Is there room in the market for a US-based long-haul LCC airline? It appears we’ll soon find out as World Airways seeks to re-launch operations. The new iteration hopes to run long-haul services with local feed handled by regional LCCs. The new brand and further details are expected to emerge in the coming weeks.
If nothing else the names around this effort are mostly familiar. The World Airways brand dates back to the Pan Am days, though it converted to mostly cargo operations in the late 80s and closed up shop in 2014. Running the show is Ed Wegel, known for his efforts with the 1980s version of People Express, US Airways Express in the 90s and he most recent incarnation of Eastern Airlines which recently folded. Wegel will serve in the CEO role and is joined by Freddie Laker as Chief Marketing Officer. Laker is the son of Sir Freddie Laker, founder of Laker Airways and Skytrain, the first transatlantic LCC operation.
That is an impressive pedigree, to be sure, but it takes more than names to find success in commercial aviation. The new World Airways faces an ever growing LCC environment and legacy carriers that might finally be stabilizing costs in manner that lets them regain part of their competitive nature. One way the new company will address that challenge is in the route network it appears to be pursuing. Rather than attacking the crowded (but high demand) transatlantic market this new operation will attempt service from the US to Asia and Latin America. The company indicated it is in talks with Boeing for as many as ten 787 Dreamliner aircraft.
The 787 is Norwegian’s aircraft of choice for long-haul LCC services, based on the combination of range and capacity. Matching that value proposition into Latin America from the United States is reasonable. In fact, the 787 is likely overkill in most of those markets based on range. But for Asia the greater capabilities of the type are far more valuable. United Airlines, ANA, JAL, Hainan Airlines and others are using 787s across the Pacific today, with expectations that market will grow. Connections through China are already driving more secondary routes into service. The World Airways operation will compete with those.
Starting an airline is an expensive proposition and long-haul operations make that even more risky. Launching a new US carrier is especially interesting these days, particularly as recent reports suggest the cyclical nature of the industry might be flattening out on the profits side, adding pressure to carrier costs. Not that there is necessarily ever a good time to start a new airline. But this one is a particularly interesting play.
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