AirTran expects to add more BWI flights in Feb.

Airline was drawn to airport because of USAir cutbacks

`Bigger operation' planned

October 10, 2001|By Paul Adams | Paul Adams,SUN STAFF

Budget carrier AirTran Airways decided to accelerate and expand its plans to enter the Baltimore market after US Airways Group Inc. announced that it would eliminate its MetroJet service, and other airlines may eventually follow suit, an AirTran executive said yesterday.

Beginning Dec. 12, AirTran will launch service at Baltimore-Washington International Airport with three daily flights to Boston and three to Atlanta, but expects to expand the number of flights to those markets and consider adding more cities in the spring, said Robert L. Fornaro, president and chief operating officer of the airline.

Fornaro's statement came just as US Airways was posting its new flight schedule, which confirmed that the Arlington, Va.-based airline will eliminate 51 of its 75 daily mainline jet flights at BWI, along with 14 of its 71 daily turboprop US Airways Express flights.

All but a few of the mainline jet flights being eliminated are part of the US Airways MetroJet fleet of 41 planes, which will be eliminated entirely beginning in December.

US Airways' pullback at BWI, announced after last month's terrorist attacks in New York and Washington, is part of its plan to cut capacity by 23 percent and eliminate 11,000 jobs. In an August meeting with analysts, the airline's chief executive officer, Rakesh Gangwal, said the company might go on the chopping block unless costs could be reduced.

"Baltimore had a big service package [with US Airways], but it now becomes slightly under-served, so I think some of those voids will be filled by other carriers as carriers get back on their feet," Fornaro said after a news conference announcing AirTran's expansion plans.

Analysts said it was only a matter of time before AirTran launched service to BWI, which has long been a magnet for low-fare airlines.

"The market is big enough," said Robert W. Mann, a New York aviation consultant. "BWI has a long heritage of really supporting low-fare operators. That's been a place where they've all done very well."

AirTran's move to BWI was hailed by Gov. Parris N. Glendening and Maryland aviation officials, who are faced with the daunting task of trying to maintain the airport's record-setting growth at a time when airlines are curtailing service as part of an industry-wide slowdown.

US Airways is the airport's second-largest customer behind Dallas-based Southwest Airlines.

Beverley Swaim-Staley, acting executive director of the Maryland Aviation Administration, said BWI continues to log near-normal traffic as passengers begin to return to the skies.

And while many airports nationwide have scaled back on capital projects, she said the state-owned airport has no plans to downsize its $1.8 billion expansion, which was announced in summer 2000.

BWI's relatively quick recovery can be credited in part to the strength of its biggest customer, Southwest, which is the only major airline that hasn't announced cutbacks since Sept. 11.

Contrary to the trend, the low-fare carrier launched new service from Norfolk, Va., to BWI and several other cities last weekend, a move analysts say is indicative of the airline's strong balance sheet.

AirTran, formerly ValuJet, is among a small number of budget carriers that have tried to emulate Southwest's strategy of catering to budget-conscious leisure travelers.

But the airline, which is based in Orlando, Fla., has had a more difficult history, its low point coming in 1996 when one of its passenger jets crashed in the Florida Everglades.

The airline launched a recovery under its new name, AirTran, and has posted 10 consecutive quarters of profit. In August, parent company AirTran Holdings Inc. moved its listing from the American Stock Exchange to the New York Stock Exchange.

Though analysts initially questioned AirTran's ability to recover from the Sept. 11 attacks, the airline surprised some by being the first to secure pay cuts from its pilots and machinists unions.

Within days of the attacks, the unions agreed to a more than 20 percent cut in pay to help the airline deal with the crisis. Fornaro wouldn't say yesterday how much cash the airline has on hand.

AirTran has 330 daily departures to 35 cities. Its primary base of operations is Hartsfield Atlanta International Airport, where it has 147 daily departures and is the airport's No. 2 carrier, behind Delta Air Lines Inc.

Like Southwest, AirTran focuses primarily on popular leisure destinations in Florida and throughout the Southeast. But it recently began to focus on the Northeast.

Fornaro said the airline approached BWI last spring as US Airways Group Inc. and UAL Corp., parent of United Airlines, were seeking a $12.3 billion merger. The merger was expected to result in the loss of much of BWI's MetroJet service.

Seeing an opportunity, AirTran officials began hatching plans to pick up gates left open by MetroJet. But when the merger failed, the deal lost some of its urgency.

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