"Dulles Airport being transformed into a hub for discount carriers"

Wednesday, September 10, 2003

Dulles Airport being transformed into a hub for discount carriers
Delta's low-fare subsidiary takes off
The Washington (DC) Times

 
Delta Air Lines begins flights today with a new subsidiary called Song at
Washington Dulles International Airport, continuing the transformation of
the airport toward becoming a hub for low-fare carriers.

Song is intended to help Delta compete with the low-cost airlines that are
chipping away at the major airline market. 

Four of the largest major airlines have lost passengers so far this year
while the four biggest low-fare carriers have gained customers, according to
the Wall Street financial firm of Blaylock & Partners. 

Song focuses on leisure travelers trying to get the best deal, usually for
vacations in Florida. 

Delta will continue seeking business travelers. It has lost 3.7 percent of
its passenger traffic so far this year, according to Blaylock & Partners. 

"Dulles is traditionally the leisure-focus airport in the Washington
market," said Stacy Geagan, Song spokeswoman. "Delta has taken a strategy to
proactively capture that market." 

Ronald Reagan Washington National Airport is used primarily by business
travelers. 

The first Song flights out of Dulles will fly to Orlando, Fla., at ticket
prices of $79 to $299 one-way. They will offer amenities such as 24-channel
television, interactive video and gourmet meals for sale. 

Low-fare airlines are able to charge cheaper rates by flying smaller
aircraft that use less fuel, pay lower landing fees and require fewer crew
members. They also change routes more quickly than big airlines to ensure
the planes are filled with the greatest number of passengers as travel
trends shift. 

In addition, Song plans to keep costs low by flying its planes 13 hours a
day, compared with 10 hours a day for Delta. Passengers will be asked to
unload or board more quickly while the airplanes are on the ground. 

Delta says its operating costs are 22 percent lower with Song. 

Other airlines have done the same market research that led Delta to develop
Song and its flights out of Dulles. 

"I think it's a shift in the mix," said Mark Treadaway, Metropolitan
Washington Airports Authority's vice president of air-service planning and
development. "You're seeing more market share being gained by low-fare
carriers. It's where the industry is going." 

Ten years ago, there were no low-fare carriers at Dulles Airport. Now,
low-fare carriers represent about 20 percent of the airport's passengers on
domestic flights. 

Many of the rest are international and long-haul domestic travelers. 

Nationally, low-fare airlines carry 35 percent of all domestic commercial
air passengers. 

Yesterday, Great Plains Airlines announced it would begin operating low-fare
flights out of Dulles on Oct. 7. Until now, the Tulsa, Okla, airline has
only flown regional flights in the Midwest. 

This week, JetBlue Airways, the industry's most profitable airline, added a
third daily low-fare flight between Dulles and Fort Lauderdale, Fla. 

Atlantic Coast Airlines announced plans to separate as a partner of United
Airlines and operate a nationwide network of low-fare flights, based
primarily at Dulles. 

"Our expectation is that once we begin service, we would immediately have
the greatest number of total departures from Dulles of any other airline,"
said Rick DeLisi, Atlantic Coast Airlines spokesman. 

The company's research shows that Northern Virginia and Southern Maryland
residents are underserved by low-fare carriers. 

After United frees the airline from its contract, Atlantic Coast Airlines
plans to begin with 275 daily departures out of Dulles and expand to 325
within the first year. 

Song flew its maiden flight out of New York on April 15. The airline has a
fleet of 36 Boeing 757 aircraft. They fly to and from New York City, Boston,
Washington and Hartford, Conn., to Fort Myers, Fort Lauderdale, Tampa and
Orlando in Florida. 

The airline plans to operate 144 daily flights by October.


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