Motor City Air Raid

Most men have it: the fantasy of one day sitting behind the wheel of an expensive sports car or climbing into the cockpit of a jet. Many outgrow the urge, but Kevin Stamper went out and bought a brand-new Boeing 737 and then, for the fun of it, launched Pro Air, his very own little airline.

And Pro Air is turning out to be a lot more than a grown man’s toy. For every stumble that giant Northwest has made at its fortress hub at Detroit’s Metropolitan Airport, two-year-old Pro Air has been there waiting to gobble up another dissatisfied customer. This year Pro Air, which now has four 737s, could quadruple its revenue passenger-miles, the industry’s standard volume measure, to 600 million miles, from 150 million in 1998. On a recent morning, Stamper gushed like a new father as he watched dozens of passengers milling about Pro Air’s hub, the motley but closer-to-downtown Detroit City Airport.

These days, the airport is filled with Detroiters who are defecting to Pro Air because of walk-up fares that are as much as 85% cheaper than Northwest’s. For instance, an unreserved seat to Indianapolis, Ind., cost $578 round trip before Pro Air came to town with its deal of $138. Northwest was forced to match. Also aiding Pro Air’s cause are hassle-free fares–no advance booking or Saturday-night stays required–to New York City; Philadelphia; Chicago; Baltimore, Md.; Orlando, Fla; Atlanta; and Indianapolis. “We’re on the edge of a revolution out here,” boasts Stamper, 50, a former aviation lawyer. “All over the country, people are fed up with getting on planes and finding out that the person next to them paid one-tenth of what they paid.”

Indeed, last week was full of flying ferment. At American Airlines, pilots and management resumed their long-running hatefest, with the former staging a sick-out that stranded hundreds of thousands of passengers. In Washington, complaints about airline service–crowding, high prices, late flights–are stacking up so fast that Democratic Senator Ron Wyden of Oregon and Republican Senator John McCain of Arizona introduced legislation for a passenger bill of rights.

Pro Air may be the first of a new wave of discount airlines essentially created by the megacarriers, which have jacked up business fares 35% in the past three years. Such increases explain why Pro Air was able to sign corporate titans DaimlerChrysler and General Motors to five-year deals, providing unlimited flights at a flat rate. Waiting to take wing are 20 new airline companies that are applying to the Federal Aviation Administration and the Department of Transportation for certification.

Certainly, discount airlines have taken to the skies before, only to be blown away like so many ducks by the megacarriers, which quickly matched their fares and added seats on competing routes. Yet the megacarriers are severely testing customer loyalty. Northwest, which controls about 62% of the passenger traffic out of Detroit, has a monopoly on local resentment due to high fares, a pilots’ strike this summer and, most recently, January’s snowstorm fiasco, in which, because of overcrowded gates, thousands of arriving travelers were trapped on the runway for up to eight hours without food or working toilets.

Despite Pro Air’s quick start, launching a discount airline is still a crapshoot. Since ValuJet Flight 592 plunged into the Everglades in 1996, consumers have equated low price with low quality. That’s one reason Stamper bought new jets rather than going the cheaper route of purchasing older planes. But even new jets are vulnerable to fierce battles that the megacarriers can wage to stave off pesky start-ups. “Pro Air can take the approach of David and make us Goliath if they’d like,” notes Marta Laughlin, a Northwest spokeswoman. “But the reality is, we’re going to compete against them the same way we compete against the Deltas of the world.”

Stamper relishes such tough talk. At 19, he was already a pilot. By his mid-20s, he was sharp enough to hold his own in dinner-table debates with his father, then a Boeing vice chairman. A day in the Stamper household might bring aviation honchos to the dinner table or even an irate call or two from powerful customers like Aristotle Onassis. Stamper says his seven-day, 126-hour workweeks will soon contribute to Pro Air’s first quarterly profit and push the company further in its three-year plan to expand its fleet of 737s to nearly two dozen. Another of Stamper’s ambitions: offer local investors a chance to own a $30 million stake in his scrappy start-up.

He will need the money. Northwest is likely to sharpen both its image and its pricing. “It’s one thing to offer low prices in a city where prices are already unusually high,” he says. “But we have to show passengers that we’re 10%, 20% better in everything we do.” Given the current mood of the flying public, that shouldn’t be too difficult.