Little Airlines

Two airlines that are entering the market with new business models are La Compagnie and WOW. They are different in their strategy, but effective in their way of expanding and offering lower cost for different markets. La Compagnie will use 757 in an all business class model to provide cheaper business class to more travelers, and WOW will offer ULCC model which will allow all coach travelers to travel for much reduced cost. Both are oceanic carriers that will give the big three, united, American, and Delta a run for their money. They are able to do this via reduced staff, outsourced labor, and information technology.
“La Compagnie, Yvelin’s new carrier, runs 74-seat, all-business-class 757s between New York City and Paris, charging about $2,000 round-trip vs. $5,000 to $11,000 for the same seat on a larger carrier.”
“Iceland-based WOW Air is trying to make that concept fly in the transatlantic market, albeit with a higher level of service. “The rise of the ULCC has been very successful when you look at Europe and the U.S.”
La Compagnie is a company with one aircraft (757) and with only one approved route from Paris to Newark. They have a good model, but they need to be able to scale. This growth is essential to have a profitable business plan, because all of their eggs are in this one 757’s basket and any down time will result in lost profit, which is unlike delta where they have many spare planes to replace planes on routes.
WOW is much bigger with 6 aircraft and 17 destinations that’s headquartered in Iceland. The destinations are throughout Europe and has a low staff of 170 and has plans to expand. With the ordering of 320 and 321neo this is an aggressive strategy with plans to increase from 90k to 450k to 720k passengers by the end of 2014.
WOW has the better business plan based on growth, but La Compagnie has the ability to grow faster if the usage rate is high because it’s geared to higher paying passengers and therefor would not need to add as many aircraft as WOW based on their market demographic. Both offer reduced prices for their respective market, and one has a faster growth strategy in the short term, so I would pick WOW as the winner in the short term, but if La Compagnie has success then they could make more profit in the midterm.
Globally air travel is turning into a commodity and that scares the shareholders of American airline companies. Commodity pricing and service reduce profits and this isn't just a trend in airlines, but in manufacturing, servicing, and maintenance. All the categories are betting outsourced because it’s cheaper. The airlines started the outsourcing in the beginning with regional's to reduce prices and increase routes via unprofitable routes in the US and are now seeing this trend come to oceanic routes and they do not like this because it was the last frontier of high profit economic routes. Competition reduces profits and increases benefits to the consumer that’s why WOW is increasing growth plans and the big three are opposing such carriers. I see that in the future their will continue to be more entrants and more competition and even more aircraft with different design and business models that will saturate routes and turn travel into a commodity.
http://wowair.u
https://www.lacompagnie.com/en/

Cargo

The new rules for pilots combine all 121 flights except cargo, which include domestic, international, and unscheduled. The new rules changed the work rest cycle of pilots so that they could be safer while carrying passengers. The change include affirmation of documents stating that the pilots are fit for duty, and if they are not fit to fly then the airline would be required to drop them from the flight. The new rules provide for 8 hours of uninterrupted sleep of the 10 hours off for rest. Which is a significant because the before the rest period was 9 which could be reduced to 8 hours but that also included travel to the hotel and could result in 6 hours of sleep. With the new rules only certain hours can be flown per week, month, and year.
The cargo pilots are exempt so they fall under the old rules of 8 hours between flight duty times. During the formation of the new rules the cargo carriers had the weight to swing the rules in their favor by saying it was going to be such a financial burden to enforce the new duty rules that they were exempt. Unfortunately, the up and coming pilots do not have the same weight to through around for exemptions of financial hardships for learning to fly and reach 1500 hours before becoming a pilot for an airline.
I’m sure the reasons for not implementing the rules for cargo operators included such reasons as value of life, public perception, and cost. Cost is usually the most important factor when it relates to a business so this is one factor that does have a lot of weight. Businesses do not survive if they are not competitive, and sure they could all be competitive on the same field if rules were implemented, but they are not just competing with themselves they are competing with different modes of transportation that is far less regulated. To that extent the other modes of transportation are also far less safe per mile than aviation so to say that all rules should be applied to all aviation pilots is unfair, because passengers are far more important than cargo, but cost is more beneficial to shippers of cargo than extra rest that requires more pilots in a decreasing pilot pool. Therefor I do not believe cargo operators need to be subjected to the same rules.
Managers would be required to manage more pilots that work less hours which would negatively impact the business. If work rest periods for all forms of transportation were on the table to increase the safety of the nation then that would be a regulation to get behind because it would be fair. A pilot is not like a bus driver he/she has vast amounts of training and is paid a large wage comparatively so to reduce his hours while increasing a bus drivers hours at a lower wage and reduced safety is a very competitive business I would hope to avoid.

http://aviation.about.com/od/Regulations/a/Faa-Final-Rule-Pilot-Duty-And-Rest-Requirements.htm