Low-cost airlines get a lift in fiscally turbulent times By Jayne Clark, USA TODAY ATLANTA =97 When Delta rolled out its first reconfigured aircraft for Song,= =20 the airline's new low-fare subsidiary last week, the message conveyed was=20 clear. And loud. Song's "house band" =97 Johnny and the Flourishes fronted= by=20 trumpet-blowing Song president John Selvaggio blasted Twist and Shout as a= =20 line of tambourine-wielding flight attendants gyrated on stage. Assorted=20 ramp workers and ticket agents mingled, eating ice cream floats, then made= =20 way for an impromptu conga line that snaked through the dank Hartsfield=20 airport hangar. Later, Selvaggio boarded the lime-green and white plane and= =20 posed for photographs, hoisting the airline's signature cocktail, the Song= =20 Sunrise, served in a plastic martini glass. Of course, whether travelers=20 primarily concerned with snagging a cheap airfare really care about an=20 airline's hipness quotient remains to be seen. But the fact is that=20 low-fare airlines are among the few rays of light in an industry clouded by= =20 financial crisis. Four of the six U.S. low-fares (excluding Song, which has no track record)= =20 =97 Southwest, JetBlue, AirTran and Frontier =97 turned a profit in at least= =20 one of the past two years, a feat that none of the "Big Six" carriers=20 (American, Continental, Delta, Northwest, United, and US Airways) achieved.= =20 And while the major airlines' share of domestic passengers has shrunk in=20 the past decade from 90% to about 70%, the low-fares have experienced=20 explosive growth and are ferrying about 20% of domestic passengers. During= =20 the same period, they've made tremendous inroads into the majors' turf. In= =20 the early 1990s, a mere 15% of their routes overlapped. Today, the overlap= =20 is 55%. Moreover, in a changing industry, not even the description=20 "low-fare" seems to fit. Analysts prefer the terms "alternative" or=20 "low-cost" airlines, referring to the way they conduct business rather than= =20 the prices they charge. Simply put: Because their operating costs are=20 lower, they can charge less and still make money. "We're in such a transition phase right now," says Joe Brancatelli, a=20 longtime industry watcher and creator of business travel Web site=20 JoeSentMe.com. "The old guys are going away, and a new generation of=20 carriers is coming up. It's hard to stick monikers on them." In fact, if=20 growth among the low-fare carriers continues at its present rate, in a=20 decade they will be transporting 40% of the nation's fliers, says analyst=20 Edmund Greenslet, publisher of the industry publication Airline Monitor.=20 Southwest Airlines, the pre-eminent low-fare success story and now the=20 nation's fourth largest airline in terms of passengers, could rank No. 1 in= =20 10 years. And JetBlue, the 3-year-old whiz kid of the low-fares, could=20 outrank Delta by 2020, he predicts. So it's not surprising that established airlines are getting on board with= =20 the low-fare concept, despite past failures. Indeed, United, US Airways,=20 Continental and even Delta have made previous unsuccessful attempts.=20 Nevertheless, bankrupt United Airlines has said that as part of its=20 reorganization plan it would establish a low-cost carrier. Virgin=20 Atlantic's Richard Branson is examining prospects for a low-cost U.S.=20 airline patterned after Virgin Blue, his Australian discount carrier.=20 Midwest Airlines (formerly Midwest Express) will launch a low-fare offshoot= =20 sometime in the third quarter. And on Tuesday, Delta launched Song with=20 service between New York's JFK airport and West Palm Beach, Fla. It will=20 gradually phase in flights between the northeast and other Florida vacation= =20 hotspots and Las Vegas, with a planned 144 daily departures on 28 routes by= =20 December. In shaping its identity, Song has borrowed from two of its would-be rivals,= =20 mixing the spunkiness of Southwest Airlines with the sophistication of=20 JetBlue. The start-up aims to distinguish itself with heavy doses of=20 panache and personality, courtesy of joke-cracking, game-playing flight=20 attendants, =E0 la Southwest. The former Delta flight attendants= "auditioned"=20 for their new jobs at Song and are referred to as "talent." Splashy=20 designer uniforms will be unveiled in the fall. The colorful seats are=20 leather. And the airline also will dish out in-flight perks (some for a=20 price), including seatback satellite television, =E0 la JetBlue. (The=20 entertainment options won't be available until October.) Like other=20 low-fare carriers, Song has adopted a simplified pricing structure. One-way= =20 fares will range from $79 to $299. But analysts note that the=20 distinguishing characteristic of a low-fare carrier isn't necessarily lower= =20 ticket prices. In an era of fare wars, every airline offers low fares under= =20 certain conditions. Indeed, the major airlines often match or undercut=20 their discount rivals' restricted, advance-purchase prices. It's when=20 travelers are buying a last-minute, unrestricted ticket that the key value= =20 of the low-cost airlines comes into play. For example, the walk-up fare for= =20 a round-trip flight between New York and Los Angeles on a major airline is= =20 more than $2,300. JetBlue's unrestricted fare is $600. "The big airlines match fares when they have to, but charge more when they= =20 think they have the passenger at their mercy. Increasingly, they don't,"=20 says Greenslet. "People know they have options." And that's thanks in large= =20 part to the Internet, which has enabled travelers to see clearly the=20 inequities of airline fare structures and in turn, helped propel the rise=20 of the low-cost carriers. Case in point: A last-minute speaker at a recent= =20 aviation conference attended by Greenslet was quoted a Washington-Los=20 Angeles fare of $2,200 on a major carrier. Southwest's last-minute fare was= =20 $400. Flying Southwest required a 45-minute drive to Baltimore and a stop=20 in Nashville, but the speaker deemed the cash savings worth the=20 inconvenience. Greenslet relayed the anecdote in a speech at the conference= =20 at which he voiced the frustration of many a business traveler who feel=20 gouged by such exorbitant fares. He startled the audience by bellowing from= =20 the podium: "I'm mad as hell and I'm not going to take it anymore!" A=20 rebellion is underway, he declared. Among other characteristics of the=20 low-cost carriers: They tend to impose fewer restrictions on their lowest fares, such as=20 Saturday-night stay requirements. Penalties for itinerary changes may be=20 more lenient. Southwest, for example, imposes no charge. Spirit allows name= =20 changes on tickets for a $25 fee. They tend to rely on point-to-point=20 service rather than the hub-and-spokes system favored by the majors. Their= =20 customers may have lower expectations and, consequently, are less likely to= =20 be disappointed. "Southwest is the pioneer of this, and they've done it=20 brilliantly," says David Field, Americas editor of Airline Business=20 magazine. "With Southwest, it's 'we're not going to give you very much, but= =20 we're going to tell jokes.' And with JetBlue, it's 'we're not going to give= =20 you much =97 maybe a little more (than Southwest) =97 but we're going to be= =20 cool and sophisticated about it.' " Indeed, as the financially troubled=20 majors cut back flights and services, they are in some respects becoming=20 more like low-fare carriers. "Essentially, what you're buying on an airline= =20 is the commodity of a seat," says Brancatelli. "And as the big guys offer=20 less, the guys who offer less as a concept don't look so bad." *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.carstt.com TnT Webdirectory: http://search.co.tt *********************************************************