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While raising $87 million in capital for his fledgling airline, Eos CEO Dave Spurlock used to play make-believe on the office floor of his friend's hedge fund in Palo Alto, Calif. He'd lay out a slice of 757's cabin in blue tape and wheel desk chairs into the imaginary aircraft's interior. Then he'd invite friends and investors over to try it out.
"I laid out hundreds and hundreds of possible configurations -- all the different ways to put a seating environment on board an airplane," Spurlock recalls. "What was crystal clear was that Eos could launch an airline with tremendous economic advantages."
HOMOGENOUS FLEET. Unlike most airlines, it's well-funded and debt free. "However," he continues, "what took more illustration was the fact that this could be done in an ultracompelling way to the consumer. And for that, design was key."
Flying the highly competitive New York-London route with 757s configured with just 48 business-class seats, Eos hopes to do for luxury business travel what Jet Blue has done for the budget market: reap the efficiencies of a finely tuned, well-capitalized startup while forging a brand identity that makes air travel more than a commodity.
In many ways, it's the logical extension of the market segmentation typical of the rest of the consumer landscape. Citing as models brands like Ritz-Carlton, Lexus and Apple (AAPL), Spurlock is betting that people will pay a premium for innovation, service, and a corporate identity that leaves plenty of room for old-fashioned, high-class aspiration. Eos' introductory fare is $5000 round-trip, rising to $6500 early next year -- a price still several thousand dollars cheaper than typical business-class fares on the route.
SPACE PROGRAM. But as the recent demise of Delta's Song indicates, finding profitable ways to improve the air-travel experience isn't easy, even at premium prices. How does Eos aim to do it?
As Spurlock points out, in the logistics-heavy realm of running an airline, it's one thing to find the best way of making things happen, but it's another to ask if something is the right thing to be happening. Nowhere was this truer for Eos than in the seats themselves -- or, as Eos advertises them, the "suites," which boast 21 square feet of space per passenger, and a jump seat for meetings or social meals.
Eos knew it had to shake things up to be competitive, rather than settling for the business-class seats that existed in the marketplace.
THIS YEAR'S MODEL. Spurlock learned this long before launching Eos, when he was director of strategy at British Airways, which along with Virgin Atlantic Airways is widely considered to offer the best transatlantic premium service.
In 1996, BA became the first airline to offer a flat-bed seat. Then, in 2000, it was the first to do so in business class, launching an innovative, rear-facing seat created with the help of London-based industrial design firm Tangerine. In a sign of how competitive the market is, that patented design is due for a makeover next year -- a relatively quick, and expensive, turnaround.
And Virgin's Upper Class suites are matched on the ground by ultrastylish "clubhouses," more like trendy bars than airport lounges.
CONFLICTING NEEDS. The bar may be set high, but Spurlock knows exactly what Eos must do to exceed it. Says Spurlock: "I've flown so much international that the core deliverables in terms of quality and product innovation were well known." He ticks them off: 1) a lie-flat bed (ideally long enough to accommodate Spurlock's 6'3" frame); 2) the ability to work with a partner; 3) a high degree of privacy; and 4) unimpeded access to the aisle. In the rarified world of premium aircraft seats, nothing "off the rack" met those standards.
Spurlock explains, "We saw this as core to the launch of the airline. Period. We could go down a path of commoditizing what was out there, or innovating. So to be 'me too' just really doesn't fit who we are as an airline." He adds, "If you have a chance to innovate, why wouldn't you?"
Well, for starters, designing an airplane seat isn't like making a new restaurant banquette. They need to withstand forward loads equal to 16 times the force of gravity, meet strict flammability standards, and be built in modules to ensure that a single mechanical failure doesn't ground an aircraft.
NOVEL APPROACH. The seats also have to serve three often-contradictory functions: be strong when upright (i.e. crashworthy), comfortable to lounge in, and function properly as beds. From an ergonomic standpoint, these needs are a nightmare. For example, the ideal seat-foam density for someone working on a laptop is very different from that best-suited for bedding down at night.
Holding his vision close, Spurlock sketched scale drawings at his dining room table and wheeled those office chairs around to try things out. But when it was time to begin serious implementation, he enlisted the help of Steve Justice, principal at Aviation Science & Commerce, an Atlanta-based aerospace consulting firm. Justice compares the process -- which was done in less than two years, on an accelerated timetable -- to his experience as an engineer at Lockheed Martin's famed SkunkWorks, which deploys small, interdisciplinary teams on top-secret projects.
In this case, he, Spurlock and Gil Morgan (a veteran airline operations specialist who is now Eos' executive vice-president of operations) worked to identify the optimum seat configuration and find someone to manufacture it, all while meeting rigorous FAA approvals -- and getting the company off the ground, literally, as quickly as possible.
SILENT NIGHT. The current iteration of the seats -- Eos is already planning improvements -- is like a cross between a La-Z-Boy and a yacht cabin, fitted-out in the pared-down design aesthetic of a business laptop. A leather headrest, LED reading light, standard 110V power outlet, and enormous foldout table make it easy to work, even with a colleague, who can sit in the visitor's seat.
When it's time to sleep, the seat merges with the ottoman to form a 6-foot 6-inch bed. In flight, Eos supplies a sheet, lambs-wool blanket, and full-size pillow -- along with Bose noise-cancellation headphones.
All told, Eos spent over $15 million on the interior design process alone, outfitting their three initial 757s with seats manufactured by B/E Aerospace.
EXPANSIVE PACKAGE. Yet the key innovation, the one which Spurlock and Justice now hold a patent for, was the seat configuration itself -- the thing first worked out with blue tape and office chairs. Staggering the seats lengthwise along the plane -- like footsteps marching forward -- allows for both privacy and unimpeded aisle access.
For most airline design teams, the No. 1 criteria is "density" -- the number of seats that can be squeezed into the cabin. But in its luxury approach to the airline business, Eos was willing to sacrifice quantity for quality, installing 48 seats in a cabin that typically holds more than 200. This enables Eos to deliver the feel of a spacious business jet, despite the fact that its chosen model, the narrow-body 757, is traditionally shunned by premium travelers because of its cramped cabin.
The choice of aircraft was also key. The 757 is optimized for the medium-length North Atlantic routes Eos flies. Just as Jet Blue reaps the efficiency of an all-A320 fleet for its domestic service, and Southwest an all-737 fleet, a holistic approach has allowed Eos to match operational efficiency with a carefully defined brand experience.
INTIMATE UNDERSTANDING. Morgan, Eos' executive vice-president of operations, likes to point out that most airlines are pretty good at what they do: They get their passengers to their destination safely, and mostly on time. But, he adds, "Airlines have lost their way when it comes to how they treat the customer." The challenge Eos has set for itself is, in effect, to transform transportation into hospitality -- to create an experience out of a commodity. "Startups need to be very close to their customers," Spurlock says. "It's the only way they'll ever survive."
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Blum is a contributing editor to BusinessWeek Online in New York
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