"Getting from A to B, with amenities"

Friday, October 13, 2006

Getting from A to B, with amenities
By STEVE HUETTEL
The St. Petersburg (FL) Times


AirTran Airways doesn't have the flash of JetBlue or the heft of Southwest
Airlines. But the Orlando-based discounter has grown into the 10th-largest
U.S. airline and rings up consistent profits.

Chairman and chief executive Joe Leonard was in the Tampa Bay area Thursday
to receive the annual Tony Jannus Award for achievement in commercial
aviation. He talked with the Times about the state of the airline business,
why AirTran decided to fly into Sarasota and whether international flights
are on the horizon.

What do travelers want?

They're looking for economy. They want to get from A to B. They don't want
to be abused in the process. And they want to get there with their bags. We
try to offer all the business amenities that business fliers like. We have
assigned seating. We have the largest overhead bins you can get inside the
cabin. And we're the only airline in the U.S. today that can say we have
business class in every single flight.

Airlines are starting to make money again, largely because domestic capacity
is down and fares are up. Can it continue?

We're in the best supply-demand situation the industry's (seen) in probably
seven or eight years. So far, nobody wants to upset the apple cart.
Hopefully, people have learned the lesson and won't start adding capacity
ahead of demand. We're going to get some help to save us from ourselves
because you can't get airplanes. Boeing's sold out. Airbus is sold out.
They're going to Asia and they're going to Europe.

AirTran is known for being tight with a buck. How do you keep costs among
the lowest in the business?

A lot of it is brand new airplanes. Our average fleet age is less than three
years and we continue to bring in new planes at a good clip. New planes are
more reliable (and) the maintenance cost is a fraction. We pay very much
attention to optimizing the utilization of everything we have. We get 11.3
hours a day aircraft utilization. We just pay a lot of attention to making
sure that if we spend money, that it's spent wisely and not just because
somebody may think something's a good idea.

Your arch-rival, Delta Air Lines, is working to emerge from bankruptcy with
much lower costs. Do you think Delta will be anxious to take on AirTran
again?

Delta's going to compete with us as vigorously as they always have. I think
they're on their fourth planning guy since we joined the company. And they
all walk in saying, "We're going to show the (last) guy how to run AirTran
out of business." And we lived through that. They look at the market share
gain. We couldn't care less about market share. We plan around profits.

Why does AirTran fly to Sarasota-Bradenton International Airport instead of
serving the market from Tampa International like discount giant Southwest
Airlines?

Clearly, you can get people who will drive from Sarasota to Tampa. But we
believe they're a separate market, and it's big enough we can serve both.
Southwest generally will not go into a new city with less than 15 flights a
day and they spool that up rapidly. We rarely go with more than two or three
flights into a new city. We're much more cautious. We go in with a much more
defensive posture rather than an offensive posture. 

You received government approval to fly your first routes outside the U.S. -
from Tampa and Atlanta to Cozumel in Mexico. Do you plan to start
international flights?

We may do that. We never did fly (to Cozumel) because the hurricane came
through and wiped out most of the hotels. I doubt we're going to fly it this
winter. When you start flying to a foreign country, you've got customs,
you've got immigration, you've got currency differences, you've got language
differences. So, in keeping with our philosophy of keeping things simple as
we possibly can and, therefore, as cost-effective as we can, that's not a
high priority for us.

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