AirCal is stepping up the already hot competition in the Los Angeles-San Francisco corridor, this time trying to lure passengers with free champagne and croissants.
The Newport Beach commuter airline, which has been steadily increasing its passenger loads and earnings since its near financial collapse of two years ago, began a $500,000 advertising campaign this week, promoting its "Almost First Class" service between Los Angeles International and San Francisco International airports.
The airline hopes the added amenities, which include more leg room, wider seats, and fresh fruit and cheese, will bring it a bigger share of the estimated 3 million passengers who travel between the two airports each year. But analysts and AirCal's chief competitor on the route are skeptical about whether the new promotion can accomplish AirCal's goal of capturing 3% more of the traffic, which would bring it an additional 90,000 passengers a year.
Backbone of Route
The Los Angeles-San Francisco route is the backbone of the so-called California Corridor (between major airports in the Southland and Bay Area), which attracts 6 million air travelers a year. In 1984, 38% of the passengers flew with San Diego-based PSA; AirCal's share was 35% and United Airlines had about 15% of the market, according to Dun & Bradstreet, a New York business information service. Although the airlines do not report passenger figures for specific routes, AirCal said about 80% of its flights are in the corridor.
For the past two years, AirCal steadily has been increasing its passenger traffic. However, some of the increase has come with added flights and lower fares on some flights. Although total miles flown have increased, AirCal's planes have been flying with fewer passengers than last year, cutting down on each run's profitability.
To fill those seats, AirCal's new promotion is directed at business travelers and "the discretionary flier looking for value," said Arlynn Whittaker, AirCal's marketing director.
AirCal's unrestricted, unlimited fare between Los Angeles' LAX airport and San Francisco is $89 one way. PSA and United Airlines have the same fare. Lower discount fares are available on all three air carriers.
Dan R. Wewer, an analyst at Rauscher Pierce Refsnes Inc., a Dallas-based brokerage firm, said the new campaign may work if AirCal can maintain a competitive flight schedule and fare structure. "If they are lacking in either area, free champagne is not going to make a difference," he said.
Rauscher said attempts by airlines, such as Braniff, to upgrade in-flight service without competitive flight and fare schedules generally have ended in failure.
At rival PSA, spokeswoman Margery Craig was a "little skeptical" about whether AirCal could increase its share of travelers on the hotly contested route by the 90,000 it has targeted.
PSA does not have any definite plans to respond to AirCal's new service, but it announced Monday it was adding two flights between John Wayne and San Jose Airport, effective April 17. PSA, however, may have a comeback. Said Craig: "Stay tuned."
In addition to the Los Angeles-San Francisco flights, AirCal will offer the "Almost First Class" service on San Francisco-Seattle trips. If it proves successful, the airline will offer it on all its routes, Whittaker said, including those to the Bay Area's three airports from John Wayne Airport in Orange County.