Despite no profits in D.M., Continental happy, for now
Continental Airlines Inc. President Larry Kellner, paying an unusual visit to Des Moines, told city politicians, business leaders and airport officials last week that his airline is committed to the city but needs more passengers to stay here longterm.
The company’s regional carrier, Continental Express, has yet to make a profit on its twice-daily flights between Des Moines and its hubs in Houston and Newark, N.J. The service began in July.
Continental is committed to serving Des Moines through the summer months, Kellner said. After that, if business doesn’t pick up, Kellner said the company would study its options, which could include cutting back on flights or eliminating routes altogether. “Des Moines is a little behind where it should be,” he said. “We’re working hard to make sure it works. If it’s not working past summer, we’ll have to take a look at it.”
The airline industry has been struggling with decreasing passenger traffic and persistent losses. Two of the biggest airlines, US Airways and UAL Corp.’s United Airlines, are currently operating under bankruptcy court protection. Houston-based Continental is the fifth-largest air carrier in the United States.
That Kellner would come to a city the size of Des Moines is a signal of the company’s frustration at not being able to attract as many customers as it would like.
His visit also provides a glimpse into the company’s strategy for wooing customers to its jets. Despite rampant customer complaints that airlines are cutting back on services such as in-flight meals, Continental has maintained meals on its flights in an attempt to further differentiate its product.
“I’ve got to say that we’ve got a lot of affection for what you’ve got here,” Kellner said. “We can use your help.”
On flights between Des Moines and Newark, Continental’s jets have been, on average, about 40 percent full, Kellner said. Occupancy on trips between Des Moines and Houston has been better, at close to 60 percent. Business travelers have so far lagged trips taken for recreation from Des Moines, he said.
One reason for Kellner’s visit was to boost awareness of Continental, he said. Along those lines, he said the company was offering $198 round-trip fares between Des Moines and Newark. The price doesn’t include taxes and fees. The sale ends March 7, and the trip must include a Saturday stayover.
Average prices for round-trip tickets from Des Moines have steadily dropped since Continental began service. That has helped passenger traffic rise in recent months, though it has not yet rebounded to 2000 levels. Last week, the airport said that 871,991 passengers departed from Des Moines in 2002, up 6.7 percent from 2001. Nationwide, airports have reported a 5 percent drop in traffic.
Des Moines was the first new city Continental added to its routes following the terrorist attacks of September 2001. A large number of local, state and national politicians were involved in persuading the airline to begin daily flights to and from Des Moines.