Moving on to a lighter topic, last week marked the start of business for Pet Airways, a privately-funded company that will fly your pet in the main cabin of their aircraft–not in the baggage hold–between New York City, Washington, D.C., Chicago, Denver and Los Angeles.
Founded by Dan Wiesel and Alysa Binder and funded by private investors, the service is initially using one Beech 1900 19-passenger turboprop, which has had its seats in the main cabin removed to make room for the pet carriers, which are provided by the airline. The plane is relatively noisy and relatively slow; it hopscotches across the country-from NY to Washington to Chicago (with an overnight layover) to Denver to Los Angeles–and then back.
The actual carrier is Suburban Airlines, a contract carrier based in Omaha, Nebraska, that flies mainly for the U.S. Department of the Interior, Alaska Fire Service, U.S. Postal Service, DHL, UPS and Airborne.
And the carrier rarely uses the major airports at these cities: Airports used are Republic Airport in Farmingdale, New York; Baltimore/Washington International Airport in Glen Burnie, Maryland; Midway Airport in Chicago; Rocky Mountain Airport in Broomfield, Colorado and Hawthorne Municipal Airport (Los Angeles Executive Airport) in Hawthorne, California.
Pet Airways promises to care for your pet from drop-off to pick-up. Drop-off can be as much as 72 hours before the flight; Pet Airways will board pets at their PAWS Lodge until the flight. Similarly, they’ll board your pet overnight after landing … for a fee.
The company eventually plans to extend its services to other major cities and expand its fleet to 20 planes (including Falcon 20, Convair 580 and Boeing 727) by the end of this year.
I was intrigued by this new venture, not least because of the timing. In this recession, with people at all income levels spending less than last year, the launch of this service is a voice of optimism, saying, “We think people are ready to pay for something new, because they care about their pets.”
At the start, Pet Airways is accepting only cats and dogs, though eventually it will accept reptiles, birds, pigs and more.
I went online several times in the past week to try booking a flight for Layla, my 67-pound Weimaraner, and had a hard time initially. The Web site needs work. Though it never told me a flight was full, it sometimes told me there was no more room for carriers of the size my dog needed.
So I invented a small cat named Mikey … and sometimes got the same message.
Eventually I did succeed in finding passage for both Layla and Mikey … though I didn’t go so far as to actually provide a credit card. And here’s where it gets interesting.
To fly Layla costs more than to fly Mikey. A round-trip from New York to Chicago, for example, costs $299 for my large dog but only $199 for my imaginary small cat. Now, if you consider these passengers freight, that difference is perfectly normal. That’s how the freight industry works … and it works very well.
But are pets more than freight, and if so is it discrimination to charge extra for larger and heavier pets?
And if not, then are people different than pets? And if not, why can’t a bold airline like Ryanair start charging its passengers according to their weight?
I think it’s an interesting question, and that some lawyers with a bent for litigation might be thinking the same thing. I also think it will be interesting to watch the airline’s progress. I sincerely hope they succeed. But I worry about that ambitious expansion plan.
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There are no airline stocks on my radar screen today, though I do like the bold, penny-pinching management of Ryanair (RYAAY), which last month announced it was working to eliminate airport check-in and baggage check-in, accomplishing both right at the aircraft. But a quick look through the charts of the 31 public companies in the industry reveals that this industry is sick. The “least sick” are AirTran (AAI), Gol Intelligent Airlines (GOL) of Brazil, China East Airlines (CEA) and China Southern Airlines (ZNH). But I don’t recommend them when there are so many strong industries and strong stocks in this bull market.
One of my favorite stocks is in the technology industry, where we often find great growth stories in bull markets. Its name is Rackspace Hosting (RAX), and its business is simple; it delivers enterprise-level hosting services to businesses of all sizes all around the world.
The company first came to my attention when our IT director selected it as the site for our Cabot server about two years ago, a choice that has proven wise. Rackspace differentiates itself from the competition–in an industry that risks commoditization–by promising “Fanatical Support” to its customers … and delivering.
More recently, on June 29 the stock earned a spot in Cabot Top Ten Report. Here’s some of what editor Michael Cintolo wrote:
“Started in San Antonio, Texas in 1998, the company now serves more than 62,000 corporate customers, including over 43,000 cloud computing customers. (Cloud computing involves hosting a customer’s applications over the Internet, thus freeing the customer from investing in, and caring for, applications. In this area, the company is positioned between low-rent Google and high-rent Microsoft.) … Looking at the numbers, we see excellent historical growth of revenues, as well as rosy projections by analysts. … RAX came public in August, 2008 [and] broke out to new price highs last week so now has no ceiling. Try to get on board on any normal pullback.”
Flash Player 9 or higher is required to view the chart Click here to download Flash Player nowWhen that was written, RAX was trading at 14, and Mike’s recommended buy range was 12 1/5 to 15. The stock did pull back calmly, on decreasing volume, touched 12 on three days, and has now returned to 14, setting up for an eventual breakout. I like it.