Indigo Airlines
Encyclopedia
Indigo Airlines was an American airline headquartered in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...

, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...

. It is generally regarded as the world's first business jet
Business jet
Business jet, private jet or, colloquially, bizjet is a term describing a jet aircraft, usually of smaller size, designed for transporting groups of up to 19 business people or wealthy individuals...

 airline
Airline
An airline provides air transport services for traveling passengers and freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit...

. It was founded in 1997 by aviation veteran
Veteran
A veteran is a person who has had long service or experience in a particular occupation or field; " A veteran of ..."...

 and University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...

 graduate Matt Andersson; business executive and Embry-Riddle Aeronautical University
Embry-Riddle Aeronautical University
Embry-Riddle Aeronautical University is a private university in the US specializing in aviation and aerospace engineering. It teaches the science, practice, and business of aviation and aerospace. Called "The Harvard of the Sky" by Time Magazine in 1979, Embry-Riddle has a history dating back to...

 alumnus John N. Fenton and McKinsey consultant and MIT PhD Tom Svrcek. During its life, its headquarters were at first located in the Near North Side
Near North Side, Chicago
The Near North Side is one of 77 well-defined community areas of Chicago, Illinois, United States. It is located north and east of the Chicago River, just north of the central business district . To its east is Lake Michigan and its northern boundary is the 19th-century city limit of Chicago,...

 area of Chicago, while later in its life its headquarters were at Chicago Midway Airport.

History

Indigo—or "individuals on the go", for the first time allowed individual travelers the ability to reserve and purchase a single seat on a traditional corporate or business jet
Business jet
Business jet, private jet or, colloquially, bizjet is a term describing a jet aircraft, usually of smaller size, designed for transporting groups of up to 19 business people or wealthy individuals...

 which then flew a "scheduled" flight like a traditional airline. Prior to Indigo the only business jet services available to consumers consisted of jet ownership or charter
Charter
A charter is the grant of authority or rights, stating that the granter formally recognizes the prerogative of the recipient to exercise the rights specified...

, both expensive options to regular airline travel. Indigo is regarded as the originator of two new categories of corporate jet air travel service: per seat, high frequency and the public or commercial corporate jet.

Indigo priced its service between its first city pair Chicago and New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...

 close to a so-called unrestricted coach fare. This allowed travelers an affordable travel option while greatly expanding Indigo's addressable market, growth potential and investment thesis. The venture was backed exclusively by the American Express
American Express
American Express Company or AmEx, is an American multinational financial services corporation headquartered in Three World Financial Center, Manhattan, New York City, New York, United States. Founded in 1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best...

 Corporation which owned approximately 12% of Indigo's capital structure. Former American Express CEO Harvey Golub
Harvey Golub
Harvey Golub is a business executive, most recently the Chairman of the Board at American International Group . His resignation as AIG chair was announced on July 16, 2010...

, now Chairman of Sentient Jet, spearheaded and directed the Indigo investment opportunity and exclusive marketing agreement.

Indigo's inventory was marketed and sold through American Express Travel Related Services as well as through the American Express Platinum Card program. Indigo was the first business jet airline to list its seat inventory in major Global Distribution Systems
Computer reservations system
A computer reservations system is a computerized system used to store and retrieve information and conduct transactions related to air travel. Originally designed and operated by airlines, CRSes were later extended for the use of travel agencies...

 such as Sabre
Sabre
The sabre or saber is a kind of backsword that usually has a curved, single-edged blade and a rather large hand guard, covering the knuckles of the hand as well as the thumb and forefinger...

 and Apollo, under the carrier code "I9" which allowed travel agents easy access to Indigo's services. The Indigo project was also supported by management consultants McKinsey & Company
McKinsey & Company
McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions...

 and was additionally advised by corporate identity firm Interbrand
Interbrand
Interbrand, a division of Omnicom, is a global branding consultancy, specializing in vast brand services, including brand analytics, brand strategy, brand valuation, corporate design, digital brand management, and naming...

 (an Omnicom company), public accountants and business advisors Arthur Anderson
Arthur Andersen
Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms among PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG, providing auditing, tax, and consulting services to large corporations...

