Across the Aisle From MAXjet

Across the Aisle Interviews, MAXjet

For some crazy reason, Josh Marks, SVP Planning & Development for MAXjet, was willing to sit down (at his computer) and talk (email) with me about the latest news at the airline. I’m hoping this is the first of many chats I can post here, so I’ve even decided to create a logo for my new “Across the Aisle” series.

07_04_06 acrosstheaislemaxjetFor those who don’t know MAXjet, I’ll let Josh explain it in his own words. The interview is below, and I have a few comments at the bottom. Take it away, Josh.

Josh: When MAXjet started all Business Class service between New York and London Stansted in 2005, we had a clear value proposition. We offered the perks of international Business Class (fast check-in and security clearance, spacious departure lounges, deep-recline leather seats, 60” seat pitch, on-demand entertainment and gourmet meals) at a flexible Economy fare. After establishing service in New York, we added flights from London Stansted to Washington and Las Vegas.

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Cranky: You recently seasonally canceled your Washington DC flights. What as the impetus behind that move? Were the flights not performing well or was it due to opportunities elsewhere?

Josh: Washington is a great summer market but turned out to be quite seasonal. So we changed Dulles to seasonal service and we will be back this May.

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Cranky: There have been rumors about high front line employee turnover. Is that something you’re seeing? If so, what do you attribute it to? Are you concerned about it?

Josh: Our voluntary turnover has been very low. We pay our pilots and flight attendants an annual salary and we don’t have a seniority system. It’s a different kind of environment with a unique appeal. We’re now opening a crew base in London and we’re excited about having international crews on board.

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Cranky: The annual salary for the front line is a really interesting concept. How does that work? Is there a baseline number of hours they fly and then if they go over they get paid overtime?

Josh: Annual salaries work for crews when paired with a line-allocation concept called fair assignment. Essentially lines are assigned by computer to employees in order to maximize equality. Employees have some ability to express preferences. So the number of hours a given crew will fly in a month can vary, but we guarantee them a salary number regardless. In our system there’s no concept of overtime or baseline hours. Similarly, there’s no seniority system (since there’s no bidding for lines).

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Cranky: How are the Las Vegas flights performing? Do you see additional opportunities for growth there?

Josh: We’ve been surprised by the mix of business and leisure travelers. People assume we draw business traffic, and we do – many take our flight to Vegas and connect on Southwest to points like San Diego, Orange County, Burbank, San Jose and Sacramento. But we also draw a lot of leisure traffic – not surprising given how many families want Business Class but aren’t willing to pay exorbitant published fares.

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Cranky: Are there any plans to begin flying to new cities in the US? Which ones?

Josh: We’ll be announcing new markets shortly as we’re already overhauling our next two aircraft. We like the B767-200ER because it offers a unique combination of trip cost, widebody spaciousness and usable range. Stansted has a long runway so the aircraft is really limited only by fuel. With our payloads (100 passengers on a plane built for 250) we can top the tanks and that means markets like London to Los Angeles or San Francisco are within our capabilities. We’re finding in Las Vegas that the longer the haul, the more our value proposition increases.

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Cranky: Have you considered flying to other European destinations from the US or are you focusing solely on Stansted for now?

Josh: We’re just looking at Stansted for coming years. Open Skies dramatically increases the routes we can serve out of Stansted. That said, if the right opportunity comes along, we’ll consider it.

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Cranky: You still haven’t submitted financial data to the DOT for the first half of 2006. Why has that been delayed and can we expect to see it soon?

Josh: We filed the DOT data; however it’s clearly not showing. We are investigating what happened.

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Cranky: Do you have statistics about on time performance and canceled flights that you can pass along?

Josh: We had some rough periods last year due to both aircraft and weather events. By redesigning our schedule and designating a spare aircraft, we’ve become one of the best operations across the Atlantic. In the past 60 days we’ve had one flight cancellation (weather-related) and more than 90% of our flights were within 30 minutes of schedule.

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So there you have it. Thank you Josh for taking the time here. And now for a couple comments.

There have been a lot of rumblings about MAXjet’s reliability in the last few months, and a look at Skytrax passenger opinions clearly shows problems. What you will notice, though, is that there haven’t been any really bad reviews over there in well over a month. (No, I don’t count the complaint that the flight attendants weren’t smiling as a really bad review.) With only one cancellation and a 90% arrival rate within 30 minutes of schedule over the last 60 days, it sounds like they may have their ship in order now, and that is crucial.

From the sound of it, we could see some more longer haul markets in the future from Stansted. I wouldn’t be surprised to see West Coast markets pop up soon. Will they go for the big airports or maybe try for a place like San Jose instead of San Francisco? For their product, I think they need to go straight for the big ones.  San Jose might work because of the business base there, but a place like Ontario instead of LA probably would not.

I like the idea of west coast flights. As Josh mentions, people find more value in the product when the flight is longer. So even if there are fewer people traveling from the West Coast to London than from New York, a higher percentage of people flying those routes may be willing to pay up for the product.

It seems to me that the MAXjet model of business class at an economy fare has a lot of growth potential. That being said, there will be plenty of competitors, and MAXjet needs to make sure they keep their operation running smoothly. The more people pay, the more they expect.

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