

Maybe I should back up a little. What exactly are they trying to start? Well, take a gas-loving 747-400, cram it with 581 seats, throw in highly infrequent service in large US markets (LAX-JFK anyone?), add a dash of ultra low fares, and you have a recipe for disaster.

They’ve really done everything they could to destroy their credibility on their website. How? First, they have a big picture of their Dr Phil-look a like CEO (at left) advertising his congressional bid. And then there’s the very odd ad suggesting you click to form a Nevada corporation for $249.

So why am I even talking about these guys? It sounds like a huge joke, but as I mentioned earlier, they actually filed a lengthy 355-page application with the DOT, so they’re probably serious about this.

What other fun tidbits were in there?

• They have a very aggressive plan to be profitable by the fourth month with a very low 5.5 cent cost per seat. Good luck getting that flying a 747 on routes like Vegas to Phoenix. That’s just about impossible.




• They’re planning on a 100% load factor on every flight




• And I quote, “Although its fares are untraditional. Family believes its effect upon existing carriers should be minimal, considering all its flights are point-to-point from and to the largest metropolitan areas. These unusually low fares are expected to have a positive impact on the market by increasing the total number of passengers choosing to fly.”
  Maybe they’ve forgotten that most airlines thrive on point-to-point traffic between the largest metropolitan areas. And maybe they’ve also forgotten that fares are pretty low already, so there’s not much room for stimulating the market, at least not at a profitable fare level.




• Bored? Let their flight attendants entertain you. “While on board, passengers will enjoy an innovative entertainment experience brought forth by many of Family’s flight attendants who are would-be “headliners” that love the thought of entertaining others and intent on creating a pleasant flying experience for our passengers.”




• Who wants advertising? “Nearly all areas of the aircraft are available for advertising including the exterior hull, wing, tail, overhead bins, seat backs, tray tables, video screens etc., and would be available for purchase on a yearly contract. Upon de-boarding, passengers on most flights will receive an assortment of all types of promotional items as a free gift from our sponsors just for flying Family Airlines, “

Ok, you get the idea. If you’d like some good reading, I’d definitely recommend browsing the application. While you’re at it, check out coverage of the airline over at PlaneBuzz. New-contributor Godzilla (aka Frank Arciuolo), weighs in with his take, and Holly has a couple followups here and here.