, public relations firm The Dilenschneider Group and investment bank and financial advisory firm Merrill Lynch & Company
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...

.

Fleet

Indigo's initial fleet consisted of four French-built Dassault Falcon
Dassault Falcon
The Dassault Falcon is a family of business jets, manufactured by Dassault Aviation.Aircraft include:* Dassault Falcon 10 Scaled down Falcon 20...

 jets fitted with: large executive style leather seats; a full hot galley; private bathroom; and laptop power outlets. Indigo was headquartered in Chicago, Illinois at Chicago Midway International Airport in the former Ameritech corporate hangar facilities. This was a comprehensive, 220000 square feet (20,438.7 m²) co-located hangar, office complex, private passenger terminal and maintenance facility.

Indigo was a fully vertically integrated aviation company and fully owned, employed and controlled its own aircraft fleet, pilots, dispatchers and maintenance services. The company operated as a Federal Aviation Administration
Federal Aviation Administration
The Federal Aviation Administration is the national aviation authority of the United States. An agency of the United States Department of Transportation, it has authority to regulate and oversee all aspects of civil aviation in the U.S...

 FAR 135 commercial operator and additionally was certified by the United States Department of Transportation
United States Department of Transportation
The United States Department of Transportation is a federal Cabinet department of the United States government concerned with transportation. It was established by an act of Congress on October 15, 1966, and began operation on April 1, 1967...

 under parts 41101 and 380 as a public charter operator. Indigo was the first business jet commercial operator to receive an additional DOT fitness approval and was granted a Certificate of Public Convenience and Necessity.

As part of its overall planning and growth objectives, Indigo early in its initial operations distributed a request for proposal to several global aerospace manufacturers for a next generation regional business jet to eventually replace its initial aircraft. Brazilian manufacturer Embraer
Embraer
Embraer S.A. is a Brazilian aerospace conglomerate that produces commercial, military, and executive aircraft and provides aeronautical services....

 both embraced Indigo's business model and responded strongly to the RFP in its efforts to introduce its new corporate shuttle aircraft, the "Legacy" jet. The Embraer Legacy
Embraer Legacy
|-See also:-External links:* * * *...

 was a customized business jet version of the popular Embraer regional airline aircraft. Indigo was the first U.S. certified commercial operator of the Legacy and launched service with this new, environmentally advanced stage 4 aircraft in 2003 in a 16-seat all business-class service. Indigo also solicited the management support of former senior American Airlines
American Airlines
American Airlines, Inc. is the world's fourth-largest airline in passenger miles transported and operating revenues. American Airlines is a subsidiary of the AMR Corporation and is headquartered in Fort Worth, Texas adjacent to its largest hub at Dallas/Fort Worth International Airport...

 executive and American Eagle
American Eagle Airlines
American Eagle Airlines is a brand name used by American Eagle Airlines, Inc. , based in Fort Worth, Texas, and Executive Airlines based in San Juan, Puerto Rico, in the operation of passenger air service as regional affiliates of American Airlines. All three airlines are wholly owned subsidiaries...

 President Peter Pappas to help guide Indigo's transition to broader regional jet service. Mr. Pappas, while at American, was responsible for the introduction of the Embraer regional jet across the American Eagle division.

Success

Consumer response to Indigo was strong. The company held a perfect safety record and delivered unusually high on-time and flight completion performance. Its passenger repeat rate was nearly 100% and its revenue per passenger mile or yield, over $1.00. The company was actively followed by major media including The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....

, The New York Times
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...

, the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....

, Fortune
Fortune (magazine)
Fortune is a global business magazine published by Time Inc. Founded by Henry Luce in 1930, the publishing business, consisting of Time, Life, Fortune, and Sports Illustrated, grew to become Time Warner. In turn, AOL grew as it acquired Time Warner in 2000 when Time Warner was the world's largest...

, Time
Time (magazine)
Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong...

, USA Today
USA Today
USA Today is a national American daily newspaper published by the Gannett Company. It was founded by Al Neuharth. The newspaper vies with The Wall Street Journal for the position of having the widest circulation of any newspaper in the United States, something it previously held since 2003...

