Independence Air will be created when a regional carrier ends its deal with United. Jacksonville will be its first Florida city.
By STEVE HUETTEL
Published May 20, 2004
Independence Air, a new low-fare airline created from regional carrier Atlantic Coast Airlines, announced plans Wednesday to start flying this summer to 35 cities from its hub at Washington Dulles International Airport.
Jacksonville is the only Florida city in the initial wave of flights, which will be flown with 50-seat regional jets. But Independence will fly to all major Florida destinations after receiving its first full-size Airbus A319 jets in November, the airline said.
Atlantic Coast had operated as United Express, flying connecting passengers between smaller cities and United Airlines' hubs at Dulles and Chicago.
Last summer, Atlantic Coast said it would break off the relationship with United, which remains under bankruptcy protection from creditors, and adopt a new business model as a low-cost carrier.
Independence Air has taken pages out of the playbooks of successful discounters such as Southwest Airlines and JetBlue Airways by offering a low, simple fare structure.
One-way fares start at $39 for flights from Dulles to Pittsburgh and Norfolk, Va. Last-minute customers will reap the biggest savings, with the highest fares capped at prices from $92 to $179 one-way. Fares don't require a round-trip ticket purchase or Saturday night stay.
Independence Air is the first low-cost carrier to fly the small jets. That will allow the airline to bring discount service into a host of small and mid-sized cities, which don't generate enough traffic to attract other low-cost carriers flying large jets.
"Today, we're writing the next chapter of low-fare service in America," Independence chief executive Kerry Skeen said. "We're definitely going to change the landscape."
The challenge for Independence will be getting fares that are 25 to 30 percent higher than Southwest charges on flights of similar lengths, said James Parker, airline analyst for Raymond James & Associates.
The cost of flying one airliner seat one mile - known as the unit cost - for the 50-seat jets is 16 cents on a 350-mile flight, compared to 10 cents for a Southwest Boeing 737 with 136 seats, he said.
That cost disadvantage is a likely reason why Independence is waiting to get full-sized jets before coming to Florida and taking on United's low-cost carrier called Ted, said Louis Miller, executive director of Tampa International Airport.
Also, many travelers won't choose a cramped 50-seat jet when a competitor flies larger planes on the same route, he said.
