Word: valujet
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Dates: during 1990-1999
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Twenty-five airlines have started up in the past seven years, and eight more are awaiting clearance from the Department of Transportation. They sport such names as Frontier, ValuJet, Air 21, Vanguard, Nations Air, KIWI and Western Pacific, and they promise that the competition is going to be different this time. They have staked their survival on two basic strategies. First, fly into a place, like Fresno, California, that the major carriers have largely abandoned. Second, don't pick the big guys' pockets; use low-fare, no-frills flights to expand the market. The idea isn't to steal market...
...intention of stealing business from the wary giants. "We're not pulling traffic away from anyone," says Mark Morro, chairman of Air 21, which last December began flying Fokker F.28 4000s, leased from USAir, out of Fresno. "We're bringing passengers back to the airport." Lewis Jordan, president of ValuJet, which bases its 47-plane fleet in Atlanta, says Delta, its looming neighbor at Hartsfield Airfield, has nothing to fear. "We stole people from their living rooms and automobiles," he insists, not from Delta flights. Maybe, but ValuJet earned $67.8 million last year on sales of $367.8 million, nearly triple...
...ValuJet's low fares undeniably attract customers who would otherwise have had to pay Delta's prices. Art Gilbert, 42, an insurance consultant from Baltimore, Maryland, recently traveled the 48 miles to Dulles Airport in northern Virginia to take a ValuJet flight to Atlanta. "I live closer to Baltimore's BWI Airport, but this flight is $400 cheaper than the other carriers," says Gilbert. "My round trip ticket cost...
...supply of idling aircraft is matched by a supply of idling airline executives. "The airline business is tough," says ValuJet's Jordan, "but it's all we really know." Jordan is a former president of Continental. KIWI CEO Jerry Murphy spent 24 years at Pan Am; Western Pacific's chairman, Ed Beauvais, started America West; and Air 21's chairman, Mark Morro, co-founded and was president of Wings West Airlines. They have seen, up close, airlines struggling and going under...
Ultimately, many airlines would be happy to eliminate tickets altogether. "This is definitely part of a trend to reduce passengers' reliance on travel agents and ticketing," says Julius Maldutis, who follows the airline industry for Salomon Brothers. Valujet, a profitable 16-month-old Atlanta carrier that mostly plies the Southeast, has never issued tickets; travelers get confirmation numbers that they use to pick up boarding passes at airports. Southwest Airlines began offering all passengers the option of ticketless service this month. Even giants like United and Delta are testing similar systems. "As Delta becomes more competitive," says vice president Vincent...