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As the majors flee small markets, there will be opportunities for smaller carriers to begin profitable routes one airport at a time.
In its first year of operation, Southern Airways Express learned as it flew.
Now, CEO Stan Little believes the company has a solid business model and that the new Madison-Destin service will be a winner.
Olive Branch-based Southern Airways Express has added the third Mississippi airport to its list of destinations, and company officials have plans for more expansion in the near future.
They are also well aware of the challenges that lie ahead after a year of triumphs and some disappointments.
Last month, Southern Airways announced non-stop service from Madison Air Center/Bruce Campbell Field and the Destin Airport in Destin, Florida. There are four flights per week utilizing the nine-seat turboprop Cessna Caravan.
“This is one of the markets we wanted to serve since we first started the company,” said Stan Little, CEO of short-haul carrier Southern Airways.
He said it took a year to bring service to Madison/Greater Jackson because Southern Airways was literally learning on the fly in 2013.
“We feel more confident in our business model now,” he said.
COO Keith Sisson, a Biloxi native who met Little while both were studying at the University of Mississippi, said the first year in operation met his expectations, though not every flight was a winner.
“There was no data to look at; no research to refer to,” Sisson said. “Nobody’s ever done what we’re doing. So, during our first year we had some successes, but also saw some disappointments. We wish all of our flights had been successful, but we anticipated that we could have flights that didn’t meet our expectations because we were learning as we went.”
Indeed, Southern Airways is flying in unchartered skies. Its mission: To offer service from its two hubs Olive Branch/Greater Memphis and Destin to select destinations utilizing propeller-driven aircraft and small airports.
In essence Southern Airways is going small in an attempt to grab the short-haul (400-mile radius) service once offered by legacy carriers, filling the niche left by the Delta merger and changes at Memphis International Airport.
“Just a few years ago, Memphis International offered 16 nonstop flights per day to destinations on the Gulf Coast,” Little said. “Today, they don’t offer one. Southern Airways is the only airline in the Greater Memphis area today offering nonstop service to the Gulf Coast.”
A niche, perhaps, but Southern Airways’ business model is audacious. Ironically, it was born from an offhand comment.
Little, an attorney in Hernando, has long owned a private plane and has retained a personal pilot, Scott Honnoll, and it was common for Little to have people ask if they could borrow his plane and Honnoll’s services.
At one point several years ago Little had requests from three separate parties, and jokingly suggested to Honnoll, who now serves as Southern Airways’ chief pilot, that he bring Honnoll on full time and start a short-haul airline.
Little laughed, but not for long. Later that day he started seriously considering his proposition, mapping out potential routes on a napkin and brainstorming. He would subsequently convince local investors that his plan was viable, and a new airline was launched.
In June 2013, Southern Airways opened for business offering non-stop flights out of the Olive Branch-Destin dual hub to Oxford (University-Oxford Airport); Birmingham, Alabama (Shuttlesworth International Airport); New Orleans (Lakefront Airport); Panama City, Florida; and Atlanta.
For all of these airports including Madison Air Center, Southern Airways’ arrival marked the first scheduled air service in their history except for Lakefront, which had not offered scheduled service since the 1940s.
The young company would quickly realize how turbulent and unpredictable the airways can be. For instance, the route from New Orleans to Panama City was a failure while the New Orleans to Destin route proved a money-maker. Last summer, Honnoll said Southern Airways flew some 3,000 people into Destin, but the company found Atlanta tough to crack.
“I could have stood on a corner in Atlanta with a bullhorn, and still nobody would have heard me,” Little said.
Marketing is key, Sisson said. While the company might be filling a void left by the larger airlines, Southern Airways officials know they are actually competing against the automobile. Sisson said Southern Airways’ challenge is to convince the flying public that its single-engine Caravans are safe, and that the convenience of flying Southern Airways outweighs the savings from driving.
Here are the selling points: There are no baggage fees and no luggage carousels; parking is free; and there is no TSA security ticket holders are required to show up only 15 minutes before their flight.
“We just have to get them on the plane,” Sisson said. “In our first year, we didn’t have one person refuse to get on the plane because it was too small.”
Southern Airways launched the Madison-Destin service at a discounted price of $148. At that rate, Little said Southern Airways would need six of the nine seats filled to break even. Once regular rates are offered, the flight will need at least five passengers to stay in the air.
One obstacle Southern Airways is looking to overcome is winter.
While it might be warmer in Destin than Memphis in the winter, it is still too cold for most beach-goers. So, Little said the company is looking at perhaps shifting its fleet farther south after Labor Day, offering flights to places such as the Florida Keys where the temperatures are beach-friendly.
That’s not to say the young company is not already looking toward expansion. The day following the Madison announcement, Little flew to New York to meet with investors who are interested in Southern Airways’ service in the northeast U.S.
Mentioning that Cessna offers an aircraft model that has both wheels and pontoons, Little asked, “How cool would it be to take off for Martha’s Vineyard from the Hudson River in New York? I feel like we are just scraping the surface now.”