Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

http://www.airportbusiness.com....jsp?siteSection=3&id=5254

It's too bad for the folks up there, especially in Akron. AKC was shaping up to be a nice little low-fare airport. But this also sheds some light on why the new FL routes here didn't include LAS. And it's the same argument I was making in stlgph's thread about AA service to LGA - there might be seat demand (FL's loads were >80% AKC-LAS), but if the demand isn't there at profitable fare levels, then it just doesn't make sense. Kudos to FL for running their business this way - dropping routes that lose money rather than keeping them for other reasons.

Site Admin

Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

Were they not turning a profit on the 2 routes that were dropped. (Flint & Akron)?

Or was this a case where they wanted the equipment for higher yield routes out of IND? I think this was clearly an equipment shift to IND given the timing of the route drop and the addition here.

I think they would see loads near 100% out of IND. From what I've seen NW just about always sells out on the route. Probably why NW never dropped it. They dropped PHX but not LAS for a reason I think. They may not make as much money per seat but they sell alot of seats. Nearly 1200 people a day travel that route from IND but there are only 3 nonstop flights.

What AirTran might do is wait until they have added a few more east coast markets before adding LAS. This would allow them to ensure full jets to LAS by using IND O/D and filling the remaining few seats with connections from the east coast.

But remember that NW has gutted schedules from non hub cities. They dropped some unsuccessful routes from IND. It seems LAS is doing fine. I would still keep it at the top of the short list of future AirTran routes.

Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

The article clearly says that they were losing money on the routes DESPITE high loads. And this has been FL's motif - they drop money-losing routes quickly, and they generally take the stand that every route has to be profitable or it gets dropped.

It may very well be that FL is using these aircraft for the new IND-LAX/SFO routes. But maybe they are adding the IND routes BECAUSE they were dropping the AKC-LAS and FNT-LAS routes. Another interesting note is that these were the only n/s LAS service from these cities. Imagine FL's analysis of IND-LAS when there are already two carriers providing n/s service. Even if they could achieve high load factors, the fares are low, so it would be tough to make money. At the very least, LAS isn't the first destination they would expand to.

Site Admin

Joined: 15 Jun 2005
Posts: 2316
Location: Indianapolis, IN

What if I told you that fares to LAX were lower than LAS? I've checked NW's fares to both markets and the norm is that LAX is cheaper. The tickets can be quite a bit cheaper at times. It would seem LAX is the lower yield market than LAS. With that being the case I would see no reason that AirTran would do 2x to LAX and not put at least 1x into LAS. Just my opinion.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

I do find it interesting that AirTran wasn't pulling a profit on the route and they were the only nonstop carrier. Also, AirTran traditionally seems to charge higher fares for nonstop flights versus those with a connection.

I wonder who was pricing them off of the route?

Also, think of it this way, if they aren't making money from Akron/Canton to Las Vegas and Continental and Southwest are offering the same fares from Cleveland, then this, by definition of association, is a money losing route for these carriers as well.

Site Admin

Joined: 17 Jun 2005
Posts: 949
Location: Carmel, IN

Faremeasure shows average Los Angeles fares (inclusive of LAX, SNA, and a couple others) at 143.22. Average LAS fares 116.19. That $27 difference can make a big impact on an airline's decision. Also, I think I read somewhere that LAS's landing fees, gate and counter rentals, etc. are pretty high compared to LAX. Don't know for sure, but it seems logical that if fares to LAS are low, and costs are high, when compared to LAX - then at the least, FL'd try LAX where they'd be the second n/s airline from IND before they'd jump into the LAS fray and be the third.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

I know Las Vegas has a landing rate in the $3 per 1,000 pound of weight range and a cost to board per passenger in the neighborhood of the middle $5 range. Not too sure what the LAX rates are. Since I am without a constant internet connection until next week per my vacation and moving apartments, someone else is gonna have to do the research on LAX.

Member

Joined: 27 Jun 2005
Posts: 333
Location: St. Louis, MO

Well, if I had my own airline, and Southwest and Northwest were both charging $200 roundtrip and barely breaking even yet only offering enough seats to cover say 35% of the daily market, I would take a gamble on charging $225 roundtrip, making that extra $25 knowing that people would probably book anyway for the sake of it being a nonstop.

AA makes a profit when they offer $150 roundtrip from STL to LAS, which they do quite often, but more often than not they do $250 or so sometimes even $300 roundtrip from STL to LAS and the people here take it because it is a nonstop. You can imagine how much more revenue $150 brings on a 757. This AA 757 model LAS-STL-LAS-STL-LAS seems to work very well for them. If only other airlines are listening....