AirTran Builds Corporate Customer Base

<B> AirTran Builds Corporate Customer Base</B>

By David Jonas


<I>Atlanta</I> - With a load factor in the mid-60s and hundreds of new corporate accounts, AirTran Airlines is showing signs of strength. Add to that new service to Newark kicking in July 1 and brand new Boeing 717s debuting this fall, and the carrier is optimistic about its future.

"We have about 850 corporate accounts, compared with roughly 300 in January," said chairman and CEO Joe Leonard. With that base in place, the carrier now plans to "start to double back to make sure we're getting volume" from the accounts.

The jump in corporate customers has resulted in business class load factors above 50 percent, a dramatic increase from the mid-20s reported in January. Business travelers make up about 40 percent of AirTran's passengers.

Those business travelers this fall will be sitting in brand new planes as the carrier becomes the launch customer for Boeing's new 717 aircraft. Leonard said the plane, which adds 11 seats at basically the same overhead cost, will become the main fleet type in coming years.

Meanwhile, with DOT revamping its predatory pricing, Leonard said there is evidence that Northwest and United "are backing off a bit" from their efforts to squelch new competition. But "on the other hand, we've seen Delta apply more pressure than ever before. After we announced our first quarter earnings, Delta matched us at LaGuardia and at Boston, two places where they never had before. And when we announced that we were coming to Newark, they increased capacity 78 percent."

For the remainder of 1999, AirTran is focusing on building new distribution channels, including a Price-line.com-type discounted Internet offering, and new travel agency and airline alliances. "By the end of the year, we should be attractive to a lot of people, especially foreign carriers coming to Atlanta," Leonard said.