You may have heard the name Lion Air before, but chances are you’ve never flown the airline, a low cost carrier based in Jakarta, Indonesia. Lion has been known for a few things over its decade-long history; some good and some bad. The bad? Naturally, it’s safety-related. And the good? Well, it’s debatable if it’s good, but Lion Air is known for having the two largest aircraft orders in history. This is one interesting airline.

Operating in Indonesia is no easy task. The frequent stormy tropical weather makes for some challenging flying, especially around the often mountainous terrain. That shouldn’t mean it’s unsafe, but Indonesia has a terrible accident record across most airlines. In fact, all but a handful of Indonesian airlines are on the European Union’s blacklist of airlines you shouldn’t fly for safety reasons. That list includes Lion Air.

Lion Air started flying in 2000, and since that time, it has had 7 accidents, though most avoided fatalities. The most recent was in April when a 2-month old 737 ran off the runway in Bali. Nobody was hurt, but the preliminary report shows some very serious pilot training issues.

The accidents, however, are just the most visible sign of a stressed operation. Lion has struggled with on time performance, only achieving around 65 percent on time in 2011. (I can’t seem to find a more recent report, but hopefully it’s improved by now.) Oh, and there was that whole “pilots with crystal meth” thing.

In other words, this sounds like a lot of Indonesian airlines. You would think this would mean Lion Air was on the ropes, right? Well, we have no idea. It’s a private airline and says nothing about finances, but there are some very public signs that this airline has plenty of cash if it needs it. This is one of the fastest growing airlines in the world. As the airline approaches 100 airplanes in its fleet (including a couple 747s that it uses to fly to Saudi Arabia), it prepares for another… 500+. Yeah, I’m serious.

Last year, Lion Air ordered 230 airplanes from Boeing. That’s an order for 29 more 737-900ERs and 201 737 MAX aircraft. Then this year, it ordered 234 airplanes from Airbus. This time, the order was for 60 A320s, 109 A320neos, and 65 A321neos. This is in addition to the aircraft already on order.

Not quite blown away yet? This airline has its fingers in a million different things. It started a regional airline, Wings Air, back in 2003. This airline is now on track to operate 60 ATR-72s within the next couple years. Last year it said it would launch a private jet company called Space Jet, though I can’t figure out if that actually happened. It’s also said to be working on a pilot training academy.

Just this month, Lion launched a new full service airline called Batik Air in the city of Manado. I’ll admit, I needed a a little help from Google Maps to find Manado. It lies in the northeast of the country, a thousand miles closer to Davao in the Philippines than it is to Jakarta. Manado only has about 400,000 people, but they better be rich for this full service airline to work.

Unfortunately, what’s public is pretty much all we know about Lion Air. The last press release the airline posted on its website was from 2006. And the “Contact Us” link just gives me a server error. This is one strange airline. But in the next few years, it might be one huge, strange airline. There’s no question that Southeast Asia is going to see tremendous growth in air travel, but what role with Lion play? It could be a big player or it could just be a blip on the radar depending upon what happens in the next few years.

[Original photo via Flickr user IMAM HARTOYO/CC 2.0]

If you haven’t seen this, get ready for a treat. Air Gumbo may not have worked out (yet…), but now we have a new plan from those crazy Cajuns down in New Orleans. Ready for it? They’re giving a bunch of tax breaks in order to get an investment group to buy Frontier and create a big new hub in New Orleans. Sounds like a great plan, right? Riiiiiiiight.

Let’s just be blunt. Is this a good idea? No, it’s not a good idea. I’m not quite sure how long this plan has been around, but the NewFrontierAirlines.com website seems new. The Memorandum of Understanding with Ponchartrain Capital to bring an airline to New Orleans has been around for a couple years, but it seems like the focus on making that airline Frontier has bubbled up recently.

The plan is this. The money-people will buy Frontier from Republic (since Republic has said it wants to sell). They will keep the Denver hub but then also establish a new hub in New Orleans with a minimum of 125 daily flights and 180 daily flights within 5 years. Then these guys will get a bunch of tax breaks from the local government and everyone is happy.

Oh wait, nobody will be happy because Frontier will fail miserably and go out of business. Do you really want to do that to all those cute little animals? I don’t think so. (Ok, maybe Polly the Parrot. She’s just asking to get axed.)

