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Cheap flight guide

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Low-cost fares

When AirTran Airways touches down in Charleston on Friday, it will
carry with it big expectations, namely the potential to save the
business community and vacationers millions of dollars in travel costs.

In
the fourth quarter, Charleston International was ranked as the
sixth-most-expensive airport in the country to fly to and from,
according to government figures. Carriers collected $445 a ticket to
land and take off in the Holy City during those three months, $66 more
than the average U.S. fare.

Local officials hope AirTran's new
twice-daily service will bring those figures more in line. With average
one-way fares of $91, the Orlando-based carrier is cheaper than the
storied low-cost pioneer Southwest Airlines Co., although Southwest
flies longer routes on average.

However, Charleston has earned a
reputation for being a place where discount carriers come to die. The
hopes for cheap fares here have crashed and burned time and again, as
the incumbent carriers selectively slashed their prices to hang on to
their customer base.

The local business community is taking
measures to make sure that doesn't happen again. The Charleston Metro
Chamber of Commerce, for example, has organized an aggressive lobby to
get its member companies to pledge allegiance to AirTran.

And the Charleston Area Convention & Visitors Bureau is featuring the carrier prominently in its marketing materials.

Chris
Fraser, broker-in-charge at Charleston-based commercial real estate
company Grubb & Ellis|Barkley Fraser, has asked all of his staffers
to use AirTran. He recently bought an AirTran round-trip ticket to
Atlanta for $235; the last trip he took, a flight to Chicago, cost
almost $800.

"If we don't fly them, they'll leave and we'll be
right back where we were," Fraser said. "And I think it has a direct
impact of businesses that are considering relocation to Charleston."

A dime a mile

AirTran
spokesman Tad Hutcheson said the company has been "very encouraged" by
advance ticket sales. He also was impressed when the company's February
announcement of its new service drew about 200 people to the Charleston
terminal.

"Usually, if we have a dozen, that's considered successful, so that was quite an eye-opener for us," Hutcheson said.

AirTran's numbers in Charleston so far are similar to its results in Savannah, where the carrier has offered service since 1995.

John
Powers, who owns Charleston-based agency Travel Management Group, said
the cheapest "buckets" of AirTran seats in its first few weeks of
service already have been snapped up.

Powers noted that competing carriers are not only slashing their prices, they're also jettisoning tricky fees and restrictions.

Saturday-night
stay requirements are falling out of the market. Walk-up fares are
dropping fast and even the cost of one-way tickets are being trimmed to
match AirTran's pricing model, he said.

"Essentially, everyone is changing their fare structure effective on the 24th," Powers said.

But cheap tickets don't make much difference if a carrier's financials aren't steady.

FLYi
Inc., also known as Independence Air, sold $59 seats right up until it
pulled into bankruptcy court and was parceled out to the highest
bidders.

Unlike FLYi, AirTran Holdings Inc is not some scrappy
upstart, but rather an ace in the discount dogfight. In its 15-year
evolution, the carrier has built a strong route map and a
frequent-flier program, a perk that helps build loyalty among business
travelers.

Its passenger count almost doubled in the past five
years and its revenue almost tripled. AirTran has made money every year
since 2001, including $15.5 million last year, though its average fares
still were just $181 round trip.

And its costs are almost as low
as Southwest's. In the first quarter, AirTran paid just under a dime to
fly one passenger one mile, a key industry yardstick. It collected just
over 13 cents per passenger per mile. In the cut-throat commercial
aviation industry, that's considered a smashing success.

"We
think they'll be able to compete in most markets they enter," said
Marisa Thompson, an analyst who tracks AirTran for Chicago-based
Morningstar Inc.

Steady hand

Mark Fava, an
aviation attorney at Nelson Mullins Riley & Scarborough's
Charleston office and a former lawyer for AirTran archrival Delta Air
Lines Inc., said the true test for the region's newest carrier will
come in the slow winter months. Charleston's business travelers and
AirTran's ability to fine-tune its flights and fares here will make the
difference, according to Fava.

"I think they're here to stay, I really do," he said. "It's long overdue. And they came in with that vision."

The
biggest flight hazard for AirTran is fuel prices, which burned so many
carriers into bankruptcy in recent years. Though AirTran has locked in
contracts for almost half the fuel it needs this year at $2 a gallon or
less, it still pays more for gas than it does to keep its 7,400 workers
on the payroll. Roughly a third of its outlays go to the pump.

The
other uncertainty on the horizon is AirTran's $389 million bid for
Midwest Air Group Inc., a Milwaukee-based carrier. If the buyout offer
succeeds, the acquisition would strengthen AirTran's position in the
Midwest, but it would also saddle the company with more debt and the
potentially costly and distracting challenge of integrating a new
company into its system.

In Charleston, AirTran will go head to
head with Delta, a carrier strengthened and streamlined by its recent
stop in bankruptcy court. Thompson of Morningstar said Delta likely
will increase its capacity in coming months, but she thinks AirTran has
built the muscle and the mass to hold its own.

"They have really
honed themselves as one of the premier low-cost carriers," Thompson
said. "They probably will have a more steady hand than most."

[by Charleston.net]

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