First Class

Upmarket Eos Ready to Double in Size

posted: 15 February 2008 ET

: Eos Airlines' fleet now consists of four Boeing 757s, each configured with 48 passenger seats, but the airline has negotiated agreements to double its fleet to eight 757s by the first quarter of 2009. Credit: Eos Airlines
: Each of Eos Airlines' Boeing 757s contains just 48 passenger seats. Each seat folds down into a 6-foot-6-inch lie-flat bed. Credit: Eos Airlines
: Adam Komack, Eos Airlines' chief lifestyle officer, says the airline counts nine of the world's top 10 corporate banks among its 200 corporate clients. Credit: Eos Airlines

Eos Airlines plans to double the size of its fleet by the first quarter of 2009 to allow the all-premium-class airline to add destinations and increase its flight schedule on selected routes.

Purchase, N.Y.-based Eos now operates four Boeing 757s, each of which is configured to carry just 48 passengers in mini-suites containing seats that fold down into 6-foot-6-inch fully horizontal beds. At present, Eos operates 44 flights a week, 22 in each direction between New York John F. Kennedy and London Stansted airports.

However, the airline has taken possession of its fifth and sixth 757s, both of which are now being refitted with 48-suite cabins. Additionally, Eos has agreements in place to add a seventh 757 this fall and an eighth in early 2009, said Adam Komack, Eos Airlines' chief lifestyle officer.

Aircraft number five will launch daily service for Eos between Newark Liberty International Airport and London Stansted on May 5. The airline will use 757 number six to begin daily service on July 6 between London Stansted and Dubai, a service made possible by the Open Skies air service deal agreed between the United States and the European Union, which comes into effect on March 30.

Eos will schedule the Dubai flight to connect with one of its three-to-four daily JFK-Stansted flights, said Komack. The airline hasn’t decided yet whether to use its seventh 757 to launch service to another new destination or to double its daily service on either its Newark-Stansted or its Dubai-Stansted route. It will wait to see how traffic develops on the new routes before deciding on deployment of the seventh and eighth 757s, he said.

"My hope is that we will be extremely successful in these markets and will want to go with frequency, because that's an important part of our business model," said Komack.

Another all-premium-class airline, UK-based Silverjet, is also starting service between London and Dubai in the near future. Silverjet has recently had some negative financial press: Property developers the Reuben brothers declined to take up the option they held to convert their $19.4 million loan to the airline to Silverjet common stock.

A few weeks previously, U.S. premium-class airline MAXjet Airways ceased operations after being unable to find new working-capital investment. However, Eos is unruffled by the idea that, as recessionary fears loom in the U.S. and Europe, all-premium airlines could struggle.

A different focus

"We're focusing on a different guest than any other new entrant," he said. "The others are creating a new type of business traveler – people who wouldn’t (otherwise) buy a business-class ticket," but are doing so because these carriers' fares are strongly discounted compared with traditional business-class fares.

Eos, however, is targeting the traditional first-class and business-class passenger. "A certain segment of the population is always going to fly only on fully lie-flat beds. Our business model has always been to serve fewer people better," said Komack.

"What we offer is a very different, uncrowded experience," he added. "Each of our guests is met at the airport and guided through the airport. We've removed all the crowds from air travel and have removed all the pain points."

Large traditional airlines can't generally do away with "pain points," said Komack, because their premium-class passengers still have to share check-in facilities, departure lounges and boarding gates with hundreds of economy-class passengers.

Eos claims not to have misgivings about British Airways' plan to launch service in 2009 with 32-seat Airbus A318s between New York and London City Airport, a few minutes from London's financial district. For one thing, British Airways has confirmed that, because London City Airport has a very short runway, BA's A318s will have to make a stop on each westbound flight to take on enough fuel for the trip.

Also, Eos – which claims now to be carrying one in nine of all business-class passengers between New York JFK and London – charges 20 percent less than the mainline carriers' business-class fares, and needs only 5-to-10 percent of the premium-class traffic on its selected high-traffic routes to be profitable, said Komack. "British Airways' announcement very much validates the model."

Eos now has premium-class travel contracts in place with 200 corporate clients, including nine of the world's top 10 corporate banks; one such bank has recently mandated that all business-class staff travel between New York and London be booked on Eos, because its fares are lower than those of the big airlines, said Komack.

Long-term plans

The airline's longer-term plans envisage it launching service to other European destinations from New York and the U.S. West Coast. Potentially, also, it might operate flights within Europe, from Europe to Middle East destinations, and from Miami to South American cities. Eos only wants to serve about a dozen routes in total, said Komack, operating enough flights on each route to capture a profitable share of its overall premium-class traffic.

Eos isn’t completely wedded to the 757: The type doesn’t have the range to operate from the West Coast to Europe, and Eos has developed plans to operate Boeing 767-size jetliners on such routes with each aircraft configured to hold 62 seats, said Komack.

Similarly, Eos might adopt an aircraft smaller than the 757 to operate any intra-Europe and Europe-Middle East services it decides to operate, he added. And though Eos has no plans to operate business jets itself, the airline is in discussions with specialist operators to offer a branded business-jet charter product like that provided by Lufthansa.