Enough talk about how bad this is. What exactly is being proposed? Basically, the plan is to build up a major airline hub operating from a new, $2 billion terminal (red flag!) in New Orleans. This hub will connect all corners of the US as well as several points in Latin America. Part of this includes connecting New Orleans with the six other commercial airports in Louisiana three times a day. This will all be low fare service with no bag fees or change fees.

It seems to me that just about any airline (let alone this one) is going to have a mighty hard time surviving without that fee revenue, especially in a high fuel environment where costs are already elevated. But wait, there’s a plan for that.

…an increase in fuel prices will be passed on to the customer by NewFrontier.

Of course! Why didn’t I and every other airline on Earth think of that? Just pass on fuel costs. Piece of cake. That brings me to another quote from the Q&A section.

The reason that most airlines fail is that they never attain the scale necessary to succeed – or their business plan is flawed.

I’m going to go out on a limb here and say that the latter is by far the big reason for airline failures. And this to me does not sound like a sound business plan. Apparently Michael Boyd and OAGback consulting disagree with me, at least according to the website. [Update: I've received a note from Mike Boyd saying that he did a study in 2005 for a very different concept, and he states his position best. "They dishonestly are using my good name to imply that I support this project. To be clear, I do not."] And maybe they’re right. After all, the Q&A shows some shining examples of how this has worked before.

11. Are there comparable sized markets to New Orleans that have been successful as hubs?

a. Yes. Memphis, Salt Lake City, Nashville, and Cincinnati.

Hmm, well Nashville hasn’t been a hub in many years though they seem to be counting Southwest’s roughly 75 daily flights as a hub. (Nashville’s metro area is also 35 percent larger than that of New Orleans.) I would hardly call Cincinnati and Memphis successful with their ever-dwindling operations. (They also have 80 and 11 percent larger metro areas respectively.) But what about Salt Lake? They have similar populations with Salt Lake even being a bit smaller, and Salt Lake seems to work as a hub. So New Orleans can do it!

No it can’t.

Salt Lake has the good fortune of being the only real alternative to the best hub in the mountain west, Denver. There are a lot of cities in that region that don’t have connectivity to the rest of the world without Salt Lake and Denver so Salt Lake plays an important role.

New Orleans does not have that. New Orleans is a mere 300 miles east of Houston and 450 miles southeast of Dallas. Both of those are huge markets that are much better hubs. And Atlanta is only 425 miles east. Memphis (or what’s left of it) is also just 350 miles north. New Orleans is surrounded by better markets that are hubs today.

Does that means New Orleans can’t support more service? I won’t say that. I would imagine that the city could probably support more a little more service than it actually has. Still, it can’t support a hub. If anything, this plan would kill what is quickly becoming a newly-viable Frontier.

[Original photo via Flickr user redlegsfan21/ CC 2.0]

Gather ’round, kids, because it’s story time. Today, I’ll tell the story of a once bright star that burnt out quickly. But not everyone believed it burnt out – some thought that it secretly retained its glow, just waiting to be reborn. Now, 25 years later, it’s happening, well, sort of. This is the story of PEOPLExpress, an airline that had its moment in the sun but should never be relaunched. This particular new effort is really comical. If it gets off the ground, it’s going to fail miserably.

The original PEOPLExpress was started in the 1980s by Don Burr. The guy was a visionary and had the dream of building a touchy-feely kind of no-frills airline where the employees were owners and everyone loved each other (along with cheap fares). It was a big change for a guy who came from a close working relationship with Frank Lorenzo at Texas International. For awhile, it worked brilliantly. Burr opened up shop at then-empty Newark Airport and New Yorkers flocked to the airline to take them all over the US for very little cash on this egalitarian airline. Egalitarian? Yep. Seats all cost the same and you bought your ticket when on the airplane.

The idea truly was brilliant, and Burr built a heck of an airline in record time. His low fare pricing model combined with extra charges for bags, drinks, etc, was well ahead of its time. But like many good things, PEOPLExpress came to an abrupt end. The airline over-extended itself and bought a bunch of airplanes to fuel its rapid growth. It was soon flying 747s to London and looking into mergers and acquisitions. It also started to tinker with its model. The wheels started to come off quickly, though it was really revenue management that was the dagger.

