Low-fare MAXjet considers MIA, FLL

Sep. 2--South Florida travelers to London seeking business-class seats and plenty of frills -- at lower fares -- may soon have a new alternative.

MAXjet Airways, an all-business-class airline launched in November 2005, is seriously considering adding a route from London to Miami International Airport or Fort Lauderale-Hollywood International Airport.

"South Florida is an extremely attractive market for MAXjet," said Josh Marks, the airline's executive vice president of planning. "It's just a function of timing."

The airline plans to make a decision on a new market by the end of this year, in order to begin service by early next year. South Florida is one of three finalists, along with San Francisco/San Jose and Orlando, Marks said.

Whichever U.S. destination is chosen will represent MAXjet's fifth, after launching its fourth -- Los Angeles -- on Thursday.

Seeking to serve small-business executives, professionals and affluent leisure travelers, MAXjet offers business class service at what it says is 50 percent to 75 percent less than current business class fares. Round trip fares from New York's JFK range from about $1,500 to about $3,000, including tax. That compares to typical business class fares of about $3,500 to $10,000.

All flights -- from JFK, Washington Dulles, Las Vegas and Los Angeles -- fly to London Stansted Airport, a favored destination for European low-cost carriers. That allows passengers to connect on such carriers as easyJet, Ryanair or Air Berlin, Marks said.

"It's an easier connecting experience at Stansted than Heathrow," he said.

MAXjet's fleet of five Boeing 767-200ERs are configured for comfort, holding 102 passengers rather than the usual 200. There are no middle seats, and each row is 60 inches apart -- more than United or Continental's business class rows, and equivalent to Delta's and American's, Marks said. Passengers are served gourmet food, have departure lounge access, and an arrival facility with showers at Stansted.

Greg Sosbee, a Dallas executive who always flies Business or First Class, earlier this month took MAXjet for the first time, from JFK to London, then back to Washington Dulles, for a two-day business trip to Munich.

"I had a last-minute trip and I didn't want to spend $10,000," said Sosbee, who paid $2,000 round-trip for his MAXjet seat. "It was quite good value for the money."

Sosbee said the ride was comfortable, and the food and service well above par, especially the airline's club in London, which he called the best he had ever been in.

"I stuffed myself on the smoked salmon and scones," he said, a far cry from the cuisine he usually finds at airport lounges.

The only downsides: a newly acquired plane that still had signs in English and Arabic on the way to London; a "beat up" bathroom on the flight back; and, most significantly, the lack of frequent flier miles.

Nevertheless, he said, the value of the ticket was much better than paying thousands of dollars more to get miles on a major carrier.

STIFF COMPETITION

As MAXjet competes on its well-traveled markets, such issues will go far in determining its success. Competitors such as American Airlines are already eyeing London Stansted. In late October, American will launch flights between there and JFK.

Still, MAXjet's niche market of business class service at affordable fares -- where it is often the only such carrier in the market -- makes it a promising venture, said Calyon Securities airline analyst Ray Neidl.

According to Neidl in a report he wrote initiating coverage with a "buy" rating in June, MAXjet can maintain relatively low fares due to its low-cost structure, from an all Boeing 767-200 fleet and scaled down airport services to low labor costs and lean corporate overhead. Yet its fleet, which has an average age of more than 12 years, may require more maintenance, adding to costs.

The airline is also well positioned for growth, Neidl said. MAXjet recently received Department of Transportation approval to fly from any U.S. city to all EU Open Skies countries, starting March 30, 2008. That would give MAXjet flying rights to destinations such as India, Kuwait, Maldives, Nigeria, Oman, Pakistan, Singapore, Thailand and the United Arab Emirates.

A China route is also potentially on the horizon. MAXjet has applied for service from Seattle to Shanghai in 2009 but has not yet received authority.

In line with expansion, the airline is likely to reach seven aircraft by year-end 2008 and eight by year-end 2009, Neidl forecasts. Planes flew 75.5 percent full in July, 83.1 percent full in June, and were up consecutively in each month during the second quarter, he said.

"As they enter new markets," Neidl said, "they seem to generate new traffic fairly quickly."

In fact, while MAXjet just issued its initial public offering on the London Stock Exchange's alternative market in June and has not yet released earnings, Neidl estimates the company will begin to make a profit in the first quarter of 2008.

NICHE MARKET

"They have a niche there," he said, "and as long as they can keep their cost structure down, they can serve a small, particular market."

Meanwhile, the airline is considering which South Florida airport would be best. Marks would not say which one he is leaning toward, adding that there are advantages at each.

"The question for any carrier is whether the infrastructure can support the number of flights introduced at the airport," he said. "It's challenging for airlines, and it's a difficult environment with delays and air traffic control congestion."

As a much larger airport, Miami has the infrastructure, but it is expensive to operate for a low-cost carrier, he said. Per passenger fees are currently $17.01.

Fort Lauderdale-Hollywood, whose top priority is to gain a London route, currently charges airlines fees of $4.36 per passenger. But MAXjet would qualify for its incentive program, which would waive fees for a year.

"Those incentives are pretty critical to new launches today, and airports know that," said MAXjet spokesman Michael Miller.

Yet with so much recent international growth at Fort Lauderdale by Spirit Airlines, the airport's challenge is to find space for more international flights. It has only five gates -- all at Terminal 4 -- that can process internationally arriving passengers, with access to Customs and Border Protection.

Coincidentally, three of MAXjet's senior executives formerly worked for Miramar-based Spirit, which is now Fort Lauderdale-Hollywood's largest carrier.

Both MIA and the Fort Lauderdale airport confirmed that they have had discussions with the airline, cautioning that they were preliminary.

"We are one of the few large airports on the East Coast without nonstop flights to London," said Steve Belleme, Fort Lauderdale-Hollywood's business development manager. "Hopefully we could find a way to accommodate them."

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