WINAIR/18inches/dp1st/mark2nd
By NOLA L. SARKISIAN
Staff Reporter
The folks at WinAir have been learning just how hard it is to start an airline.
The fledgling, low-cost air carrier debuted at Long Beach Airport on Nov. 2, touting inexpensive fares to Las Vegas, Salt Lake City, Sacramento, Oakland and Seattle.
But during its first two months of operations, WinAir planes only flew at 40 percent capacity far below the industry standard of 70 percent or more. And its service to Seattle was quickly canceled altogether for lack of customers.
The low numbers are especially troublesome for a discount carrier whose success depends on keeping planes full. Through Jan. 15, customers can buy one-way tickets to Las Vegas for $29, Salt Lake City for $39, Sacramento for $39, and Oakland for $39 fares that are generally lower than those of Southwest and other competitors. The question is how much longer can the airline afford those prices.
Part of the challenge, says Leon Christensen, president of the Salt Lake City-based airline, is to make people aware of Long Beach as an alternative to Los Angeles International Airport or John Wayne Airport.
“Right now it’s about educating the people to recognize a new way to travel and to break old habits,” he said. “Most successful ventures, like Vanguard and Frontier, took three years to turn the corner and be profitable.”
Long Beach is a city of 450,000 residents that also draws 1.5 million people a year to its convention center. In addition, tourist traffic is heavy at the 6-month-old Long Beach Aquarium of the Pacific.
“It’s a win-win situation no pun intended for everyone. It’s a huge step forward in traffic that works both ways to lure people to our growing region,” said Linda Howell DiMario, president of the Long Beach Area Convention and Visitors Bureau.
Airline analysts aren’t so sure.
“Their numbers are low. Usually low-cost carriers have about a 70 percent load factor to break even,” said J.A. Donaghue, editor-in-chief of Air Transport World magazine. “They’re getting off to a fairly slow start.”
Added analyst Glenn D. Engel of Goldman, Sachs & Co.: “You can’t have low-cost fares without the high volume. You have large aircraft flying short distances. Hopefully, people will choose them for the convenience, since prices everywhere are so competitive.”
Since 1978, when the airline industry was deregulated, scores of carriers have gone under, most of them start-ups. A number of those failures operated out of Long Beach.
“The West Coast is littered with the corpses of dead or departed airlines who were chased out from extreme competition,” Donaghue said. “But WinAir can build. One thing in their favor is the low costs of operating out of Long Beach Airport.”
Long Beach officials painfully recall the exodus of major carriers in the wake of a 13-year court battle over noise levels that pitted the city against several airlines. Following the departures of TWA, Delta and Alaska Airlines, only America West, American and a few cargo carriers remained, leaving a majority of the 41 flight slots empty. WinAir is now using 14 of those spots and expects to utilize 29 by March 1.
Airport spokeswoman Kathy Parsons said each occupied slot adds $6 million a year in economic impact to the city of Long Beach in terms of jobs, taxes and services. To facilitate the extra passenger traffic and demand, Parsons said the 1,170-acre airport is being renovated.
Plans are underway to double the size of the security area at the airport and increase the number of baggage carousels. If WinAir takes off, Parsons said, the airport is forecasting a total of 2 million annual passenger arrivals and departures by the end of this year, compared to 611,000 in 1997.
