Acela speeds through airlines' shuttle customer base

By Marilyn Adams, USA TODAY, 4/16/02

For decades, Andrew LaGrega was a loyal regular on shuttle flights between New York and Boston. Even before the shuttles were operated by US Airways and Delta Air Lines, the shopping center developer flew from Boston, where his firm is based, to New York at least twice a month.

No more. Now, he boards Amtrak's bullet-shaped Acela train near his office, plugs in his laptop, switches on his cell phone and rides the rails to New York.

"Between getting to and from the airport and waiting in the airport, the train actually takes less time," says LaGrega, a partner in the Wilder Cos. "It's about half the price, and I don't have to expose the holes in my socks to airport security. The best news is my cell phone works almost 100% of the trip, so I can be very productive."

His only complaint is that since he started using the train last October, it's gotten more crowded — which might help explain why Delta's and US Airways' shuttles haven't been crowded enough.

Shuttle flights in the Northeast corridor — serving Reagan Washington National, New York's LaGuardia and Boston's Logan airports — aren't the only kinds of flights to and from New York that haven't bounced back since September's attacks. A USA TODAY analysis of OAG data on domestic flights shows airlines are offering 17% fewer seats this month from the three New York-area airports than in April 2001, but only 10% fewer nationwide.

Virtually every airline has sharply reduced service to and from New York. American, which now owns TWA, is offering a third fewer seats from JFK than the two airlines combined did this time last year, for example. Continental has almost 39% fewer seats from LaGuardia. United has a third fewer seats from LaGuardia. Northwest has cut seats from Newark, N.J., 26% and 22% from LaGuardia.

The only airline really ramping up in New York is JFK-based JetBlue, a low-fare, leisure-oriented start-up that went public last week. JetBlue's capacity at JFK has jumped 76% in a year.

Whether travel, particularly business travel, to New York has dropped sharply or just shifted partly to rail, it's bad news for airlines that have a big stake in the city.

It's a bad sign for New York. While some experts blame the recession and general falloff in business-travel spending, others say New York's wounded economy is a major reason for weakened demand. And the more-stressful airport experience is an albatross for airlines that's often beyond their control.

Just as worrisome for the shuttle airlines is Amtrak, which long operated a Metroliner train service in the corridor that couldn't beat flying, time-wise, pre-Sept. 11. Now, as airports remain unpredictable, Amtrak has a competitive new product: the higher-speed Acela train, targeted squarely at the business traveler. It offers business-class and first-class service, Internet ticket sales, laptop power ports, headphones, a dining car and shortened trip times.

"A lot of folks seem to have converted to train travel," says Amtrak spokeswoman Karen Dunn. "Acela and Metroliner continue to sell out. Before Sept. 11, maybe one train a day sold out. Now, we're selling out eight to 10 Acela trains a day, and six to eight Metroliners." Each Acela seats 304 passengers; the Metroliner, 330.

The Acela, which travels New York to Boston in 3 hours, 28 minutes, shaved about 90 minutes off the old Amtrak time. With more track improvements, Amtrak hopes to reduce that trip time to 3 hours in the next year. New York to Washington still takes about 2 hours, 43 minutes. A business-class ticket for a New York to Boston trip bought on short notice is $236 vs. $411 for a coach shuttle flight.

Acela has surpassed Amtrak's ridership predictions. In February, the latest month for which data is available, 204,836 riders boarded the sleek Acela Express trains: 50,422 between New York and Boston, 133,032 between New York and Washington, and 21,382 elsewhere along the route. That set a monthly record, and represented a 16-fold jump over February 2001, its third month of operation.

The most dramatic month-over-month increase came last October, when ridership nearly doubled from September. At the time, Reagan Washington National had been shut for security reasons for three weeks and had reopened for a fraction of its normal schedule. Airlines only this week are allowed to resume normal schedules there.

Shuttle flights have definitely felt the pressure. "Our shuttle isn't rebounding as fast as our other service," Delta Executive Vice President Vicki Escarra said in March.

In the fourth quarter, the latest data available, Delta's shuttle revenue was off 38% from a year earlier — down almost twice as much as revenue systemwide.

In recent weeks, buoyed by spring break, both the Northeast shuttle and long-haul traffic to New York have improved, Delta says. "Since Easter, we've seen a turnaround in our New York performance," says Harlan Bennett, vice president.

This week, Delta launched a print, radio and billboard ad campaign in Boston, New York and Washington aimed at shuttle defectors with the message, "Planes are faster than trains" and offering triple frequent-flier miles on shuttle flights from now through May 31. It also promises to get Delta shuttle passengers through the airport in 20 minutes or Delta will award 20,000 frequent-flier miles.

US Airways says its shuttle is suffering no more now than its domestic traffic systemwide. But in January, shuttle traffic was down 29% over a year earlier. By March, that gap had declined to 15%.

The airline was nervous enough about losing shuttle passengers to Amtrak earlier this year to run an anti-train advertising campaign in Boston, New York and Washington newspapers. US Airways also put the message in direct mailings to shuttle fliers.

"Time flies. It doesn't wait for the train," said the newspaper ad next to a photo of a harried business traveler.

US Airways claims the average walk time from airport curb to gate, including the security checkpoint, is 20 minutes on its shuttle.

"Our goal is to keep it below 20 minutes," says Stephen Usery, US Airways' vice president for marketing. "We found in our research that the perception was you had to get to the airport two hours early for the shuttle."

After the campaign, US Airways' shuttle traffic improved. Now, Usery says, shuttle customers and former customers seem to understand the wait time isn't that bad. But the recession hasn't gone away, and Amtrak's trip times are likely to get better as time goes on. For now, Usery says, US Airways is studying its next marketing move in New York.

"I'm in a watch-and-see mode right now," he says.

Contributing: Barbara Hansen

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