AirTran Airways, the second-largest carrier out of Baltimore, has slashed its growth plans for 2009 and 2010 nearly in half to rein in costs as the price of jet fuel soars.
The Orlando, Fla.-based airline will sell two of its Boeing 737 aircraft in April, positioning the discount carrier to cut its capacity growth rate to 5 percent during the next two years, AirTran executives said yesterday.
Previously, the company projected increases in available seating of 8 percent in 2009 and 10 percent in 2010, according to AirTran Chief Financial Officer Stan Gadek.
"We're making what we think is a dramatic adjustment," AirTran Chief Executive Officer Robert L. Fornaro said in a Web cast of a Raymond James investor conference. "We're taking that growth rate down again."
AirTran had already cut growth plans twice for this year, first halving its 20-plus percent growth target to a more manageable 10 percent and then trimming it further to 9 percent. "A lot of the airlines are cutting back on domestic growth because it is such a tough market to be in," said Bob Harrell, an airline and travel analyst based in New York. "Even the most profitable carrier - Southwest - has been cutting back, so [AirTran] is in good company."
Southwest Airlines, which flies more than half of all passengers at Baltimore-Washington International Thurgood Marshall Airport, has also slowed capacity growth by cutting flights and reducing the number of aircraft it plans to fly in 2008.
The leading discount carrier will hold its growth rate at 4 percent to 5 percent this year, rather than the 6 percent it had projected.
While AirTran still plans to add flights at BWI, Southwest is cutting back. In May Southwest will reduce its daily departures to 166, from 172 currently, and AirTran will initiate new flights to Los Angeles and to Burlington, Vt.
The federal Department of Transportation also recently granted AirTran a coveted new slot out of Ronald Reagan Washington National Airport.
Flights to either Jacksonville, Fla., or Milwaukee will be added to the six daily departures AirTran now has out of Reagan. Adding routes out of La Guardia Airport in New York and from Milwaukee also remain priorities for AirTran, Fornaro said.
The discount carrier's decision to rein in its expansion "really won't impact our BWI growth plans," Kevin Healy, AirTran vice president of marketing and planning, said in an e-mail. "The effect will be more on noncore growth."
New year-round flights to Daytona Beach, Fla., for example, will now be stopped for the season in June, AirTran executives said.
AirTran has a nonstop flight from BWI to Daytona on Saturday and Sunday.
As AirTran's third-largest market behind Atlanta and Orlando, BWI officials said they expect some level of growth to be maintained. AirTran flew nearly 2.5 million passengers through BWI in 2007, a 16.4 percent increase in traffic.
"AirTran is the fastest-growing airline at BWI," Maryland Aviation Administration spokesman Jonathan Dean said. "They've made a number of new air service announcements in recent weeks."