Flying Start

Despite recent failures, new airlines continue to take to the skies

Sir Richard Branson relishes telling the story of the birth of Virgin Atlantic. On virgin.com he recalls what happened in the early 1980s when his flight from Puerto Rico to the British Virgin Islands was cancelled: “I had a beautiful lady waiting for me in BVI and I hired a plane and borrowed a blackboard and as a joke I wrote ‘Virgin Airlines’ on the top of the blackboard, ‘US$39 one way to BVI’. I went around all the passengers who had been bumped and I filled up my first plane.” After that he bought a secondhand B747 and “made it that much more special than all the other airlines we were competing with”.

Unfortunately, many new airlines end in failure within months – be they wholesale start-ups, rebrands or offshoots of existing carriers – proving that it isn’t as easy as Branson made it look. There are all sorts of factors involved, but if an airline isn’t making money fast, it won’t be able to keep flying. The cost of fuel is a huge overhead, so if tickets aren’t being sold, funds soon run dry.

Sometimes airlines are trying something different, such as operating with all-business class layouts, but as we have seen from the historical failures of Maxjet, Eos and Silverjet when they tried this, as well as La Compagnie’s all-business New York JFK route out of London Luton (the French airline is hanging on to Paris Orly), taking chances isn’t often rewarded.