Jet America, the proposed Charleston-based budget airline, is no more and investors' money is being returned, according to a letter sent to investors Monday.
Jet America, the proposed Charleston-based budget airline, is no more and investors' money is being returned, according to a letter sent to investors Monday.
"Charleston needs a low-cost carrier to come to town," wrote John Weikle, a South Charleston native and the major force behind Jet America. "Unfortunately, it's not going to be Jet America."
Local investors, including the Charleston Area Alliance, the Charleston and Central West Virginia Convention and Visitors Bureaus and private individuals, had raised $1.9 million - short of the $3 million goal, according to Weikle's letter. He had also asked the state for $1 million from West Virginia Jobs Investment Trust.
"We certainly tried to raise the money here," Weikle wrote.
The money issue, coupled with the Friday closing of Skybus Airlines, which was founded by Weikle, led Weikle to cancel the project.
"Charleston is still my hometown and I care deeply about what happens here," Weikle wrote. "Perhaps someday I can bring an established low-cost airline to town."
Matt Ballard, president of the Charleston Area Alliance, said that Weikle was writing checks on Tuesday, returning the seed money.
"The Skybus announcement has taken the wind out of our project," Ballard said. "I can't tell you how disappointed ... that the Charleston Area Alliance is to see this project suspended."
Kanawha County Commission President Kent Carper said the Jet America project was a learning experience about the tumultuous airline industry.
"It was worth going through it," Carper said. "The thing that I learned is that today's thinking will probably not mean much tomorrow in the airline business."
Carper's concerns began last week, after looking at rising jet fuel prices and market conditions.
On April 3, he sent a letter to the Central West Virginia Convention and Visitors Bureau instructing them to freeze all the money the CVB had invested in Jet America.
During the same time, Jet America had requested funds to offset startup expenses, he said.
"Too many questions were being raised for my comfort level," he said.
The closing of Skybus on Friday just made it more complicated, he said.
"There's no way we would have done this if I didn't think Skybus was successful," Carper said on Friday.
Despite the end of Jet America, he and others remain committed to expanding air service at Yeager airport. Carper said a direct flight to New York City or Newark, N.J., is a top priority. The 9/11 attacks derailed such a flight the first time, Carper said.
"We are in a very challenging time," he said. "We need to stand up and do this and stop talking about it ... the airlines don't just coming knocking on the door anymore."
Yeager director Rick Atkinson said the airport is constantly talking with airlines about expanding service. For example, he was in Houston last week meeting with Continental Airlines.
"The difficulty with an existing carrier is that they are not really adding new schedules because of fuel costs and a weakening economy," he said.
Yeager is lucky in some ways, he said.
"The best thing is that we have not seen our schedules cut," he said.
Also, Southern Skyways' flights to Myrtle Beach, S.C., and Orlando, Fla., are bright spots.
"Our relationship with Southern Skyways is a good one and it is a good way for us to expand our offerings to meet needs," he said.
Jet America, the proposed Charleston-based budget airline, is no more and investors' money is being returned, according to a letter sent to investors Monday.
"Charleston needs a low-cost carrier to come to town," wrote John Weikle, a South Charleston native and the major force behind Jet America. "Unfortunately, it's not going to be Jet America."
Local investors, including the Charleston Area Alliance, the Charleston and Central West Virginia Convention and Visitors Bureaus and private individuals, had raised $1.9 million - short of the $3 million goal, according to Weikle's letter. He had also asked the state for $1 million from West Virginia Jobs Investment Trust.
"We certainly tried to raise the money here," Weikle wrote.
The money issue, coupled with the Friday closing of Skybus Airlines, which was founded by Weikle, led Weikle to cancel the project.
"Charleston is still my hometown and I care deeply about what happens here," Weikle wrote. "Perhaps someday I can bring an established low-cost airline to town."
Matt Ballard, president of the Charleston Area Alliance, said that Weikle was writing checks on Tuesday, returning the seed money.
"The Skybus announcement has taken the wind out of our project," Ballard said. "I can't tell you how disappointed ... that the Charleston Area Alliance is to see this project suspended."
