Friday, March 24, 2006

Setback for Simmons

Update: Here is a link to a WBAL interview with Wayne Simmons about the breakdown in talks with Cape Air.

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The on and off again Cape Air deal is off again. Unless they find another certificate to jump onto in time for the rapidly approaching high season, then it will be unlikely that they ever get up and running again.

Note for the "eye-rollers" out there (i.e. those that pooh-pooh any startup simply because they are a start-up): There are incredibly large differences between startups like Simmons and Skybus. Simmons is the type of startup that we have seen so many times before that deserves some rolls of the eyes. All of the classic signs of trouble are there. Most notably, they make promises again and again that they never seem to keep (and when they finally partially deliver on one of the thousand promises they made they say, "See, I told you so"), if naming the airline after the founder is not a tell then I do not know what is, they talk to the press way too much and they have gotten their investment through all local channels. A startup like Skybus is very different. Although they used to make promises they couldn't keep, once they started dealing with Morgan Stanley closely they started to clam up and get down to business. Speaking of Morgan Stanley, the fact that Skybus used the proper channels to raise capital which requires the plan and team to go through fairly rigorous due diligence processes is a large differentiating factor. At the end of the day we do not like Skybus' revenue model as it currently stands...but they are an exception to the rule that all startups are jokes to be laughed at.

3 Comments:

At 3:58 PM, Anonymous Tucano Bandeirante said...

The ones I feel sorry for -- up to a point -- are the cities that are so desperate for service they actually give money to these clowns. I've seen cities get suckered time and time again.

If Cape Air is walking away, it has to be pretty bad. And the bigger question: is there really a need for air service between the DC/Baltimore area and Ocean City? I think not.

Plus US Airways has flights between Salisbury, MD and BWI that let you connect seamlessly to the global transportation system. Who are you connecting with flying on Simmons? And they weren't all that reliable when they were flying, so you drive away even the miniscule numbers of people who might have been interested in the service.

 
At 9:16 AM, Anonymous Anonymous said...

The problem with Cape Air is they are really "Amtrak with Wings" . They are experts in obtaining grants, and use aviation only as a mechanism to get money. They really are not i the aviation business, rather they are in the "fleecing of america" business.

 
At 2:42 PM, Blogger jeff fonner said...

cape is a fine company ....they prove that a little guy can make it .....go little guys ....this whole simmons thing is retarted ....i would say it would be a huge money loser

 

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