When American pioneered modern revenue management, it could offer low fares to compete with PEOPLExpres (and price being similar, people chose American) while keeping some seats to sell at higher fares in order to keep its flights profitable and full. PEOPLExpress never had a chance, despite many efforts to change its model in order to survive. Just before it would have failed, it sold and was merged into Continental. It was PEOPLExpress that formed the basis for Continental’s highly profitable Newark hub today.

That airline had a mission – it saw an opportunity to bring low fares to a big city market and it was wildly successful before it strayed and failed. And now, someone wants to bring PEOPLExpress back. Will the new one live up to such a lofty and deserving mission?

No freakin’ way.

The newest incarnation of PEOPLExpress is going to be based in Newport News. That’s in southeastern Virginia. Apparently, because Southwest decided to pull AirTran out of Newport News, this new team thinks that means there’s opportunity. Yeah right. There are already two low cost airlines there – Allegiant to Orlando and Frontier with seasonal Denver service. It’s 30 miles away from Norfolk, which has Southwest, and 60 miles away from Richmond, which has JetBlue.

So where exactly is that opportunity? There really isn’t one, but just for kicks, let’s pick apart their value proposition as given on the PEOPLExpress website:

Today’s PEOPLExpress seeks to re-establish convenient nonstop service in markets that have been abandoned by other carriers, or that only offer a “commuter” service option. We also want to simplify the booking and purchase process by including baggage fees and seat assignments without piling on upgrade and ancillary fees, and by keeping our fare structure simple and understandable.

I feel like a kid in a candy store with this kind of statement. I just don’t know where to start. Let’s start with the route selection. In general, markets have been abandoned by other carriers because there isn’t enough demand. If the markets have regional jets operating, again, it’s because there isn’t enough demand for something larger. Now, there are exceptions to this rule, if airlines are willing to look at other models. Allegiant, for example, serves markets that legacy airlines simply wouldn’t be able to touch. So is PEOPLExpress looking at other models? Not really. In fact, the differences in its model versus legacy airlines is going to hinder its chances of success even further.

The airline wants to be a low fare airline (as it says in the press kit, fares will start at $69) BUT it also wants to have no fees for two checked bags or for seat assignments. So it’s going to have a low base fare and low ancillary revenue. That spells disaster.

The airline will also be using 158-seat 737-400 aircraft. That is a lot of seats to fill on flights from places like Newport News, which it is serving due to “few air traffic issues, mild climate, and favorable economic conditions.” The last one is a good reason, but the first two are just downright silly. Where else is the airline going?

PEOPLExpress plans to initially serve destinations in Florida, New England, the Great Lakes, and MidAtlantic regions. We have identified service routes through Pittsburg [sic], PA, Providence, RI, Newark, NJ and West Palm Beach, FL. Additionally, we have plans to serve Orlando, FL, Boston, MA, and many cities abandoned by other carriers. Specific route structures will be shared at a later date.

So it’s primarily short haul flying in the east, but just to clarify, those other cities are potential focus cities. Pittsburgh, for example, will start with several frequencies early on. Yeah, that makes sense. Everyone remember Skybus? It had very low fares plus a low demand hub (Columbus) and it didn’t work there. PEOPLExpress wants to do the same thing but without the ancillary revenue that Skybus generated. This all spells financial disaster on so many levels.

In fact, I see almost nothing that works here. It’s just more of the same tired, recycled ideas that many an entrepreneur has tried in the past. Those have all been followed by failure. So will this airline even get off the ground? It’s unclear.

I tried to get in touch with PEOPLExpress using the email address on the website, but I received no response.

I want to know if any funding has been secured. (I don’t believe so.) I’m also really curious to know how the airline thinks it will start flying this summer when it doesn’t even have the structure in place to try for FAA approval. Maybe it will outsource flying to another airline as you see with companies like Direct Air. But again, I received no response so I have no clue.

To sum this whole thing up, this is not a good idea at all. It’s just like many other efforts which have come and gone quickly. The only reason this one is getting more press is because it’s using a familiar name.

Update 2/20 @ 1013a: Aspire has an interview with these guys that sheds light on a lot. It looks like the money man is Bill Hambrecht, who was so enamored with his initial investment in the original PEOPLExpress (which lost a ton of money) that he threw a bunch of money away building Vanguard in its image. (Remember that mess of an airline?) Now he’s going for the trifecta.

