Indy President speaks

Old Jun 29, 05, 10:34 am
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Join Date: Dec 2004
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Indy President speaks

in Huntsville..
Times Business Writer [email protected]
Low-fare airline may be forced to halt some flights

The president of the low-fare carrier Independence Air, hit with higher jet fuel costs like other airlines, believes that it has the "staying power" to continue service.

"We have struggled financially," said Tom Moore, president and chief operating officer of Independence Air, which started flying to five cities last June from its hub at Dulles International Airport outside Washington. It now serves airports in 45 cities, including Huntsville International Airport, with more than 400 flights a day. But, "these are difficult times in the whole industry."

Moore, a more than 20-year veteran of the airline industry, spoke Tuesday to the Huntsville Rotary Club.

UAL Corp., United Airlines' parent company, entered Chapter 11 bankruptcy in December 2002, and US Airways Group has also filed for Chapter 11 protection.

Fuel has grown from 12 percent of Independence Airline's costs to about 25 percent to 30 percent, said Moore, "at a time when we really can't raise fares." Asked about the impact of crude oil prices remaining at more than $50 a barrel, Moore said the higher fuel costs will force the airline to look at whether to continue service to "marginal communities."

Independence Air started service to Huntsville International Airport last Oct. 1 with six daily nonstop flights to Dulles and connecting flights from there to 30 other cities. It now has three daily flights from Huntsville to Dulles.

"Huntsville wasn't working for us when we had (six) flights a day," said Moore, adding that he believes the carrier can still offer travelers here a good, low-cost option with the schedule of three daily flights.

The airline had also started flights from Huntsville to Orlando and Tampa last November, but dropped those flights after two months. Moore said there wasn't enough demand for the Florida flights.

Earlier this year, the company completed a financial restructuring that includes agreements with most of the company's aircraft creditors to defer lease payments and reduce the number of its 50-seat regional jets from 87 to 58 in the company's fleet. "That brought us some breathing room to build out our brand," said Moore. FLYi Inc., the parent company, has reported a net loss of $105 million for the first quarter of 2005. It reported a preliminary annual net loss of more than $190 million for 2004.

The carrier had good news for May, reporting a systemwide 73 percent load factor, a key industry measure of the number of passengers carried in proportion to the available seats. That load factor is the company's highest since beginning service as Independence Air. As recently as January, its load factor systemwide had been just under 46 percent.

In Huntsville, the load factor was more than 70 percent in May, making it one of the top-performing local markets for the airline.

Independence Air spokesman Rick DeLisi said Tuesday that the systemwide load factor in June is expected to be ahead of May.
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