There’s optimism as Red Way begins flights out of Lincoln Airport Thursday

The Red Way experiment, the Lincoln Airport’s push into the leisure travel sector, gets underway Thursday with its first flights — to Las Vegas and Orlando.

There’s plenty of optimism, but also a fair share of uncertainty.

“It could be wildly successful,” said David Haring, the airport’s executive director. “It could also be maybe a little bit less successful than we’re hoping it is so we have to rethink what we’re doing.”

Make no mistake, airport officials are entering into the agreement with Red Way cautiously optimistic.

“We believe it will be successful here in Lincoln and could also potentially prove to be a roadmap for other communities the size of Lincoln to utilize in the future,” Haring said.

Ever since losing Delta Air Lines at the beginning of 2022, the airport has put a focus on landing a budget or leisure-focused airline, but Haring quickly found it was a seller’s market.

Even armed with a brand-new $56 million terminal and $3 million in American Rescue Plan Act funding from the city of Lincoln and Lancaster County, nothing was guaranteed, he said.

“Air carriers need airports far less than airports need air carriers,” he said. “There’s always going to be another airport that wants that service.”

The current economic climate has created an environment where airports — especially smaller ones like Lincoln that are less than an hour from a much larger full-service airport — are at a distinct disadvantage.

A city used to be able to attract a carrier with an economic development campaign featuring speeches from the mayor and chamber of commerce president.

That’s no longer the case, Haring said. 

“Airports across the country are losing air service at fairly significant rates, especially smaller communities,” he said. “In our case, we have taken a creative approach to this.”

Enter Red Way, a new startup airline with a creative business model crafted specifically for Lincoln.

“I look at Red Way as Lincoln’s airline,” said Nick Wangler, CEO of Fly Next, the controlling arm of Red Way, who has been pondering this concept for about three years, but it “took a big step last summer when the city and county came together to provide a funding mechanism.” 

Once the funding was put in place, it all came together — quickly and organically. Haring was put in touch with Ed Wegel, a 30-year airline industry veteran and chairman and CEO of Global Crossing Airlines, which began flying in 2021 and provides charter and cargo services.

Both sides saw potential — especially after a meeting earlier this year in Miami, where Global Crossing is based.

“We like the demographic,” Wegel told the Journal Star in March. “We like the economics. We like the area of the country.

“We think that this has a great chance of success.”

He was referring to a service that’s known as “charter by the seat.”

Charter flights typically are one-time flights wholly paid for by a single entity, such as a sports team, a company or a vacation tour operator.

In fact, Global Crossing does numerous charters every year. Wegel said it flew 28 college football teams to bowl games this past winter and also flew 37 college basketball teams to their NCAA Tournament game destinations. In addition, the airline has provided charter service to touring musicians including Bruce Springsteen, Lady Gaga and Harry Styles.

But under Department of Transportation rules, charter airlines also can offer scheduled service and sell tickets by the seat to individuals at commercial airports.

Global Crossing will provide the aircraft and charter licensing for the operation. Though it’s technically charter service rather than commercial service, Wegel said Red Way passengers won’t notice a difference.

“It’s pretty much the same,” he said, pointing to published schedules and a website to buy tickets. “From the customer perspective, there is really no physical difference.”

Red Way’s business model is similar to what Allegiant and Frontier airlines have found success with in recent years.

Haring said that most of the markets to which Allegiant flies can’t support flights on a 150-seat aircraft on a daily basis.

“But they could support 150-seat aircraft a couple times a week to a market,” he said.

Red Way will begin two flights per week to and from Orlando and Las Vegas on Thursday. Over the next two weeks, it will start flying twice a week to Atlanta, Austin, Dallas, Minneapolis and Nashville. 

The flights are three and four days apart to mirror the average stay at a destination. However, it’s not an ideal travel situation for someone looking to connect with another flight, Haring said.

Red Way has committed to serving the seven cities through Nov. 29, but because the service is meant to be seasonal, it will likely suspend flights to most of them after that, at least for a few months. New cities will be served during the winter, said Wangler, who added that more than 10,000 tickets have been sold so far.

“June looks good. July looks better and August looks even better than July,” Wangler said. “We’re just excited to get planes in the sky and have people experience” what Red Way will offer.

Using the ARPA funding — something the airport’s legal counsel found was being done in Tulsa — was the game-changer, Haring and Wangler agreed. 

Flights cost about $6,650 an hour to operate. That’s from a passenger’s check-in to when they retrieve their luggage. Airfares and all other passenger revenue — from baggage charges to alcohol sales — go toward that hourly cost.

If the revenue exceeds the $6,650-per-hour formula, then there would be no need to dip into the ARPA funding.

What Haring will be mindful of is if the airport is losing money on each flight and being forced to use the ARPA funding too quickly.

“If we see this is just drawing money way faster than it should be — where we don’t see how this is going to work — that may be a reason to stop it.

“Ultimately, the goal here is not to just drain the $3 million as fast as possible. It’s just to have that there as a necessary incentive to get the service started.”

In this economy, Haring said the only way Lincoln could attract an air carrier was to provide a revenue guarantee to offset the financial risk.

The ARPA funding expires if it isn’t used by 2025, which creates a perfect scenario, Haring said.

“If we haven’t used it, that would be great,” he said. “What that would mean is that the service is successful and we haven’t had to draw down any of the funding.”