Low airfares sending ticket sales sky high

Tuesday, June 1, 2004

PULSE: Edward D. Murphy

Independence Air seems to be off to a flying start, at least in Portland.

The low-fare carrier doesn't actually begin flying in and out of Maine until later this month, but it has already started selling tickets. And in Portland, people seem to be snatching them up at a healthy clip.

Portland, either as a destination or a starting point, accounted for more ticket sales than any of the other 34 spokes on the airline's wheel during the first week of sales. Rick DeLisi, the company's director of communications, said the sales figures exclude Dulles International Airport outside Washington, D.C. As Independence Air's hub, Dulles will have hundreds of daily flights.

DeLisi made the rounds in Portland last week, but declined to offer specific numbers on the sales or say who ranked second or third behind Portland. But he speculated that there are two factors behind the sales: Independence Air's high profile as the first low-fare carrier to serve Portland and the airline's June 23 launch in Maine, coinciding with the beginning of the summer tourism season.

While low-fare carriers are no longer novel - airlines such as JetBlue and Southwest are firmly entrenched, while United and Delta have begun their own low-fare operations - Independence Air is taking a slightly different tack.

Most low-fare carriers are a version of Wal-Mart in the sky: What revenues they sacrifice by cutting prices, they make up in volume.

A full 150- or 200-seat plane, even at low fares, is at least as profitable as a half-filled one at higher fares. But Independence will try to make a go of it by selling cut-rate tickets for flights on its 87-plane fleet of 50-seat regional jets.

Those smaller jets aren't that much cheaper to operate. However, Independence is banking on a system with a high number of relatively short flights - the 1 hour, 40 minute flight to Dulles from Portland is one of the airline's longer legs - combined with quick turnaround times to keep those planes going about 11 hours a day, two hours longer than the industry standard.

That means another planeload of customers a day for each jet, resulting in lower costs. And reduced expenses allow for fares to Dulles of $69 to $136 each way, depending on when the tickets are purchased. Major carriers charge about $180 and up on their cheapest round trips to Dulles, which usually require an overnight Saturday stay.

Independence should appeal to both business and leisure travelers, he said. Business travelers typically care about schedules, he noted, and Independence will offer six round trips to the Dulles hub daily. DeLisi contrasted that with other low-fare airlines, which - with larger planes - would probably bring in only two or three flights daily to a market such as Portland.

"That's really not much of a schedule," he said. "We'll have a very solid product by Day 1."

DeLisi expects Independence Air to become more attractive to customers as it expands its service area this fall. Independence now concentrates on the East Coast, with a few flights into the Midwest as far as Chicago.

The company expects to add West Coast destinations and probably another Florida stop - Independence now flies as far south as Jacksonville - beginning this fall. The airline has ordered four Airbus A319 jets, with 132 seats each, that are due to arrive in November; another 18 for next year; and five more in early 2006 to service those longer-haul flights.

"We have a pretty high degree of certainty that we're not going to stop at 27 (larger planes)," he said.

emailtag Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

|emurphy@pressherald.com|

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