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"Cheap flights key for business"

Thursday, August 17, 2000

Cheap flights key for business
Airline and airport officials see low fares as a way to keep passengers
By Ben Werner
The Savannah (GA) Morning News

An airport is only as strong as its cheapest link.

Keeping airfares reasonably priced is key to Savannah International
Airport's success, said Patrick Graham, the airport's executive director.

Graham spoke prior to Wednesday's Airport Commission meeting to area
business leaders about improvements at the airport. Work continues to
improve customer service and keep affordable airfares, he said.

"Low-cost carriers are important to any airport because they keep fares down
by causing competition," Graham said.

Big-name airlines sharing markets with low-fare carriers are pressured to
compete by offering lower fares themselves. This competition attracts a
greater number of fliers and helps stem the flow of passengers driving from
Savannah to Jacksonville, Fla., to fly Southwest Airlines, Graham said.

Southwest does not fly to Savannah, but the nation's second-largest low fare
carrier, AirTran, does. And the presence of a low-fare carrier has helped
push Savannah airport's passenger numbers up to about 1.8 million people for
2000, Graham said. Nine airlines now fly into and out of Savannah.

Businesses such as the Paradies Shops at the airport have benefited from the
increased traffic. Paradies, which sells magazines, clothing and snacks at
53 airports, received approval at the meeting to turn its PGA Pro Shop
section into a separate store at the airport.

The new store will sell golf equipment and official PGA merchandise often
sold only at tour events. The $250,000 store will have about 1,000 square
feet and will include a putting green.

The rising number of passengers, and their high disposable incomes, makes
Savannah's Paradies one of the company's top performers, said Gregg
Paradies, senior vice president for the Atlanta-based company.

But while everyone else seems to be benefiting from AirTran's presence
AirTran itself has been disappointed. AirTran's corporate travel package,
which includes free upgrades to business class and an aggressive frequent
flier program, has been slow to take off in Savannah.

AirTran flights out of Savannah ran at a 56 percent seat occupancy for the
three months that ended June 30. The company says it must have at least 61
percent occupancy to break even. The other airlines out of Savannah are
averaging around 70 percent occupancy.

"Generally speaking, we've had minimal corporate travel support," said Bill
R. Howard, AirTran's director of sales.

AirTran, which started flying in 1993 as ValuJet, has been overhauling its
fleet and services for about a year and a half to make itself the carrier of
choice among business travelers. AirTran is the launch airline for the new
Boeing 717 regional jet.

"Our MO if you will, is to keep business travel low," Howard said.

By gearing its services toward passengers flying for business rather than
pleasure, AirTran Holdings Inc. appears to finally be emerging from 1996's
fatal ValuJet crash.

According to Securities and Exchange Commission documents, all but two of
the lawsuits filed against the company after the crash have been settled.
For the three months that ended June 30, AirTran reported revenues of $160
million and posted profits of $22 million compared to revenues of $140
million and profits of $14 million during the same period last year.

"We're confident about the market place," Howard said. "It's just a matter
of getting the word out."

Business reporter Ben Werner can be reached at 652-0381 or by e-mail at

Other items covered by the Airport Commission

* Work repairing the leaks in the airport's parking decks is supposed to
begin Aug. 17. Repairs are expected to be completed by the end of the month.

* The Airport Commission approved a plan to pay $414,000 for a new public
address system. The new system should make it easier to hear throughout the
airport by allowing operators to adjust volumes according to the needs of
specific areas.

* The commission also approved a plan to buy a $111,000 baggage carousel for
Delta Airlines. This project will be paid for by Delta ticket sales.

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