AirTran: Space Cramped by Rapid Growth

AirTran Airways is looking prosperous these days -particularly at the check-in counter - but perhaps too prosperous for some customers.

During a recent Monday morning rush, more than a hundred AirTran customers stood in a line that wrapped around the carrier's main lobby and down a hallway behind its ticket counters. The lines have gotten so long this summer - with wait times commonly hitting an hour - that the discount carrier last week advised Atlanta customers to arrive two hours before their flights, rather than 90 minutes.

And this is when things are going normally.

Last month, a glitch in a new computer system at the fast-growing airline caused thousands of passengers at the Atlanta airport to miss flights. While AirTran quickly fixed its problems and sent $100 travel vouchers as apologies to roughly 15,000 affected customers, the incident and long lines raise a question:

Is AirTran experiencing growing pains?

No, according to AirTran Chief Executive Joe Leonard. "We don't think the airline's ever run better than it's running now," said Leonard, who called the recent near shutdown a "hiccup" and insisted it wasn't a signal of strains on the 7,700-employee airline.

While industry experts give AirTran high marks for how it handled the computer incident and say the airline's overall performance compares well to other carriers, they contend AirTran's 20 percent-a-year growth rate is causing headaches.

"I think we'd be crazy not to admit that they're having some growing pains," said Terry Trippler, a travel and fare expert with Vacation Passport, a Minneapolis-based travel club.

He rates AirTran's customer service highly but said he's also sensing more stress among employees, perhaps because of the airline's rapid growth. "It's not the happy, happy airline it started out to be," he said.

AirTran executives say the carrier is bursting at the seams at the Atlanta airport - by far its largest operation - and customers are feeling the effects.

"We are facility-constrained in Atlanta," said Tad Hutcheson, AirTran's marketing chief. "We are the fastest-growing airline in the country. We've got 20 planes coming this year. We've got 20 planes coming next year, and we want to put these planes in Atlanta, but we need the facilities to do so."

To be sure, many airline executives would be happy to have AirTran's problems. The Orlando, Fla.-based carrier has been making hay in the post-9/11 world while Delta Air Lines and other "legacy" carriers ran into financial trouble and retrenched.

AirTran's revenue has more than doubled since 2000, to $1.4 billion last year, and it has remained mostly profitable. Its passenger base has grown at a similar rate, to 16.6 million last year.

Delta slims down

Meanwhile, Atlanta-based Delta, which filed for bankruptcy last September, has been shrinking its operations domestically and in Atlanta as it shifts more planes to international routes it hopes will pay better.

Through March, the latest data available, Delta and its regional carrier partners transported 1.4 million fewer passengers at Hartsfield-Jackson International Airport than a year earlier, a decline of 8 percent. AirTran's passenger volume, on the other hand, went up by about 500,000, or 20 percent. AirTran now flies about one in six Atlanta passengers, compared to one in 10 five years ago.

"We desperately need more gates and facilities," said Hutcheson. Besides the back-ups in the ticket lobby, AirTran contends that a lack of facilities causes bottlenecks for arriving aircraft and baggage handlers.

Hutcheson said AirTran could use up to 50 gates, compared with the 29 it now has to handle 250 flights a day. Delta and its regional partners, by comparison, handle more daily flights per gate, with 100 gates at Hartsfield-Jackson handling 1,040 flights a day.

Space tough to get

So far, it appears AirTran will have a difficult time getting much more space at the airport. The city's longtime plans to build an additional terminal are on the back burner. An option being discussed is to convert a vacant airport structure such as a former Northwest or Delta maintenance hangar into a concourse with boarding gates, but AirTran is resisting that idea.

AirTran hoped to have nearly exclusive use of three new gates on Hartsfield-Jackson's D concourse when construction is complete this fall. But Delta has also asked to use the gates, which will be "common use" gates available to all carriers, rather than leased to one airline.

The airport began shifting away from long-term leases to gain flexibility to respond to changes in the industry, said Hartsfield-Jackson spokeswoman Felicia Browder. Hartsfield-Jackson wants to make newly constructed gates and ticket counters common use.

Existing facilities also will become common use when airlines' leases expire in 2010, said Browder. Currently, about one-fifth of the airport's gates and ticket counters are multiuser.

Browder said the changes were prompted by Hartsfield-Jackson's overall traffic growth rather than any concerns that Delta's shrinkage and AirTran's rapid growth have caused an imbalance in how facilities at the airport are used.

"It's not about one airline vs. another, per se. It's about looking at the big picture," she said. "I wouldn't say things are out of balance."

Meanwhile, Delta says it needs all the airport gates and other facilities it leases at Hartsfield-Jackson. Even though total passenger loads are down, Delta expects its international traffic to grow.

Delta has invested tens of millions in self-service kiosks and other upgrades of its Atlanta terminal that it says now allow most customers to check in within minutes. Delta spent $12 million last year on such improvements. And the airline plans another overhaul beginning this fall to add more kiosks and check-in counters that can handle both international and domestic flights.

Still bare-bones

AirTran's bare-bones way of doing business could be exacerbating some of its problems in Atlanta. AirTran has dozens of check-in kiosks at the Atlanta airport, but they haven't eliminated long lines.

During that recent Monday morning rush, customers couldn't reach many of AirTran's kiosks for several minutes because the line folded three times in front of a row of 15 kiosks near the ticket counters, blocking access. Relatively few people were using them.

"That's not the way it's supposed to work," said AirTran's Hutcheson. He said the current layout of AirTran's check-in lobby "seems awkward" and needs to be improved, but space is limited.

"When you first walk in, it looks pretty intimidating," said Hutcheson. He said the line "moves pretty fast," but an hour is "excessive."

Even with AirTran's rough edges here and there, its customers remain relatively tolerant, according to industry experts, possibly because of the discount airline's reputation as a fare-buster.

"I'd have to say they're in the ups and downs of the industry," said Wichita State University professor Dean Headley, who co-produces an annual ranking based on the DOT's statistics on on-time arrivals, baggage complaints and other measures. AirTran was second in last year's ranking but is about average so far this year, he said.

Customer complaints were surprisingly muted during the recent software shutdown, despite the hours-long waits while AirTran's ticket agents struggled to find seats for thousands of travelers who missed their flights because of the delays. At times when the computers were down, the agents wrote boarding passes by hand.

Kevin Jones, a senior loan officer at First Rate Mortgage in metro Atlanta, said AirTran's problems prompted him to call ahead of a recent flight to make sure the software bugs were fixed, but he expects to remain a loyal customer.

"I've never had any problem with AirTran," he said, adding that he usually flies on the discount carrier unless Delta or another airline offers a more convenient or cheaper flight. "Their people are nicer."



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