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AIRTRAN'S CONTRACT WITH STATE BOOSTS ITS PROSPECTS IN AREA

For the first time, a discount airline has beaten out the major carriers for New York State government contracts to fly state employees to about a dozen destinations.

AirTran Airways has become the state's airline of choice for travel from Buffalo to Atlanta and Miami, Fort Lauderdale and Orlando, Fla. The airline also won air travel service contracts to 11 Sun Belt cities from two New York City-area airports.

The development has brightened the airline's prospects at Buffalo Niagara International Airport, local officials say.

One local travel expert believes the state's business will help the airline establish itself over the long haul in the Buffalo market.

"It gives them a foothold," said Patrick R. Byrne, treasurer of MPB Travel of Buffalo. "Dealing with the state will provide AirTran a steady revenue stream."

Local officials say they're pleased because they value AirTran for its affordable air fares to Atlanta and connecting cities.

Anything that bolsters AirTran's business and helps keep the airline in Buffalo is good for all the region's air travelers, said Lawrence M. Meckler, executive director of the Niagara Frontier Transportation Authority.

AirTran began flying from Buffalo to Orlando in 1995 and to Atlanta in 1998. The airline pulled out of Rochester and Syracuse in 1998.

Keeping discount airlines in Buffalo has become a top priority for the NFTA because of the prohibitive fares the major airlines charge when competition is scarce.

The region lost three discount carriers last year, including Delta Express and US Airways MetroJet. When they ended nonstop service from Buffalo to Orlando, air travelers saw one-way coach fares increase by 190 percent and the availability of advance-purchase seats fall, Byrne said.

Picking up the state business reduces the threat that AirTran will pull out of Buffalo. Just a year ago, NFTA officials expressed concern because AirTran wasn't doing as well as expected. At the time, the airline indicated ticket sales would have to improve for it to continue serving Buffalo.

"This gives them more stability," Meckler said. "And the more stability they have, the more we see them as a permanent presence at the airport. We worry a lot less about them now."

An AirTran spokeswoman echoed the comments from local officials.

"Something like this is extremely important for our viability in the market," AirTran's Cara Maruskin said of the state contracts.

AirTran last week added a third daily flight between Buffalo and Atlanta, since bookings in Buffalo showed the airline could support the extra daily flight, Maruskin said.

By choosing AirTran, the state figures to lower its air-travel costs to the Southeast.

AirTran offers fares that are, on average, 42 percent less than what the major airlines charged the state last year on the selected routes, according to a Buffalo News analysis of prices quoted to the state Office of General Services.

In all, AirTran won the right this year to fly state workers between 21 pairs of cities, including four destinations from Buffalo, because:

AirTran's $109 one-way fare between Buffalo and Atlanta is 62 percent less than the $284 fare charged last year by United Airlines.

AirTran charges $159 each way to and from Miami, down 38 percent from the $258 fare charged by Northwest Airlines last year.

AirTran's fares to two other Florida cities, Fort Lauderdale and Orlando, are at least 46 percent cheaper than what Northwest charged last year.

Two other discount carriers in Buffalo decided not to pursue state contracts.

Shuttle America and Vanguard Airlines, which introduced low fares from Buffalo to Albany and Chicago's Midway Airport, respectively, say it's too difficult to accommodate the way the state pays for the travel of its civil servants.

The state issues an invoice when an employee travels and pays later.

The discount carriers prefer passengers who pay when booking a flight.

In the meantime, New York State will pay hundreds of dollars more for a round-trip ticket from Buffalo to Albany or to Chicago's Midway because state workers are booked on the more expensive airlines.

Shuttle America, for example, charges one-way fares to Albany ranging from $59 to $179.

This year, US Airways -- the state's designated carrier between Albany and Buffalo -- charges the state a one-way fare of $226. That's $47 above Shuttle America's highest one-way fare.

Travel agents are required by the state's air-travel contracts to book fares on the designated airlines for state workers, unless another airline offers a cheaper fare, said Peter Constantakes, a spokesman for the state Office of General Services.

Shuttle America said it has booked New York employees on its Buffalo-Albany route.

But industry observers say the contracts effectively steer state workers to the designated airlines, even if they're more expensive, because travel agents for state agencies may not take the time to look for the lowest fares.

Constantakes said the selection of AirTran marks "the first and only time" a discount carrier has won a state contract for air travel.

The difference in cost is dramatic, not only compared with last year's prices but also compared with current prices charged in upstate markets not served by AirTran.

AirTran doesn't fly out of Rochester or Albany.

State employees flying from Rochester to Atlanta will pay a $243 one-way fare on Delta Air Lines, while those in Albany will pay Delta a $287 one-way fare. Employees traveling to Atlanta from Buffalo will pay a $109 one-way AirTran fare.

A local business advocacy group said AirTran's success in this market is important in combating the the high air fares that have socked business travelers.

"We believe AirTran is part of an ongoing solution to the high costs that businesses face for their air travel," said Julie R. Hazzan, communications director for the Buffalo Niagara Partnership.

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