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Landing in a niche

St. Petersburg- Clearwater International Airport is enjoying a growth spurt as a home to low-fare and charter carriers.

By STEVE HUETTEL
Published October 6, 2003

photo
[Times photo: Cherie Diez]
Passengers arrive at St. Petersburg-Clearwater International Airport on a Southeast Airlines flight from Newark.

CLEARWATER - Camille Speare had to take an extra day off from work and endure jokes from family members about flying little-known Southeast Airlines. No, it's not Southwest, Speare insisted, and no, she won't be flying in a propeller plane.

But nothing could spoil her delight over the price: $59 each way between St. Petersburg-Clearwater International Airport and Newburgh, N.Y., about 50 miles north of New York City.

"This is one sweet deal, an unheard-of deal," said Speare, who lives in Clearwater and was visiting relatives north of Newburgh. Was she worried flying the tiny Largo-based carrier for the first time? "No, just wing it," she said.

The small airport here has long lived in the shadow of Tampa International Airport (TIA), where giants such as Delta, Southwest and US Airways fly. American Airlines, the last big-name carrier at St. Petersburg-Clearwater International, pulled out in 1989 to consolidate its operations at TIA.

That left the airport as home to a host of small, off-brand airlines that tended to come and go.

Some moved on to Tampa, with mixed success. Others tested the local market briefly and gave up. One called JetTrain announced plans to fly into St. Petersburg-Clearwater International in 1996 and went under two weeks later, before its wheels ever touched down in Pinellas County.

The airport simply isn't going to attract a top-tier carrier, says interim director Thomas Jewsbury. But with lower airline fees and less congestion than TIA, St. Petersburg-Clearwater International is attractive to new low-fare and charter carriers.

With fewer than 2,700 passengers arriving and departing on an average day, the airport remains small potatoes compared to Tampa International, which handles 16 times as many passengers. Still, St. Petersburg-Clearwater International is enjoying a growth spurt as its top two airlines expand and a new low-fare carrier arrives today.

The dominant player is ATA, the nation's 10th-largest airline with 64 jets and 7,200 employees. ATA carries two out of three passengers at the airport and makes daily nonstop flights to Las Vegas and to its hubs in Indianapolis and Chicago's Midway Airport.

No. 2 is homegrown Southeast. The charter airline was launched 10 years ago as Sun Jet International Airlines, sold and went bankrupt before the original owner bought the assets back and relaunched it under the new name in 1998. Southeast has scheduled flights to Newburgh, Newark, N.J. and Allentown, Pa. On Friday, it will add Columbus, Ohio.

The newcomer, USA 3000, Airlines begins a limited schedule with nonstops to Chicago's O'Hare International, Newark and Cleveland and plans to add four more cities. Schedules now show the two-year-old airline will fly from St. Petersburg-Clearwater only through April. Airlines officials insist USA 3000 will fly all but two destinations year-round.

All three airlines cater to leisure travelers looking for the cheapest price. Advertising for Southeast and USA 3000 prominently display $59 one-way fares to Newark (not including taxes and fees).

Customers also can save money on incidentals. Big-name airlines such as Delta, American and US Airways charge $100 to change a nonrefundable ticket, compared to $50 at ATA and $30 at USA 3000 and $25 at Southeast.

St. Petersburg-Clearwater International ended free parking last year. But it is cheap: $5 a day in the long-term lot across from the terminal. That's half the cost of Tampa International's parking garage and $2 less than the daily rate for the bigger airport's remote lot.

But airline experts warn that the cheapest deal isn't always the best deal, particularly if you're on a tight schedule.

Weather or mechanical problems create huge headaches for passengers flying airlines with a handful of planes and small route networks. An American or Delta can usually bring down another plane or reroute travelers through Dallas if Chicago is snowed in.

Southeast with eight jets or USA 3000 with six might not be able to do that, says Bill McGee, a travel columnist with USAToday.com and consultant to Consumer Web Watch, which reports on the accuracy of information on the Web.

"When something goes wrong, it goes really, really wrong," says McGee. "The problem just dominoes."

