"SFO's loss, Oakland's gain: Low-fare airline to move"

Monday, January 23, 2006

SFO's loss, Oakland's gain: Low-fare airline to move
ATA plans to consolidate with Southwest
By Neil H. Dempsey
The San Francisco (CA) Examiner


Throwing a wrench into San Francisco International Airport's attempts to
lure and retain low-fare carriers, officials confirmed Sunday that ATA
Airlines will pack up its bags this spring to move across the Bay - making
it the fourth discount airline SFO has lost in less than four months.

Officials said the airline, once known as American Trans Air, will
consolidate its flights with Southwest at Oakland International Airport
beginning on April 27. ATA joined Southwest in a code-share agreement
allowing passengers to build trips using both airlines last February,
spokeswoman Michelle Foley said. Southwest itself previously left SFO for
Oakland.

ATA constitutes about 0.5 percent of SFO's total business, according to
airport officials, and recently reorganized its senior leadership structure
in anticipation of emerging from bankruptcy this year. A formal announcement
regarding the move is expected today.
 
Despite SFO's long-standing campaign to recruit discount airlines, ATA will
be the fourth in a list of low-fare carriers to part ways with SFO since
late last September, when Independence Air announced it would fold because
of high fuel prices. In October, Song announced a merger with parent company
Delta; then, this winter, WestJet quietly stopped serving SFO, airport
representatives said.

Despite overall increases in passenger numbers at the airport, the departure
of low-fare carriers is a blow to SFO's attempts to compete with airports in
San Jose and Oakland - both of which host discount leaders Southwest and
JetBlue - for a national market that an SFO report recently noted represents
about 30 percent of domestic passengers across the country.

In that report - an appeal to the Department of Transportation for a swift
certification of low-fare carrier Virgin America - SFO Director John Martin
noted that only 15 percent of SFO's domestic traffic utilizes low-fare
airlines. In San Jose, 48 percent of domestic passengers use low-fare
carriers, and in Oakland, 70 percent of all passengers fly on Southwest and
JetBlue alone. 
 
"Notwithstanding the sustained work of the airport and the city to secure
additional low-cost air service, the community remains sorely lacking
trans-Atlantic low-cost carrier service of the kind that Virgin America
promises," Martin wrote, adding that the number of providers was declining.

Moving to limit the damage done by massive cuts to the United Airlines
workforce following Sept. 11, 2001, the airport in 2003 approved slashing
landing fees by 50 percent for new carriers offering to serve an underserved
market at the airport.

But SFO representatives said Sunday the airport won't again offer reduced
landing fees - currently only allotted to international airlines - or
provide any other type of incentive plan to gain low-cost airlines, or to
retain them. Instead, they said, the airport is focusing on its
international and long-haul business. "Mostly, we're trying to build the
international side of the business," airport spokeswoman Kandace Bender
said. "We're pretty happy with the way things are going."
 
Bender said the anticipated arrival of Virgin America and the emergence of
United Airlines from bankruptcy will help SFO keep competitive prices.

ATA will offer a full schedule out of Oakland beginning April 28. The
airline will increase its flights when it moves, adding a flight to Hilo,
Hawaii, in addition to the 30 weekly flights it now provides to Maui,
Honolulu and Chicago from SFO, Foley said.

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