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BWI recovers from post-9/11 MetroJet loss

THE BALTIMORE SUN

Less than a year after the Sept. 11 terrorist attacks, Baltimore-Washington International Airport has replaced most of the domestic air service it lost as a result of flight reductions and cost-cutting moves implemented by struggling airlines last fall.

The reversal comes after US Airways, once the airport's leading carrier, heightened fears of a sharp decline in service by dismantling its faltering Baltimore-based MetroJet division in December, ending 46 daily flights to Florida, Chicago, Boston and a handful of other heavily traveled destinations.

Additional cuts followed, slashing the Arlington, Va.-based airline's BWI passenger totals by more than 60 percent.

Despite those losses, using BWI as a starting point for that family vacation to Orlando, Fla., or that business trip to Chicago is just as easy as it was before last September's attacks. And it might be cheaper, too, as low-fare airline AirTran Airways and other carriers cut fares in a bid to attract former US Airways customers.

"The biggest thing that the change with US Airways has done is it has made BWI a more diverse airport in terms of the airline choices that are available," said Antony Storck, director of air service development for the Maryland Aviation Administration, which oversees the state-run airport.

With year-over-year passenger totals down by 10.6 percent in the first half of this year, BWI can no longer claim to be the fastest-growing airport in America. But airport officials point out that BWI has lost fewer passengers than airports nationwide. And at a time when the industry is focused on cutting unprofitable flights, some airlines are still looking to Baltimore for growth opportunities.

In the past year, AirTran and Southwest Airlines, the airport's dominant carrier, have added service to fill the gap left at BWI by MetroJet's demise.

"Those [MetroJet] passengers were picked up right away," said Michael Boyd, an Evergreen, Colo., aviation consultant.

"You've gone from more of a traditional airport to one that is very highly focused on low-fare service," he said.

The low-fare carriers that have dominated BWI terminals in recent years aren't the only ones picking up passengers. Major carriers such as American Airlines and Delta Air Lines have used BWI to funnel more passengers to their hubs in Chicago, Dallas and Atlanta. Boosted by its purchase of Trans World Airlines last year, American Airlines is likely to overtake US Airways as the airport's second-biggest carrier sometime in the next year, if not sooner.

"We now have five carriers that are carrying more than 100,000 passengers a month at BWI," Storck said. "A year ago at this time, we had three."

AirTran may soon make it six. Days after the lights went out at MetroJet ticket counters, the Orlando, Fla.-based airline launched new service from BWI to Atlanta and Boston. One of a few airlines to post profits since Sept. 11, AirTran has since grown its BWI operation to 22 flights daily and has plans to add two more at the end of October. It carried 90,538 passengers in June, up from 26,679 in its first full month of operation.

"Virtually every city that [MetroJet] was in, we are now in," said Robert L. Fornaro, a former US Airways executive who is now AirTran's president and chief operating officer.

Like all airlines, AirTran's revenue has taken a hit as a result of the weak economy and an industrywide decline in air travel. But in just 10 months, the airline has done something US Airways executives concede MetroJet was never able to do: make money. Fornaro said the company expects to earn a "small profit" from its Baltimore operations this year.

"It's gone better than a usual startup for us and probably for most carriers," he said.

And AirTran isn't done expanding. The airline typically runs eight to 10 flights per day at each airport gate it leases. At that rate, the airline's four gates at BWI are still underused, Fornaro said, and the company has options for more. "We're going to fill out our schedule there. We don't like to operate 22 flights on four gates," he said.

But Fornaro concedes that AirTran's growth will be held in check by Southwest, which carries eight times more passengers at BWI and is the industry's low-fare leader.

Southwest is the only major airline that has continued to grow since the Sept. 11 attacks. The Dallas-based carrier has added 11 daily flights to its BWI schedule since last September, bringing the total to 138. Seven of the new flights are to Norfolk, Va., but the rest are to former MetroJet markets, including Manchester, N.H.; Orlando, Fort Lauderdale, and West Palm Beach, Fla.

The airline will launch twice-daily flights from BWI to Los Angeles this month, marking its first major foray into nonstop transcontinental flying.

"We've been doing pretty well up in the Northeast because of things like US Airways and other carriers cutting back service and the continued demand for low-fare service," said Christine Turneabe Connelly, a spokeswoman for Southwest.

US Airways' retreat from BWI will continue for a while. The airline plans to trim capacity an additional 13 percent by Nov. 2, eliminating 10 more flights from BWI. Included in the cuts are flights to San Francisco, Los Angeles, Seattle, Rochester, N.Y., and Charleston, W.Va. When it's over, the airline will operate 44 flights from BWI, less than a third of its total operations a year ago.

B. Ben Baldanza, US Airways' vice president of marketing, said the carrier's strategy is to use cities like Baltimore primarily to feed hubs in Pittsburgh, Charlotte, N.C., and Philadelphia.

That's a significant change from the airline's previous strategy of using BWI as a staging area for its battle against Southwest. Launched in 1998, MetroJet was set up to be US Airways' answer to low-cost competitors. But with some of the highest operating costs in the industry, US Airways' days of competing head-to-head against Southwest and other low-cost carriers are over.

"Routes from Baltimore to Florida, the Northeast or to the West Coast lost money every month we flew them," Baldanza said.

Instead of taking business from rivals, the MetroJet operations in Baltimore siphoned passengers away from US Airways hubs, he said. "Baltimore was one of the places we had to retreat from in order to make the other cities work. It's the reality of the economy," he said.

With the economy still sluggish, there is concern that other airlines might follow US Airways' lead as the typically slow fall travel season approaches. American Airlines has said it will reduce capacity 9 percent and lay off 7,000 employees in a bid to cut costs.

The airline declined to say whether its growing BWI operations will be affected. Continental Airlines and Northwest Airlines also have made moves to trim capacity in response to reduced demand.

The airport's international operations are also a source of concern. With no major hub operations, BWI has never been able to attract much attention from international airlines.

International passenger traffic has declined by double-digits this year, led in part by the departure of Irish carrier Aer Lingus shortly after the Sept. 11 attacks.

But with Southwest and AirTran still increasing domestic traffic, BWI officials remain optimistic.

"We didn't feel the effects as much as everybody else did the last time [airlines] were talking about 20 percent capacity reductions," said Storck, the air service director. "Most of those carriers didn't do those reductions at BWI."

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