=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/05/13/f= inancial0949EDT0043.DTL ---------------------------------------------------------------------- Monday, May 13, 2002 (AP) Big US air carriers fight JetBlue on long hauls SUSAN CAREY, The Wall Street Journal (05-13) 06:49 PDT (AP) -- LONG BEACH, Calif. -- Officials of Long Beach Airport used to beg airlin= es to fly here, to little avail. But suddenly, this sleepy terminal is prize turf in the showdown between aggressive low-fare carriers and the industry's giants. The fighting began after JetBlue Airways, a profitable low-fare startup, discovered this underused facility sitting 20 miles by car from nearly seven million Angelenos. Last year, JetBlue scooped up all 27 of the airport's idle jet departure slots. Now that all the slots are gone, AMR Corp.'s American Airlines -- until recently content with its four slots here -- suddenly wants to double its presence and launch service on a New York-to-Long Beach route JetBlue is serving. American is threatening to take legal action against the airport if it doesn't get what it wants. Another carrier with a sudden interest in Long Beach is Alaska Airlines, which abandoned the airport in 1994. Now, it wants three slots so it can fly to Seattle, home of parent Alaska Air Group Inc. Besides JetBlue's five daily departures, to New York's Kennedy airport and Washington's Dulles Airport, the only other passenger flights leaving Long Beach right now are American's four flights a day to Dallas, and America West Holding Corp.'s five flights a day to Phoenix. Sept. 11 rattled airlines, but they haven't lost their instinct for the fight. As low-fare carriers spread their wings on big carriers' last refuge, bread-and-butter long-haul routes, the big carriers are fighting back, offering matching flights and rock-bottom fares some think they can ill afford to charge. Southwest Airlines, the low-fare king, this past week announced plans for its first nonstop coast-to-coast route, offering two daily flights between Baltimore and Los Angeles, starting in September. UAL Corp.'s United Airlines, which already serves that route, vows it will be competitive on price. Recently, American and United each have added flights and lowered fares, notably to Oakland, Calif., on transcontinental routes served by two-year-old JetBlue. JetBlue says it isn't worried. "We can make money at these fares," says David Neeleman, the chief executive. "The question is whether (the big airlines) can." Long Beach's Art Deco terminal is an unlikely site for an airline brawl, if only because its administrators tried so hard for so many years to expand service -- up to the daily limit of 41 jet takeoffs allowed under strict noise rules. "There have been 20 slots available for years," says the airport's spokeswoman. Adds Beverly O'Neill, Long Beach mayor: "I went personally to Alaska, Southwest, Frontier, Aloha, Hawaiian. For one reason or another, they didn't show interest." Plus, airport officials tried as recently as last year to encourage American to add flights. Then along came JetBlue. Eager to add a West Coast base to its home at N= ew York's Kennedy airport, it decided Long Beach was perfect, and officials there couldn't say yes fast enough. "It was exactly what we wanted," says airport manager Chris Kunze. American says its decision to seek more slots and match JetBlue's routes to Kennedy had nothing to do with JetBlue's arrival, but was prompted by a desire to increase coast-to-coast flying from Kennedy. And, since Sept. 11, American says, some fliers prefer small airports, where security lines aren't as onerous. Alaska, too, says it has reasons other than JetBlue for asking in March = to return to Long Beach. The company says congestion at other southern California airports is hampering its growth in the region. A big point of contention for JetBlue's rivals is that JetBlue currently is using only five of the 27 slots it reserved and isn't bound to fill until May 2003. The airport bent its policy requiring airlines to make use of reserved slots within six months and gave JetBlue two years, based on the delivery schedule of new planes to the growing carrier. American, historically one of the industry's most aggressive competitors, has complained to the city of Long Beach that changing the policy and allowing JetBlue more time is discriminatory and stifles competition. But the policy is hardly ironclad; the airport previously has changed its slot-allocation rules three times. To resolve the dispute, the airport has granted American temporary use of four additional slots, and American already is selling seats on the new flights, two to Chicago and two to New York. The flights are set to start June 15. American vows it will make the temporary slots permanent somehow. As for Alaska, it may refuse the airport's offer of three temporary slot= s. "We don't want to start service in the fall and pull out in 2003," says a spokesman. Both Carriers have lodged administrative appeals with the airport manager, who last week denied American's request for permanent slots; Alaska's appeal is scheduled to be heard today. Last week, JetBlue added a new twist to the skirmish by notifying the airport it plans to accelerate its expansion and fill all the slots by October -- shortening the time American would have to use its temporary slots and blocking Alaska's plans to start, unless the airport revisits its noise rules and allows more flights. JetBlue will add a fourth Kennedy flight next month, nine more flights in August and 12 in October, the company said. It isn't saying where it will fly, but Mr. Neeleman has said it will primarily serve cities it already serves from New York. Route Tussle Daily flights: JFK to Long Beach * JetBlue: Up to four this June * American: Two starting this June Dulles to Oakland * JetBlue: Two started in May * United: Two started in May Source: the airlines =20 ---------------------------------------------------------------------- Copyright 2002 AP