Kanawha County Commission President Kent Carper said the Jet America project was a learning experience about the tumultuous airline industry.
"It was worth going through it," Carper said. "The thing that I learned is that today's thinking will probably not mean much tomorrow in the airline business."
Carper's concerns began last week, after looking at rising jet fuel prices and market conditions.
On April 3, he sent a letter to the Central West Virginia Convention and Visitors Bureau instructing them to freeze all the money the CVB had invested in Jet America.
During the same time, Jet America had requested funds to offset startup expenses, he said.
"Too many questions were being raised for my comfort level," he said.
The closing of Skybus on Friday just made it more complicated, he said.
"There's no way we would have done this if I didn't think Skybus was successful," Carper said on Friday.
Despite the end of Jet America, he and others remain committed to expanding air service at Yeager airport. Carper said a direct flight to New York City or Newark, N.J., is a top priority. The 9/11 attacks derailed such a flight the first time, Carper said.
"We are in a very challenging time," he said. "We need to stand up and do this and stop talking about it ... the airlines don't just coming knocking on the door anymore."
Yeager director Rick Atkinson said the airport is constantly talking with airlines about expanding service. For example, he was in Houston last week meeting with Continental Airlines.
"The difficulty with an existing carrier is that they are not really adding new schedules because of fuel costs and a weakening economy," he said.
Yeager is lucky in some ways, he said.
"The best thing is that we have not seen our schedules cut," he said.
Also, Southern Skyways' flights to Myrtle Beach, S.C., and Orlando, Fla., are bright spots.
"Our relationship with Southern Skyways is a good one and it is a good way for us to expand our offerings to meet needs," he said.
However, like the major carriers, low-cost airlines are feeling the pinch too, he said.
"They are struggling with their business models ... it's hard to operate in a $110-a-barrel-of-oil world," he said.
Jet America's route plans, ticket price savings and passenger increases would have been significant for Yeager, Weikle said Tuesday.
According to projections in Jet America's business plan, Yeager travelers could have had direct to flights to Denver, Phoenix, Dallas, Minneapolis, Chicago, Detroit, Boston, New York City, Philadelphia, Washington, Myrtle Beach and four destinations in Florida.
Fares would have started at $1, with an average fare of $73. Compared to Yeager's current average fare of $206, that is a 65 percent savings.
The flights would have been on seven 122-seat Embraer-195 jets, with 35 daily departures.
Once Jet America was stable, Yeager could have seen passengers grow from 300,000 yearly to 1 million, according to two-year projections.
Weikle said he notified Jet America investors in Charleston via e-mail Monday at 9:01 p.m. saying that "we were closing down the project and returning checks starting [Tuesday]."
Some of the investors were notified Saturday night, he said.
The grounding of Skybus played a significant role in the decision to not pursue Jet America, he said.
"The Skybus model was a huge success in Columbus [Ohio] in the beginning," he said. "But then something happened which I'm just beginning to sort out."
Although he is the founder, Weikle's connection to Skybus ended after the airline's first flight in May, he said.
He believes the airline's operation problems at the end of December hurt the airline in the public's eyes, he said. Also, the early expansion into Greensboro, N.C., was a likely pitfall, he said.
"It just seems to me that management lost control of the operation sometime after the first of the year and never really recovered," he said. "The executive team failed to embrace the employees of the airline."
The significant cutting of salaries from the original plan and the elimination of the company's 401(k) match were particularly troubling, he said.
However, Weikle is committed to the ultra-low-cost carrier model, but it must be executed properly, he said.
"Our business models, Ryanair in Europe and AirAsia in Kuala Lumpur, continue to enjoy double-digit net margins," he wrote in a letter to investors. "The model works. And it works better than any other airline model in the world."
Atkinson agreed.
"I'm a realist, and I think the model that John proposed will work in the right economic circumstances and would even survive in an economic downturn," he said.
And if the Jet America project hadn't been in its infancy, it might have survived, too, he said.
For now, Weikle is turning his attention to Skybus, with the Jet America management team in tow.
"We've got to figure out a way to save 450 jobs for some very fine people," he said.
To contact staff writer Sarah K. Winn, use e-mail or call 348-5156.
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