New York Air, a brand-new airline, yesterday announced plans to begin service between Washington and New York later this year with one-way fares as low as $29.
The new airline, created by Texas Air Corp., the parent company of Texas International Airlines, will offer the first serious competition to the heavily traveled Eastern Airlines shuttle, which has a near-monopoly on the route. About 2.5 million traveled by air between the two cities last year.
Beginning Dec. 14, New York Air plans to operate between Washington's National Airport and New York's LaGuardia Airport. The proposed fares will be 20 percent to 50 percent below the current Eastern shuttle price of $60 each way. New York Air plans to charge $49 each way for weekday flights until 7 p.m. After 7 p.m., and all day weekends, the fare will be $29 each way.
The new service must be approved by both the Civil Aeronautics Board and the Federal Aviation Administration. Approval is expected. New York Air's application appears in line with the requirements and philosophy of the Airline Deregulation Act of 1978. And, unlike other new airlines, it is beginning with significant financial resources, access to aircraft and extensive management experience.
The new carrier must also win landing and takeoff rights at crowded National Airport. Although a complicated legal situation now exists, Texas Air officials are confident the problem will be resolved in their favor.
The airline plans nine flights from Washington to New York and 10 flights back each day during the week using 115-seat DC9 aircraft. The airline will have seven or eight flights in each direction on Saturdays and Sundays.
Unlike the Eastern shuttle, which guarantees a seat to everyone who is at the gate by the scheduled departure time, New York Air will require reservations on its flights. Unlike the shuttle which offers no food or drink service, New York Air plans to offer free drinks during business hours and snacks at meal times.
"Within a year or so we expect to find ourselves in direct competition with many, if not most, of this country's largest airlines," Frank Lorenzo, chairman of New York Air and President of Texas Air Corp., said yesterday. "To attract present travelers we'll offer unrestricted low fares, frequent flights and good service."
"We anticipate that our appeal will generate new trips and first-time flyers -- trips which at today's high prices just aren't being taken -- and brand-new flyers who otherwise would be on the interstate highway driving north," he said.
While they lost their bid for National to Pan American World Airways, they did make $45 million in the process -- money now being spent on the new airline.
The parent company is supplying the initial fleet of 6 DC9 jets -- an investment of almost $50 million -- plus another $25 million for start up costs.
Lorenzo said New York Air plans to add Washington-Boston, Washington-Newark and Boston-New York flights during the first quarter of 1981. Later, the airline plans to add service to other major cities within 700 miles, or approximately two hours flying time, from New York and Newark, he said.
Attending the press conference with New York Air officials yesterday was Alfred E. Kahn, the president's chief inflation fighter and former chairman of the CAB. Kahn, a strong proponent of airline deregulation, said "this is just exactly the way it was supposed to work but until today, there was one obvious market where competition was needed -- in this northeast corridor.
"And it is not surprising that Texas International is doing it,' he added, noting that the officials involved with New York Air were the ones who last year had tried to buy the much larger National Airlines.