The soaring price of crude oil has claimed another victim: Travelers who had hoped to fly from the Washington area to London on the cheap this fall will have to wait until the spring, at least if they had planned on taking Maxjet Airways.
Maxjet is still firmly on the ground. And the price at the pump has sent the Dulles-based low-cost international airline back to the drawing board.
"The fuel issue is hurting everybody in the airline industry," said Mike Malik, Maxjet's chief marketing and information officer. "But when you're starting out it hurts even more."
Maxjet Airways Inc. had planned to begin operations with daily service to London this spring from Baltimore-Washington International Airport and New York's John F. Kennedy International Airport. Last month, the company said service would begin this fall.
But now, with fuel prices hovering around $60 a barrel and the company still awaiting final certification from federal regulators, Maxjet says it hopes to offer four weekly flights from JFK beginning in November and three weekly flights from BWI beginning in March. The initial destination remains Stansted Airport, a mecca for low-fare airlines about 40 miles north of central London.
"I mean, fuel at $2 a gallon is really hurtful to any operation," Malik said yesterday.
Maxjet also has scaled back plans to lease eight Boeing 767 aircraft by the end of this year. The company now says its fleet will grow gradually to three 767s and not expand beyond that number until the third quarter of 2006.
The effects of fuel prices are evident throughout the U.S. airline industry, as carriers have responded by raising fares several times this year. When crude oil was selling at about $40 a barrel last January, for example, Delta Air Lines announced it would cap its most expensive domestic fares at $499 in coach and $599 in first class each way. Last week, with crude oil prices topping $60 a barrel, Delta raised those caps by $100.
Maxjet has told regulators it will sell economy- and business-class tickets at 15 to 70 percent cheaper than those of traditional carriers. But its start-up model was based on buying fuel at $1.10 a gallon, equivalent to about $40 a barrel, the company said in a recent filing with the Transportation Department.
Now, with jet fuel selling in the $1.80- to $2-a-gallon range, the company said it is even wondering whether leasing Boeing 767s was -- or is -- such a great idea.
On its Web site, Maxjet describes the 767 as "ideally suited to the low-cost model for transatlantic and other long-haul flying."
But in a June 30 letter to government regulators, Maxjet chief executive Gary Rogliano wrote: "High fuel costs have called into question the long-term viability of Boeing 767-200ER aircraft of the type MAXjet originally planned to acquire."
Maxjet already has leased one 767. But the company may at some point acquire Airbus A330 and Boeing 777 aircraft "that will offer superior fuel consumption," Rogliano wrote.
Maxjet plans to run charter flights to Europe and possibly Latin America. The privately held company said it also hopes to offer scheduled service to Stansted from a third U.S. city, possibly Boston, beginning in May.
A milestone for Maxjet could come Friday when its first jet -- a 767 the company apparently was committed to leasing -- is scheduled to arrive at Dulles International Airport.