AirTran Airways CEO Says Success Comes Plane And Simple
Skip directly to the full story.
By TED JACKOVICS The Tampa Tribune
Published: Oct 13, 2006
ADVERTISEMENT
More from this channel:
Search for more information:
Site Search Archives Keyword
TBO.com Site Search | Tribune archive from 1990
Orlando-based AirTran Airways continues to carve out a reputation as a low-cost, low-fare airline that operates in the black because it focuses on profit rather than market share.
It is the sixth busiest airline serving Tampa International Airport, where AirTran flies about 1.2 million passengers annually, 37.5 percent more than in 2003.
Chairman and Chief Executive Officer Joe Leonard visited the Tampa Bay area on Thursday and discussed the airline before being honored as the winner of the 2006 Tony Jannus Award, which recognizes contributions to commercial aviation.
AirTran has faced fierce competition, especially with Delta Air Lines on Atlanta flights. How will competition change for AirTran with airlines such as Delta that are restructuring under bankruptcy protection?
We expect to maintain our cost advantages over Delta Air Lines and Northwest Airlines. Our costs are coming down each year, down 1.5 percent this year, and we expect another 1.5 percent next year. We are in pretty good shape relative to competition.
How stiff is the competition?
We think we have been competed against more vigorously than any airline in the country. Delta is on its fourth planning guy [against us]. They say they are going to run AirTran out of business, and we have lived through that.
One reason Southwest Airlines and AirTran remain profitable is that we focus on profits [not market share], and we do not lose sight of that.
Last month AirTran said it would delay delivery of eight new Boeing 737 jets from 2007 to as late as 2011. Does that reflect a perception the economy is softening?
We have grown 25 percent in each of the last five years, and that is a difficult pace to keep up. We intend to grow in the 15 [percent to] 20 percent range, and this is the time to do it. I don't know if the economy will slow, but if it does, we want to be ahead of it.
What do consumers want?
They look for economy. They want to get from point A to point B and do not want to be abused in the process. They want to arrive with their bags. We offer snacks [not meals], and we get no complaints. Our passengers know what we are trying to do with costs.
What is your strategy for starting new markets?
We don't go into new markets unless we believe they will be successful. If it's a close call, we would like to get some support [like marketing subsidies AirTran gets in Sarasota and about a half-dozen other destinations, though not Tampa]. But we don't go into a market because we get support, ... we want to lower our risk.
What is your Florida strategy?
Forty percent of our business is in Florida. We will be very focused on Florida this winter and will beef up our schedules. One problem we have is that Florida is very good in the second [March-June] and fourth [October-December] quarters but not the third quarter.
So we are thinking about developing east-west flights during the summer. We flew Atlanta-Seattle last summer for four months, then pulled back.
How do you intend to expand?
We will create focus cities where we have 30, 45, 50 flights a day, like Baltimore, Chicago's Midway Airport, Indianapolis.
What about the Tampa market?
Tampa is a strong business market for us. It has leisure travel, too. We consider Tampa and Sarasota separate markets, and we will continue to serve them both.
Do you expect to expand with international service?
We were going to fly between Tampa [and Atlanta] and Cozumel, Mexico, but last year's hurricanes wiped out the hotels in Mexico, and we did not start the service. We won't be expanding internationally in 2006 or 2007.
We want to keep it simple. When you fly internationally, you have to deal with immigration, currency and language differences. If we keep things simple, we keep them cost effective.
Do you anticipate creating a second hub like Atlanta, where you schedule about 230 daily flights?
No, there's never going to be another Atlanta, not for us, not for anybody. Hubs are staked out.
How is the winter holiday season shaping up?
Advance bookings for November and December look pretty normal compared with a year ago. It's going to be a good holiday season.
How healthy is the industry, considering factors it can control?
We are in the best supply and demand situation the industry has been [in] in seven or eight years [with no airline adding large amounts of capacity, which in turns leads to lower fares to fill seats]. So far no one wants to upset the apple cart.
American Airlines has held back. Northwest is holding the line. Continental is growing a little but is not out of hand. We are growing, but we are so small that it is a small percentage industrywide.
For the first time, we are getting help to save ourselves from ourselves. No new airliners [beyond those already ordered] are available. All the new ones [Boeing and Airbus] are going to Europe and China.
Reporter Ted Jackovics can be reached at (813) 259-7817.
