Prices Fly at TLH

MY VIEW - At the close of 2007, 921,816 people had flown in and out of Tallahassee Regional Airport for the year. That was down a whopping 233,256 (20.2%) from the airport's record year of 2004 (1,155,072).  The decline in passenger traffic has been highly noted since the departure of discount carrier AirTran, who arrived in Tallahassee November 15, 2001 and announced its plans to depart July 20, 2004.

AirTran's stay in Tallahassee is a rather unique story. In 2001, Tallahassee became AirTran's 35th destination, the company's 8th in Florida. Offering two daily nonstop flights between Tallahassee and Atlanta, three Daily flights between Tallahassee and Tampa with continuing service to Miami, AirTran was set to fill a void long neglected by other airlines serving the Tallahassee market. Introductory fares we're announced at $44 for a one-way trip from Tallahassee to Atlanta, $30 from Tallahassee to Tampa, and $49 from Tallahassee to Miami. Airtran, city officials, and Tallahassee residents all expressed excitement about the deal to bring in a discount carrier; however, there was one entity that wasn't so happy.

Delta Airlines, the long dominant airline at Tallahassee Regional went public with its lack of satisfaction over the city's courtship with a discount carrier. Delta even went so far as to withdraw itself from the local chamber of commerce blaming it for the city's pledged revenue guarantees to Airtran as a condition to enter the market. Blake Poole of Delta said publicly, "If there's an organization we're a member of and they're using our dues to bring in competitors and subsidize them, then we really don't need to be a part of that organization."

Sue Dick of the Chamber of Commerce did all she could to make it perfectly clear that the funds being pledged as a subsidy to Airtran were coming from the City Commission not the Chamber of Commerce, however, this seemed to make no difference to Delta.

In the summer of 2002 while traffic at most of the nation's airports was down, passenger traffic in Tallahassee was soaring! Having increased at a rate of 15% in 2002, 28% in the month of May alone, things were looking bright for air travel in the Capital City. Airport officials and travel agents all attributed much of the increase to the most recent arrival of low-fare carrier AirTran Airways into the Tallahassee market noting, "The new competition has lowered airfares and kept people from going to alternate airports."

Despite the great gains in overall traffic at the airport since AirTran's arrival, by October of 2002, the company had not yet begun to turn a profit and therefore turned to request the 2nd half of its revenue guarantee from the City -- ensuring continued operations through the following year. City Commissioners quickly approved the request.

Given flights in the $50 range, one would think there would be no reason to travel outside of Tallahassee to fly. However, in the case of Tallahassee, it would take much longer than a year for travelers to realize prices had come down as many in our market had become so accustomed to traditionally high air-fares. Sadly during this time, there was very little in the form of advertising (Billboards, print, TV commercials) noting the new LOW prices to fly out of TLH.  Instead AirTran and airport officials relied heavily on web advertising, and destination marketing.

During December of 2002, the battle with Delta heated up once more, and it was reported in the Tallahassee Democrat that Delta did not like Tallahassee's Gesture toward AirTran. That gesture, of course being the 2nd subsidy to continue operations. Delta's station manager, Jimmy Castex told the airport advisory board December of that year that he was, "Struggling diligently to keep service to Tallahassee at the same level." Hinting that the aircraft Delta uses to serve our market would be removed if nothing was done to address his competitive concerns.

Thereafter Delta lowered its fares to match AirTran’s, and in some cases undercut its discount rival. As a result, AirTran saw a reduction in passengers, and by June of 2004, had reduced its number of flights in and out of Florida's capital city. The very next month, July 20, 2004, AirTran officials announced they weren't covering their operating costs in Tallahassee and were pulling out of the market.

Since AirTran's departure, passenger traffic at the airport has fallen, meanwhile prices have risen drastically. Continental began service to Tallahassee Regional in February of 2004 promising competitive rates to its hubs in the West. Gulfstream resumed its service to TLH soon after AirTran's departure, and this year American Airlines began service to Tallahassee. Despite the number of carriers serving our Airport, fares remain high, and passenger traffic well below the levels experienced when a discount carrier was around, leaving one to ponder if Tallahassee will ever have a second chance at low airfares.

After nearly 3 years of declining passenger activity at the airport, is it now appropriate to worry about the direction things are going at Tallahassee Regional?