Another small victory for DL...Airtran leaves GSO

[MedFlyer]

Airtran is leaving GSO on Sept 6th. First TLH and now GSO....

http://www.news-record.com/news/now/airtran072304.htm

 

[Steeler Fan]

I never saw anything in the article that implied a "small victory for DL"...I took a little something different from it. In spite of 80% load factors, the business class loads were lower than what AirTran was looking for, so they're going to utilize the profit center elsewhere:

"Isaacson said he believes that the decision of Orlando-based AirTran is not so much a reflection on PTI or the region, as it is that AirTran believes it can be more profitable by redeploying its aircraft in other markets."


The faster we get more airplanes, the better. I think for now it's a matter of figuring out where to best deploy the planes we have.

 

[P38JLightning]

"redeployment"

Yes its a common theme that whenever someone pulls out of a market people think they smell blood and possible hints of long term failure. JB pulled out of ATL. Big Fat Hairy Deal.

Even though we as pilots consider them a rapidly growing airline, they are still only getting about a plane a month (maybe a little faster, but whatever). A ton of their routes are coast to coast or NE to FLA. That means you need a new delivery just to do a daily coast to coast (approximately, assuming 5-6 hours block each way).

So if you have your eye on a lot of markets (which both AT and JB do) and one or two are either losing money, or very profitable, but way less profitable than others, you pull the lesser profitable ones in favor of the ones you make more money from. You can always go back.

JB pulled out of ATL but then started to invest big time in BOS and I think LGA. Smart move. AT kicked the RJ's to the curb. That meant they lost 10 jets worth of "lift" or the seat equivalent of 4 or 5 717's in a short time period. If they tried to recover those routes on the lesser profitable routes right away they wouldn't be able to expand as fast into more profitable routes until later. Why leave money on the table just for the sake of "market share"? When they return (and they will) expedia.com will still spit out the lowest fare, they will still advertise in those markets, and the pax will be back.

Anyone who thinks any of these realignments are an indication of an impending AT and/or JB failure to keep kicking major @ss is mistaken.

 

[FLB717]

Ask Delta is the small victory in GSO and TLH will be continued in PNS for example, not. But I will go so far as to say if we pull from other markets it may be ICT and or MYR, low to average loads, but very depressed yields. Most of these cities have a small population base that does not travel in great numbers. TLH has about 200K of a population in and around. PNS has a few million with in 1 hours drive. But if Medflyer needs a job we should be hiring well into the future.

 

[DonVerita]

I think most of this has to do with AirTran wanting to fly longer haul, higher yield routes with the 717. Short hops like TLH, and GSO were perfect for the RJ's, but with them leaving the fleet, it appears some of their markets had to leave with them. The plan is to build up the current route network with more frequency and then add a few cities next year.

 

[MedFlyer]

I've never said that I think these route bailouts mean Airtran will fail. I expect (barring something huge) that Airtran will be successful for many years into the future.

However, I do believe that these changes certainly undermine the "100 seaters will rule the world" crowd. Going forward, I don't expect to see Airtran making a lot of inroads into small markets. I think Airtran will set its sights on bigger markets where profits are almost guaranteed.

 

[~~~^~~~]

Airtran's retrencement from these markets means they are less of a network carrier and a little more of a LCC.

That is good for Delta, who must leverage their network position to try to get another 10-15% more revenue for the same ASM. This is how the RJ is important to a network carrier, but has little role in a LCC.

The E jets will allow LCC's to build into network carriers and the 7E7 might be their ticket to international ops.

Airtran is exercising options on 737's - so they are not stepping too far back.

 

[climbhappy]

as a triad resident, i saw the few times i flew on the RJ to be mostly full. 3/4

with airtran serving raliegh RDU, i don't think it matters. RDU is only thirty minutes in the non peak time doing 75 MPH by car.

A full load on a 717 from RDU is better than two half full 717s. I have read a copy of a study that the NC DOT had done for the nc air travel picture. folks are always willing to drive up to an hour and half to get a better ticket. right now us air customers in and around charlotte drive to GSO to get a cheaper ticket.

makes a lot of sense ! yeah right!

 

[FLB717]

Medflyer,

I agree with you very much on your last point of view. I for one am very disapointed that I have to learn of these developments from this forum and USA Today than from my own company.

