AirTran Moves Onto New Delta Turf

[haze]

[ The Atlanta Journal-Constitution: 10/22/03 ]

AirTran moves onto new Delta turf

By RUSSELL GRANTHAM
The Atlanta Journal-Constitution


AirTran Airways begins flying between Atlanta and Washington's Reagan National Airport on Thursday, invading another key market for rival Delta Air Lines.

AirTran will have three nonstop daily flights between Atlanta and the close-in Washington airport. Its move onto the route has already lopped almost two-thirds off last-minute fares, according to J.P. Morgan analyst Jamie Baker, dropping the short-notice, one-way price from $639 to $237.

AirTran also begins one daily nonstop flight Thursday between Reagan National and Fort Myers, Fla., and another from Reagan National to West Palm Beach, Fla., on Dec. 4.

The fast-growing airline is expected to report third-quarter earnings today of about $18 million, or 22 cents a share, excluding special items that last quarter boosted second-quarter net income to more than $57 million.

AirTran already flies to Dulles International Airport in Northern Virginia and Baltimore-Washington International. But it has long sought access to Reagan National, which is preferred by many business and government fliers.

This summer, the Federal Aviation Administration awarded AirTran special landing rights at Reagan National, one of a handful of volume-controlled U.S. airports where airlines must have "slots" to operate. AirTran competed with Spirit Airlines and Comair, a Delta subsidiary, for two-year rights to open a route to a major city such as Atlanta.

Low-cost carriers' increasing focus on such high-fare markets is permanently eroding the long-term prospects of traditional carriers like Delta, said Baker, the J.P. Morgan analyst.

"With each successive [low-cost carrier] route, so goes the network carriers' last grasp on pricing power," he said. He expects AirTran to grow 20 percent annually for several years, powered by low labor and other costs, and a recent order for up to 110 new jets.

Baker projected that low-fare carriers such as AirTran, JetBlue and Southwest will boost their fleets by a third by 2006 and control 40 percent of the U.S. market in terms of departures, compared with 32 percent currently.

"Given the rate at which [low-cost carriers] are expanding, the devastating pricing impact they possess and the network carriers' myopic refusal to question their own business model, we believe [discount carriers] will eventually inherit the earth," said Baker.

Delta has been fighting back by matching fares and adding flights, as it did after JetBlue and AirTran began flying nonstop last spring between Atlanta and Los Angeles.

In November, Delta is adding one new flight each from Atlanta to Dulles and Baltimore/Washington, bringing its total to 41 flights a day to the three airports. The Atlanta-Washington market ranked as Delta's sixth-largest in 2000, according to consulting firm Unisys R2A.

Meanwhile, JetBlue went into another Delta stronghold -- Atlanta to the San Francisco Bay area -- last month with a daily nonstop flight.

AirTran also plans to begin flying nonstop between Atlanta and San Francisco starting Nov. 12.

Yes, analyst Jamie Baker of J.P. Morgan just said that discounters will eventually inherit the Earth. Let's hope that forces everybody to offer all-leather seating and personal video monitors in every seat back like JetBlue has and Song is planning on having. Now we're talking! Most roundtrips anywhere across the U.S. for under $300, with leather seating and satellite TV to boot!

[dbaker]

You tend to post a lot of full, long articles from the AJC but don't post ones like:

AirTran faulted on performance
On-time ranking low in U.S. report

AirTran Airways is doing a lot of things right to become one of the fastest-growing airlines in the country, but it could use some improvement in being punctual.

The Orlando-based airline, which has its hub in Atlanta, is among the worst in on-time performance, according to the federal government's monthly reports on airline customer service.

[Delta7203]

Baker, I swear!- YOU MAKE ME SO MAD!!! You are not in the airline industry so you have no business saying anything negative about it. The ONLY reason that Delta is ahead of AirTran in on-time statistics is because of the ATC. These guys control who lands and when they land. And at Hartsfield (I am refusing to call it Hartsfield-Jackson) The ATC gives Delta flights priority landing. Yesterday when I flew from LAX to ATL I arrived in the ATL holding pattern after the jetBlue flight but I got to land before him -- yes, I was very late...

