Technically, America West Airlines (NYSE:AWA) has already flown to and from the East Coast plenty of times. But it's about to start something new: non-stop, coast-to-coast flights, featuring low fares, beginning in October.
The low fares, such as $299 for a last-minute, one-way business class trip, are one new development. (Comparable flights on other airlines can cost more than $1,000.) So is the departure from the old hub-and-spoke system, used by most of the older airlines, which would route passengers through hub airports instead of just ferrying them directly from point to point. Such point-to-point service has been one hallmark of upstart (and successful) airlines such as Southwest (NYSE:LUV) and JetBlueAirways (NASDAQ:JBLU).
America West is taking on its larger rivals as it offers twice-a-day roundtrip service between New York's JFK airport and Los Angeles and San Francisco airports. Flights will also soon be added between Boston's Logan airport and the two California metropolises. CEO Douglas Parker noted that, "This will bring low-fare service to the last major non-stop routes dominated by high-cost carriers. We will be flying to the right airports at the right prices."
Recently sacked pilots and flight attendants from other airlines have reason to rejoice along with passengers -- America West will be hiring more personnel to pull off its plans.
This news was enough to send America West shares flying up some 4%, but investors need to be careful. While it's certainly true that some airlines such as Southwest have terrific long-term track records as investments -- and that other newer airlines such as JetBlue hold much promise -- the airline industry is a notoriously difficult one. Over many decades, it hasn't made many people rich. Just a few of the business' challenges include volatile fuel prices, the financial drain of empty seats, fare wars, expensive equipment, and vulnerability to bad weather and geopolitical turmoil.
Learn more about the fascinating airline industry in this Fool Radio interview with Southwest CEO Jim Parker, in this article on the "Flying the Sordid Skies" by Robert Brokamp, and in Whitney Tilson's warnings about steel and airlines.
