- The Washington Times - Wednesday, February 8, 2006

Airline executive Gary Rogliano is surrounded by wounded legacy carriers that continue to slash wages and pensions, wander through bankruptcy court and contend with record-high fuel prices.

The industry is reeling, but Mr. Rogliano remains undaunted about the timing or purpose of tiny Maxjet Airways, a privately held airline based at Washington Dulles International Airport.

Carnage in the industry “hasn’t given me pause at all,” Mr. Rogliano said.

With one plane, Maxjet has started a low-fare international airline catering to business travelers. In November the airline began flying to London from New York’s John F. Kennedy International Airport. A second plane takes flight March 15, when the nascent airline plans to inaugurate service from Dulles to London.

Maxjet will make a single roundtrip flight from Dulles to suburban London’s Stansted Airport four days a week and go head-to-head against three airlines flying from Dulles to London’s Heathrow Airport. United Airlines, British Airways and Virgin Atlantic have six daily departures among them.

Mr. Rogliano argues that his competitors charge too much, and Maxjet is banking on interest from frugal business travelers.

Maxjet is marketing an introductory roundtrip fare of $999 from Dulles. It will charge roundtrip fares as low as $1,750 beginning March 15. Roundtrip fares from Kennedy Airport are as low $1,600.

A walkup fare for a roundtrip ticket in business-class seating on British Airways this week cost $9,358, according to the airline. A walk-up business-class fare cost $9,373 on United Airlines and Virgin Atlantic charged $4,415 for a seat in its upper-class cabin, according to their Web sites.

“These airlines can’t come down to our price,” Mr. Rogliano said. “We followed the low-cost business model. We just did it in business class.”

Maxjet’s chief executive officer said the airline can offer cut-rate fares because it provides a single service rather than accommodating business and leisure travelers on the same flight.

A surge in demand for business-class seats has pushed ticket prices up, leaving room for a low-cost alternative, said Kevin Mitchell, chairman of the Business Travel Coalition, which promotes lower fares for business travelers.

About 5 million international inbound and outbound passengers passed through Dulles last year, and the number of international travelers is expected to grow at twice the rate of domestic travelers, said James Bennett, president and chief executive officer of the Metropolitan Washington Airports Authority, which operates Washington Dulles International and Ronald Reagan Washington National airports.

Maxjet isn’t the only airline hoping to lure business from legacy carriers. Eos Airlines started service from New York’s Kennedy Airport to Stansted in October. Eos offers a premium service and charges a walk-up business-class fare of $6,500.

So far, neither Maxjet nor Eos has eroded British Airways’ market share, British Airways spokesman John Lampl said.

British Airways carries more than 2 million passengers a year from the United States to London.

With a single Boeing 767 that seats 102 passengers, Maxjet isn’t expecting to put competitors out of business.

“The good news is we only have 102 seats. The bad news is we only have 102 seats,” said Mr. Rogliano, a 54-year-old New Yorker and accountant by trade.

Maxjet plans to bolster its fleet to 11 planes by the end of 2007, and new flights from Boston, Chicago, Dallas, San Francisco and Los Angeles are likely.

“The idea is not to grow fast. It’s to grow appropriately,” Mr. Rogliano said.

Maxjet has raised nearly $18 million from investors since its inception in March 2004, it disclosed in filings with the transportation department. Its majority shareholder is wealthy Utah businessman Kenneth Woolley, who owns 43 percent of the company was an early investor in low-fare carrier JetBlue Airways.

International business service is all about space to help passengers cope with a seven-hour flight to England. Maxjet is spending about $1 million a plane to install seats that lie nearly flat and have 60 inches of pitch, the standard measurement representing the distance from one point on a seat to the same point on a seat in front. The pitch on economy-class seats typically ranges from 31 inches to 36 inches.

Eos has 48 seats on its Boeing 757s that lie flat and measure 78 inches in length. Business-class seats on both Virgin Atlantic and British Airways also lie flat.

“We’re getting customers who say it’s not worth an extra $5,000 to have a seat lie flat,” Mr. Rogliano said.

Maxjet’s aircraft are built to accommodate 200 seats, but installing just 102 means no passengers must sit in the dreaded middle seat. Travelers get meals served on china. Maxjet also raffles off two bottles of wine on each flight and once a week, on a randomly selected flight, it gives away a pair of tickets for a roundtrip flight.

“I’ve got to do the little things,” Mr. Rogliano said.

Maxjet has 300 employees, some of whom worked at defunct Independence Air, which stopped flying last month.

Neither Maxjet’s low fares nor Eos’ premium service ensures survival, Forrester Research travel industry analyst Henry H. Harteveldt said.

“The survival prognosis for startup airlines is not good. Independence Air is already toast,” he said. “The competitive environment is bloody, and you have a more efficient United Airlines that’s just come out of bankruptcy and is investing in international routes. It’s not an easy challenge for these guys.”


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