, CNN
CNN
Cable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...

, CBS
CBS
CBS Broadcasting Inc. is a major US commercial broadcasting television network, which started as a radio network. The name is derived from the initials of the network's former name, Columbia Broadcasting System. The network is sometimes referred to as the "Eye Network" in reference to the shape of...

 and ABC
American Broadcasting Company
The American Broadcasting Company is an American commercial broadcasting television network. Created in 1943 from the former NBC Blue radio network, ABC is owned by The Walt Disney Company and is part of Disney-ABC Television Group. Its first broadcast on television was in 1948...

 television and was featured in a 2001 Pulitzer Prize winning article in the Chicago Tribune
Chicago Tribune
The Chicago Tribune is a major daily newspaper based in Chicago, Illinois, and the flagship publication of the Tribune Company. Formerly self-styled as the "World's Greatest Newspaper" , it remains the most read daily newspaper of the Chicago metropolitan area and the Great Lakes region and is...

.

Indigo also became the object of organized lobbying from Congressman Steven Rothman of New Jersey (D-NJ9), who felt that Indigo represented unwelcome expansion at New Jersey
New Jersey
New Jersey is a state in the Northeastern and Middle Atlantic regions of the United States. , its population was 8,791,894. It is bordered on the north and east by the state of New York, on the southeast and south by the Atlantic Ocean, on the west by Pennsylvania and on the southwest by Delaware...

's Teterboro Airport
Teterboro Airport
Teterboro Airport is a general aviation relief airport located in the Boroughs of Teterboro, Moonachie, and Hasbrouck Heights in Bergen County, New Jersey, United States. It is owned and operated by the Port Authority of New York and New Jersey...

.

Other parties including Senator Jon Corzine
Jon Corzine
Jon Stevens Corzine is the former CEO of Goldman Sachs and of MF Global, and a one time American politician, who served as the 54th Governor of New Jersey from 2006 to 2010. A Democrat, Corzine served five years of a six-year U.S. Senate term representing New Jersey before being elected Governor...

 (D-NJ) and Senator Frank Lautenberg
Frank Lautenberg
Frank Raleigh Lautenberg is the senior United States Senator from New Jersey and a member of the Democratic Party. Previously, he was the Chairman and Chief Executive Officer of Automatic Data Processing, Inc.-Early life, career, and family:...

 (D-NJ) joined in an effort to persuade Department of Transportation Secretary Norman Mineta
Norman Mineta
Norman Yoshio Mineta, is a United States politician of the Democratic Party. Mineta most recently served in President George W. Bush's Cabinet as the United States Secretary of Transportation, the only Democratic Cabinet Secretary in the Bush administration...

 that Indigo's public charter flights demanded of the Teterboro Airport, part of a group of New York City metro airports operated by the Port Authority of New York and New Jersey
Port Authority of New York and New Jersey
The Port Authority of New York and New Jersey is a bi-state port district, established in 1921 through an interstate compact, that runs most of the regional transportation infrastructure, including the bridges, tunnels, airports, and seaports, within the Port of New York and New Jersey...

, certain security services it was not equipped to provide. Additionally, certain so-called multi-airport proprietor rules were invoked to lend additional weight to opponent's arguments.

Congressional lobbying directed to Admiral James Loy
James Loy
Admiral James Milton Loy served as Acting United States Secretary of Homeland Security in 2005 and United States Deputy Secretary of Homeland Security from December 4, 2003, to March 1, 2005...

, Transportation Security Administration
Transportation Security Administration
The Transportation Security Administration is an agency of the U.S. Department of Homeland Security that exercises authority over the safety and security of the traveling public in the United States....

 (TSA) Administrator and eventually codified in special interest legislation, was signed by President Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....

 as part of an FAA Reauthorization Bill. Indigo and American Express management, as well as FAA administration, argued that Indigo's use of Teterboro was appropriate and preferable to local alternatives such as LaGuardia Airport
LaGuardia Airport
LaGuardia Airport is an airport located in the northern part of Queens County on Long Island in the City of New York. The airport is located on the waterfront of Flushing Bay and Bowery Bay, and borders the neighborhoods of Astoria, Jackson Heights and East Elmhurst. The airport was originally...

 or Newark Liberty International Airport
Newark Liberty International Airport
Newark Liberty International Airport , first named Newark Metropolitan Airport and later Newark International Airport, is an international airport within the city limits of both Newark and Elizabeth, New Jersey, United States...

 which were designed and configured for large airline aircraft and to prohibit the company from accessing the airport was an unfair discrimination under federal airport funding criteria. By September 2003, Indigo halted all flights in and out of Teterboro Airport.

