First-Class Flight Or Folly?

It's one thing to start a new airline in the midst of an economic slowdown, especially as fears of terrorism and SARS have left most major carriers struggling--and often failing--to fill enough seats to break even. But an audacious new start-up claims it will not only fill its flights when it begins flying later this year, but do so solely with first-class travelers.

Pending government approval, Primaris, a new airline based in Las Vegas, may begin operating first-class-only transcontinental and international service as early as this fall.

But will passengers be willing to pay the premium??

"The market will tell us," says Daniel Kasper, a managing director at LECG, an economic consulting firm that specializes in aviation, who is skeptical but not entirely surprised to hear about the new carrier's plans. "There are certain times in an economic cycle for this, but this is not one of them. That makes this [venture] more interesting--or more questionable."

Primaris founder and CEO Mark Morris says his timing is perfect. He plans to market to business travelers not just with the promise of better space and service, but with discounts. The airline will offer its first-class fares for 50 percent to 70 percent less than the so-called "unrestricted fares" many traveling executives now pay. That means a cross-country flight that costs $2,000 on a major airline would be between $800 and $1,000 on Primaris--still more than a vacationer would pay, but far less than a business executive would spend on a regular unrestricted fare. "We've tried to come up with a new paradigm," says Morris.

Actually, it's not a totally new concept. More than two decades ago, Morris went to work at a first-class-only airline called Air One, eventually rising to become CEO before the carrier disbanded in the mid-1980s. But Morris says Primaris has a more targeted marketing strategy than Air One. Primaris is aimed only at business travelers, who make up about 40 percent of the total air passengers yet account for about two thirds or more of airline revenues, he says. "We are not going after leisure travelers."