MaxJet Adds New London Route
Dulles Firm Offers Business-Class Lite

By Cecilia Kang
Washington Post Staff Writer
Monday, April 3, 2006

Boutique airline MaxJet Airways was set to launch its Dulles - to-Stansted, England, direct flight service today, complete with beef tenderloin on demand, ample leg room and almost fully reclining seats.

The only catch: It's an all business-class service that, while far cheaper than premium seats in major airlines, will be well above most coach fares.

From its fleet of attendants in triangle felt hats and pin-striped suits, to four-course meals including mesclun and goat cheese salads and New York strip streaks, the Dulles-based company hopes to carve out a niche as other airlines are stripping down their in-flight service.

"Now we have something that no one else is doing and that distinguishes us," said MaxJet's chief executive, Gary Rogliano.

The company's discount business-class service first launched in November 2005 with a route between John F. Kennedy airport and Stansted, a suburban London airport that has become a fast-growing hub for European discount airlines.

Industry watchers have mixed opinions on the company's low-cost luxury strategy, yet MaxJet said it is planning more routes.

"Looking forward, things look strong," Rogliano said. "Our New York service has been very strong and we're already in the process of buying our third and fourth planes."

Rogliano said he expects the company to start producing a profit by early summer. He said MaxJet will launch a service between Boston and Stansted around the middle of June. It is also looking into routes between Stansted and Chicago, San Jose, San Francisco and Dallas.

The start of MaxJet's service today comes three months after the closure of Independence Air, the region's other recent experiment with discount air travel. Independence sought bankruptcy protection late last year and closed in January after failing to find a buyer.

Since it began two years ago, privately held MaxJet has undergone several changes in its business plan, management and route locations. An average of half of the seats on the New York route have been full since it began, according to Rogliano, who said he regarded that as a good start.

Some industry analysts felt otherwise. Mike Boyd, head of airline consulting firm Boyd Group Inc., said the concept makes sense: lure away business-class fliers from major airlines and persuade coach passengers to move to the other side of the cabin curtain by offering premium services at as much as 75 percent off the price of business-class seats on major airlines.

A round-trip ticket on May 1 in United Airlines' business class is quoted on United's Web site for more than $8,000, compared with $1,800 for the same dates on MaxJet.

But the problem, according to Boyd, is that business-class passengers of major airlines are hooked into frequent-flier programs and corporate contracts with major airlines. Meanwhile, it has been historically challenging to persuade coach passengers to buy more expensive tickets, regardless of the enhanced service.

"It's very difficult for a new brand to break into the marketplace, and I don't think there are enough people out there to fill enough seats to make this worthwhile," Boyd said.

The inaugural Dulles-to-Stansted flight scheduled for today is a little more than half full, with seats reserved mostly by employees and media. The company would not provide information on its reservations for the rest of the week.

The Dulles-Stansted route will operate five days a week, departing Dulles at 7:30 p.m. and arriving in Stansted at 8:30 a.m. the following day. The return flight will leave London at 1 p.m. and arrive at Dulles at 4:30 p.m. the same day.

Rogliano, who came to the company 13 months ago, spearheaded the budget business-class strategy. He noticed that major airlines were getting rid of staple services like food. Discount services were sprouting that departed from traditions like seating assignments and business- and first-class cabins. Yet he knew there was a demand for premium services, he said.

The company remodeled their two leased Boeing 767 airplanes, reducing the number of seats from 220 to 102 and equipping each with a personal entertainment system. Passengers who want to sleep can order a cold beef tenderloin steak to be delivered right away.

The airline industry has seen a handful of niche players move into the market, with varied success. English entrepreneur Freddy Laker pioneered discount air travel in 1977 with flights between New York and London for as low as $135 one-way. Laker Airways collapsed into bankruptcy in 1982.

Yet as the sole business-class-only carrier, MaxJet may have captured an overlooked but growing market, said Darryl Jenkins, an aviation analyst.

"There's an awful lot of international traffic out of Dulles and there will be a lot of future growth at Stansted, the low-cost carrier capital of Europe," Jenkins said. "This is a great business plan and there's enough room in the market for a boutique airline like MaxJet to be successful."