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AirTran halts expansion of D/FW schedule
08:46 PM CDT on Wednesday, October 19, 2005
By SUZANNE MARTA and ERIC TORBENSON / The Dallas Morning News
Officials at Dallas/Fort Worth International Airport had high hopes when AirTran Airways Inc. agreed to expand its operations from one gate to four just two years ago.
Business travel was starting to show signs of strength, and airport officials hoped the Florida-based carrier would build a mini-hub to launch new low-fare service from North Texas with as many as 30 daily flights.
The carrier, which already flew between D/FW and its Atlanta hub, soon announced it would add flights to Orlando, Fla.; Baltimore; and Las Vegas.
But AirTran's plans at D/FW seem to have hit some bumps.
During the summer of 2004, AirTran launched two daily flights to Los Angeles and promised service later in the year to Fort Lauderdale and Tampa.
Service to the two Florida cities was never launched, and the carrier confirmed Wednesday that it would suspend service to Los Angeles in December.
Kevin Healy, AirTran's vice president for planning and marketing, said fuel was the primary reason for pulling the D/FW-Los Angeles flights.
AirTran officials hope to resume the service if jet fuel becomes more affordable, Mr. Healy said. "It was a difficult call to make" to D/FW officials to inform them of the decision. "But they're businessmen too, and they understand that you have to make a profit."
Still, even as AirTran is reducing service at D/FW, it's adding 7 flights from Chicago's Midway airport, a move Mr. Healy said wasn't a big factor in his D/FW decision.
Industry analysts said Wednesday that while fuel has staunched expansion plans for airlines around the country, fierce competition from American Airlines Inc. also played into AirTran's decision at D/FW.
"I think competition with American was overwhelming," said Ray Neidl, an analyst with Calyon Securities.
After AirTran announced its service starting at $99 each way to Los Angeles, Fort Worth-based American announced it would match the low fares on its 39 flights to the five airports it serves in the area.
At the time, Mr. Healy described American's move as overkill and said, "It's hard to imagine that our two flights are causing this much of a response."
The competition was a boon for D/FW, which saw its demand for Los Angeles service grow 68 percent, as customers jumped at the lower fares.
Research by Harrell Associates showed that similar fares that spring were closer to $150 each way.
But in just 12 months, fuel prices nearly doubled, presenting tough choices for all carriers.
Industry consultant Michael Roach of Roach and Sbarra Associates in San Francisco said fuel prices made it even more difficult for AirTran to take on the world's largest carrier at its biggest hub.
With 850 daily flights, American commands 84 percent of passenger traffic at D/FW.
Gerard Arpey, American's chairman and chief executive, said AirTran's move wasn't "a seminal schedule change."
"We are reducing capacity and consolidating traffic and so are a lot of other airlines," Mr. Arpey said. "I see that as more of a tactical decision."
Kevin Cox, D/FW's chief operating officer, said AirTran officials have assured him that they remain "very interested in growing and expanding in this market when there are less cost pressures."
But Mr. Cox said Dallas-based Southwest Airlines Co. played a role in slowing AirTran's North Texas expansion – not American.
Ever since Southwest announced it would fight to repeal the Wright amendment restrictions on long-haul flying from Dallas Love Field, AirTran has held back on growth plans, Mr. Cox said.
"They planned to use four gates, and now they're only using three," he said. "This cloud of uncertainty [over the Wright amendment] has chilled the marketplace."
Beth Harbin, a Southwest spokeswoman, said AirTran's move had nothing to do with its stance on Wright. "The cost of jet fuel today is something none of us counted on," she said.
Mr. Cox said high jet fuel costs, combined with the renewed Wright debate, makes it unlikely D/FW will soon find tenants to fill its 22 gates left idle when Delta Airlines Inc. shut its hub in January.
Attracting more service from low-cost carriers has been a priority for D/FW.
"If you take one or more of these [factors] away, then maybe we'll see an AirTran or JetBlue competing very effectively at D/FW," Mr. Cox said.
It wasn't clear whether American would continue to keep its lower pricing to Los Angeles after AirTran departs in December, although low fares were available Wednesday on American's Web site into next year.
American spokesman Tim Wagner said it still faces competition on the route from US Airways Inc., Frontier Airlines Inc. United Airlines Inc., and other carriers that offer one-stop service.
"We will price competitively," Mr. Wagner said.
