Newsday (Suffolk Edition) from Melville, New York on February 28, 2002 · 42
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Newsday (Suffolk Edition) from Melville, New York · 42

Melville, New York
Issue Date:
Thursday, February 28, 2002
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TECHNOLOGY wwwnewsdaycomebiz I Low-Cost Airlines Faring Better By Tom Incantalupo STAFF WHITER ' For some airlines the recession and post Sept 11 falloff in air travel has been devastating But for others it’s been little more than a temporary setback with the contrasts sometimes dramatic Consider these events in a seven-day period earlier this month: Feb 12 Bloomberg News Service reports that traffic on the 17 largest airlines in January months after the terrorist attacks while improving was still 12 percent below a year earlier For US Airways the nutfor carrier at LaGuardia airport the drop was almost 20 percent And for American the nation’s largest airline the decline was IS percent That afternoon New York-based JetBlue Airways which carried 3 million passengers last year said it planned to raise $125 million by selling shares to the public to finance an expansion that included new planes and a doubling of service in this year alone Six days later Southwest Airlines the only mqjor carrier to remain profitable and not lay people off after Sept 11 said it would add 4000 workers this year to its 32000-member work force as part of an expansion plan JetBlue reported a (385 million profit fin: last ar Southwest’s profit fell by 11 percent from 2000 it it still was more that half a billion dollars Collectively the mqjor airlines lost $7 billion ' Those hurt the least have tended to be low-fare low-cost airlines whose ace in the hole is that they can cut fares in tough times to keep customers coming and still earn a profit Besides Southwest and JetBlue low-cost carriers include Frontier Airlines Air Tran Airways Vanguard Airlines and Spirit Airlines “They’re in a better position to weather a downturn because their overall cost structure allows them to be very aggressive in pricing” said Bill Oliver a vice president of the aviation consulting firm the Boyd Group based in Evergreen Colo whether they are unionized like Southwest or non-union like JetBlue their wage scales are comp ble to those of traditional carriers But their costs usually are lower because their work forces tend to be younger and therefore lower on wage scales Oliver says more liberal work rules also helps costs Said Gary Kelly Southwest’s chief financial officer “Our folks just basically get out there and get the job done Route systems are another cost-saving area The most successful of the low-cost carriers including Southwest and JetBlue have point-to-point rather than “hub and spoke” systems The latter employed by most traditional carriers “feeds" passengers from remote locations along spoke routes and into one or more central locations or “hubs" where they are combined with other passengers on outbound flights The system has benefits but also is costly says Oliver because of frequent delays as aircraft wait for others to arrive with connecting passengers Extended ground time means lower aircraft utilization Some low-cost carriers also save money by avoiding crowded airports like LaGuardia where rents are high and air traffic delays can increase operating costs “Time is everything” Kelly said See TRAVEL on A45 Sill NnmUy Photos JuHa Galnaa Going Up! Mayor Michael Bloomberg William Mack of Apollo Real Estate Advisors left and Charles Gargano of Empire State Development sign a steel beam yesterday at the celebration of the construction of the AOL Time Warner Center in Manhattan which will also house Jazz at Lincoln Center Wynton Marsalis at left artistic director addresses the crowd Work has begun on the lower floors of the $1 7 billion 21 -million-square-foot complex at Columbus Circle The jazz complex will feature a Jazz Hall of Fame a 1100-seat theater and a 600-seat performance atrium The first 24 floors will Include facilities for transmission of CNN and CNNfn stores restaurants and a garage Two glass towers will rise 80 stories housing almost 200 condominiums and the Mandarin Oriental hotel Seat Belt Goal Loosened 2003 Level Now Set at 78 THZ ASSOCIATED PRK88 ' Washington — The government is backing away from its goal of getting 90 percent of Americans to wear seat belts by 2005 contending that level set in the Clinton administration is too unrealistic The new goal is 78 percent by 2003 compared with 87 percent envisioned under the Clinton plan Federal regulators will decide after 2003 whether to see new goals “Let’s put into effect a target we can actually use” Jeffrey Runge head of the National Highway Traffic Safety Administration told a Senate Appropriations panel yesterday The Clinton administration’s 10-year plan has proved too ambitious he said Seat belt use was a record 73 percent in 2001 but below the goal of 86 percent The agency will also target seat belt education and enforcement efforts in 12 states including Florida Texas and New York to boost usage Runge added The decision was criticized by Sen Patty Murray (D-Wash) who leads the transportation subcommittee for Betting lower expectations “I believe in realistic goals but I also believe when you lower your goal like that you send a very bad message” Murray told Runge Seat belt laws are set by the states The federal government can encourage states to pass tougher laws and pressure motorists to wear seat belts with tiie help of public education campaigns Seat belt use was at 68 percent when the 10-year plan was developed in 1995 The plan recommended that states pass tough laws requiring seat belt use that police strictly enforce those laws and that the public be educated about the dangers of not wearing a seat belt Seventeen states and the District of Columbia allow police to pull over motorists solely because they are not buckled up In most other states police can only issue seat belt citations to drivers pulled over for another traffic offense Chuck Hurley executive director of the Air Bag & Seat Belt Safety Campaign said the goal of 90 percent probably was unrealistic but that it was needed to encourage states to enact tougher laws The NHTSA said seat belt use saves 11000 lives and prevents 2 million injuries annually Runge said reaching the 78 percent level by 2003 will not be easy It would mean 15 million would have to wear seat belts Reaching that goal would save 1130 lives and prevent 18500 injuries in 2003 Runge said

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