A smaller bite to get up to the Big Apple
Airport says Delta's fare restructuring sparked competition
BY CHIP JONES
TIMES-DISPATCH STAFF WRITER Dec 1, 2004
Delta Air Lines' local fare experiment is changing the chemistry of flying from Richmond to New York City.
A study of fares for flights to LaGuardia and Newark airports revealed stiff competition by US Airways and Continental, with round-trip tickets going for as low as $188 late last week.
The fare information was part of a staff report yesterday to the Capital Region Airport Commission.
Richmond-New York business fares leveled off Monday at $455, but airport officials said they were still markedly lower than the $1,000-plus prices charged in the fall.
"Richmond for the first time is seeing competitive fares at some of its markets," said Jon Mathiasen, Richmond International Airport's chief executive and president. "It's just the start."
More evidence of fare relief to New York appeared yesterday. US Airways spokeswoman Amy Kudwa said the airline is selling round-trip tickets between Richmond and LaGuardia Airport for as low as $118 as part of a systemwide fare sale that ends Friday.
And last week, she said, "US Airways did match the [Delta] initiative in the Richmond marketplace" with its walk-up price of $418.
Virginia-based US Airways, with eight flights a day, has the most flights to New York, the No. 1 destination from Richmond. Continental has five daily flights to Newark Liberty International Airport, and Delta has three a day to LaGuardia.
The price-jockeying was welcome news for the airport commission, which has made lowering air fares its top priority. Members of the regional governing board quizzed Mathiasen about marketing plans, data collection and other ramifications of Delta's fare restructuring.
The Atlanta-based carrier, which had nearly 29 percent of the local passenger base in October, announced Nov. 16 that it was dropping business and leisure fares to nine key cities, including New York and Atlanta.
The announcement followed an intense lobbying effort by Mathiasen and the Greater Richmond Chamber of Commerce. About 15 area corporations have pledged to support Delta's fare initiative.
The airline took out a full-page ad in yesterday's Times-Dispatch declaring "Delta's doing something exciting in Richmond," with sample fares to the nine cities.
Chesterfield County Board of Supervisors Chairman Kelly E. Miller, who is on the airport commission, asked Mathiasen whether the airport could get in a bind by supporting one airline at the expense of another. "Does that defeat our purpose?" he asked.
Mathiasen replied that Delta officials do not expect all business travel to swing their way, and the airport keeps lobbying all airlines for lower fares.
Delta, he said, simply expects to gain more passengers and see revenue growth by making its fares more attractive to business travelers, who make up more than 60 percent of Richmond International's client base.
Airport commission member Beverley "Booty" Armstrong urged Mathiasen to "lobby like crazy" for corporate and business support of the lower fares. "We need to get commitment from heavy users."
The commissioners briefly mulled over the earlier failure of AirTran Airways, the low-fare airline that briefly flew between Richmond and Atlanta in the late 1990s.
But Troy Bell, the airport's marketing manager, said things have changed - both in the airline industry and the local business community.
"One difference from six years ago is the corporate participation" in working with Delta to lower fares. Large employers such as Capital One Financial Corp., Wachovia Securities, BB&T Capital Markets, Overnite Corp. and the law firm Hunton & Williams have been part of the effort to improve the airport's fare structure.
"They realize they have a stake in this," Bell said.
Mathiasen said "legacy" airlines are collectively fighting for their lives around the country. American Airlines recently slashed fares in Miami by nearly 90 percent because of competition from low-fare carriers.
"How can they do that?" Miller asked.
Mathiasen explained that "it only takes a minimum of premium fares" on each aircraft to make a flight profitable, so cheaper fares can be offered for other seats.
"It sounds like it could turn into a fool's game," Miller said of the price-cutting.
For now, though, Richmond is in the game.
Any ideas? Staff writer Chip Jones can be reached at (804) 649-6726 or cjones@timesdispatch.com