TRANSPORTATION
     

AirTran Airways ended service out of Richmond, but David L. Blackshear, executive director of the Capital Region Airport Commission, hopes to lure another low-cost airline.

photo by Mark Rhodes

Michael Allen says the Richmond-to- Chicago round-trip fare usually costs $465 or more. So they often put their suitcases in their car and drive the two hours to Baltimore-Washington Inter-national Airport, where they can get to Chicago and back for about $110. For the Allens, it's a no-brainer. They save more than $700 on the tickets.

"It might not be worth it for some people to drive from Richmond to BWI," says Michael Allen, an executive with the Virginia Auto Dealers Association, "but for us, it's worth it. I know we're not the only people around here who drive to Baltimore to fly."

Richmonders by the thousands drive to BWI, Washington Dulles International Airport or Norfolk International Airport to save on air fares. The U.S. Department of Transportation has given them even more reason to drive to another airport -- or to just plain drive. The agency's most recent report on air fares rates Richmond as the costliest place to hop a plane in the United States.

According to the report, which examined markets with 100,000 or more passengers, Richmonders who used their local airport last year paid 47.3 cents per mile to fly. Compare that with Baltimore's 13.8 cents per mile, Norfolk's 21.4 cents and Washington, D.C., at 22.8 cents. (See chart.)

There can't be many people who want the prices to come down more than David L. Blackshear, executive director of the Capital Region Airport Commission, which oversees Richmond International Airport. After all, lower fares always translate to more passengers. Blackshear trusts the U.S. Department of Transportation's numbers. He explains Richmond's high air fares this way: "Richmond is, I would say, very unusual."

At least three out of four people who board a plane in Richmond are business travelers. "A lot of people in Richmond don't realize eight Fortune 500 companies are headquartered here," Blackshear says. "People are coming and going all the time on business. The airlines know that. They make businesses pay the price for last-minute travel. They pay for the availability of all the jets we have here." Every major national airline, except Trans World Airlines and Southwest Airlines, flies jets in and out of the state capital.

As recently as late last year, Richmond business travelers paid an average of $782 to fly to Boston and back, $1,332 to fly round-trip to Dallas, $872 to Milwaukee, $1,042 to New Orleans, $844 to St. Louis and $1,776 to San Francisco or Seattle. Compare that with the fares for people who bought their tickets in advance and accepted flight restrictions. That round-trip flight to Boston cost $191; Dallas, $190; Milwaukee, $285; New Orleans, $170; St. Louis, $305; San Francisco, $454; and Seattle, $458.

The airlines can afford to charge less on these "excursion fares" because, as Blackshear notes, so many business people who fly in and out of Richmond can't take advantage of them. They don't have the luxury of knowing where they will need to be seven to 21 days in advance, so they pay the business fares.

Martha Steiner, a Richmond computer saleswoman who recently returned from a business trip to Los Angeles, paid $1,678 for air fare. Actually, her company paid. "If I had to pay, gosh," she says. "I know I don't have enough in my checking account right now to cover that."

Buford Scott, chairman of Scott & Stringfellow, says he often pays $550 or more to fly from Richmond to Newark or New York City. He says he was pleased to get a $201 fare in November to fly from Richmond to West Palm Beach, Fla., with a layover in Charlotte, N.C.

Steve Bayard, owner and president of Capital Pontiac GMAC, says his company saves money by taking advantage of frequent-flyer fares and by requiring his employees to spend Saturday nights wherever they happen to be on their business trips. Sometimes Bayard drives to the airports in Norfolk or the Washington area. "You learn to live with the system," he says. "I think we fly out of Richmond for a lot less than 47 cents a mile."

Business travelers want relief, but relief translates to a low-fare airline. Last year, AirTran Airways, the company that acquired ValuJet, began flying jets from Richmond to Atlanta, with connecting flights to 18 other cities. It charged about $200, forcing Delta Airlines, which has a hub in Atlanta, to match the price. But in November, AirTran informed Richmond airport officials that it is pulling out of town by Jan. 5.

Blackshear says AirTran had two things going against it: A lot of air travelers didn't trust it because of the ValuJet crash in Florida, and it didn't market itself well in Richmond. He says many Richmonders told him they thought AirTran only went to Atlanta. "AirTran came in and tried to compete with the 800-pound gorilla," he says of Delta. "And they lost." With AirTran out of Richmond, airline industry analysts expect Delta to triple or quadruple its fares to Atlanta.

Richmond now has its sights set on Southwest. "I have great hopes that Richmond is the place for Southwest, that they will be extremely successful here," says Blackshear. Consultants hired by the airport have produced reports that show the airline would make money if it comes.

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Southwest isn't talking, and Richmonders aren't holding their breath. In the airline world, Southwest is known as a tease. And an attractive tease at that. Every airport that doesn't have Southwest wants it, and Southwest knows it. Its low fares force other airlines to lower their fares, and all of that causes people to fly more often. Analysts say Southwest is busy battling US Airways Express in Baltimore and courting business travelers in the Northeast who often fly in and out of New York City.

Like Richmond, Norfolk also is making eyes at Southwest Airlines. "They told us they're definitely interested in the Hampton Roads area," says Wayne Shank, deputy executive director at Norfolk International Airport. "They're not a tease, in my opinion. They're very, very careful about making decisions." Shank doesn't expect to hear anything definite from Southwest for a couple of years.

Low-fare airlines do a good job of serving the West, Shank says. Not so in the East, where low-fare airlines are in demand. In 1998, Norfolk's airport lost Air South and AirTran. That, combined with the Northwest Airlines strike, hurt Norfolk, where air traffic last year was flat. It remains to be seen how much two new low-fare airlines, Shuttle America and Cape Air, will help.

To try to drive down fares, Roanoke has been pursuing AirTran, which flies to Atlanta and beyond. Now that AirTran has announced it is leaving Richmond, Courtney thinks Roanoke may look more attractive to AirTran. Atlanta is a popular destination for those flying out of Roanoke, and AirTran wouldn't have to compete with Delta, as it did in Richmond. AirTran failed in Richmond, Courtney says, because Delta matched AirTran's low fares, and Delta's frequent flyers had no reason to switch to AirTran.

But Courtney wonders how long AirTran and other low-fare airlines can survive. Only Southwest is financially secure. Roanoke airport officials have spoken with Southwest representatives, but Courtney says it is unlikely Southwest would fly into an airport as small as Roanoke's. It is about a third the size of Richmond's airport.

* * *

Even if Southwest chose to fly to Richmond, it has very few airplanes to spare right now, and Richmond International doesn't have much room, even after AirTran leaves. AirTran, which flies propeller planes in and out of Newport News-Williamsburg International Airport, uses two ticket counters and one gate at Richmond's airport. Everyone agrees Southwest would need more counters and gates than that.

The Richmond airport commission wants to expand the airport whether or not Southwest comes. It figures it needs about $25 million to add six counters and four gates, and it plans to ask the state for some help to get financing. "Without it," Blackshear says, "we're in a pickle."

A Louisiana native, Blackshear says he can relate to Richmonders who drive to airports in Norfolk, Baltimore and the Washington area. "Most people have three choices," he says. "One: You fly. Two: You don't fly, you drive. Or three: You don't go.

"The choice for me is easy," he continues. "I drive. Frequently, I drive to Louisiana. I don't make a million dollars a year."

A few minutes later, Blackshear politely excuses himself. He has a plane to catch. It's a business trip.

© JANUARY 1999, VIRGINIA BUSINESS MAGAZINE