Yesterday we blogged about Allegiant’s change in our service to Orlando: the airline will soon fly between Springfield and Orlando International Airport, rather than Orlando-Sanford Airport. Springfield is one of ten cities getting the change in service.

Today news outlets across the country are paying attention to Allegiant’s switchero. The Orlando Sentinel reports, “Six of the destinations that Allegiant will start serving from OIA are routes on which it faces direct or indirect competition from AirTran, another discount airline whose headquarters is located at Orlando International.”

The paper goes on to to Allegiant’s vice-president of planning, Robert Ashcroft, “Part of this is just to make it clear to our friends at AirTran that, you know, we’re not a soft option. We thought we needed to become a little more competitive with them.”

A pleasant bit of information from the Atlanta-Journal Constitution…

Of flights leaving Atlanta, the ones that run on-time the most often are the ones to/from Springfield, MO and Cedar Rapids, IA.

Wish we could take the credit for the on-time performance, but, alas, no. So we’ll just mention it and give credit to Delta/ASA.

Perhaps more interesting is the list of top ten flights with the worst average delay. According to the paper AirTran leads the deliquent pack with an average delay of 81 minutes for flight #579 to Newark.

Mike blogs this:

“Hey what’s going on? I hear about Branson getting AirTran with service to Atlanta and Milwaukee. Now they got Sun Country airlines with service out of Minneapolis on a 737s and to add AirTran uses 717s. What do you think will happen? Do you think their fares will be consistently lower b/c they use large aircraft? Are any of the airlines at SGF talking about lowering prices?”

Let’s cut to the chase and then explain why. We don’t think the airport south of Branson will have much impact on our airport. Why? Because it caters to a very select crowd and the service will be very limited (in terms of options that if offers customers).

There will be SW Missourians who use it, but probably not in significant enough numbers for Springfield airlines to notice. If (and it’s a big if) significant competition does emerge, it’s likely that Springfield airlines will respond by cutting fares. And that would be good for customers at both airports.

Mike…I’m not picking on you, but I need to challenge a couple of your assumptions. First of all, a larger airplane does not, in and of itself, mean lower fares. Fares are determined by the fare structure, or, if you will, the business model being used by the airline. Simply put, an airline can have “low fares” on either big planes or small planes–depending on the business model and fare structure that the airline uses. There are dozens of variables that an airline juggles that help determine fares. The variables include the average distance traveled on an airline’s route system, the size of its route system, the cost of fuel, the cost of labor, the cost of airplane maintenance, airport fees and charges, and, in the case of Branson, the amount of compensation received from the airport. The list goes on.

I sense that you’re assuming that fares will be lower at the Branson airport and that they will be consistently lower. That’s a huge assumption.

With all airlines prices go up and down. They have fire sales. They have introductory fares. And then there are the factors that customers sometimes forget about. For example, let’s suppose you see an advertisement for AirTran that says you can fly from Branson to Atlanta for $79 one way. Well, that’s good if you just want to go to Atlanta. But what if you’re ultimate destination is somewhere else? Let’s say you want to go to San Francisco. What’s it going to cost you to fly to San Francisco from Atlanta? Is the total cost of flying from Branson to San Francisco less than the cost of flying from Springfield to San Francisco? Probably not. Of course, right now, we don’t have anyway of knowing because the Branson service doesn’t have a track record.

Now let’s talk a little bit about what we do know about: the service in Springfield.

Our airport has non-stop service to 12 destinations (on May 3, when we start service to Los Angeles, we’ll have 13 non-stop destinations). Five of those 13 destinations are on a low-cost airline, Allegiant Air. It’s not unusual to find roundtrip fare on Allegiant for less than a hundred bucks. That means that sometimes you can go to Las Vegas, Orlando, Phoenix, Tampa/St. Petersburg and Los Angeles for less that $100.

As for the other three airlines in Springfield (American, Delta/Northwest and United), there are good deals out there. In the past week I chatted with someone who found roundtrip fare between Springfield and Cozumel, Mexico for $330. That’s on American! Another person told me about just booking roundtrip fare between Springfield and Seattle for $340.

Don’t believe it? Check out one of those web sites that hunts for low fares. Here’s some of what airfarewatchdog.com found on Friday:

• $185 roundtrip to Chicago O’Hare on American. No minimum stay

• $213 roundtrip to Houston IAH on American, No minimum stay.

Or how about the weekend sales? Here’s a sampling:

• Albuquerque, NM   $202 roundtrip. United.

• Chicago O’Hare $186 roundtrip. United.

• Dallas/Ft. Worth, TX $200 roundtrip. American.

• Manchester, NH $264 roundtrip. United.

• Missoula, MT $266 roundtrip. United.

• Spokane, WA $274 roundtrip. United.

• Washington Dulles, DC $220 roundtrip. United.

• White Plains, NY $250 roundtrip. United.

People who say fares are always higher in Springfield are out-of-touch!

That’s probably more answer than you wanted Mike; I hope it all made sense within the context of your questions.

Mike poses an astute question :

“Are you certain they [the Branson airport] are subsidizing [AirTran]? USA Today quotes, “We’re not writing a check for $5 million or anything crazy like that. That’s all I can say” To me, when you are talking millions, even $2 million is pretty crazy.”

It may not be “a check for $5 million,” but you can be sure that AirTran isn’t doing it for free. Consider the case of Gulfport, Miss. AirTran is ending its service to the casino laden area in January. Here’s what the Atlanta Business Chronicle had to report on December 3:

“It is an unfortunate but necessary decision to discontinue AirTran Airways’ service to Gulfport-Biloxi,” AirTran said in a statement. “We have flown under a contract with the casinos since we began the market in 1999, since that is the bulk of the business flying into the market. The casinos have made the decision to operate without a contract for flying, and the market is just not financially viable for us without that support especially in today’s volatile economic times.”

Does it sound to you like the casinos were buying (AKA: subsidizing) the service?

Look, it’s in the airline’s best interest to take a deal if it’s offered. After all, AirTran reported a net loss of $107.1 million in the 3rd quarter. Today its stock closed at $3.64. That compares to American at $9.53. United at $9.94. Delta at $10.50. Allegiant at $43.08. Southwest at $7.30. JetBlue at $5.55. Alaska Air at $26.48. As I look at a list of airline stock closings, it appears that only Frontier closed lower: 0.185 !

Read a September post on this blog about AirTran’s financial situation: Sign of the Times.

Or from August: this post about pilot layoffs.

Low cost airline AirTran “expects to report its first annual loss since 1999.” That’s according to the Atlanta Journal-Constitution. The paper continues, “AirTran has been selling planes, postponing new aircraft deliveries and cutting flight capacity since earlier this year in the midst of high fuel costs.”

It’s all worth mentioning here because the airline is frequently rumored to be one of the carriers that could add service at the new airport south of Branson.

Low-cost airline AirTran plans drastic cost cutting measures—that’s according to the Atlanta Journal-Constitution. The paper reports the airline will lay off 169 pilots effective September 3. This news comes on the heels of the company’s 2nd quarter financial results: a net loss of $13.5 million despite record passenger numbers.

The AJC quotes an analyst as saying the airline will have ”"substantial losses and cash burn of over $100 million” in the second half of this year, based on current fuel prices.”