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Luxurious, Limited Houston Airline Launched

November 11, 1992

HOUSTON (AP) _ A new luxury airline called UltrAir hopes to dodge the industry’s troubles by serving a tiny fragment of business travelers flying between Houston and four other U.S. cities, its founders said Wednesday.

Like other small airlines that recently started flying to a handful of airports, UltrAir officials say the company plans to stay small.

″We know our market,″ founder Barney Kogen said. ″UltrAir is going to remain a 10-airplane airline forever.″

Nearly a year ago, Kogen sold his Lifeco Travel Services, the nation’s fifth-largest travel service company, to American Express for a reported $100 million.

The new carrier’s angle will be to put fewer seats with more room in 727s, add extra space for baggage, turn their gates into ″executive lounges,″ feature more and better-trained flight attendants and serve gourmet food and beverages on china and tablecloths.

″There’s not going to be any crowds,″ Kogen said. ″There’s going to be no crying babies, unless somebody wants to buy them a ticket. There’s going to be no drunk vacationers.″

Beginning Jan. 10, UltrAir plans to fly to Los Angeles and Newark, N.J. There will be no Saturday service.

Flights to Washington National are planned for March, when UltrAir takes delivery of three more airplanes, and service to New York La Guardia is due to begin in May when three more aircraft are added.

Only two fares will be charged - the same for each of the four destinations - and Kogen said they will be ″competitive″ with the full fares of major healthy carriers.

The founders figure 35 passengers per flight is their break-even point. With 60 passengers a flight, or 600 passengers per day, they expect $100 million a year in revenue.

Glenn Engel, an analyst with Goldman Sachs in New York, said UltrAir would have a hard time competing for business travelers with Houston-based Continental Airlines’ flight frequency, prices and frequent flier miles, which UltrAir plans to negotiate with customers.

″The question is, can he attract passengers better than Continental can? And I am skeptical. The hard part for the new entrants has always been filling their planes without having to cut their price,″ Engel said.

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