Who the F*&@ is AURA?
Those of you who saw that I accidentally published my jumbled notes on AURA last week already knew this topic was coming. AURA, an airline you’ve probably never heard of, is under development and is hoping to start flying next year. This is not an ordinary airline effort. In fact, it’s incredibly ambitious from a design perspective. I spoke with founder Zander Futernick about his plans.
Let’s start with the basic idea. Zander wants to acquire some used CRJ-700s that are meant to hold about 70 people. He will put these airplanes through a massive reconfiguration that will result in a mere 29 seats on each aircraft in a very non-traditional two-class configuration. These airplanes, operated on behalf of AURA by Presidential Aviation, will fly between big cities. If all goes well, AURA will siphon off a tiny number of business travelers and make money while the big guys ignore the airline. In reality? I am incredibly skeptical.
I told Zander my feelings going into the conversation, and he fully understood my skepticism. He was just appreciative that I was willing to hear him out. It’s clear that he’s done a lot of work analyzing this, but analysis can only get you so far. This brought my back to the summer of 2003 when I was an intern with the founder of Atlantic Express, the airline that would become Eos.
At the time, our business plan seemed so simple. The New York to London market was huge, and we only needed a miniscule piece of it to fill our spacious all-business class 757s. How hard could it be? The answer: incredibly hard. Zander noted that in one of the airline’s first markets, Miami to New York, it only needs less than a percent of the total market to work. Sure, and it sounds easy, but it isn’t. To be fair, things have changed in the industry since my experience 15 years ago, but they haven’t changed that much.
In a market like Miami to New York, American will be paying incredibly close attention. It won’t need to lower fares to match, because AURA’s fares aren’t all that low. But the second AURA shows any hint of gaining traction, American will fight. I would expect targeted frequent flier bonuses and closer monitoring of corporate contract performance for one. Zander wasn’t as concerned about the frequent flier program since they’ve continued to be devalued over time. But the reality is that AURA can only help people on a couple routes. Business travelers will still be slaves to the big guys elsewhere, and those programs matter a great deal.
I’ll step off my soap box now. Let’s just talk about the product at hand. This product is really over-the-top with everything from pre-ordering of fresh meals to be cooked onboard and even self-sanitizing lavs. It’s a brand, an experience, and it sounds nearly impossible to pull off.
These airplanes will have 21 seats equivalent to a domestic First Class (above). They will also have 8 seats in “Wave” class which is a futuristic looking cradle of sorts (below).
The images look fantastic, there’s no question. But it’s going to take a ton of work and time to get this certified. Those Wave seats are actually AÏANAWAVE seats from a company called Yasava. Yasava does interiors for corporate aircraft, and it is… something else. Visit the website and you’ll learn that it’s Swiss. The office is, well, “the Yasava Creative Center above the lake of Geneva allows us to live and breath according to ancient wisdom.”
I did ask Yasava whether these seats were certified to fly. The answer: “These will be FAA certified for the specific application for AURA in the Bombardier CRJ200 / 700 / 900 / 1000 aircraft series, together with the other elements of the new cabin.” I read that as a hard no.
I can’t even imagine how miserable and lengthy the certification experience is likely to be. It’s not just the seat, but there’s also a lot of technology planned for the aircraft. Take a look at this image of a virtual window using OLED technology on the ceiling.
AURA says it’ll take delivery of the airplanes this Fall (not acquired yet), refit them in the winter, and then be ready to take passengers by mid- to late-2019. That sounds impossibly aggressive.
If AURA does get up and running, it’ll start with the Miami-New York-Chicago triangle. Soon after, you’ll see flights from those cities to Atlanta. Then it’ll go west into markets like LA to Denver and Chicago. These are all big city markets with a ton of service already. AURA plans on going in with up to 4 frequencies a day in the biggest markets. That’s a far cry from what the traditional airlines offer, but Zander says research shows that 4 is enough. I disagree. At the very least, it’s a negative when comparing with the big guys. And if that’s a negative, then what’s the positive beyond the futuristic cabin design?
Like JetSuite X, AURA is going with the private terminal-style of operation. Travelers will avoid the big passenger terminal headaches, and in some places, they’ll avoid the popular airports all together. I asked about airports, and Zander explained that they’ll look at several options and they’ll listen to their KeyHolders (I’ll talk about that in a minute) to see which airports they find most desirable. In Chicago, for example, if they have most customers going into Chicago from elsewhere, then they’ll likely prefer a private terminal at Midway or O’Hare. But if they have a big base of people who live in Chicago, particularly northern suburbs, and are looking to fly elsewhere, then they’d look at Chicago Executive (the old Palwaukee).
Another thing that will make the airline stand out is its pricing practices. It is starting out as a quasi-membership organization. If you pay a nominal initiation fee ($100 through July 31 at which point it goes up to $250 – regular rate is $700) you become a KeyHolder. Then those KeyHolders will pay $100 a month (sign-ups after July pay $250 a month) once the airline starts flying from their city. Zander says the number of sign-ups are in the thousands, but then again the only commitment is a $100 fee so it’s a relatively low bar. He compared this to an Amazon Prime-style offering where you get benefits for signing up but it’s not that membership fee that’s going to make the company profitable. It seems to be more a way to create that sense of belonging with the brand. You’re part of an exclusive club.
That membership fee does come with one major benefit: you pay half what non-members pay for tickets. People who aren’t KeyHolders can still fly, but they’ll just pay a lot more. What are we talking about? You can see the flat pricing list on the website. For KeyHolders, Miami to Chicago will be $380 for First Class during off-peak times and $480 during peak. Wave class will be $830 off-peak and $930 peak. (These fares are fixed for the first year but they may change after.) For comparison, I can buy a walk-up tonight (on the day I wrote this) from Miami to LaGuardia in First on Delta for $423.21. With a week’s notice it can go as low as $300. Is someone really going to pay double a commercial First Class price just to fly in a fancy cradle on a couple hour flight? That’s what AURA is betting.
Of course, we have a long way to go before anyone would even have the ability to buy those fares. Zander wouldn’t share any information about how much funding the company has other than to say that it is backed by “private investors worldwide.” That says nothing about how much has been raised, and whether it’s enough to acquire the minimum 4 aircraft AURA needs to take flight. Even if it has enough, can it refit those airplanes in a timely manner and get space at major airports? If so, then the fun begins. It has to woo traffic and become profitable.
Zander seems confident that this is going to work. I, well, I wish them luck.
