NYT : New York to London In Your Private Suite

[hkskyline]

New York to London In Your Private Suite
23 August 2005
The New York Times

SAN DIEGO -- WITH crowds and missed connections, desperation and short tempers, strikes and threats of strikes, the scenes at airports this summer have sometimes resembled the fall of Saigon, to borrow an image often employed by Michael Boyd, the air-travel consultant.

Beneath the tumult is a treasure of opportunity for airlines that know how to seize it. With international travel booming, there is money to be made in providing comfort and style to business executives who want to be pampered on long voyages.

The most recent example of the race to gain their allegiance was an announcement by American Airlines last week that it was refurbishing first-class and business-class cabins on 767's and 777's starting next year. American said international routes would account for 30 percent of its seat capacity by the end of this year.

The trans-Atlantic routes are considered to be the most profitable of all, but the competition for customers is brutal. Now, a start-up airline called Eos says it is prepared to make it a bit more brutal. Starting around Sept. 15, pending expected regulatory approval, Eos plans to start flying Boeing 757's between New York and London outfitted with just 48 seats, about a fourth of the 180 to 200 crammed into the cabins of most long-haul 757's.

The idea, says David J. Spurlock, the Eos founder and chief executive, is to grab a small chunk of that crucial route. Eos, he said in an interview here last week at the annual convention of the National Business Travel Association, will be ''a premium airline purposely designed to bring value to the international business traveler who demands a high degree of service.''

''Southwest Airlines freed the short-haul economy-based traveler from the grip of the traditional airlines,'' he said. ''We seek to do the same thing for the long-haul business traveler.''

Eos will be compete with British Airways and Virgin Atlantic, the current favorites of business travelers on the New York-London circuit. The extra space is the major selling point for passengers who want to work or relax in more comfort than even the most popular competing business-class cabins, and at competitive fares. The published round-trip business-class fare is now about $8,000, though big-volume customers can negotiate that down to $6,000 or less.

But Mr. Spurlock, a former director of strategy for British Airways, indicated that the fare on Eos would start in the $6,000 range. ''We have committed publicly to fares 25 percent below existing rack rates'' on the top carriers, he said.

Among Eos's attractions are new flat-bed seats in private suites that provide passengers with 21 square feet of space. I tried out the seat last week. There's actually enough room to hold a conference with a colleague sitting in a fold-down seat, without touching knees.

Eos, with $185 million in initial financing, is now installing the seats in its three 757's. Once in operation, Eos will fly once daily each way between Kennedy International Airport and Stansted Airport outside London.

The industry has more than a few sad stories of innovative premium start-ups that faltered. The names MGM Grand and Legend Air come to mind. Fly First, a premium carrier based in Scotland that plans to operate between London and Newark, recently postponed its first flight until it could raise more money.

Last week, Mr. Spurlock announced the departure ''by mutual agreement'' of the Eos president, Bonnie Reitz, a former vice president for marketing at Continental. Colleagues said she was eager to return full-time to a consulting business she runs.

Will Eos find a profitable niche? ''I think they're putting their toe in a deep and lucrative market that Dave Spurlock knows real well'' from his background with British Airways, said Robert W. Mann Jr., an industry consultant. He added: ''They will have difficulties with the big network guys who can out-schedule them and out-loyalty-program them. But my take is that the market is sufficiently deep and their need for the crumbs is sufficiently small that as long as they stay on target and deliver the service, I think their prospects are pretty good.''

Mr. Spurlock said Eos expected to make arrangements with another premium airline to provide preflight access to an airport lounge at Kennedy. Each flight will have four flight attendants, and he said initial expectations were that passenger loads would be in the range of 30 to 35.

John Lampl, a spokesman for British Airways, which is recovering from several days of delays and backups caused by a recent strike by caterers, was noncommittal. ''It'll be very interesting to watch,'' Mr. Lampl said. ''Actually, competition makes us sharper. We'll just have to see how he does.''

[Cheese Mmmmmmmmmmmm]

Wow this could be huge... an airline that sucks all the lucrative business travelers away from the big guys?

Airlines like American better have something incredible up their sleeve to counter this.