Update: JetAmerica Folds

[SengaB]

I went to the Jetamerica site today and took note of the following information.

Melbourne, Florida–July 2, 2009–Jetamerica, the nation’s newest low fare indirect air carrier service that offers non-stop seats starting at $9 each way announces today it is self-imposing a 31 day delay of the launch of its first flights, which were originally scheduled for July 13, 2009 but are now slated to take-off on August 14, 2009.

http://www.jetamerica.com/news/

Senga

[LGA777]

Very bad timing IMO. In many parts of the country kids go back to school 1 to 2 weeks after their new "proposed" date of start of service. Especially in leisure markets September is the lowest demand month of the entire year, with the last week in August being pretty up their as well, possibly the slowest week of the June-August weeks.

Good luck to them, they are going to need it.

LGA777

[Matt Molnar]

JetAmerica began issuing refunds today. Refunded customers will also get some fees waived if they choose to book again in the future.

The future is looking very questionable, however.

Problem #1: they started selling tickets before they actually secured any slots at EWR, and to this day they have not obtained any, even though service is set to start in a month. Not clear if they didn't realize they needed slots, or if they did this deliberately...maybe they needed that ticket money to pay for the slots? After tickets went on sale, the FAA reminded both JetAmerica and Miami Air that they needed to obtain slots. It sounds like Miami Air, not wanting to dirty their own good name in this debacle, scolded JetAmerica about selling EWR tickets.

Problem #2: They have reportedly not yet secured any ground handling contracts at Minneapolis.

Problem #3 (Possible collapse indicator): Toledo Airport has taken down all its JetAmerica signage.

Stay tuned...

[cancidas]

Stay tuned...
doesn't look very promising to this armchair CEO...

[T-Bird76]

JetAmerica began issuing refunds today. Refunded customers will also get some fees waived if they choose to book again in the future.

The future is looking very questionable, however.

Problem #1: they started selling tickets before they actually secured any slots at EWR, and to this day they have not obtained any, even though service is set to start in a month. Not clear if they didn't realize they needed slots, or if they did this deliberately...maybe they needed that ticket money to pay for the slots? After tickets went on sale, the FAA reminded both JetAmerica and Miami Air that they needed to obtain slots. It sounds like Miami Air, not wanting to dirty their own good name in this debacle, scolded JetAmerica about selling EWR tickets.

Problem #2: They have reportedly not yet secured any ground handling contracts at Minneapolis.

Problem #3 (Possible collapse indicator): Toledo Airport has taken down all its JetAmerica signage.

Stay tuned...

Not sure that was the real issues Matt..

Jet America's press release noted that there were 6,486 consumers who were already ticketed for their EWR route, and due refunds.

Computing this out, their data would seem to indicate JetAmerica, two weeks from service had average bookings of 38 passengers per segment to EWR, operated with 737-800 airliners. Do the math....those numbers don't bring in a profit of squat.

[Matt Molnar]

That's beside the point...first of all, if their business plan requires they turn any profit in the first year they are doomed...second of all, they did very little marketing in the New York area...third of all, the number of people who actually want to fly between Newark and Toledo is probably a fraction of what they think it is.

My main point is it seems very tenuous, if not illegal, that they would sell tickets on a route that they do not yet have legal authority to operate, no? I know airlines do this fairly often when they begin marketing new international routes, but they always add a disclaimer saying that the service is pending government approval.

[T-Bird76]

That's beside the point.

That's not besides the point Matt... If their bookings was this grim early on during the peak summer months of travel, their forecast must for the fall and winter couldn't have been pretty. Its very easy to assume this is the sole reason they decided to "delay" start up. I doubt this airline will ever see the skies.

[Matt Molnar]

Put a fork in 'em, they're done.


Discount air carrier JetAmerica folds (http://nycaviation.com/2009/07/17/jetamerica-folds/)

NEWARK, N.J. — JetAmerica, a fledgling discount airline that garnered attention with $9 promotional fares, has folded without ever getting off the ground.

The Clearwater, Fla.-based company says it’s suspending sales to all markets and will immediately begin to process refunds to customers. Service was originally supposed to begin July 13 to underserved markets in Toledo, Ohio; South Bend, Ind.; Melbourne, Fla.; and Lansing, Mich. Flights were also scheduled to larger airports in Minneapolis and Newark, N.J.

[LGA777]

Surprise, surprise, surprise. At least they appear to be doing the right thing and appear to be refunding their customers. I feel sorry for the operators at MLB and TOL who where counting on them for new service.

Regards

LGA777

[Matt Molnar]

Maybe not completely dead yet? CEO blames expensive Newark slots for delays, says they will refocus on other markets.

Press release:

JetAmerica Suspends Sales
$900,000.00 in Refunds to Passengers
Clearwater, Florida - July 17 - JetAmerica, the public charter air carrier operator, announced today that it is suspending sales to all markets and that it would immediately begin to notify affected customers and process refunds to all customers who have booked seats on its flights.

“We are reluctantly suspending our public charter operations effective today,” said John Weikle, CEO, who has been with the company since April. “Finalizing the slots required to support our charter program at Newark has taken longer than expected and we have decided to suspend our flights in order to refocus on different markets. We still strongly believe that there is an unmet need for affordable air service to secondary markets and we look forward to offering this option again in the near future,” concluded Weikle.

“We will be refunding more $900,000 in ticket reservations for flights from August 14 through the end of September,” said Bryan Glazer of World Satellite Television News and Media Relations, which represents JetAmerica.

Glazer’s firm, which previously represented JetBlue and Virgin Atlantic Airways, was retained by JetAmerica in May. The firm’s national media blitz generated headlines across America that helped sell more than 20,000 tickets during the first JetAmerica’s online e-commerce operations.

“It is unfortunate that so many consumers’ will be affected. This was unavoidable. I worked closely with the executives of JetAmerica for several months and know they did their very best to overcome the challenges that the slot situation posed. But in the end, the business plan never called for paying for more than a half million dollars for slots,” said Glazer.

He added, “Don’t be surprised if JetAmerica comes back with new routes and new destinations.”

All customers will receive automatic refunds within 7-14 business days. Any customer not receiving a full refund in 14 days should call 727-451-3970.

[PhilDernerJr]

Anyone want to bet for or against them making a return one day in the future? ;)