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JSX, a Dallas-based airline flying short-haul routes, mostly in the western United States, has a secret tool to avoid financial devastation experienced by larger competitors. It’s fresh air, which can be found, in abundance, at many of the company’s terminals.
Since its 2016 founding, JSX has been unusual. JSX is a public charter airline, so while it operates some of the same aircraft as American Eagle, or United Express, it does so under different rules. Because its Embraer regional jets have 30 seats, even though they could fit more, JSX’s passengers do not need to go through traditional security screening, allowing them to arrive as little as 20 minutes before departure. And since JSX customers don’t use main passenger terminals — its aircraft depart from hangars or small private terminals — customers avoid most of the hassles of airline travel.
In pre-Covid times, that niche was enough. People paid a slight premium to fly from Burbank to Oakland or Orange County to Las Vegas for a better product. They enjoyed extra legroom and free snacks, and sometimes bragged on Instagram about how they were flying on a private jet, even though they were not.
Now, JSX has a new advantage. Its customers interact with far fewer people, not only on onboard, but also in departure lounges. Outside of the airplane, where proper social distancing is impossible, JSX customers can follow most Covid-19 safety guidelines, as the company’s marketing team repeatedly points out.
At many airports, there’s even fresh air. The hangars tend to have indoor and outdoor waiting space, and JSX has created outdoor waiting rooms at some airports where it does not use hangars. In Las Vegas, early-arriving passengers can check-in and immediately go outside and wait until boarding. At Boeing Field in Seattle, JSX has installed picnic tables outside for passengers.
“You do not need to surround yourself with hundreds of other people,” CEO Alex Wilcox said in an interview. “There is no touchpoint. The entire check-in process is entirely contactless. We are not going to touch your stuff or you, anymore than we need to.”
The airline also has added a few new extras to increase passenger confidence. For example, it claims it was the first U.S. airline to introduce a A.I. thermal screening process, and it recently added HEPA air filters to its cabins. The aircraft manufacturer, Embraer, calculated the airplane didn’t need them, because the cabin already had a high airflow per passenger ratio. But JSX’s larger competitors advertise the filters on other planes, so Wilcox figured JSX should follow.
“They are in vacuum cleaners, and they are pretty cheap,” he said. “I am sure it has some marginal benefit.”
Holding Up OK
Business is far from what it was, but JSX is holding up OK, the CEO said. It is flying about half of its 23 airplanes, and running about 70 percent load factors, while charging about $50 more than its larger competitors, Wilcox said.
“In terms of recovery, June came back really well, mostly around Vegas reopening,” Wilcox said “Our loads came back to just about par in the month of June. We did not see that among other air carriers. That’s when we started to realize we were going to be in a somewhat different category.”
Las Vegas remains a top performer, he said, because JSX struck up deals with MGM Resorts and Wynn Resorts. MGM is offering airfare discounts to consumers who buy three-to-five night work from Vegas packages, while Wynn is selling vacation packages with included JSX airfare from Burbank, Oakland, Orange County and Phoenix.
Here, too, JSX benefited from an unexpected pandemic boost. In the past, a regional airline with two dozen airplanes might not be able to get the attention of two giant hotel companies.
“In the old days, it would have been hard, getting people focused,” Wilcox said. “We would have been a rounding error but we are much more meaningful.”
Other markets are not as robust as Las Vegas, but Wilcox said he’s seeing better demand on intra-California routes. JSX is also generating some cash through its traditional charter business, moving groups around the country.
As for the fall, Wilcox said he’s cautiously optimistic. Normally, for non-discount airlines, business travelers replace vacationers after Labor Day. It is unlikely that will happen this year. But it is possible business travelers who need to fly will choose JSX for the same reason as leisure travelers — health safety.
“I am a little anxious about September,” Wilcox said. “But with schools coming back, the pent-up demand for business travel is going to resurface … What we are seeing so far for September is actually encouraging.”
What Happens Next?
U.S. airlines will be navigating the pandemic for the foreseeable future, which should give JSX some tactical opportunities. But what about after? Will JSX’s customers return to regular airlines, where they can pay cheaper prices?
Wilcox said they won’t, claiming the company, which is privately held, was on solid footing before this crisis. He said JSX is attracting new customers, who he argues will remain when health risks subside because the experience is better. He notes NPS scores, measuring customer service, have increased since the pandemic began.
Henry Harteveldt, an airline industry analyst, said he agrees JSX can continue to occupy a niche. The 2010s were dominated by big global airlines that promised customers they could get them anywhere in the world. Many of those airlines are shrinking and will not offer the same proposition in 2021 as in 2019. They may not even be able to retain all their markets, particularly smaller airports, opening potential new opportunists for JSX.
“I think that small is the new big,” Harteveldt said. “I think that in normal times JSX exemplifies that. For a certain type of traveler, JSX will provide outstanding convenience and time savings. They are able to exploit legally some loopholes and operate from private aviation terminals to provide a fast on and off experience that can save people time at the airport. I like what they do.”