JetFirst Searches for Help to Get Off Ground

Feb. 22, 2006
JetFirst, a Grand Rapids start-up airline, hopes to raise $8.5 million through a private offering with Dorsey & Whitney LLP.

It will take plenty of cash to get a new airline off the ground in Grand Rapids.

JetFirst, a start-up airline, hopes to raise $8.5 million through a private offering with Dorsey & Whitney LLP. Those who want in on the venture must make a minimum investment of $50,000.

So far, JetFirst has raised about one-quarter of the money it needs, according to company president Chris VanDenHeuvel. But VanDenHeuvel said he remains optimistic the carrier will be ready to launch a commercial jet service service before the end of the year.

That's a slower start than anticipated. One of SelectJet's principal investors, Mike Gorham, had spoken of a March or April 2006 launch. Gorham is vice president and operations director for SelectJet, a charter jet service also based in Grand Rapids.

JetFirst also must successfully navigate a fitness review by the Federal Aviation Administration. That process usually takes six or seven months to complete, and VanDenHeuvel said he has not yet initiated the paperwork necessary for the review.

"We wanted to wait and see how the private placement went first," VanDenHeuvel said. "It would be nice to have that money in the bank before we start the review process."

Part of the FAA review involves analyzing an airline's financial resources.

JetFirst's plans three daily flights between Grand Rapids and Midway International Airport in Chicago, plus four daily flights between St. Cloud, Minn., and Chicago. All the routes would be direct, with the exception of one daily flight starting in Grand Rapids and stopping in St. Cloud before continuing on to Chicago.

The airline figures it can sustain the schedule with a fleet of three 30-seat Dornier 328 jets. The aircraft would be maintained in Grand Rapids.

If VanDenHeuvel and his partners succeed, commercial air service will return to a market that has had none since Northwest Airlines and its affiliate Mesaba Airlines discontinued flights to the Grand Rapids-Itasca County Airport two years ago.

Before joining JetFirst, VanDenHeuvel worked as a manager for Mesaba Airlines. He said an upstart airline can succeed where his former employer struggled.

Part of VanDenHeuvel's optimism stems from the direct link JetFirst will offer to Chicago. While Northwest and Mesaba continue to fly from the Chisholm-Hibbing Airport and Duluth International to Minneapolis-St. Paul and Detroit, no carrier has flown direct from the Northland to Chicago since American Eagle discontinued service to Duluth in 2004.

VanDenHeuvel said travelers using Midway also will gain direct access to discount carriers Southwest Airlines and AirTran Airways.

JetFirst's success likely will hinge on its ability to make the Grand Rapids-Itasca County Airport more of a regional airport than it has been, VanDenHeuvel said.

He said JetFirst probably will need about 25,000 passengers a year to fly out of Grand Rapids. That's about 2 times as many people as Northwest typically funneled through the airport.

Peter McDermott, president of Itasca Development Corp./Jobs2020, an economic development agency, believes JetFirst could attract 20,000 to 25,000 passengers per year.

"The timing of Northwest's flights was terrible," McDermott said. "If you were a business traveler, it was very difficult to get out and get back the same day. There also were reliability issues. A lot of flights got canceled."

JetFirst's decision to fly jets, instead of prop-driven airplanes like Mesaba Airlines used in Grand Rapids, also should give it an edge, said McDermott.

JetFirst isn't the only startup considering aviation world these days. As thefinancially-challenged larger carriers have scaled back operations, niche opportunities are emerging.

Equitair Ltd., aims to use Dornier jets to fly passengers back and forth between Morristown Airport in New Jersey, Boston and White Plains, N.Y.

Paul Bultmeyer, Equitair's managing director, said that unlike JetFirst, his firm has no ambitions to become an airline itself. Instead, Equitair will line up corporate passengers by subscription and then contract with a licensed jet operator to provide the service.

"Starting up an airline entirely from scratch would be a stretch," Bultmeyer said. "It's a riskier venture than we would want to be involved in."

That's not to say it can't be done, he added. "It all depends upon the market."

Duluth News Tribune

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