Airone business development manager Robert Burns (left) and Executive Chairman Ian Burns (right) is seen here with Transport Minister Mike Henry at a reception hosted by the Burns' at Terra Nova hotel in Kingston, August 14. - Winston Sill/Freelance Photographer

Even as most of the world's airlines rack up huge losses, the owners of Airone Ventures Limited (AVL) remain confident that the no-frills, low-cost carrier they plan to launch in the Caribbean next April will break even within 24 months.

".... Ancillary services, are just not built into our model so that we have the leanest possible model you can have," Irishman Ian Burns, told Wednesday Business last week.

Indeed, eliminating the frills is a critical part of the model that Burns outlined to analysts, to allow Airone, even in this period of high oil prices, to keep fares low and still not lose money.

Airone officials expect that up to 60 per cent of the airline's fares will average around US$5 on its Caribbean and US destinations. Travel taxes would drive up the price travellers pay.

Airline launch

Burns and his partners, including his son Robbie Burns, with an initial outlay of US$30 million, had hoped to launch their airline in Jamaica earlier this year.

But, their application, for a licence to be based here, was turned down by the Jamaican authorities, who feared that it would provide too much competition for the state-owned Air Jamaica and weaken the Government's ability to entice a buyer for the loss-making carrier.

Air Jamaica, a scheduled carrier, which provides meals and drinks to passengers, has lost over US$1 billion over the past decade, including US$170 million in 2007. The loss is projected to be even higher this year.

With Jamaica's reticence of having Airone having either Kingston or Montego Bay as its base, Burns and his partners moved to Barbados, where they are awaiting final approval for registration there.

Flight operations

Airone, however, still has an application before Jamaica's Civil Aviation Authority (CAA) to operate flights into the island - likely to be easier if it carries the status of a Barbadian national carrier. The terms of its expected registration, however, remains unclear.

Jamaica's delayed decision on Airone's application not only put off the airline's launch but forced the company, Burns said, to let go its initial slate of executives. It is now head-hunting for a chief excutive officer to replace Peter Delany.

When Burns first signalled the Airone plan last year, it was project ed to operate as many as 18 flights per week from Kingston's Norman Manley and Montego Bay's Sangster airports to Fort Lauderdale, Florida and New York City in the United States. It expected to fly 300,000 passengers per years in and out of Jamaican gateways.

Passenger projections

Its new passenger projections have not been publicised, but Burns and his partners are hoping that by the time Airone takes off, the sluggish US economy will have pulled out of what is largely accepted - if not formally categorised - as a recession and that there will have been a further moderation in the price of oil.

Soft global travel markets and huge jumps in their bills have eroded profit and weakened the balance sheets of many airlines, including the most efficient, no-frills, budget carriers.

The Airone, principals, however, are not deterred by these facts, saying that they business model is likely to be sustainable. They believe that the low fares they promise will stimulate Caribbean Diaspora markets. They also expect to squeeze maximum efficiency out of all areas of their operations.

"It (maintaining low fares) is also done by very good negotiation skills on costs and sourcing and making sure that everybody is sensitised to ride on time," Burns said. "Plane utilisation is a huge issue, so we have to get our turnaround times in airports (and) ... get our flight structure right."

"We are going to make sure those things work because that's really what drives the fundamentals of the business," he said.

Among the innovations planned, in the effort to lower operating cost, will be the booking of tickets and flight confirmations by text messaging by mobile phones.

Robbie Burns, Ian Burns' son who is director of marketing, suggested that part of the expected success of Airone will be letting passengers know precisely what they are buying - low-cost, no-frills flights.

Package policies

"We will operate an all-economy no-frills service with no free meals and drinks, no in-flight entertainment, no business class, no allocated seating and no frequent flyer programmes," said Robbie Burns.

Passengers will, however, have the option of purchasing "drinks and snacks, priority boarding and travel insurance, as well as a host of goods and services like car hire, hotel bookings, tours and events".

But, these, he stressed, will come at "an additional cost".

john.myers@gleanerjm.com