[Photo via Wikimedia user Eduard Marmet/CC 3.0]

Everybody know what time it is? That’s right kids, it’s time to figure out who the f*&@ Vision Airlines is! You might have heard of the airline in previous incarnations, but things have changed a lot. And since Vision has just announced it’s starting commercial flights from Atlanta to Louisville and has designs on Allegiant-style flying, I thought it would be an appropriate time to dig in.

When I arrived in Atlanta last month, I was surprised to see Vision listed on the baggage claim board. See, I hadn’t heard the name in years, and the last time I heard about those guys, they were doing Grand Canyon charters from their base in Vegas. Could this be the same airline? Yep. It is, but it’s doing things differently these days than when it started in 1994.

Most recently, Vision was in the news for something completely different from what you’d expect. It was the airline that carried Russian spies over to Europe for the big spy swap this past summer. Yep, Vision had gotten into the charter game and won that contract. But that’s just one part of a lot of different businesses that Vision has been dipping its toes into. According to the website, here’s what they’ve been working on.

• Casino Charters to bring desperate gamblers from their homes to casinos.
• Sports Charters to carry teams and sometimes fans to games.
• Vacation Charters usually meant to bring pasty white tourists to warm, sunny spots, usually for travel agencies that put packages together.
• Capacity Substitution for airlines that need a little extra capacity, possibly to augment existing fleets during busy times or to step in for an airplane that’s out of service for a temporary time.
• Wet Leasing which seems like capacity substitution except for longer periods of time (like a season instead of a week) and probably more integrated with the contractor brand.
• Bus Travel through its Vision Coach subsidiary.
• Grand Canyon tours still live on through the Vision Holidays subsidiary.
• Scheduled Charter service, the newest part of the business.

In other words, it’s an airline with no focus at all but apparently a lot of ideas of things it thinks it could be doing. So to fulfill that dream of doing everything, Vision has a motley fleet. To the best of my knowledge, there are four 767-200s in the fleet, including the seventh off the line which was built for United way back in 1982. There is also one 737-300, three 737-400s, and one 737-800. Most of these seem to have been obtained from lessors after the previous airlines failed, and many were in storage for quite some time. They probably got great rates on these airplanes.

But that’s only part of the story. Vision is also the last airline in the US buzzing around with Dornier 228s and 328s turboprops that I know of (at least in the lower 48). The 228s are primarily for the Grand Canyon business, but the 328 is what’s being used for the first scheduled charter service.

That’s right. Beginning on December 13, the Dornier 328 will go into service twice daily between Louisville and Atlanta. You can book it yourself at visionairlines.com or via the phone at 877-FLY-A-JET. (Yes, it’s hilariously misleading since this route is actually flown by a prop.) Is there a need for this? Well, Delta flies that route nine times a day but nobody else does, so Vision thinks there’s a market for low fare service. One of the airline execs is from Louisville, so he thinks he knows that there’s huge demand for low fare service. He also thinks, according to an interview with Today in the Sky that he can snag corporate customers from companies like UPS and Home Depot.

Meers thinks Vision can siphon of some of those corporate customers since its fares will be lower than what Delta is currently charging.

If he really thinks he can get those guys to send their business away from Delta, he’s got a rude awakening ahead. UPS and Home Depot need Delta for a lot more than just flights to Louisville, and Delta will make that very clear.

I wish I could ask about this and a lot more, but I’m unable to get a call back. I’ve left messages at the airline’s headquarters and have yet to receive a response. I’ve also emailed their contracted PR person Bryan Glazer who said “You can use the news release. I sent an e-mail to my client asking if he’ll speak with you. standby.” I’m still standing by and haven’t heard anything. Glazer, you might recall, was also the spokesperson for Jet America when it failed to launch. I think that in itself explains this quote from him in Today in the Sky.

Unlike other start-ups, Vision Airlines has been in business for 16 years; it is a financially solid company.

Heh, kind of funny. So for now, I have to go with what’s public. But would I really be writing about this airline if it was just content flying from Louisville to Atlanta? Nope. It now has its sights set on a new Allegiant-style business as well.

. . . the carrier expects to announce a “fairly significant” growth plan that will add up to a dozen new cities, with various point-to-point routes among them. Vision does not plan to operate a hub-and-spoke operation focused on connecting passengers.

When pressed on where the carrier might fly, Meeks says “it’s reasonable to assume it will be to typical Florida leisure destinations,” though he didn’t rule out other “underserved” markets in the region.

