Nashville Fills In Vacuum Left By AA

I>Nashville </I>- Music City is singing a very different air service tune these days as it works hard to remake itself as a base for origin and destination traffic, rather than just a hub center.

Specifically, Nashville is responding to American Airlines' decision over the past few years to scale back its operations, which at one point saw 140 American Airlines flights and 150 American Eagle commuter flights a day. Today, while American continues to have a presence, it operates only about 20 daily flights.

American Airlines spokesman Tim Smith said Nashville was a hub in the era "when we and the rest of the industry were losing billions of dollars. Some of the services out of Nashville were not profitable."

As a result of the pullout, passenger traffic declined from more than 10 million to just 7.6 million in 1995 (see chart, Page 32). But officials from the city and the Metropolitan Nashville Airport Authority are very upbeat because of a swarm of new carriers that have moved in, coupled with the rapid growth of others already here: Almost all of the airlines serving Nashville have expanded service within the past 18 months. In fact, the increased overall traffic originating and departing from Nashville means more hotel nights and more car rentals for the city.

"In the last 18 months to two years, the whole complexion of the airport has changed from being a connecting hub airport to a rapidly growing origin and destination market," said Carole Martin-Willis, director of communications and marketing for the airport. O&D traffic has grown almost 30 percent in the past 18 months, she said, and the airport is building a new $33 million parking lot to accommodate demand.

For business travelers, the change means more options as carriers and lower fares gravitate to Nashville. The new Delta Express made its debut here Oct. 1, flying to Orlando and going head to head with Southwest on that route. "Frequencies are not what we would like to be," Martin-Willis said, "but all of our major domestic jet markets have been picked up." American's London service has not been replaced, however.

But Peter Buchheit, travel manager for Black & Decker in Towson, Md., said that airline hubs are a complex issue and represent mixed results for corporations, with higher prices in some cases and lower in others. He added that American's pullback might be an indication of more airline service cutbacks to come.

Looking back on American's decision to "de-hub" Nashville, Martin-Willis said, "we were disappointed, but it was a business decision on their part. They were a high-cost carrier, and were not competing well in this market against lower-fare competitors. But when they announced they were pulling out, we got calls the next day from airlines to talk about coming into the city."

Southwest Airlines has seen the most rapid growth in the wake of American's phase-out. Spokeswoman Kristie Kerr said the airline had 20 flights to four non-stop destinations as recently as July 1995; as of Jan. 15, 1997, it will offer 44 non-stop flights to 14 destinations. On Oct. 27, Southwest is adding a daily non-stop to Providence, and on Jan. 15 it will add three non-stops to Jacksonville.

"American created an opportunity for us," Kerr said. "This is a growing community with a growing business market, and the non-stop service we offer is critical for the business traveler."

Another low-cost carrier new to Nashville is Western Pacific, which entered the market last February with a daily flight to Colorado Springs and with connections all over the west.

Local boosters say airlines are simply responding to Nashville's economy, one of the fastest-growing in the country, with an unemployment rate of just over 3 percent and with a base that goes well beyond its highly visible entertainment industry to include health care, printing and auto manufacturing. Opryland, the massive convention hotel here, is typical of why substantial air service is important to Nashville.

Opryland spokesman Tom Adkinson said the city as a whole "has not been hurt by American's withdrawal. It looked bad on paper, but the competitive market reacted. The demise of American has allowed others to flourish."

In retrospect, he said, "we had concerns about American's departure, but they didn't materialize. For instance, when American stopped flying to National Airport in Washington, USAir came in two days later."

And even American claims to have faith in Nashville's future as a solid market. "We still operate 23 flights a day out of Nashville, more service than in other non-hub cities, and we will stay at about that level," said American's Smith.

American now offers service to Dallas/Fort Worth, Chicago, New York, Los Angeles and Miami. The London service was terminated, explained Smith, because "we had good leisure business coming into Nashville but not enough of a business-leisure mix to make it profitable."

Also crucial for corporate travelers, said Martin-Willis, is that commuter service is being redeveloped.

Regional carrier Corporate Express is expected to begin service in December to Knoxville and the Tri-Cities-Kingsport, Bristol and Johnson City.

The airline also has plans to extend service to markets out of state in the near future. According to Corporate Express president Chuck Howell, the carrier will start with two J32 aircraft, the same used by American Eagle.