- John

[haze]

Originally Posted by dbaker

You tend to post a lot of full, long articles from the AJC but don't post ones like:

AirTran faulted on performance
On-time ranking low in U.S. report

Wrong baker, on another thread a few weeks ago I posted remarks about AirTran's August on-time performance. I stated that it was great article "warts and all." The good part being that AirTran was at the very top of the heap handling luggage, the warts being they were lagging with on-time performance. I went on to say that I'd much rather arrive 15 minutes late with all the correct luggage than fly through violent thunderstorms and arrive without my bags.

What you fail to mention is that article explains that it's really no fault of AirTran, much of it has to do with the frequency of bad weather around Atlanta. Delta has the same problem. It also has more to do with the fact that other carriers significantly "pad" their schedules (and pay employees extra for that padding) in order to skew on-time performance numbers, a game that AirTran refuses to play. They have said that they plan to drastically improve on-time numbers however, but not by padding their schedule like other carriers do. As they continue to expand to other mini-hubs and diversify out from the Atlanta hub, on-time numbers will automatically improve due to weather conditions. They also plan on segregating the flights from different regions by adding more and more new aircraft to the fleet so the weather in one region will have less effect on flights in another region. Fewer routes in different regions will be shared by the same single aircraft, so bad weather in any region will have less of an effect on on-time performance. Also, much will be done to reduce the turnaround times on the ground, but unfortunately this will probably diminish luggage handling. Maybe not...

So AirTran is basically attempting to compete with the on-time performance of other airlines that play by a different set of rules by padding their schedules. If AirTran is able to pull that off without padding their schedule or reducing luggage performance that would really be making a statement about the prowess of this little feisty airline. But I don't suspect that AirTran will ever be able to pull off much more than "middle-of-the-pack" ontime rankings until they play by the same set of rules as everybody else and pad their schedule by 15-20 minutes. By the way, on my recent flight to Memphis AirTran departed Atlanta 10 minutes early and landed 15 minutes ahead of schedule in Memphis. My return flight departed Memphis 10 minutes early and arrived 20 minutes ahead of schedule in Atlanta. And my luggage was right there waiting for me as soon as I walked up to baggage claim. Apparently they've already begun working on these number

As far as long AJC articles go, I usually post articles that only take 2 or 3 minutes to read on an 8th grade level. Posting the actual article instead of just a link provides a more powerful "on-the-spot" argument. I apologize if that's too much for you to handle. Maybe you're thinking of the real long one jetmech717 just posted about AirTran's quarterly profits?

So I already have posted comments in the past about AirTran's on-time performance so your claim that I ignore such issues just doesn't carry any weight. But I still suggest everybody read that article you posted because it does tell the whole story about how AirTran is not entirely at fault. The bad weather inherent with operating out of Hartsfield (as well as a heavy presence in Florida), the padded schedules of other airlines, and ATC practices all contribute. And it's also good to hear that a Delta pilot at Hartsfield knows that ATC practices directly affect the on-time performance of AirTran which further substantiates these claims.

By the way Delta 7203, I've flown Delta wherever AirTran didn't fly in the past (Vegas, LA, etc) and have always been a big fan. I usually fly AirTran to NYC (Laguardia and Newark), but our relatives live in the Lower East Mill Basin of Brooklyn near JFK so we're going to give Song a try this December. Looking forward to it actually, I'm a big fan of the 757 like you. Shame that Boeing is stopping production soon but also looking forward to the 7E7 (787?). With the 7E7 being a twin-isle, long range, 250-seater, could the 767 be next? Probably. I know Song has all-leather seating, but when are they installing the seatback TV monitors? Maybe you'll be piloting my flight and we can chat

[B717mech]

It was me that quoted the long article about our profits, not 717jetmech. I was unaware how long it was when I copied it.

[haze]

Originally Posted by B717mech

It was me that quoted the long article about our profits, not 717jetmech. I was unaware how long it was when I copied it.

If you want, you can go back to that article post and click "edit" in the upper right hand corner. That will allow you to shorten any portion of the article you didn't intend to post. I use the "edit" feature all the time to include points I forgot to make or words I misspelled

[B717mech]

I did that earlier, thanks though. It sure has been quite in here lately.

