JetAmerica: A Buyer’s Guide to the New Low-Cost Airline

JetAmerica, a new startup, is planning to challenge the current economic and competitive headwinds that beset new airlines, with the hope of becoming a survivor. But the initial publicity about its plans left at least one reader skeptical about its ability to perform:

“JetAmerica states on its website that it is a ‘Public Charter Operator.’ What is the significance of this to me, the passenger? How is this different from a scheduled airline? It also claims to have big planes, but I understand from media reports that it actually only has one plane! This could mean big delays, especially later in the day. Flight times are a bit strange, no doubt because there is only one plane. I am interested but a bit skeptical.”

The short answer is that, as a public charter, JetAmerica follows some but not all of the same rules as the schedules airlines.

What’s With Public Charters?

Technically, JetAmerica isn’t an airline at all: It’s a wholesaler that will sell seats on flights it charters from Miami Air International. In bureaucratic terms, that’s a public charter. JetAmerica will sell the tickets and be responsible for fulfilling its commitments to passengers. But the actual flying will be done by Miami Air, a charterer with a fleet of eight 737s.

Public charters have been around for many years. Before deregulation, they were often the prime vehicle for low-fare air travel. They are only one of several types of charter, which also include charters for sports teams, political campaigns, special events, and corporations.

Charters operate under some of the same rules that govern scheduled airline, but not all.

• Safety and security. Charter airlines such as Miami Air International are fully certificated and they are subject to the same FAA safety rules as scheduled airlines. They are also subject to the same security rules.
• Contracts. Instead of the “contracts of carriage” that scheduled airlines must file, charter operators (including JetAmerica) must file “tour participant” or “charter participant” agreements. They’re similar to contracts of carriage, in that they precisely spell out the operator’s responsibilities and disclaimers.
• Overbooking protection. The primary government-enforced passenger protection currently in effect in the US is the rule regarding compensation for overbooking. According to the DOT’s Fly Rights booklet, those protections do not apply to charter flights.
• Carrier or operator failure. According to DOT rules, charter operators are required to deposit passengers’ prepayments in escrow accounts until transportation is actually completed. JetAmerica and Miami Air both say they put advance payments into escrow, as required. The purpose of this rule is obviously to protect charter travelers against carrier or operator failure.

As far as I know, once it gets started, JetAmerica will be the only domestic “airline” currently operating as a public charter, but over the years there have been others. Startups often adopt this business model, at least at the beginning, because it allows them to get a fast start.

JetAmerica’s Basic Plan

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JetAmerica seems to be following the general pattern established by Skybus, a recent startup that quickly failed—not surprising, in that JetAmerica’s founder was one of the founders of Skybus. It plans to focus on smaller cities with generally inadequate nonstop service on the bigger lines. Flights will be operated in 737-800s; all coach, with the usual tight seating.

According to press reports, JetAmerica will start flying on July 13 linking Newark with Toledo, South Bend, Lansing, and Melbourne (for Orlando). Additional flights will ultimately link Melbourne with Lansing and Toledo, and Toledo with Minneapolis-St Paul. Presumably, if the market response is favorable, the line will add more new cities.

Fares will generally be low—currently pegged at around $69 each way—but the carrier promises that it will sell at least nine seats on every flight for $9. All onboard amenities, checked baggage, advance seat assignment, and such will be extra-cost options. Tickets will be nonrefundable, but reusable for a $50 fee. An unusual provision is that if you have to cancel but can find a replacement traveler, you pay only a $25 fee.

JetAmerica’s charter participant agreement is, as usual for charter operators, pretty one-sided. It declines liability for missed connections, lost or damaged baggage, and most other airline misadventures. It also says that travelers relinquish the right to institute a credit card chargeback—a condition that may or may not be enforceable in court. As is true for charter programs, generally, JetAmerica’s agreement states that in the event of a major schedule change, ticketholders can get a full refund, but only if the major change involves a delay of more than 48 hours or a price increase in excess of 10 percent.

As to reliability, although JetAmerica will start up with just one plane, Miami Air could presumably substitute one of its other planes in the event the contracted plane experiences a significant delay. Also, JetAmerica says it “reserves the right” to arrange substitute transportation on a scheduled airline, although it does not promise to do so. In any event, a serious mechanical problem would probably cause more difficulty on JetAmerica than on a big scheduled line.

I’m sorry to report that before it even starts flying, JetAmerica is already guilty of misleading advertising. It says fares will be as low as $9, but a footnote says that all posted fares exclude a “convenience” fee of $5 per flight ($10 round-trip) for online booking, and a $10 fee for a phone booking. In effect, you can’t book a seat without paying at least an extra $5, which, because it is mandatory, should be included in the base fare. (I’m submitting a formal complaint to DOT about this practice, but it’s anyone’s guess about whether DOT will do anything.)

What’s the difference between JetAmerica and Skybus, and will JetAmerica succeed where Skybus failed? As I see it, the main difference is that, from the beginning, JetAmerica plans to link its smaller cities with major destinations—places with large populations or places lots of people actually want to visit—such as Newark, the Central Florida vacation complex, and Minneapolis. Skybus, by contrast, flew from a bunch of smaller cities to a hub in Columbus Ohio, neither a major tourist magnet nor source, and it made connecting at Columbus almost impossible. Unfortunately, central Ohio just didn’t provide enough as either to keep Skybus in the air. Presumably, JetAmerica will do better, just on the basis of its big destinations/sources. Other factors remain to be seen.

Buyers’ Guide

At this point, I wouldn’t advise against booking a JetAmerica flight. However, as with all flights, you should pay for your ticket with a credit card. And unless you can score one of those “$9” (actually $14) seats, you probably shouldn’t sign up for—and count on—a flight many months in advance.