It started as a 50-employee airline running one major route. One year later, Compass Airlines has served half a million passengers, employs nearly 500 workers and has 17 aircraft flying to 26 cities.
The Chantilly airline was born out of Northwest Airlines’ bankruptcy reorganization. Northwest received federal permission to operate 76-seat regional aircraft instead of just 50-seat planes, and created a new airline to make contract negotiations with pilots flying the larger planes easier. The company bought many of the assets of the former Independence Air to get the airline off the ground a little sooner, President John Bendoraitis said.
The airline started flying the larger planes in August.
Compass serves as a regional carrier for Northwest, meaning it feeds passengers to the airline’s hubs in Detroit, Minneapolis and Memphis, Tenn., Bendoraitis said. It also flies to new markets for Northwest — a route from Detroit to Monterrey, Mexico, will begin May 2 — and adds capacity.
In 2008, the airline will receive 19 more aircraft and will nearly double employment to about 900, Bendoraitis said.
Compass is dealing with the troubles of being a startup airline during a tough time for the industry. Three small carriers abruptly ceased operations in the last two weeks — ATA, Aloha and Skybus — and Frontier Airlines filed for Chapter 11 bankruptcy protection Friday.
“It’s certainly a challenging industry, no doubt about it; one only has to pick up a newspaper to read about the troubles,” Bendoraitissaid. The company has the advantage of not having gone through bankruptcy or wage cuts, but it still has to contend with soaring fuel costs and other factors.
“It’s not a very stable industry,” said George Hoffer, professor of economics at Virginia Commonwealth University. Regional airlines are dramatically affected by mergers, acquisitions and the constant influx of newer, more fuel-efficient aircraft competing with them, he added.
But Compass is in a better position than many of its competitors because of its larger aircraft; most regional carriers have 50-seat planes, which are harder to profit from, he said.
Northwest reported a loss of $8 million, or 3 cents per diluted share, during the fourth quarter of 2007 and brought in $3.1 billion in revenue, but it does not report revenue figures for its regional carriers.