Indigo management also argued that the company helped advance the state of general aviation security and pointed to its advanced security procedures that were unique to the industry.

Indigo employed its own security personnel and was the first jet charter company to operate sterile flights between general aviation, non-airline facilities. Indigo customers, employees and vendors cooperated with comprehensive identity, background and screening procedures that were unprecedented in the private jet industry. Indigo submitted to numerous TSA security audits and was fully approved by relevant U.S. Government agencies. Comprehensive general and private aviation security continues to be an unresolved public policy issues.

By 2004, Indigo had voluntarily idled its operations after challenges in securing additional capitalization. The Indigo concept continues to resonate strongly with the traveling public and in 2005 the Netjets
NetJets
NetJets, a subsidiary of Berkshire Hathaway, offers fractional ownership and rental of private business jets.-History:NetJets Inc., formerly Executive Jet Aviation, was founded in 1964 as one of the first private business jet charter and aircraft management companies...

 company, backed by Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...

's Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...

, announced its intention to begin scheduled business jet service between Chicago, New York and Los Angeles. Other projects mimicking the Indigo business model include Geneva, Switzerland based Club Airways, started by World Economic Forum
World Economic Forum
The World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....

 founders the Schwab family. Other notable ventures borrowing on the Indigo "per seat" inventory, distribution and pricing strategy include the Dayjet
DayJet
DayJet was an American commercial aviation operation that provided on-demand jet travel using Eclipse 500 Very Light Jets. The company began operations in Florida in October 2007 and suspended operations on September 19, 2008....

 company, Linear Air
Linear Air
Linear Air is a private part-135 charter operator and air taxi service headquartered near Boston in Concord, Massachusetts. Linear Air's primary operations base is located at Hanscom Field in Bedford, Massachusetts, and the company also operates from a base at Westchester County Airport in White...

 and various jet membership programs offering "shared per seat charter" services. Several North Atlantic services (sometimes referred to as the "Indigo of the North Atlantic") also directly applied the Indigo concept of a commercial corporate jet but in larger traditional airline aircraft and included MAXjet
MAXjet Airways
MAXjet Airways was an American, transatlantic, all-business class airline that operated between 2003 and 2007. Its headquarters were located on the grounds of Washington-Dulles International Airport, and in the Dulles area of Loudoun County, Virginia, United States.MAXjet operated services to...

, Eos
Eos Airlines
Eos Airlines, Inc. was an American all-business class airline headquartered in Purchase, New York, with its flights from John F. Kennedy International Airport, New York...

 and Silverjet
Silverjet
Silverjet was a British all-business class airline headquartered at London Luton Airport, Luton, Bedfordshire, England, that, prior to the suspension of operations on 30 May 2008, operated services to Newark Liberty International Airport and Dubai International Airport...

.
In 2008, a new company called Greenjets began non-scheduled per-seat or shared-ride private jet service between major eastern US metropolitan markets. Greenjets intends to expand to include service to 30 major US markets by 2011. Greenjets, unlike Indigo, does not own or operate aircraft, but utilizes the vast jet charter fleet in the US for lift.

Publications

The original Indigo White Paper was titled "Redesigning the Traditional Airline Model" and published in the Spring 2000 edition of Institutional Investor's Journal of Private Equity
Journal of Private Equity
The Journal of Private Equity is a quarterly academic journal covering strategies and techniques in venture capital investing, from seed capital and early state investing, to mezzanine investing and later-stage financing. The editor in chief is James E. Schrager ....

. Indigo Founder and former CEO Matt Andersson also reviewed several of Indigo's broader aerospace, consumer and public policy initiatives in his book "The New Airline Code" published in 2005.

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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