The Battle for First Class

My flight on Silverjet had a few firsts: my first time passing through security and boarding a plane in seven minutes; the first women-only loo in the troposphere (the result of a heartfelt suggestion from a woman at Heathrow); the first carbon-neutral airline, which takes up to $23 from round-trip fares to fund projects that neutralize carbon emissions.

It was economics rather than environment that attracted Nigel Hysom and Craig Thrussell to Silverjet, whose $1,800 price appeals to a category of flyer called SMEs, for "small and medium enterprises." The two London-based financial consultants fly as often as twice a month and usually take Air India because of its low $2,000 round-trip business fare. "We don't have the buying power to fly BA or Virgin," says Hysom. "As a growing business, we have to look at costs--and a flat bed is everything."

For now, the transatlantic market, buoyed by corporate travel, can keep a lot of planes in the air, but should the traffic slow, the incumbents could always resort to price wars, a tactic they've used in the past to shoo away upstarts. The upstarts, on the other hand, need new markets, which could test their operating capability. "EOS is still the gold standard, but Silverjet is proving that the alternative carriers are here to stay," says Michael Holtz, owner of the Smart Flyer, a high-end travel agency in New York City. As a publicly traded company, Silverjet will be under pressure to deliver profits. Lobbenberg says the airline is likely to compete with MAXjet in efforts to capture the bottom end of the up market.

As for EOS, UBS transport analyst Tim Marshall says, it "would be prudent to target the SME and leisure market rather than the global corporates," arguing that network depth, breadth and frequency are important to corporate flyers. "The presence of EOS may actually stimulate the business-class leisure market," says Marshall.

That might allow many people, like me, who are now crammed in coach to upgrade. And it would give business flyers more flexibility. Simon Martin, a British futures exchange analyst who usually flies BA, Delta or American, was on an EOS flight for two reasons: he didn't want his business compromised by potential labor troubles (since resolved) at BA, and he was the company's guinea pig for finding other airline options. He would report to colleagues that EOS was "slightly better" than BA's first class. "It's a dirty job," he said, after finger sandwiches and a sweet cheese soufflé, "but someone's got to do it."