The (re)relaunched Eastern Airlines wants to deliver on its promise of a broad geographic footprint. The carrier applied for DOT permission to grow its scheduled service fleet from one aircraft to three, allowing it to bring new routes to market. Following its recent approval to operate flights to Mexico it announced its intentions to serve Cabo San Lucas from its JFK home “early in 2020.”
The new route plan was included in the filing requesting permission to increase its fleet size. Cabo joins Guayaquil, Ecuador (GYE) and Georgetown, Guyana (GEO) on the carrier’s route map. The Guayaquil service launched on 12 January and Georgetown expects to fly on 5 March 2020. Assuming the DOT approves this request the Cabo San Lucas service should launch on 8 March 2020 per the filing.
Guayaquil is also expected to increase to twice weekly in March while Georgetown will launch as twice weekly service with “frequency increases based on demand.” The Cabo service will launch with two weekly flights and increase to four over time.
The desired frequencies for early March could conceivably be served with a single aircraft rotating through the trio of destinations. Growing into Eastern’s desired level of frequencies will require the additional aircraft, however, as will optimizing the operation for peak travel day demand.
The carrier notes it recently was approved as a Civil Reserve Air Fleet carrier. With that designation Eastern expects to see additional revenue from new military transport contracts going forward. The carrier also recently closed on a $25 million loan secured by its aircraft, giving it sufficient capital to being these routes to life while continuing with its charter operations on the rest of its 10-plane fleet. And its primary investor indicated a willingness to pump more cash into the company if needed.
Service to Guayaquil competes against LATAM and JetBlue while the Georgetown flight faces competition from American Airlines and Caribbean Airlines. JetBlue will join the Georgetown party in April 2020. The Cabo route would operate without direct competition, giving it an edge as the company seeks to find profitable services.
The filing also includes financial details from Eastern’s current operations. The company reported $2.5 million in losses for the trailing year ending in November 2019. It also expects the Cabo San Lucas flight to cost approximately twelve million dollars in the first year.
The carrier anticipates an average load of 55% and average one-way fare of $253 as it launches the route, with both those numbers increasing over time, to $370 per passenger and 72% loads by the end of the first year. The company also expects $35/passenger in air-related products revenue, a/k/a ancillary fees.
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