Turbulence for the all-premium airlines?

Following the demise of MAXJet back at Christmas, there was a bit of conjecture about how the reduction of capacity in the market would actually be good for the other airlines in the space (SilverJet, EOS and L’Avion are the big three right now). Despite pundits claiming for months that these upstarts were going to take a bite out of the legacies (mostly American Airlines and British Airways, and Air France to a lesser extent), the legacies are still flying just fine on the routes, and British Airways has announced what seems to be a reasonable approach to the competition, OpenSkies, which will be mostly premium seats with a few coach seats, just in case. So the legacies are keeping their share of the market and responding appropriately, but the upstarts are still ok. Or are they.

Jarad Blank seems to think the answer is no, and he’s got some pretty impressive numbers to back up his reasoning. Basically, EOS has a burn rate of ~$50MM annually and they are likely going to struggle to decrease that number before they run out of money in their current funding cycle. They may find another cash infusion, but it doesn’t look promising.

It will be sad to see the premium carriers fall. That being said, I’m not likely to ever pay that much for a plane ticket, so I’d just be holding out for reward travel to show up, just like I was saving for a trip on the Concorde years ago. So I guess my vote doesn’t really count.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.