Wait, is this actually the reincarnation of Jet America under another name? I suppose we’ll find out if we see any flight going to Toledo or Melbourne. I actually think there is an opportunity for more Allegiant or Spirit-style service in this country, but will Vision and its strategy of trying everything on the map be the one that make it work? I doubt it. But if I can get a call back from them, I’ll be happy to let them change my mind.

[Original Photo via Flickr user boboroshi/CC 2.0]

There are no columns more fun to write than those diving into some obscure little airline that has grandiose startup plans. This time, it’s California Pacific, but it’s different from most of the others I’ve profiled. First of all, these actually have some money and have a shot at getting off the ground. Second of all, the idea isn’t a bad one. That doesn’t mean I think the plan is perfect, but this is certainly one of the more promising startups I’ve profiled here.

California Pacific, or hilariously enough for all you Canucks, CP Air, is planning to set up shop in Carlsbad, California. Carlsbad lies in north San Diego County, about 35 miles north of San Diego’s Lindbergh Field and 60 miles southeast of John Wayne Airport in Orange County. Today, only United flies to Carlsbad with six daily props up to LAX. That’s it. US Airways used to fly in from Phoenix, but those flights are gone.

So why the heck do we need more service at this airport when it’s surrounded by others? Well it’s really not going to draw from Orange County. Even though it isn’t that far, people in Orange County don’t think about going south for their flights. This is really targeted at people in north San Diego County, and that’s a big group of people. There is a lot of business in North County and traffic can suck driving down to Lindbergh. Then you have to park and wait in line as you do at any big airport. Carlsbad, meanwhile, just got upgraded from a double-wide trailer to a nice and small terminal that is completely efficient. You can roll up and be on a plane in just a couple minutes, so the time savings are dramatic.

Despite the new terminal, however, the runway is pretty short at 4,897 feet. That’s almost a thousand feet shorter than the already very short runways at John Wayne, so they really can’t fly very many types of planes out of there, at least not with a full load.

So what will CP Air be doing? Flying Embraer 170s. These airplanes can fly out of there since the runway is just about the same length as London/City and they fly in there safely (with crazy dive-bombing approach procedures as well). They also have decent range, even on the short runway so they can cover the western US. I might like to see the Q400 here, but they wanted jets and this is probably the right one to choose considering the contraints.

I actually met with one of the guys working on this startup (a frequent Cranky reader), and we spoke for awhile about it. The airline is planning 4 times a day to Sacramento, Oakland, San Jose, and Phoenix. They’re also looking at 3 times a day to Vegas and a weekly trip down to Cabo.

What don’t I like about this? With the exception of the weekly trip to Cabo, these are all Southwest Airlines markets and that’s bad news for CP Air. Yes, CP Air can save you time all else being equal, but Southwest has 13 daily flights from San Diego to Oakland alone. That’s a huge frequency advantage that may very well prevent a lot of North County passengers (who already use Southwest anyway) from shifting to CP Air. If Southwest wants to play hardball, they can, not too mention United and their corporate contracts.

I’m also not a fan of the aircraft configuration. These planes are flying on 1 hour hops yet they’re planning on having First Class, Business Class, and Coach. Seriously? Who needs that? It adds complexity and takes away seat density that you’d really want to have to keep costs per seat low. I’d ditch it and maybe have a couple rows of extra legroom at most if they really think they need it.

Unlike most startups, I like the market area and the service plan, but if I were these guys, I’d be doing everything I could to keep things simple and cut out operational complexity. I’d also see if I could find a way into someone else’s frequent flier program. Maybe Alaska would set up a frequent flier partnership since they do it with everyone else? That would go a long way to attracting business travelers, that’s for sure, though I would be surprised if they could work that out easily.

Another X factor here? The founder. Ted Vallas founded Air Resorts to do the same thing in 1980, and now he’s back again and some of what he says concerns me. For example, he says, “My business plan of 1980 was nearly identical to my proposed plan of 2009.” Things have changed a lot since then, so a statement like that makes me very nervous.

To sum it up, the focus here has to be on the local business guys. Tourism is not going to be a good market here, so they should just forget about it. If people want to go to San Diego attractions, they’ll fly to San Diego. Legoland is right near the airport in Carlsbad, but nobody flies to San Diego just to go to Legoland. North County is not a destination. It’s all about business, so if they can make inroads there, despite their frequency disadvantage then they might be on to something.