"Destination discounts for airlines at SFO"

Wednesday, August 20, 2003

Destination discounts for airlines at SFO
By Justin Nyberg and Adriel Hampton
The San Francisco (CA) Examiner


A program designed to attract low cost carriers and diversify the menu of
cities served by San Francisco International Airport won approval from the
Airport Commission on Tuesday. 

The Commission voted 5-0 to offer a 50 percent discount on landing fees for
any airlines adding flights to new destinations. The program will make it
cheaper for airlines to explore new markets and is part of a concerted
effort to attract low cost carriers to SFO. 

Discount carriers are the only airlines that continue to post profits in the
face of an industry-wide drop in passenger levels, but they make up just 9
percent of SFO's overall traffic, compared with a national average of 25
percent. Bankrupt United Airlines flights constitute almost half of the
departures from SFO. 

Airlines are charged several hundred dollars each time they land at SFO. The
fees account for 4 to 5 percent of the total costs for the flight, so any
reduction would be a significant money-saver for airlines looking to expand
to more destinations, and the markets that come with them. 

After another dismal year, officials hope the new program will increase
passenger levels and decrease the cost of airline tickets purchased at the
last minute, wrestling market share away from cheaper airports like San
Jose's Mineta International Airport and Oakland International Airport, host
to low-cost giant Southwest Airlines. 

"As fares go down, the demand increases," Martin said when he announced the
program at a press conference Aug. 5. The airport served 30 million
passengers last year, down from 41 million during the height of the local
economy in 2000. 

Three airlines are already poised to take advantage of the new discount. ATA
Airlines will begin serving Newark this fall and, until recently, was the
airport's sole low cost carrier. In the fall, ATA will be joined by AirTran
Airways, which announced it will begin flights from SFO to Atlanta on Nov.
12. America West will begin serving John F. Kennedy International Airport on
Dec. 19 and Logan International Airport in Boston on March 1, 2004. It is
the first time America West has offered nonstop transcontinental service. 

SFO Director John Martin, San Francisco Mayor Willie Brown and AirTran Vice
President of Sales Kevin Healy announced that airlines new service Monday at
San Francisco City Hall. 

AirTran is the nation's second-largest discount airline and the new flight
to San Francisco will be it's second coast-to-coast destination. Coach
tickets start at $99 one way, with daily departures from SFO at 9:30 a.m.
The carrier plans to add a second flight, at 8:45 p.m., except Tuesdays and
Wednesdays, on March 4. 

Martin said the new Atlanta flight should bring in $800,000 in concession
sales, of which $120,000 will go to San Francisco. He welcomed the low-cost
airline and said he hopes it will lead to more such flights. 

"We want to see more fare competition, more service competition," Martin
said. 

SFO's roster of discount airlines also includes Frontier and Midwest
Express.


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