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As network planners at Alaska Airlines charged with where the carrier would fly and when, Ben Munson and David Sunde sometimes identified smaller communities that were ripe for air service, only to realize their employer didn’t have the right airplane to profitably fly the route.
Out of that shared frustration came a business plan. The two entrepreneurs, who did not overlap during their stints earlier this decade at Alaska but shared the same general concerns, decided to start a bus company that would function like a regional airline. Their company, called Landline, intends to shuttle passengers on behalf of the airlines from the smallest markets to nearby airports, where they can catch a flight. They think they can sell their service for bus routes of just 50 to 250 miles, with the price of the bus ticket becoming part of the overall ticket price for the flight, much like a connecting leg of a trip.
Similar operations have been around for decades, and Lufthansa still has robust bus routes in Europe. In the United States, however, plane-to-bus connections have fallen out of favor this century. Continental Airlines and United Airlines, as separate companies, had bus routes into the late 1990s, but canceled them outright or replaced them with the smallest regional jets. Munson and Sunde, who call themselves students of “ancient” airline schedules, say they’ve identified one current bus route from the Big 3 U.S. airlines — United’s Allentown, Pennsylvania to Newark bus service.
But they see an opportunity, as regional carriers, many of which have had trouble attracting pilots at cost-effective wages, retire some of their smallest and least efficient jets. As they have done so, many smaller communities have lost air service to nearby hubs.
“The genesis of the idea was, with consolidation and the pilot shortage and the lack of really any aircraft development in the sub-60-seat sector, there is not a proper way to source this mission if you are in an airline,” said Sunde, the startup’s CEO.
Running it Like An Airline
After Continental pruned its bus operation in the late 1990s, a spokesman told The New York Times the airline “does not want to be in the bus business.”
But Munson and Sunde say they don’t want airlines to think of it that way anymore. They claim they’re operating what’s essentially a regional airline that uses buses, rather than aircraft. It’s a deliberate approach to try to attract risk-averse airlines executives, who often prefer business models they know.
They want to mimic the capacity purchase agreements regional carriers negotiate with larger airlines. Usually, the big airline buys all the seats on flights operated by a smaller airline and then sells them to customers using its own computer system. Customers don’t think they’re transferring from SkyWest Airlines to United Airlines; they see it as a seamless connection from United Express to United.
“When you spend time in the regional airline business, you start to learn how challenging it is to make money with small aircraft,” Sunde said. “The cost structure of the bus is really unbeatable. No one had ever approached it like running an airline before.”
For any startup, the first customer is always the toughest to attract. But Munson and Sunde recently signed up Sun Country Airlines, a Minnesota-based low-cost-carrier that had been seeking to expand its local catchment area beyond Minneapolis.
Sun Country CEO Jude Bricker had been looking for a way to scoop cost-conscious travelers from smaller communities without having to send a 183-seat Boeing 737-800 to pick them up.
Sun Country is using Landline buses to expand to Duluth and Mankato, and it plans to use its website to sell a single ticket for the bus-to-flight connection. The buses have Wi-Fi, reclining leather seats, and food and drinks.
“You can buy a ticket as if you were flying from Mankato or Duluth to Cancun,” Bricker said. “You can check in at the airport in Duluth, check your bags, get your boarding pass, board the bus, drive to Minneapolis, go through TSA there, and get on the airplane.”
Landline will act almost as a Sun Country Express. Customers will have everything on the same ticket, and if the bus or the flight is late, the airline and Landline will make sure the passenger still reaches the final destination. Landline might even hold the bus for connections, just like a regional carrier might hold a flight for stragglers.
Bricker said he sees a couple of other benefits. Generally, smaller markets have higher fares and less competition, so Sun Country may be able to charger higher prices for Duluth to Minneapolis to Cancun, than for a Minneapolis-Cancun nonstop. And while normally, Delta Air Lines, the market leader, would aggressively defend its profitable smaller Minnesota markets, Bricker said he is betting Delta won’t consider a bus true competition.
“We think it’s less threatening to Delta to offer connecting service on the bus than it would be to have airplanes,” Bricker said. “If we flew a plane in and had it overnight in Duluth, had it carry passengers in the next morning to connect to our bank, southbound, it would be an affront.”
Because Sun Country has relatively few flights, Landline also sells tickets to the public, who can use the service to connect to any airline in Minneapolis. But for customers flying those carriers, the connections are not as seamless.
The Landline founders, who say they’ve raised nearly $4 million, have much bigger plans than operating a couple of bus routes for one of America’s smallest airlines.
They argue more airlines will need their services as regional carriers grapple with what might be a coming pilot shortage. So far, most of the larger regional airlines say they’re not having trouble filling cockpits, though most have had to raise wages to entice applicants. But even smaller carriers, many with 20 or fewer seats on turboprops, have had more acute issues. Last year Great Lakes Airlines, which flew airplanes with as few as nine seats into the smallest U.S. communities, shut down, blaming a pilot shortage.
Environmental concerns and fuel costs could also spur airlines to invest in bus service. The smallest regional jets are some of the least efficient airplanes, and airlines might try to use buses to improve their environmental sustainability. (More train transfers are also a possibility; KLM, the Dutch airline, said earlier this month it would push some passengers to the train on the Brussels to Amsterdam route.)
Another issue is air traffic control delays. The skies are saturated in many U.S. regions, and while the system works OK during good weather, it’s far less reliable during storms. When bad weather hits, major carriers often cancel regional flights, so it’s possible a bus could be more reliable than the average United Express CRJ-200.
So far, none of the big airlines have been ready to sign up with Landline. But the two executives say the key is to persuade major carriers that Landline is not a bus company, but an airline-style business that happens to use buses.
“We want to make the airline feel like it’s nothing foreign,” Sunde said. “This is just another interline partnership in every way, including the way we structure the compensation.”