Skip directly to the full story.
By TED JACKOVICS The Tampa Tribune
Published: Oct 13, 2006
ADVERTISEMENT
More from this channel:
Search for more information:
Site Search Archives Keyword
TBO.com Site Search | Tribune archive from 1990
Orlando-based AirTran Airways continues to carve out a reputation as a low-cost, low-fare airline that operates in the black because it focuses on profit rather than market share.
It is the sixth busiest airline serving Tampa International Airport, where AirTran flies about 1.2 million passengers annually, 37.5 percent more than in 2003.
Chairman and Chief Executive Officer Joe Leonard visited the Tampa Bay area on Thursday and discussed the airline before being honored as the winner of the 2006 Tony Jannus Award, which recognizes contributions to commercial aviation.
AirTran has faced fierce competition, especially with Delta Air Lines on Atlanta flights. How will competition change for AirTran with airlines such as Delta that are restructuring under bankruptcy protection?
We expect to maintain our cost advantages over Delta Air Lines and Northwest Airlines. Our costs are coming down each year, down 1.5 percent this year, and we expect another 1.5 percent next year. We are in pretty good shape relative to competition.
How stiff is the competition?
We think we have been competed against more vigorously than any airline in the country. Delta is on its fourth planning guy [against us]. They say they are going to run AirTran out of business, and we have lived through that.
One reason Southwest Airlines and AirTran remain profitable is that we focus on profits [not market share], and we do not lose sight of that.
Last month AirTran said it would delay delivery of eight new Boeing 737 jets from 2007 to as late as 2011. Does that reflect a perception the economy is softening?
We have grown 25 percent in each of the last five years, and that is a difficult pace to keep up. We intend to grow in the 15 [percent to] 20 percent range, and this is the time to do it. I don't know if the economy will slow, but if it does, we want to be ahead of it.
What do consumers want?
They look for economy. They want to get from point A to point B and do not want to be abused in the process. They want to arrive with their bags. We offer snacks [not meals], and we get no complaints. Our passengers know what we are trying to do with costs.
What is your strategy for starting new markets?
We don't go into new markets unless we believe they will be successful. If it's a close call, we would like to get some support [like marketing subsidies AirTran gets in Sarasota and about a half-dozen other destinations, though not Tampa]. But we don't go into a market because we get support, ... we want to lower our risk.
What is your Florida strategy?
Forty percent of our business is in Florida. We will be very focused on Florida this winter and will beef up our schedules. One problem we have is that Florida is very good in the second [March-June] and fourth [October-December] quarters but not the third quarter.
So we are thinking about developing east-west flights during the summer. We flew Atlanta-Seattle last summer for four months, then pulled back.
How do you intend to expand?
We will create focus cities where we have 30, 45, 50 flights a day, like Baltimore, Chicago's Midway Airport, Indianapolis.
What about the Tampa market?
Tampa is a strong business market for us. It has leisure travel, too. We consider Tampa and Sarasota separate markets, and we will continue to serve them both.
Do you expect to expand with international service?
We were going to fly between Tampa [and Atlanta] and Cozumel, Mexico, but last year's hurricanes wiped out the hotels in Mexico, and we did not start the service. We won't be expanding internationally in 2006 or 2007.
We want to keep it simple. When you fly internationally, you have to deal with immigration, currency and language differences. If we keep things simple, we keep them cost effective.
Do you anticipate creating a second hub like Atlanta, where you schedule about 230 daily flights?
No, there's never going to be another Atlanta, not for us, not for anybody. Hubs are staked out.
How is the winter holiday season shaping up?
Advance bookings for November and December look pretty normal compared with a year ago. It's going to be a good holiday season.
How healthy is the industry, considering factors it can control?
We are in the best supply and demand situation the industry has been [in] in seven or eight years [with no airline adding large amounts of capacity, which in turns leads to lower fares to fill seats]. So far no one wants to upset the apple cart.
American Airlines has held back. Northwest is holding the line. Continental is growing a little but is not out of hand. We are growing, but we are so small that it is a small percentage industrywide.
For the first time, we are getting help to save ourselves from ourselves. No new airliners [beyond those already ordered] are available. All the new ones [Boeing and Airbus] are going to Europe and China.
Reporter Ted Jackovics can be reached at (813) 259-7817.
..wondering if Daytona Beach is on the Horizon....???