E-mail smarta@dallasnews.com and etorbenson@dallasnews.com
__________________
08:46 PM CDT on Wednesday, October 19, 2005
By SUZANNE MARTA and ERIC TORBENSON / The Dallas Morning News
Officials at Dallas/Fort Worth International Airport had high hopes when AirTran Airways Inc. agreed to expand its operations from one gate to four just two years ago.
Business travel was starting to show signs of strength, and airport officials hoped the Florida-based carrier would build a mini-hub to launch new low-fare service from North Texas with as many as 30 daily flights.
The carrier, which already flew between D/FW and its Atlanta hub, soon announced it would add flights to Orlando, Fla.; Baltimore; and Las Vegas.
But AirTran's plans at D/FW seem to have hit some bumps.
During the summer of 2004, AirTran launched two daily flights to Los Angeles and promised service later in the year to Fort Lauderdale and Tampa.
Service to the two Florida cities was never launched, and the carrier confirmed Wednesday that it would suspend service to Los Angeles in December.
Kevin Healy, AirTran's vice president for planning and marketing, said fuel was the primary reason for pulling the D/FW-Los Angeles flights.
AirTran officials hope to resume the service if jet fuel becomes more affordable, Mr. Healy said. "It was a difficult call to make" to D/FW officials to inform them of the decision. "But they're businessmen too, and they understand that you have to make a profit."
Still, even as AirTran is reducing service at D/FW, it's adding 7 flights from Chicago's Midway airport, a move Mr. Healy said wasn't a big factor in his D/FW decision.
Industry analysts said Wednesday that while fuel has staunched expansion plans for airlines around the country, fierce competition from American Airlines Inc. also played into AirTran's decision at D/FW.
"I think competition with American was overwhelming," said Ray Neidl, an analyst with Calyon Securities.
After AirTran announced its service starting at $99 each way to Los Angeles, Fort Worth-based American announced it would match the low fares on its 39 flights to the five airports it serves in the area.
At the time, Mr. Healy described American's move as overkill and said, "It's hard to imagine that our two flights are causing this much of a response."
The competition was a boon for D/FW, which saw its demand for Los Angeles service grow 68 percent, as customers jumped at the lower fares.
Research by Harrell Associates showed that similar fares that spring were closer to $150 each way.
But in just 12 months, fuel prices nearly doubled, presenting tough choices for all carriers.
Industry consultant Michael Roach of Roach and Sbarra Associates in San Francisco said fuel prices made it even more difficult for AirTran to take on the world's largest carrier at its biggest hub.
With 850 daily flights, American commands 84 percent of passenger traffic at D/FW.
Gerard Arpey, American's chairman and chief executive, said AirTran's move wasn't "a seminal schedule change."
"We are reducing capacity and consolidating traffic and so are a lot of other airlines," Mr. Arpey said. "I see that as more of a tactical decision."
Kevin Cox, D/FW's chief operating officer, said AirTran officials have assured him that they remain "very interested in growing and expanding in this market when there are less cost pressures."
But Mr. Cox said Dallas-based Southwest Airlines Co. played a role in slowing AirTran's North Texas expansion – not American.
Ever since Southwest announced it would fight to repeal the Wright amendment restrictions on long-haul flying from Dallas Love Field, AirTran has held back on growth plans, Mr. Cox said.
"They planned to use four gates, and now they're only using three," he said. "This cloud of uncertainty [over the Wright amendment] has chilled the marketplace."
Beth Harbin, a Southwest spokeswoman, said AirTran's move had nothing to do with its stance on Wright. "The cost of jet fuel today is something none of us counted on," she said.
Mr. Cox said high jet fuel costs, combined with the renewed Wright debate, makes it unlikely D/FW will soon find tenants to fill its 22 gates left idle when Delta Airlines Inc. shut its hub in January.
Attracting more service from low-cost carriers has been a priority for D/FW.
"If you take one or more of these [factors] away, then maybe we'll see an AirTran or JetBlue competing very effectively at D/FW," Mr. Cox said.
It wasn't clear whether American would continue to keep its lower pricing to Los Angeles after AirTran departs in December, although low fares were available Wednesday on American's Web site into next year.
American spokesman Tim Wagner said it still faces competition on the route from US Airways Inc., Frontier Airlines Inc. United Airlines Inc., and other carriers that offer one-stop service.
"We will price competitively," Mr. Wagner said.
E-mail smarta@dallasnews.com and etorbenson@dallasnews.com
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