(FORTUNE Small Business) – This Spring, small-plane operator Atlantic Coast Airlines learned that its biggest customer, United Airlines, wanted to renegotiate its contract. That's a situation that many small businesses might face in these cost-conscious times. But not many others are apt to copy ACA's solution: dump United and start a competing airline.

At first glance, it may seem that ACA's executives have helped themselves to too many single-serving cocktails. The new airline will be taking off in the midst of a travel slump that has forced even its largest competitors, including United, into bankruptcy. What's more, ACA is hoping to start a discount airline--with much smaller planes than Southwest's or JetBlue's, which would seem to be a huge liability in a volume business. Part of the reason Southwest and JetBlue can offer such low fares is that they cram customers into so many seats.

But ACA predicts a smooth takeoff when the business launches, as early as April. ACA argues that its 50-seat planes are an advantage in small markets like Rochester, N.Y., and Savannah, where other airlines have struggled to fill bigger jets. What's more, unlike other airline startups, ACA already controls gates in major markets, including its own terminal at Washington Dulles Airport.

Finally, ACA has years of experience, more than any other low-fare carrier except Southwest. For 14 years, ACA ran flights for United, as United Express, out of Chicago and Washington. The deal with United, responsible for 85% of ACA's revenue, helped the company pull in $39 million of income last year. But when United filed for bankruptcy, "it made us think," says Kerry Skeen, ACA's CEO.

Thought turned to action when, in an effort to cut costs, United wanted to reduce the fees it paid to ACA, a move that would have effectively erased the small airline's profits and forced it to lay off hundreds of employees. "A lot of people thought a new United contract was the Holy Grail," says Skeen. "At the end of the day, we didn't feel that way."

Analysts are split on whether ACA's plans will fly. Still, points out Ray Neidl of Blaylock & Partners, "the old business model of the airline industry isn't working. Why not try something new?" Who knows? Maybe bigger--planes or contracts--isn't better.