His advice: seriously consider a bigger airline if you absolutely, positively need to be somewhere - like a wedding or work - the same day you're flying or early the next day.

Infrequent flights and spotty schedules also can complicate travel plans. Neither Southeast nor USA 3000 has daily flights to any destination from St. Petersburg-Clearwater International.

That's why Speare, the Clearwater woman thrilled with her cheap ticket, took off from work on a Friday to fly Southeast. She wanted to go on Saturday, but the airline flies to Newburgh only on Sunday, Monday, Thursday and Friday.

USA 3000's schedule still is more perplexing. For example, the airline will fly to Cleveland and back on Mondays starting Oct. 13. Those flights stop in December, when USA 3000 begins flying on Tuesdays, Wednesdays and Thursdays.

Another oddity: nearly all the airline's St. Petersburg-Clearwater departures take off after 7 p.m., with most arriving well after 10 p.m. local time. None take off before noon.

Because Southeast operates as a "public charter," passengers don't have the same rights as they do on a regular scheduled carrier.

Public charters can cancel a trip up to 10 days before departure. Or they can put passengers on another airline's flight, even if isn't nonstop or requires changing planes.

Southeast cancels only a tiny fraction of flights, said spokesman Scott Bacon. The airline keeps a reserve plane in Florida in case of unexpected mechanical problems and will buy tickets on other carriers so passengers aren't stranded.

"If you routinely make a practice of making changes and cancellations . . . you won't be in business long," he said. "You see more cancellations on other carriers."

Southeast apparently isn't lacking for customers. Bacon said the airline filled 89 percent of its seats in July and August - higher than almost any other carrier.

Here's a rundown on the two biggest carriers at St. Petersburg-Clearwater International and the newest competitor:

ATA

The Indianapolis-based airline grew from humble roots. Yet despite its low profile, ATA is bigger than trendy low-fare upstarts such as JetBlue and AirTran.

In 1972, Latvian-born George Mikelsons started a travel club called Ambassadair that flew Midwesterners to sunny vacation spots in Florida, Mexico and the Carribbean. He created ATA in the early 1980s as a charter airline, flying vacationing tour groups and U.S. troops under government contract.

ATA began its first scheduled flights - from Indianapolis to Fort Myers - in 1986. The airline expanded the scheduled flights quietly to avoid attracting attention from big competitors.

Now, ATA is in the big leagues by most any measure. The airline is the biggest carrier at Chicago's Midway Airport and No. 3 overall in the Chicago market. ATA flies coast-to-coast nonstop, including a route from St. Petersburg to Los Angeles, with connections to Hawaii.

But the airline has struggled with a cash crunch. ATA ordered 50 new Boeing aircraft at a cost of $2.5-billion in 2000. The first 737-800 was delivered four months before the Sept. 11 terrorist attacks, which sent the airline industry into financial crisis.

ATA was stuck with big debt payments and more seats to sell in a time of weak demand and cheap ticket prices. That ATA was expanding into new cities didn't help the bottom line, said Mikelsons, who returned from retirement as chief executive last summer.

"When you do that, it takes a while to become known," he said, "and you find yourself selling nothing but introductory fares at ridiculous prices."

ATA warned investors in August that it might file for bankruptcy unless it received concessions from creditors. Boeing will defer delivery of seven planes, and leasing companies tentatively agreed to delay payments. ATA is asking bondholders to help restructure its debt.

Mikelsons was encouraged by a $43.3-million profit last quarter and signs that air travel is starting to pick up. Because ATA has always focused on holding down costs, the airline is in far better shape than traditional, hub-and-spoke carriers, he said.

"They certainly have a bigger problem than we do," Mikelsons said. "If you're profitable, you can fix a cash crunch. If not, how the heck do you fix (that) or anything else?"

SOUTHEAST AIRLINES

As Southeast celebrates its 10th anniversary this morning by handing out $10 bills to passengers on the 8 o'clock flight to Newark, founder Thomas Kolfenbach can look back on a colorful decade.

His airline, originally called Sun Jet International, did well as a small hybrid between a charter operator flying tour company customers and a scheduled carrier selling flights direct to the public.