[Delta7203]

Haze-

Thats great! I thought that the T.V.s and such were suppose to get installed this month?! Maybe I was misinformed. I believe that I still have a week (minimum) until I become a Song Convert. I try to get the Atlanta-Los Angeles route for Delta when ever I can. But when I convert I'll be on the bottom end of the bid (again) so who knows what I'll get in December!

As far as I have heard, Boeing is going to name it's new plane the 7E7 and not change the 'E' to a number. I think it stands for Environment friendly , Efficient, and Economical. And yes, I will miss my 757s when they are all retired (long time from now). Maybe I'll get to be a 7E7 pilot! -- who knows?

I believe that a major U.S. based airline said the following about Boeing:
"The people of Boeing have made their 737 family so good that they have made their 757s, and 767s obsolete."

- John

[haze]

Originally Posted by Delta7203

And yes, I will miss my 757s when they are all retired (long time from now).

I believe that a major U.S. based airline said the following about Boeing:
"The people of Boeing have made their 737 family so good that they have made their 757s, and 767s obsolete."

Yes, the 757 will probably remain in many inventories for at least the next 10 years. I also heard that about the 737, specifically that an airline canceled it's latest order for 757s to order the new 737-800s instead. Airbus can only wish that the A320 was in the same ballpark as the 737 but they're not even close, especially with the new 737-700s and -800s. I'm somewhat reluctant to fly JetBlue since they fly the A320, but I'll probably give them a try anyway to LA in March. Airbus probably suffers from Boeing envy

[haze]

Originally Posted by haze

...but I'll probably give them a try anyway to LA in March.

Well, maybe not:

[ The Atlanta Journal-Constitution: 10/24/03 ]

Citing competition, JetBlue will bid Atlanta farewell

By RUSSELL GRANTHAM
The Atlanta Journal-Constitution


Just six months after arriving, JetBlue Airways is leaving Atlanta.

The discount airline, known for a hip image and TVs at each seat, will end service between Atlanta and Long Beach and Oakland, Calif., on Dec. 4. Executives said they want out of an intensifying West Coast dogfight with Delta Air Lines and AirTran Airways.

"We just thought it was a little crazy," said JetBlue Chief Executive Officer David Neeleman.

Though it hadn't built a meaningful presence in Atlanta, JetBlue's launch of flights to the Los Angeles suburb of Long Beach in May marked the first nonstop service to the West Coast by a discount carrier. It challenged Delta's dominance on the route and prompted AirTran to launch its own flights.

Fares to the Los Angeles area plummeted. Sale fares for advance-purchase Long Beach flights run as low as $176 round-trip on JetBlue, and short-notice fares are less than half the $2,000-plus prices before competition heated up.

Business travel consultant Chris McGinnis termed Jet-

Blue's retreat "a bummer" but said he expects fares will stay down because AirTran still will compete with Delta to Los Angeles and San Francisco. But fewer seats may be offered at those prices, he said.

JetBlue already had pulled back, cutting its Long Beach schedule from three flights to one in September. It added an Oakland flight at the same time.

AirTran has two daily flights to Los Angeles International Airport. It will start one daily flight to San Francisco International on Nov. 12, with a second flight planned next spring.

Previously limited to East Coast and Midwest markets, AirTran also has added flights to Las Vegas and Denver this year. It has ordered longer-range jets and is expected to use some of them to bolster its presence in the West.

AirTran President Bob Fornaro said JetBlue was at a disadvantage because it didn't have an Atlanta hub feeding customers into its flights.

Fornaro said AirTran had planned West Coast flights even before JetBlue's entry.

After JetBlue announced its West Coast plans last winter, Delta matched the new airline's fares, offered triple frequent-flier miles and doubled its capacity to three Los Angeles airports by adding flights and bigger planes.

Delta added the flights "to meet anticipated demand," Delta spokesman John Kennedy said. Delta will "compete vigorously" in all its markets, he said.

"It became a kind of a war between AirTran and Delta," Neeleman told industry analysts Thursday in a conference call after releasing third-quarter earnings.

"We certainly with our cost structure could have stayed in there for a long time just to . . . prove a point, but we're not into proving points. We're just into making money," the JetBlue CEO said.

Did their CEO just admit that JetBlue is only interested in making money? That makes me feel wonderful about their customer service and aircraft safety. Maybe I won't fly them now after all