AirTran: Delta taking back some customers

By Kelly Yamanouchi

The Atlanta Journal-Constitution

A resurgent Delta Air Lines has won back some customers from discount rival AirTran Airways, prompting AirTran to cut flights in Atlanta and expand elsewhere.

That’s not Delta bragging, it’s AirTran explaining the situation to analysts.

“Today, Delta is much stronger than the Delta we saw four or five years ago,” AirTran Chief Executive Bob Fornaro said Tuesday at an investment conference in New York. “They’ve been able to ultimately take back customers that we actually borrowed for a couple of years. They are a tough competitor.”

Fornaro said Orlando-based AirTran now has about 200 flights a day at Hartsfield-Jackson International Airport, its largest hub. AirTran had about 260 flights a day at the hub in 2008.

That was probably “too high” for a long-term scenario, Fornaro said during the J.P. Morgan Aviation, Transportation & Defense Conference in New York.

For years, AirTran focused on Atlanta for its growth. Atlanta-based Delta struggled after the Sept. 11, 2001 terrorist attacks, then filed for Chapter 11 bankruptcy in 2005.

“We were able to gain a lot of leisure and business travel from Delta,” which helped AirTran post strong profits in 2007, Fornaro said.

Delta finished its bankruptcy reorganization in 2007, which Fornaro cited as reason for its renewed vigor, and closed a massive merger with Northwest Airlines in 2008.

Now, AirTran is focusing growth on mid-sized cities such as Indianapolis and Milwaukee, markets that do not have a large carrier as dominant as Delta in Atlanta. Fornaro said such markets are well-suited for AirTran’s mid-sized Boeing 717s and 737s. He said those cities may not be easy for a larger carrier to serve other than through regional partners, offering opportunity for AirTran.

At the same conference Tuesday, Delta President Ed Bastian said his airline is “looking at alternative arrangements” in Asia since losing its bid to partner with Japan Airlines.

Delta also said it canceled 7,000 flights in February due to storms, reducing first-quarter earnings by $30 million.