Las Vegas Airline for High Rollers a Bluff
Reporters across the country – from CNN to USA Today to the Associated Press – are regurgitating news about LV Air, a full-frill carrier set to launch in August. With an innovative sponsorship model, low labor-costs, and a built-in cache of wealthy clientele, this start-up would be a fantastic story – if it were true. Unfortunately, nothing about this venture adds up.
It sounds sexy as hell. High-rollers will be picked up by limo, whisked past airport security lines, wined and dined with food made by Las Vegas chefs, and treated to lay-flat seats, personal iPads, and a club-like atmosphere with music, mood lighting, and onboard gambling. Best of all, the flight will be free since casinos and local advertisers will foot the bill. But wait, there’s more. If you’re not satisfied, there is a money back guarantee! Only, you didn’t pay anything. Does this mean the casinos get a refund if passengers don’t lose enough to cover the investment?
From a business perspective, the sponsorship story is also juicy. The Las Vegas upstart is fully-embracing the advertising-revenue model that other airlines have only dabbled in with things like seatback ads and mileage rewards. That much may work. I have long thought legacy carriers will be rescued by taking names like PetCo United Airlines or Budweiser US Air. (Beer isn’t unprecedented. We’ve already got Kingfisher Air in India.)
But to maximize efficiency, LV will also partner with an existing commercial airline, thus reviving the brilliant “airline within an airline” idea (think Ted and Song). According to the LV Air website, it will be a subsidiary of said airline, so they must have a profit-sharing model so lucrative the airline won’t mind sharing its customer-base.
By leasing four of this supposed parent company’s 767s, LV won’t have to waste time getting its own FAA certificate and they’ll be up and running in August, barely six months away. No matter that the plane pictured on the website is not a 767. Or that pimping these planes out with lay-flat beds and in-flight-entertainment systems will keep them grounded for months. Presumably they’ll pay the lease fees during the installation, and if the mystery airline needs its planes back at the end of the lease, they’ll once again pay for the reconfiguration.
One thing LV claims it won’t be paying for is high labor costs. They plan to operate four round-trip flights a day between New York and Vegas (two million passengers in its first two years according to LV) with only 50 employees. Talk about efficiency. Air carriers around the world will be taking notes on this one.
Even if they can squeeze transcontinental turns (12-hour duty days, at least) out of their crews, they can’t pull this off. With an FAA minimum of four flight attendants per 767 (likely seven or more for the service they’re suggesting) and two pilots, they’ll need a bare minimum of 24 crewmembers per day to staff these four trips. Take sick days, delays and time off into account (transcon turns mean more days off and longer rest periods), and they’ll need way more than 50 crew just to work the route, not to mention the schedulers, the supervisors, the dispatchers, the marketers, the managers, the planners, the buyers. You can outsource things like maintenance and catering and baggage delivery, but you still need someone to order and account for these services and supplies.
At first glance, LV Air sounds great. Its marketers think so anyway – the website is ripe with promises. You’ll find “amazing value” and experience a “fantasy.” “You will be enthralled,” and there will be a clientele “unlike any ever seen.”
But will it fly? Don’t bet on it.
A little late but I just started reading into this and I totally agree.