As a new breed of transatlantic, high-yield, super-premium player emerges, airline vets from the established carriers, veterans of the hotel and hospitality industries and others are experimenting with variations on a familiar theme. One player, though, Gary Rogliano, chief executive of Maxjet, the Washington Dulles-based contender, is running a carrier that wasn’t his idea in the first place and isn’t close to any of the businesses he has run in the past.
Rogliano, an accountant by training and an investor by choice, isn’t worried, though. “We’re not a start-up anymore. We are financed by people who have net worth’s from $5 million up to $2 billion. The carrier has the deep pockets to offer the service until it catches on: it has about $15 million in start-up funding. They are,” quips Rogliano, “the Richmond mafia”.
Maxjet’s investors from the capital of the Old Confederacy, now a banking and finance centre, include former Pittston Co chief executive Joseph Farrell; prominent Richmonders Beverley “Booty” Armstrong and William H Goodwin Jr, both principles in an investment firm that holds luxury resorts and hotels; former Reynolds Metals chief executive Jeremiah Sheehan; and Richard L Sharp, chairman of CarMax, a major retailer of used cars that has changed that once-disreputable business. Other backers include Ken Wooley, an original JetBlue Airways investor.
The airline is not Rogliano’s brainchild. The former chief financial officer of Pittston, a conglomerate that operates coal mines, armoured-car delivery services and an air courier unit, Rogliano was recruited to Maxjet just before it started up in November 2005.
The airline’s backers were concerned about the economics of its original plan, which would have applied the low-cost carrier model to transatlantic routes. Instead, they chose to position Maxjet as a premium all-business-class service, competing with the major transatlantic carriers’ full-fare business class but preserving elements of the low-cost model: simplicity, a sharply focused market, and an emphasis on value. Rogliano says that Farrell jokingly told him he had two hours to decide whether to accept the job.
The concept of an all-premium North Atlantic airline is not entirely new: Richard Branson toyed with such an approach when planning the launch of Virgin Atlantic, and just before the 11 September attacks, a carrier dubbed Blue Fox mulled such service between London Luton and New York. Rogliano says Maxjet is simply the low-fares concept applied to a slightly different market segment.
Maxjet’s aircraft, heavily refurbished Boeing 767-200ERs, each have 102 seats in a two-two-two configuration. The seats recline back far enough that they are sleeper seats, but are still a business class product – at business-class fares. That’s the slogan that Rogliano chose for Maxjet: “It’s just good business.”
The carrier started service between New York John F Kennedy and London Stansted with six trips a week, and has since added flights between Stansted and its Dulles home with five weekly services as well as recently announced flights that will link Las Vegas McCarran International and Stansted starting in November with twice weekly nonstops.
“Half our customers come from the USA and half come from the UK – so we are well balanced,” says Rogliano. He adds: “The demographics of where they are coming from are much broader than we expected. It works out that 70% of our customers are coming from the business market and 30% from the leisure side.” The airline is running at load factors as high as 70%, he says, quipping: “The good news is that we only have 102 seats. The bad news is that we only have 102 seats.” The target customers are small- and medium-enterprises as well as large corporate accounts.
Maxjet faces strong competition from the established legacy carriers in the UK-US market, from Virgin Atlantic and British Airways to the resurgent US carriers such or American Airlines, which has just relaunched its 767 business class with an improved sleeper seat.
Because of their size, these carriers can compete aggressively on price, but Maxjet, while remaining price-competitive, stresses its service offering: real space and room, no walk-through traffic from coach, an exclusive lounge at each end of the flight and its own loyalty programme.
Eventually Maxjet will have 11 aircraft, probably adding Boston Logan as its next US city and later still possibly Chicago Dallas and the two big California airports.
A New Yorker by birth, the 52-year-old Rogliano still sounds like a New Yorker when he talks, even though he spends about half his time in London, flying back as often as every week. In the little time he has at home, Rogliano relaxes on a 230-acre farm not far from Richmond, where his wife raises pedigree dogs including German shepherds. “I’m thinking of travelling a little less. My food bowl is always the last one filled, and sometime the dogs won’t let me on the bed.”
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Source: Airline Business
