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Flying high
By STEVE HUETTEL © St. Petersburg Times, published September 25, 2000 TAMPA -- Al Smith lives 8 miles from one of Florida's nicest, newest airports. Yet he hasn't flown out of Sarasota-Bradenton International in years. Instead, the FedEx deliveryman and his wife recently boarded a bus near the airport for a 90-minute ride to Tampa. Like 1-million other Manatee and Sarasota county residents each year, they choose Tampa International over their local airport so they can fly a low-fare carrier such as Southwest Airlines. About 1.5-million passengers used Sarasota-Bradenton International last year, about 88,000 fewer than in 1996, Southwest's first year in Tampa.
In the five years since Southwest landed in the Sunshine State, it has done nothing less than change the way people fly in Florida. When Southwest first arrived, most Floridians didn't know anything about the airline. Readers of business news were familiar with Southwest through the reputation of chief executive Herb Kelleher, who dressed as Elvis and regarded Wild Turkey and cigarettes as essential food groups. But Florida airport officials and other airlines knew a different side: the fierce competitor that slashed fares, ran with clockwork efficiency and quickly dominated short-haul markets. By the end of last year, travelers on average paid about 10 percent less to fly out of Tampa than they did in 1995. Fares paid by fliers at three other Southwest cities in Florida -- Orlando, Fort Lauderdale and Jacksonville -- fell 8 percent to 15 percent over that time. More people than ever jam the four airports, which grew at more than twice the annual rate of airports nationwide over the past five years. The flip side: Nearby airports are losing business. Airports in Daytona Beach and Melbourne suffer as locals drive to Orlando for cheaper fares. Miami International, still the state's largest hub thanks to connecting international passengers, fell behind Fort Lauderdale as the busiest airport for people flying to and from South Florida. Southwest dominates the airline market within the state, carrying nearly four of 10 people flying between Florida cities. Most of those passengers flew smaller, noisier turboprops operated by commuter airlines before Southwest arrived with its jet fleet. In the $10-billion business of flying people into and out of Florida, Southwest also has made headway against stiff competition. Southwest holds 9 percent of that market, ranking just behind No. 3 American Airlines. Top-ranked Delta Air Lines grew its share to 30 percent since Southwest's arrival, while No. 2 US Airways slipped slightly to 18 percent. Both Delta and US Airways created all-coach, low-fare carriers, Delta Express and MetroJet, to battle Southwest. Along with smaller bargain carriers such as JetBlue and AirTran, they have helped stimulate Florida travel. The healthy economy has undoubtedly played a part, providing people extra spending money for trips to the Sunshine State. But it was Southwest's invasion that lit the fire, airport officials and aviation professionals say. They call the changes in Florida's commercial aviation landscape easily the most significant since the federal government deregulated airlines more than 20 years ago. "Everywhere they go, they change the dynamics of the business," said Darryl Jenkins, director of the Aviation Institute at George Washington University. And the competitive landscape keeps shifting. On Sept. 14, Southwest said it will start flying to West Palm Beach in January. Delta Express and MetroJet are beefing up Florida flights. Gulfstream International, a commuter carrier that flies as the Continental Connection, is running instead of fighting. Last week, Gulfstream cut service inside Florida, including half of its eight daily turboprop flights on Southwest's busy Tampa-Fort Lauderdale route. * * * Like it or not, flying Southwest-style is a different airline experience. Passengers get plastic cards with numbers at the gate instead of seat reservations. They board in bursts of 30 and grab seats in a process some compare to a cattle stampede. Flight attendants in shorts and short-sleeve knit shirts offer friendly encouragement with comments such as, "You're just picking a seat for an hour, not your living room furniture." Southwest's quirky culture comes from its roots as a scrappy start-up that the big airlines tried to crush in the Texas dust. The airline was conceived on a cocktail napkin over drinks. Businessman Rollin King told Kelleher about Pacific Southwest Airlines, beloved by Californians for its cheap fares and casual style. Maybe a Texas clone could make it luring travelers between far-flung Texas cities out of their cars with bargain prices, King said. On the napkin, now enshrined at Southwest's headquarters, they mapped out a triangle with Dallas, Houston and San Antonio at the corners. After years of clearing legal hurdles thrown up by competitors, Southwest took off in 1971 with three planes. Keeping costs low was critical. Southwest flew its jets as much possible, developing ways to unload and reload people, bags and provisions -- peanuts and drinks -- in 20 minutes. Flight attendants wore hot pants and white boots. Playing on the name of its home airport, Love Field in Dallas, Southwest called snacks "love bites" and the planes "love machines." Originally hired by King as Southwest's attorney, Kelleher served briefly as interim president after Lamar Muse left in 1978 and took the job for good four years later. He gladly accepted the additional jobs of head cheerleader and poster boy for Southwest. Equipped with bandoleers holding airline-size bottles of Wild Turkey, he arm-wrestled an aviation company executive in an old Dallas wrestling arena for rights to the advertising slogan "Plane Smart." Kelleher still attends flight attendant graduations and loads bags on "Black Wednesday," the busy travel day before Thanksgiving. The antics disguised the fact that Southwest had a solid strategy and was becoming a force in the airline industry. Southwest spread across Texas and by 1982 had a foothold in Phoenix, Las Vegas and California's three biggest markets: Los Angeles, San Francisco and San Diego. Three years later, the airline went into