"Discount airline passes on CVG"

Thursday, November 30, 2006

Discount airline passes on CVG 
By Kerry Duke
The Cincinnati (OH) Post

 
The votes have been tallied, the results are in and the decision of the
judges is final: Cincinnati/Northern Kentucky International Airport has lost
out again.

AirTran Airways, the Orlando-based low-cost airline, has decided against
expanding service to the local airport.

AirTran had listed Cincinnati/Northern Kentucky on its Web site as one of 48
airports that the airline might serve, and then invited the public to vote
on which airport should get the new service.

Phoenix won. AirTran announced this week it will begin new non-stop service
from its hub in Atlanta to Phoenix Feb. 15.

The airline would not release vote totals for Cincinnati/Northern Kentucky
or say where the airport ranked in the polling. But Judy Graham-Weaver,
manager of public relations for the airline, did allow that the airport
"fared very well on the survey. "

"I know there was a really good showing for Cincinnati and quite a lot of
interest for the community there in wanting low fares," she said.

The survey was not the deciding factor, but it did provide AirTran with a
helpful gauge on what kind of customer support the airline might expect at
various new destinations. Even though Cincinnati/Northern Kentucky wasn't
chosen, the response could have a bearing on future expansion decisions, she
said.

The survey captured the attention of many tri-staters. A grassroots e-mail
campaign urged people to vote at AirTran's Web site. The airport's Web site
promoted the survey as well, and linked to it to make voting easier.
Graham-Weaver said some people even called to make sure their vote had been
tallied.

It's no wonder the low-cost carrier drew such interest from the region.
Cincinnati/Northern Kentucky has ranked as the most costly airport in the
nation to fly out of. The airport has enjoyed little success in attracting
discount airlines.

With Delta Air Lines and its subsidiary Comair handling about 80 percent of
the flights, competitors have found it difficult to muscle in. When other
airlines enter the market, Delta has responded by cutting fares to the
cities the newcomer serves, say airport officials. Passengers abandon the
newcomers for flights on Delta, where they can more easily pile up frequent
flyer points.

AirTran itself tried to make a go of it at Cincinnati/Northern Kentucky for
three years before pulling out in 1998, the same year Air Canada bailed out
of the airport after less than a year. Vanguard Airlines has twice failed
here, the last time in 2000.

Currently, only one low-cost carrier operates here. USA 3000 began
operations at Cincinnati/Northern Kentucky in 2002 with twice weekly flights
to Cancun, Mexico, and has since expanded with flights to Punta Cana,
Dominican Republic, and Fort Myers, Fla.

Airport spokesman Ted Bushelman said he wasn't surprised that AirTran chose
to expand elsewhere. He said although the airport would welcome a low-cost
carrier and it made a push for AirTran, there "were other markets that I
thought they might go to before they would go here."

"There are a lot of markets out there that are way underserved, and you have
to remember that we've 122 direct flights," he said.

Any new carrier would have to find just the right niche and likely be
prepared to compete pretty heavily, he said.

Graham-Weaver said AirTran is not afraid of competition, nor is it a
stranger to vying with Delta for business given that AirTrain's own hub is
in Atlanta, home of Delta's main hub.

"Since we started in 1993, we know that especially Delta has matched our
fares and tried to undercut us in every market that we're in. We're very
used to competing with them at that level," Graham-Weaver said.

More important than the presence of Delta in decision-making about expansion
is what kind market the airline might enter, what the numbers say and the
business opportunities, she said.

AirTran's past failures at Cincinnati/Northern Kentucky doesn't rule out the
airline having another go at the airport, she said. AirTran is a very
different airline now from what it was in the 1990s.

Graham-Weaver said she suspects that the decision to pull out of
Cincinnati/Northern Kentucky in 1998 had as much to do with altered route,
hub changes and reposition-ing airports because of the 1997 merger of Value
Jet and AirTran Airlines as anything else. It was that merger that created
AirTran Airways.

She also said the proximity of Dayton International Airport, where AirTran
has service, wouldn't rule out expanding service to Cincinnati/Northern
Kentucky. She noted that AirTran serves both airports in Washington, D.C. as
well Baltimore, and recently began flights to Newburgh, N.Y., less than 60
miles from White Plains, N.Y., which the airline also serves.

"If the numbers are there and the market is right and we know that there is
enough demand to support both, it's still considered," she said.

Richard Gritta, a finance professor at the University of Portland, Ore., who
tracks the airline industry, said there are more important numbers than the
survey's influencing the decision of AirTran or any other airline to expand.
Among those are consumer demand, economics of the region, market conditions
and, most importantly, the kind of incentive package offered.

"It would really depend on what kind of package the city fathers would put
together. That's the big thing. How much will they be willing to bribe?"
Gritta said.

"... As they would say in the trade, it's the money, stupid. That's exactly
what they're looking for. If they can make money, they're going to come in.
If they can't, they're not. It's that simple."

AirTran has announced expansion to three cities thus far this year and will
likely add four or five more to its routes in all, Graham-Weaver said.

"So there are still probably a couple of more announcements coming," she
said.

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