Next time you're trying to get from New York City to Chicago, you might want to try going through New Jersey. Not on the turnpike, but through Teterboro Airport, which is just 12 miles from Manhattan and forbids big airline jets. You can arrive just 20 minutes before your flight. Pull up to the "terminal" (a tidy, one-story brick building), pause for a beverage in the lounge with about a dozen other passengers, speed through security and stroll 25 feet across the tarmac to a luxuriously appointed Embraer business jet. Slide into one of the 16 spacious leather seats (there are no middle seats) and dig into a gourmet meal. Then land at another convenient, smaller airport: Chicago's Midway. The fare: $1,500 round trip, about the same last-minute fare you would pay the better-known outfits with hubs in Chicago, American Airlines and United Airlines.
Welcome to Indigo, the upper-crust company that doesn't even call itself an airline. With most of the country's large carriers suffering financially and cutting back flights and amenities, a fresh flock of new and expanding niche carriers is rushing to fill the gap with wildly varying routes and styles of service. Indigo and an unprecedented transatlantic Boeing Business Jet service offered by Germany's Lufthansa Airlines are aimed at executive travelers. Others, like JetBlue Airways and AirTran Airways, are profitably targeting bargain hunters. Some are even more offbeat: Want to fly among skimpily clad hostesses from Atlanta or Newark, N.J., for a golf weekend in Myrtle Beach, S.C.? Try Hooters Air. Feel the urge to disrobe once you're airborne? Fly Naked-Air.
Rather than route flights through regional hubs and blanket the world with service like the traditional U.S. airlines, the upstarts offer flyers a patchwork of routes and a wide choice of onboard perks. The smaller carriers are choosing routes for which demand is brisk even amid a slumping economy and lingering fears of terrorism. That means smaller markets are being turned over to regional airlines or abandoned altogether.
Price-conscious trips today require more preflight planning than simply calling one or two major airlines that serve your city, but the potential payoff is huge. The typical fare has dropped 18% since 2000, although flyers might have to arrive at a secondary airport or bring their own dinner. And to the delight of their employees and shareholders, several of the smaller airlines are finding ways to boost revenues and profits in their niches. "What are crumbs for the major airlines are a full meal for us," says Dan McKinnon, CEO of tiny North American Airlines, primarily a charter carrier that flew more than 500,000 passengers last year from its base in New York City. Traffic is up 40% so far this year.
You can thank Southwest Airlines for the changes--or curse it, if you are a competitor. Southwest, based in Dallas, created the basic-fare, point-to-point model the new discount carriers are adapting and profiting from. Five airlines today--AirTran, ATA, Frontier Airlines, JetBlue and Spirit Airlines--aspire to be the next Southwest, and at least two major carriers, Delta Air Lines and United, have launched or announced plans for low-fare, me-too subsidiaries (a second try for both).