A Michigan homebuilder bought Sun Jet, hired an airline veteran with grand plans to expand the airline, then gave it up when red ink forced the airline into bankruptcy court. Kolfenbach bought back the assets and relaunched the airline in 1998 as Southeast.

The charter airline carried some interesting passengers: prisoners in custody of the U.S. Marshals Service, the White House press corps and gamblers headed for Atlantic City, N.J., and Biloxi, Miss.

But the business of leasing planes and crews got too chancy, Kolfenbach said, especially as tour operators cut back after the terrorist attacks. "I figured if we were going to bleed, we might as well . . . control our own destiny," he said.

Southeast shifted its business almost entirely to selling scheduled flights to the public, mostly vacationers traveling from the Northeast to Florida.

His strategy is to stay clear of the major airlines by flying to cities on the edge of metropolitan areas, such as Newburgh and Allentown, Pa. He also likes smaller airports with lower costs, like St. Petersburg-Clearwater and Sanford International outside Orlando.

Southeast generally flies routes no longer than 21/2 hours. That's as far as its planes can fly profitably for the price his passengers will pay, Kolfenbach says.

"I don't care if people are flying from here to San Francisco - they don't think it should cost any more than $99 (each way)," he says. "I can't get $1 more even if there's an extra half hour of flying."

USA 3000

While Southeast is moving out of the business of leasing planes to tour companies, USA 3000 owes its existence to that line of work.

The airline is owned by the family that controls Apple Vacations, the nation's second-largest tour package operator. Apple leases about half of USA 3000's flights to get customers to their vacations.

"The reality is if there weren't an Apple Vacations, there wouldn't be a USA 3000 Airlines," says Trevor Sadler, an airline spokesman.

That shouldn't make a difference to passengers who buy tickets on the airline's local flights, he said. Apple doesn't put its customers on USA 3000's scheduled flights, Sadler said.

But the relationship probably explains why the airline's local flights will leave so late: USA 3000's first priority is meeting Apple's schedule, said aviation consultant Stuart Klaskin of Klaskin, Kushner & Co. in Coral Gables. "They're doing Apple Vacation's bidding," he says.

Sadler says the evening departures won't appeal to some customers. But with fares starting at $59 one-way, bargain hunters might be flexible in their travel plans.

"We must have a service we can economically justify," Sadler said. "If time is of great convenience to you . . . there certainly are alteratives. But if you are budget-conscious, you may be pleased to accept the service."

Customers also might be surprised by the amenities, including meals on every flight and current in-flight movies on trips over two hours, Sadler said.

Apple Vacations still leases aircraft from other charter carriers and buys blocks of seats from major airlines, says Scott Berman, a partner with PriceWaterhouseCooper's hospitality and leisure consulting business in Miami.

The company's owners started USA 3000, with its own planes, to guarantee Apple a reliable source of flights for customers at the right price , he said.

"Getting (commercial airline) seats to Florida in January, February and March is costly," Berman said. "It's all about control - control of seats at a price where they can compete."

-Steve Huettel can be reached at huettel@sptimes.com or 813 226-3384.

Aircraft: 64 jets, 17 turbo-prop

Employees: 7,200

Cities served: 47

Non-stop from St. Petersburg-Clearwater International Airport: Chicago Midway; Indianapolis; Las Vegas; Los Angeles.

SOUTHEAST AIRLINES

Aircraft: 8 jets

Employees: 320

Cities served: 8

Non-stop from St. Petersburg-Clearwater: Newark, N.J.; Newburgh, N.Y.; Allentown. Pa.; Columbus, Ohio (starts Oct. 10).

USA 3000

Aircraft: 6 jets

Employees: 330

Daily flights (average): 24

Cities served: 39

Non-stop from St. Petersburg-Clearwater: Chicago O'Hare; Newark, N.J. (starts Oct. 9); Cleveland (starts Oct. 13); Detroit (starts Nov. 4); Pittsburgh (starts Dec. 21); Milwaukee and Philadelphia (start Dec. 22).

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