Start-Up Airline Seeks to Fill Vacant OIA Slots

Jan. 7--Virgin America, a start-up low-fare airline, wants to become the newest carrier at Orlando International Airport, where several industry bankruptcies are likely to leave empty gates this year.

The new California-based airline is expected to begin flying later this year if it receives approval from the U.S. Department of Transportation.

"Orlando is a very cooperative airport," Virgin America spokeswoman Stacy Geagan said. "It's a very attractive market, so we'll definitely explore opportunities in Orlando."

The airline, which will fly mostly coast-to-coast long-haul routes under the Virgin brand, has garnered attention for its minority investor Richard Branson, the British billionaire and hot-air balloon enthusiast who owns the Virgin Group, which controls Virgin Atlantic Airways.

Orlando International Executive Director Bill Jennings wrote a letter dated Dec. 22 supporting Virgin America's bid as a start-up.

In the letter, Jennings said newcomers to the industry result in "lower prices for air travel, expanded consumer choice and spurred innovation in the marketplace."

Virgin America, which is headed by former Delta executive Fred Reid, is looking at Orlando at a time when the airport is in need of carriers to take over gates expected to be abandoned by bankrupt Delta Air Lines and recently shut down Independence Air among others.

Delta announced plans last month to close 16 of its 24 gates. Independence Air controlled two gates, and bankrupt airlines Northwest and United lease a combined 13 gates that they could abandon.

That could mean the airport stops receiving lease payments on nearly 20 percent of its gates, resulting in an increased financial burden on the airport's signatory carriers that are required through their leases to shore up any budget shortfalls.

The airport's goal is to attract new carriers, though it's unclear how long that could take.

"It's one of our top priorities," said Robert Ladd, the airport's senior director of commercial properties.

While the courtship between Orlando International and Virgin America proceeds, other airlines have attempted to persuade the DOT not to approve the new carrier.

Among the concerns is that the start-up will further saturate the market and hurt the industry by driving prices down to below profitable levels just as they were beginning to stabilize.

"I think there's a legitimate question right now about whether the country needs another low-cost airline," aviation consultant Stuart Klaskin said. "The public is happy to fly cheap, but prices need to come in line with costs."

Geagan said some other airlines are "colluding in an overt attempt to stop the DOT process."

"We think it's unprecedented the amount of objections they've had to our application," she said.

The DOT is likely to make a decision this year, though Virgin America officials say they have not been given a time frame.

Klaskin, a partner at KKC Aviation Consulting in Miami, said Orlando is not the only airport expected to have empty gates. Others such as Dallas/Fort Worth International Airport also have space.

"I think it's safe to say Orlando International is not really in danger of having all these excess gates for a long period of time," he said. "The trend is we're seeing airports incentivizing carriers to come in by not using traditional, long-term signatory leases. They rent the gates for an hour if they need to."

Ladd, one of the airport's senior directors, said details of how Virgin America would operate in Orlando are not yet known, but they are welcome.

"We're ready for them when they want to get here," he said.

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