Chicago and St. Louis. About the only region of America where Southwest wasn't flying by the early 1990s was the East Coast, the nation's busiest and most expensive airline market. After establishing a Baltimore beachhead in 1993, the airline set its eyes on Florida. * * * The Sunshine State looked like the old Texas Triangle on a smaller scale, said Richard Sweet, Southwest's senior director of marketing and sales. Florida has four major metropolitan areas -- South Florida, Tampa Bay, Orlando and Jacksonville -- large enough and far enough apart that people would pay a reasonable price to fly between them instead of driving. Southwest offered an introductory fare of $17 from Tampa to Fort Lauderdale (its average fare on that route at the end of last year was $56). In Southwest's first year, the number of annual passengers flying between the two cities jumped more than 50 percent to more than 330,000. Now, the number is pushing half-a-million. Commuter airlines initially could compete against Southwest for business travelers by offering more frequent flights. But Southwest has 11 flights a day between Tampa and Fort Lauderdale each way, a virtual air bridge between the state's two biggest metro areas. So when Michael Goldberg and two other executives of a Fort Lauderdale advertising company wrapped up their meeting at Raymond James Financial ahead of schedule on a recent Friday, they just went to Tampa International to catch an early flight home. "It's just one cup of coffee or two, and we get on the next one," said Goldberg, a partner in Harris, Drury Cohen. He carries a photocopy of the Southwest's Tampa-Fort Lauderdale schedule in his jacket pocket. Sweet says Southwest will keep building the number of flights throughout Florida as new planes become available. "The mix of leisure and business travelers makes it a perfect market, and a market that still has a long way to go," he said. "We're just scratching the surface." Southwest also expects to grab more passengers flying in and out of Florida. Following its strategy of avoiding overcrowded airports where planes sit at gates and on taxiways, Southwest has zeroed in on less-congested airports in the Northeast, a rich source of travelers to the Sunshine State. First, the airline ringed Boston with flights to Providence, R.I., and Manchester, N.H. Then Southwest took a bite of the huge metropolitan New York market by jumping into Islip, Long Island. The airline landed in Albany, N.Y., in May and starts serving Buffalo on Oct. 8. Jenkins, the George Washington professor, predicts the next target will be Allentown, Pa., close enough to threaten US Airways' Philadelphia hub. Naturally, Delta and US Airways aren't standing still. Delta Express and MetroJet have low operating costs, with crews earning less per flight and jets being flown more than at their mainline siblings. Delta and US Airways don't break out financials for their low-fare divisions but say both are earning money. Delta has successfully defended its turf flying people into and out of Florida. Delta Express wasn't the Silver Bullet, says Wayne Aaron, the airline's director of domestic network analysis. While Delta Express battles Southwest and MetroJet on 11 routes, Aaron said, Delta also has expanded full-service flights into Florida from its Atlanta hub and regional jets flights on Comair, a regional carrier owned by Delta. "We're fighting for Florida customers with a lot of different products," Aaron said. A case in point is the route from Tampa to New York's La Guardia International. The closest airport to Manhattan, La Guardia was traditionally an airport where airlines could reap premium fares as they do at Reagan Washington National just outside Washington, D.C. Perhaps in response to low-fare competition at other New York area airports, US Airways this month switched its full-service Tampa-to-La Guardia flights to all-coach MetroJet. Then, Delta announced mainline flights on the route in November, likely angling to pick off high-paying business fliers who want to upgrade into first class. * * * Fast-growing Florida airports struggle to keep up with the growth. Tampa International has started a new $110-million airside terminal with 14 gates five years ahead of schedule, director Louis Miller said. Throw in new car rental buildings, expanding bag claim areas and adding gates to another airside and the airport will spend a total of $400-million over the next five years, he said. Last week, Orlando unveiled a new 16-gate terminal -- seven for Southwest -- built at a cost of $130-million. Jacksonville opened a new 1,300-space economy parking lot and is building a 2,400-space garage. In all, the airport will spend $175-million for the extra parking, a terminal renovation and a concourse expansion to add six gates, spokesman Robert Peek said. "Southwest Airlines has changed the landscape of air travel in Jacksonville," he said. The landscape has changed for neighboring airports, too. But not for the better. Sarasota historically has lost passengers to Tampa. But the exodus has escalated since Southwest arrived, director Fred Piccolo said. He estimates about 40 percent of air travelers in Manatee and Sarasota counties fly from Tampa to save a few bucks. "It's a difficult scenario to compete against," said Piccolo, who recently offered to waive landing fees for airlines that bring new flights. "They save $50 or $60, but it costs that much to drive, pay tolls and parking. We try to get them to look at the entire cost." Piccolo's problem created a business opportunity for Doug and Jan Brown, owners of Sarasota-Tampa Express. Two years ago, the former charter bus operators smelled opportunity in all those Tampa-bound travelers. Their company runs seven daily trips to Tampa International. Only about 600 customers ride the coach each month and pay $20 one way, Jan Brown said. But the company earns extra money picking up bags lost by airlines at TIA and returning them to Sarasota customers. "We hang on during the (slow) summer, but we're doing okay," she said. "We think the business is going to grow." © 2006 • All Rights Reserved • St. Petersburg Times
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From the Times Business report
From the AP
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