Carrier A Legend In The Making
<B>Carrier A Legend In The Making</B>
By David Jonas
<I>Dallas</I> - Already well-known for sidestepping a legal barrage from American Airlines and the city of Ft. Worth, Legend Airlines next week takes to the skies from its base at Love Field. The all-business-class startup on Leap Day will launch service to Los Angeles and Washington Dulles, followed by Las Vegas in March, and will offer a competitive and more convenient long-haul option to the major carriers at Dallas/Ft. Worth International. However, now that the door has been opened for long-haul service out of Love, other carriers, including Legend's archrival American, promptly responded by announcing their own flights.
"I am a spontaneous business traveler, and I get hosed pretty good when I fly out of DFW," said T. Allan McArtor, Legend's CEO. "You don't get a very good value there. The alternative is Legend at Love Field." McArtor brings along impressive credentials, including former head of the Federal Aviation Administration and leader of Federal Express's global airline operation.
Legend's route system initially will include five daily flights to Los Angeles, four to Washington Dulles and at least one to Las Vegas. According to vice president of sales Carol Roudebush, the fares will be extremely aggressive, including a seven-day roundtrip advance purchase fare to Los Angeles of $1,338 and three-day advance purchase of $1,516, compared with the $1,784 walk-up fare currently available in the market. Likewise, a seven-day roundtrip advance purchase fare to Washington is $1,148 and a three-day advance purchase is $1,301, compared with the $1,530 walk-up fare offered by others.
"Though all fares are nonrefundable, we think they appeal to the business traveler because no weekend stay is required," Roudebush said. "We expect these fares to be matched, but we are the one bringing them to the market."
Now that routes have been announced, the carrier will begin discussions with scores of key corporations in Dallas, Los Angeles and Washington. "We have identified and soon will approach about 75 potential corporate clients in those markets and eventually have discount programs in place," Roudebush said, noting that both volume and market share considerations will be explored.
"Many corporations are getting wire-brushed pretty good by our competitors at DFW, and some already have contacted us," McArtor said.
As the year progresses, Legend will work to get up to speed in several areas, namely distribution. It expects to offer electronic ticketing through Sabre no later than June 30, and through Galileo and Worldspan by the summer. A corporate booking product through the carrier's Web site (www.legendairlines.com) also is on the 'to do' list for 2000.
"We'll try to be as technologically advanced as possible and the Web site will be a major source of ticket sales," McArtor said, noting that Legend already employs 10 or 12 Sabre products. "We have learned that you need to manage your information as much as the physical aspects." Legend will adhere to the industrywide 5 percent and $50 travel agency commission caps, but offer a flat $10 per ticket payment to online travel agencies.
The Love Field location is a big draw for business travelers as it is located much closer to the Dallas city center than DFW. Lisa Bauer, senior vice president of marketing and customer service, said a flight from Love Field will shave an hour off the typical businessperson's commute. "Our aim is to reduce stress for the business traveler by offering closed-in garage parking--just 40 feet from the terminal--as well as garage toll tags and even valet parking," she said. And because Love Field is much smaller and less congested than DFW, taxi time to the runway is greatly decreased while on-time performance should be excellent, by industry standards.
Because there was virtually no gate space available at the existing Love Field terminal, Legend opted to build its own executive facility. It features club-like seating, modem connections, telephones, a full service business center and a conference room.
The fleet currently consists of five reconfigured DC-9s with 56 leather seats arranged four abreast. Each seat offers laptop outlets, inflight phones, 46 inches of pitch and live 24-channel television programming furnished by DirectTV. In fact, Legend, along with JetBlue, is the launch customer for the live broadcast system. Another perk for business travelers is the four-bag limit for carry-ons.
Going with a 56-seat configuration allowed Legend to take advantage of a provision in the Wright Amendment. While the legislation overall prevents carriers from operating long-haul routes from Love Field, the provision states that 56-seat aircraft and smaller can serve any destination nonstop. Southwest, for example, only can operate flights from Love Field to cities within Texas and its contiguous states (Arkansas, Louisiana, New Mexico and Oklahoma) because it operates an all-737 fleet, each with at least 122 seats. Despite adhering to the letter of federal law, Legend was brought to court by American, the dominant player at DFW. However, the appeals court recently upheld the Department of Transportation's ruling that Legend can serve any destination from Love Field.
With its preventive legal efforts defeated, American quickly announced the "first phase" of its own long-haul Love Field flights as part of a "vigorously aggressive" strategy. Beginning May 1, the carrier will operate reconfigured Fokker 100 jets with 56 first class seats to and from Chicago and Los Angeles, respectively four and five times daily. Reconfigured MD80 aircraft will be used for those flights later in the year.
"We have said all along that if this issue pans out in a way where the airport is opened to long-haul service, then American will be there. Therefore, within hours of the appeals court affirming an airline's right to fly long-haul from Love, we announced our own flights," said AA spokesman Al Becker. "It is a competitive issue, though not directed exclusively at Legend. We have a responsibility to our customers and ourselves to be competitive in the marketplace, though we continue to fervently believe that long-haul service should be out of DFW."
Nevertheless, AA felt it important enough to move Dave Kennedy, currently senior vice president of operations at American Eagle, on to a new "special assignment," vice president for Love Field operations.
Should American increase service at Love Field, its business travelers certainly would be tempted to use the more convenient facility. While such a scenario would give AA a foothold against a new competitor, it contradicts AA's focus on DFW as its primary hub. It also will raise an eyebrow or two at other airlines that may look at Love Field as an excellent opportunity to grab a share of Dallas business travelers.
"American now has a huge consistency issue that will confuse the public," Bauer said. "They will be offering the same fare from here as they do from DFW, where the traveler might be stuck in coach in a middle seat." However, she said Legend would embrace any other carriers entering Love Field because "this is not about monopolization and the consumer should get to decide from several options." Of course, a lack of gate space will limit the ability of other carriers to operate from Love Field.
Continental Express, which already serves Houston from Love Field, also received final approval for long-haul flights. Four daily flights to its Cleveland hub aboard 50-seat Embraer regional jets will commence June 1. The regional subsidiary also said it will bump up frequencies to Houston to 13 daily.
Legend, emphasizing frequency over capacity, will add new routes and planes based on demand from business travelers. Armed with the authority and equipment to fly to major business markets from Love Field, and with little room at the airport for other new entrants, Legend has become a formidable thorn in American's side.
"The whole idea is to get into AA's biggest markets and all the major cities in the country," McArtor said. "There is a very unique niche here for Legend to develop and defend Love Field.