After almost $600,000 in subsidies, AAI pulls out of DAB

[CitationLover]

http://www.news-journalonline.com/NewsJournalOnline/Business/Headlines/bizBIZ02030108.htm

AirTran plans hiatus at Daytona Beach
By THOMAS S. BROWN
Business Writer DAYTONA BEACH -- AirTran, citing rising fuel costs, said Friday it will discontinue service at Daytona Beach International Airport on June 12, but plans to resume flights sometime next winter."We are in talks with the airport about when (service) will come back for the winter season but that has not been determined at this time," AirTran spokeswoman Judy Graham-Weaver said Friday.
She said record-high oil prices, topping $100 a barrel, have prompted AirTran to switch to seasonal schedules for many markets, including some other Florida cities and Las Vegas.
However, airport spokesman Steve Cooke said he remains hopeful AirTran will reconsider and stick with year-round operations in Daytona Beach. "This has not been set in stone," he said, adding the airport expects a final decision from the airline in about two weeks.
Cooke said AirTran considered a similar cutback last year, but changed its mind after the airport agreed to have its own employees take over AirTran's baggage-handling chores.
"We're going to do everything we can to get them to stay," Cooke said.
Asked if any additional incentives have been offered to AirTran, Cooke replied, "No, not at this point.
AirTran started service to Daytona in January 2007 after the airport agreed to waive a year's worth of landing fees, worth about $395,000, and provide up to $200,000 in marketing support.
AirTran offers five round-trip daily flights to Atlanta and one trip on Saturdays and Sundays to the Baltimore-Washington airport. It has a daily roundtrip flight to LaGuardia airport in New York on a seasonal basis, but it hasn't disclosed how long that flight will continue.
AirTran filled only 60 percent of its seats on Daytona flights during January, which Cooke said may reflect new competition from US Airways. A year earlier, AirTran filled 55 percent of its seats but gradually built its load factor to 90 percent during the summer.

 

[Captjiggles]

Why do you always post TRS stuff? It must be really cold in MKE.

 

[CitationLover]

Why do you always post TRS stuff? It must be really cold in MKE.

i am only following what others do. it was actually warm this weekend for the time of year.

besides a TRS is the first computer i ever used. TRS80's rock!

 

[Captjiggles]

It's just really weird!

 

[maxblast72]

Sounds like a good business plan to me. Fly the route when you can make some money. Let Delta lose money with RJ's on the route for the rest of the year.

 

[Kharma Police]

I heard we need the aircraft for our expansion in MKE. Also, we are not taking as many 737s this year because supposedly, some 717s will be coming available soon.

 

[CA1900]

Explain to me again why $600,000 of my tax money is being used to fund and promote "cheap" air travel in a so-called deregulated market?

 

[CitationLover]

I heard we need the aircraft for our expansion in MKE. Also, we are not taking as many 737s this year because supposedly, some 717s will be coming available soon.

nice try.

btw, saw band of brothers last week, was pretty good.

 

[CitationLover]

Explain to me again why $600,000 of my tax money is being used to fund and promote "cheap" air travel in a so-called deregulated market?

because it isn't "deregulated". there are plenty of government subsidies to go around, the largest being the PBGC who allowed continental, us airways, united, and delta to dump billions in pension obligations on the taxpayer.

 

[CA1900]

because it isn't "deregulated".

I know. That's why I said "so-called deregulated."


It's only a free market until that market tries to correct itself. Then our tax money is rushed in to prop up the weaker company. I love it!

 

[B727Driver]

Until true capitalism exists in the airline business, taxpayers and labor will be share the burden while mgmt laughs all the way to the bank, ex. Tilton, Carty, the list goes on.

 

[FIREMAN]

Explain to me again why $600,000 of my tax money is being used to fund and promote "cheap" air travel in a so-called deregulated market?

I thought the money came from the Chamber of Commerce?

 

[RIDETHELIGHTING]

Until true capitalism exists in the airline business, taxpayers and labor will be share the burden while mgmt laughs all the way to the bank, ex. Tilton, Carty, the list goes on.

UsAir should have been gone a long time go.

 

[Britpilot]

Explain to me again why $600,000 of my tax money is being used to fund and promote "cheap" air travel in a so-called deregulated market?

That is not your tax money. The cash came from the airport authority. $395,000 was in landing fee waivers, no cash there just loss of revenue. $200,00 was for "marketing support" Maybe some cash there
It is common for smaller cities to assist airlines with funding to obtain air services.
An example of your tax money being used would be the Essential Air Services programs in effect around the country.

 

[Ace McCoy]

From an interview with the Midwest COO:

Q. What about new routes?
A. It is probably premature, and we wouldn't mention those in advance of a public announcement. We are certainly looking at a lot of opportunities but keep in mind that fuel is hovering around $100 a barrel, and with fuel at $100 a barrel, markets that once made sense no longer make sense.

So it looks like Airtran is not the only one re-evaluating routes.

Or can Midwest only make smart market decisions?

 

[maxblast72]

I know. That's why I said "so-called deregulated."


It's only a free market until that market tries to correct itself. Then our tax money is rushed in to prop up the weaker company. I love it!

Daytona Beach is not giving Airtran a break on some fees because Airtran is a weaker company, Daytona Beach is giving Airtran a break so the consumers in Daytona Beach market can enjoy lower ticket prices which stimulates traffic in and out of Daytona beach.

Daytona Beach chamber of commerce can see what has happened to ticket prices in Knoxville, TN and Greensboro, NC after Airtran has left and does not want that to happen in Daytona Beach if possible.

 

[CitationLover]

Daytona Beach is not giving Airtran a break on some fees because Airtran is a weaker company, Daytona Beach is giving Airtran a break so the consumers in Daytona Beach market can enjoy lower ticket prices which stimulates traffic in and out of Daytona beach.

Daytona Beach chamber of commerce can see what has happened to ticket prices in Knoxville, TN and Greensboro, NC after Airtran has left and does not want that to happen in Daytona Beach if possible.

so the raw materials prices (oil) keep going up, but you want LOWER ticket prices while negotiating?

 

[maxblast72]

so the raw materials prices (oil) keep going up, but you want LOWER ticket prices while negotiating?

I never said that we need to lower ticket prices. These cities just realize that Airtran prices will be lower than legacy prices any day of the week. Airtran can make money at lower ticket prices due to lower overall cost structure and a simpler business model (no RJ's).

That is not to say that ticket prices won't be rising significantly for LCCs and legacies soon due to fuel cost (as they should), but just that our prices would always be lower than legacies overall.

 

[Ty Webb]

Baby needs a new pair of shoes!

Let's call it what it really is . . . . AirTran saving some money where they can, so they will have more to spend at the negotiating table. .

 

[ultrarunner]

Subsidies in an effort to lower ticket prices in order to stimulate traffic are only going to go so far...the airline STILL has to make money and the seats STILL have to be filled. You can lower that ticket price all you want, but that is just not going to force folks to all of a sudden have a NEED to fly.