 

[46Driver]

Ask Delta is the small victory in GSO and TLH will be continued in PNS for example, not. But I will go so far as to say if we pull from other markets it may be ICT and or MYR, low to average loads, but very depressed yields. Most of these cities have a small population base that does not travel in great numbers. TLH has about 200K of a population in and around. PNS has a few million with in 1 hours drive. But if Medflyer needs a job we should be hiring well into the future.

A few million? I don't know about that - I thought Santa Rosa and Escambia counties themselves only totalled 250k. At any rate, I would hate to see AirTran leave PNS - it was a nightmare then with both Delta and AirTran being oversold, I couldn't imagine if capacity left the market.

 

[pilotyip]

Airtran out of TOL

AirTran pulled out of TOL two years ago, city would not support their presence. All it did was drive up the prices being charged for trips out of TOL and made it as far as I know a 100% regional airport. Now I drive to FNT to ride AirTran.

 

[FLB717]

46Driver,

I was counting the people from Mobile to the far east of PNS. when I lived MOB it was common to drive to PNS for lower fares.

 

[46Driver]

Just curious, what is the population of Mobile? I had to drive there every week last summer to commute to work because every Delta and AirTran flight out of PNS was perpetually sold out. And that's with a Delta PPR card!

 

[FLB717]

A total guess I would say in the greater Metro rolleyes: ) Mobile area I would say 120K, but I hope someone has better idea than me.

 

[Ty Webb]

While Delta will benefit by being able to really "bend 'em over" in TLH and GSO, it hardly represents a "victory". To me, it means there are routes with better yields and we are going after those, and unlike companies that are willing to lose millions to stay in unprofitable cities in the name of "marketshare", I think we are more focused on making money, wherever that might be.

Since 9/11 we have went from 36 cities served to 45 now. Since we have Ryan AND Miami Air doing subservice for us while we wait for aircraft, it sounds like a few of the lower yielding cities are being dropped in favor of higher-yielding ones.

I would say a million for the "cachment" area is pretty fair, from MOB to PNS to Destin/Ft. Walton area. I am sure we will get some driving in from Panama City now, if TLH fares go through the roof.

 

[MedFlyer]

Here are the numbers from the 2000 Census (note: these numbers are for the Metropolitan Statistical Area (MSA) which includes the central city and outlying suburbs).

Mobile: 540,258 79th largest MSA in the US

Pensacola: 412,153 100th largest MSA in the US

Fort Walton Beach: 170,498 184th largest MSA in the US

Realistically, there are over 1 million people within about an hours drive of PNS. Of course, some people in Mobile are actually closer to GPT (another Airtran city).

For reference purposes, here are the populations of the two cities that Airtran is leaving.

Tallahassee: 284,539 136th largest MSA in the US

Greensboro/High Point/Winston Salem: 1,251,509 37th largest MSA in the US

 

[Mugs]

To me, it means there are routes with better yields and we are going after those, and unlike companies that are willing to lose millions to stay in unprofitable cities in the name of "marketshare", I think we are more focused on making money, wherever that might be.


So Ty,

Will there be work for all of us former legacy carrier pilots in essential air service since you guys won't serve many small markets that are unprofitable despite your low costs? You won't mind your tax dollars paying for that, right?

 

[46Driver]

Thanks for the numbers, I had no idea PNS and MOB were that big. Quick, somebody put up a fence and keep the Yankees out.... Unfortunately, that idea is too late - Fortune 500 last year listed PNS as the #1 best real estate bargain in America and things exploded.

 

[Ty Webb]

So Ty,

Will there be work for all of us former legacy carrier pilots in essential air service since you guys won't serve many small markets that are unprofitable despite your low costs? You won't mind your tax dollars paying for that, right?

Mugs, if you want a straight answer, ask a straight question. If you just want to throw mud, find someone else to play with.

If you really feel a huge, honking need to blame someone, though, the blame really belongs at the feet of the legacy carriers.

We came into towns with high fares. We offered to provide service at lower, yet profitable rates. Legacy responds by dumping another three, four or five more flights a day into said market, at prices they can;t make money at. Yields plummet. Sometimes, we stay and sometimes we go.

 

[BLUE BAYOU]

Could it be that AAI leaves markets where they are no longer getting incentives from the communities they serve? I know for a fact the Wichita supports their operation with some money-- whether it be via a "bank" that business travelers draw from or like the casino in Gulfport that also supports their flights with incentives... They moved to PNS only after the city offered them a $3 million incentive vs VLP's $1 million and then only a few weeks after 9/11. Can anyone confirm some of AAI's business practices? Does this sound about right, or am I smoking something...