US Airways' new airline, MetroJet, will throw down the gauntlet to the US champion of low-costs, Southwest Airlines, when it launches operations out of Baltimore-Washington on 1 June 1998.
Details of US Airways' low-cost competitive response hold no surprises, according to analysts. By launching a service out of Baltimore that will initially serve Cleveland, Ohio; Fort Lauderdale, Florida; Manchester, New Hampshire; and Providence, Rhode Island, US Airways will avoid its own hubs and more congested airports in the eastern US. MetroJet will begin with five Boeing 737-200s and could be operating 20 aircraft by the end of 1998. Expansion plans allow for up to 54 aircraft in the launch phase.
MetroJet's biggest challenge will be to take on the Baltimore operations of Southwest, with one of the lowest seat-mile costs in the US. 'They have got to confront Southwest sooner or later,' says Glenn Engel at Goldman Sachs in New York. 'I think it's something that has to be done. They are already in those markets and losing money and they believe they have to defend those markets. There's not much new in what they are announcing, but with just five aircraft at the start they are being cautious and it's good to be cautious.'
While US Airways has not yet revealed service or pricing details, it is emphasising high frequencies at a '. . . more modest price,' suggesting it has its eye on the business traveller. 'Customers will speak of taking MetroJet to Florida and other destinations just as easily as business travellers today speak of taking the Shuttle to New York,' says US Airways chairman and chief executive officer, Stephen Wolf.
Karen Walker
Source: Airline Business
