Aviation: Look out for Moxy
Have you heard the name Moxy? We're not talking about the Marriott Hotels brand here - has Moxy come up in an aviation context? OK, what about David Neeleman?
Neeleman is a Goliath of the airline industry. He transformed little-known Salt Lake City based Morris Air into a success that eventually pushed Southwest Airlines into a $130m acquisition. He then went on to assist in the formation of WestJet in Canada before founding JetBlue Airways in 1999, which at the time was the best funded airline start up in aviation history. In 2008 Neeleman pounced again when he set up Brazilian low-cost operator Azul. Then when TAP Air Portugal was put up for sale in 2015, Neeleman teamed up with Portuguese entrepreneur Humberto Pedrosa and their Atlantic Gateway consortium took 61% of the semi-privatised European airline. He remains at the helm at Azul and acts in an advisory role at TAP.
Following on from Morris Air, WestJet, JetBlue, Azul and TAP, David Neeleman is aiming to launch another US-based airline. (Photo: James G. Howes)
Neeleman also pioneered the Open Skies ticketless reservation and touch-screen check-in system. Navitaire is its latest incarnation, used by more than 50 airlines worldwide. So it could be said that Neeleman knows a few things about airlines and the technology that drives the business.
Now though, Neeleman is working on a new US airline venture which he's code-named Moxy. The fledgling carrier has already signed a memorandum of understanding for 60 Airbus A220-300 aircraft (formerly Bombardier C-Series 300), is raising start up capital, and is aiming to launch operations in 2021. Earlier this month he revealed a little of his thinking around Moxy - or whatever it will eventually be called, which apparently isn't important at this stage - to Condé Nast Traveller magazine.
Based on that feature, it appears that Moxy will be founded on a number of principals:
Operating on unserved routes, primarily between secondary US cities.
Offering multiple cabins and flexible pricing, with ancillaries in lower fare classes.
Using technology to support every step of the journey, including simplifciation and expediting resolutions when problems arise or rebooking becomes necessary.
It's that first point - unserved point-to-point routes - that Neeleman believes is critical to Moxy's success. He suggests that his new airline won't have any direct competition in the markets it serves. Although domestic services are his main target, international flying isn't out of the question with Europe and South America - including a codeshare with Azul - being possibilities. Beyond that though, so far he's staying quiet about the airports where the A220s will be seen - its not even clear where the airline will be based, although that probably doesn't matter too much as its unlikely to be built around a single hub. The technology will probably be in Salt Lake City.
Neeleman taking a similar approach to Allegiant Air, which went into small direct markets no other airline served, and turned most of them into successes. But unlike Allegiant, Moxy won't be ultra-low cost. Neeleman claims the A220s will enable Moxy to offer low fares while delivering good customer experience - including full-service in premium cabins when customers elect to pay for it. He also says the aircraft's flexibility - its ability to operate short hops, or to fly from coast to coast across the USA - makes it ideal for the markets he's aiming at. He aims to undercut the fares major carriers such as American, United and Delta by as much as 50%, while offer his customers an opportunity to fly direct rather than forcing them to connect through a hub. With technology, he aims to emulate the ease of use already offered by leaders in the field such as Uber.
Its still at least two years until Moxy hits the runways and airways of America, but The Aviation Oracle can't help feeling that the proposition could be quite compelling to customers that are frustrated with whats currently on offer. An airline that offers first class when a customer wants to be lavish, or a tight seat down the back with paid extras when money is tighter. A carrier that will use apps to enable changes or rebooking, rather than expecting customers to stand in a queue or wait for a response from a call centre. The convenience of flying from local airport to local airport without the drudgery and long hikes associated with a mega-hub.
While Neeleman waits for the aircraft to arrive, his team are already working on the I.T. systems and apps that he believes will give Moxy a significant edge. Customers heading for smaller cities across the USA could have a real alternative to hubbing with the US majors in just over two years time. Does anyone want to bet against Neeleman pulling off yet another success?
Footnote January 3, 2019: The memorandum of understanding for 60 Airbus A220-300s was converted into a firm order at the end of 2018.
Text © The Aviation Oracle