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Dulles-based discount airline receives federal approval to use BWI

The first U.S.-based low-cost international carrier has received preliminary federal approval to use Baltimore/Washington International Airport as its hub, a decision that may soon add discount flights to Europe to the airport's busy domestic schedule.

Dulles-based SkyLink Airways Inc. received a conditional green light from the U.S. Department of Transportation Jan. 11 to operate the nation's only low-fare airline dedicated to international service.

Although the application names BWI, the carrier's Web site offers no hints about its plans for the Maryland airport. In fact, a number of job advertisements posted by the company refer to New York City as the home location, casting doubt on whether the company will pursue the plans put forth in its application.

The company - which must still satisfy the safety and operating requirements before gaining Federal Aviation Administration approval - plans to start flying out of BWI this spring to Stansted Airport, a major low-cost carrier airport north of London, and to Paris, according to its application.

Ultimately, the company said it plans to fly Boeing 767s to at least a dozen points in Europe and Central and South America.

In its application, SkyLink said it plans to offer ticket prices between 15 percent and 70 percent lower than larger carriers during the winter, off-peak season, when the larger airlines offer their lowest fares. To Paris, for example, the airline said it could offer one-way economy fares as low as $300 compared to the $500 to $1,300 charged by larger carriers.

At least one analyst said that while it makes sense for the startup airline to locate at an airport already known for its low- cost carries, it faces formidable challenges ahead.

By offering cheaper fares BWI is able to draw passengers from a wide geographic area including Virginia, Washington and Pennsylvania, said Robert Mann, president of R.W. Mann & Co. Inc., an airline industry consultancy in New York.

BWI has a history of drawing a lot of traffic, said Mann. It was no surprise that Southwest ended up in Baltimore because they understood it was a strong traffic point.

Southwest Airlines now controls 47 percent of the daily business at the Linthicum airport.

Nonetheless, it is a tough time to be starting an airline in an industry in which fares are already very low and competition is fierce.

The only place where they [the large carriers] can make money is in international flights, Mann said. An incumbent carrier is going to be extremely resistant to giving up traffic. They would be willing to offer low fares to keep a competitor out of the market.

For the consumer, international flights equal significant accumulation of frequent-flier miles, said Jay Ellenby, president of Baltimore-based Safe Harbors Travel Group Inc. Consumers may not want to give up those miles to fly with a low-cost carrier that does not offer a similar package.

When they are flying six, seven, eight hours they are going to cruise some serious points, he said.

To grab international business, international carriers typically depend on domestic airlines to feed their flights. They forge relationships with one another that allow them to integrate their ticketing and baggage services so that the exchanges appear seamless to customers.

But Southwest, for example, has not established such agreements.

They have to have agreements, Ellenby said. Otherwise people have to move all their bags from carrier to carrier and that is the last thing they want to do.