INDIANAPOLIS -- ATA's decision to install a business class on its
entire scheduled-service fleet by mid-November is the culmination
of several years of effort to shift the focus of what once had been
known almost exclusively as a leisure product.
ATA believes the effort is paying off. Passenger surveys last
year revealed that 50% of the airline's patrons were on a business
trip, up from 20% a few years ago, said John Happ, the airline's
senior vice president of marketing and sales.
Just over two years ago, the airline created a sales and
marketing unit exclusively for signing up corporate customers.
Today, the nation's 10th-largest airline has more than 600
corporate accounts, Happ said.
"We've really tried to position ourselves as a business-flying,
value option," he added.
Gradually, ATA has been building the pieces, evolving and
sometimes adding elements that weren't in the original plan.
In May 2001, the airline launched what it called a "complete
image transformation" to try to broaden its appeal to business
travelers. That included ditching the palm-tree logo and livery
that adorned its promotions and aircraft.
By then, ATA already had ordered new 737 and 757 aircraft and
was building up frequency to business-oriented points such as New
York, Philadelphia, Washington and Chicago. At the time, ATA said
it did not plan to launch a frequent-flyer program, but it reversed
itself and rolled one out in October 2002.
Happ said it is on target to enroll about 1 million members by
year's end; an elite level for that program is in the works.
The fleet modernization is complete; the airline now flies only
737s and 757s for its scheduled service. And ATA has continued to
use its fleet expansion to add business routes and build existing
ones -- to the point where about 47% of the airline's capacity now
is in what ATA defines as business markets.
But the lack of a business class has hampered its sales pitch to
corporations, Happ said. He said the decision to add a 12-seat
business class -- and cap domestic, one-way fares at $399, similar
to its $299 cap on economy -- "opens doors that are already open,
just a whole lot wider."
Happ said the business-class product has been under
consideration for two to three years. But it wasn't until last
year, after ATA looked at customer survey results and used Sabre
Airline Solutions to analyze the costs and benefits, that it
decided to take the plunge.
ATA flies primarily out of Chicago's Midway and, in some ways,
the business class is a way to further distinguish its service from
rivals such as Southwest. But the airline also goes up against some
of the big network airlines and sees a lower-priced business class
as a way to take them on, as well.
Of course, the real proof will come in the bottom line. ATA
Holdings, ATA's parent company, posted a $20.4 million profit in
2003 -- its first full-year profit since 1999 -- but lost $19.6
million in the fourth quarter.
Both were improvements over a $169.3 million full-year loss and
$55.1 million fourth-quarter loss in 2002.
To contact reporter Andrew Compart, send e-mail to [email protected].