Photo: Matt Thaler via JetPhotos.net.
Today is your lucky day! I am offering two throwbacks for the price of one - which just so happens to be free, anyways. I initiated this post with AirTran in mind, but it soon became apparent that I could not tell the whole story of AirTran without first providing context for why they ended up merging with ValuJet. I found AirTran's story admirable and consider them a comeback story for the ages with how disliked ValuJet was (you think Spirit is bad??). So sit back, relax, and soak in some aviation history.
Part I: ValuJet
CALLSIGN = "CRITTER"
ValuJet Airlines was formed in 1992 by past executives of the defunct carrier Southern Airways, who consolidated in 1979 following airline deregulation. Co-founder Robert Priddy had an impressive track record, serving as a founding partner for other successful start-ups such as Atlantic Southeast Airlines and Florida Gulf Airlines. Initially, most support staff, like pilots, mechanics, and flight attendants, had arrived from the recently deceased Eastern Air Lines. After Eastern's collapse, Atlanta had a large hole in air service to fill. ValuJet desired to fill this void as a low-cost carrier instead starting with a hub-and-spoke network principally out of Atlanta-Hartsfield International Airport.
Introducing service with two former Delta Air Lines DC-9s, ValuJet initially flew to three cities in Florida from their home in Atlanta. Starting with a focus on Florida was a firm decision and supplied instant success. Many more customers would flock to the airline once ValuJet became the first to introduce ticketless travel in '93. The airline introduced fifteen additional aircraft into its fleet between 1993 and 1994 and went public shortly after. By the end of 1995, ValuJet was named the top company in the Georgia 100 as published by the Atlanta Journal-Constitution, with a $67 million net profit margin on revenues of $367 million. Also worth noting, ValuJet became the fastest airline to record a profit with earnings of $21 million in 1994.
In late 1995, ValuJet placed an order with aircraft manufacturer McDonnell Douglas to serve as the launch customer for their upcoming MD-95 (known today as the Boeing 717). Set to be the youngest airline to launch an aircraft, the Boeing 717 promised ValuJet an economical replacement for their fleet of early-built DC-9s and the ability to reach further cities while sustaining profitability.
As it turned out, all this success came at a great sacrifice. Low-cost carriers were already known for taking cost-cutting to the extreme. As part of their business measures, aircraft maintenance for their thriving fleet was outsourced to the lowest bidder. Often, those mechanics would subcontract specific maintenance tasks to their subcontractors. The complexity resulted in poor oversight by management, and it did not take long for a dangerous culture antonymic to safety to emerge.
As more hair-raising stories continued to surface, the FAA began to step up its oversight of ongoing maintenance procedures, forcing ValuJet to slow its pace of expansion. In October of 1995, the Department of Defense even rejected an attempted bid made by ValuJet to transport military personnel, citing passenger safety due to their numerous maintenance concerns.
In early 1996, the FAA field office in Atlanta had filed a motion appealing to the head office in Washington for ValuJet's fleet to be grounded. At the time ValuJet’s total fleet number was 52, all of which were DC-9s that had previous owners and were on the back end of their life cycles. In 1994, the airline had fourteen emergency landings. The following year, that number nearly quadrupled to 57. With the situation rapidly deteriorating, the government required their approval anytime ValuJet wanted to acquire additional aircraft or enter a new market, the first time an airline was required to do so since deregulation.
On May 2, 1996, the FAA released a report that ranked ValuJet as the worst low-cost carrier for safety. The study was initiated as pressure mounted on the FAA to address growing safety concerns regarding low-cost airlines. The data defines an accident as “an incident that results in damage to an aircraft or injury or death,” revealing four accidents per 100,000 takeoffs between 1990 and 1996. To draw a comparison, 12 other low-cost carriers came in at 0.7 per 100,000 takeoffs. Tower Air, the other low-cost carrier to score poorly, came in at number two.
Only nine days later would ValuJet 592 crash into the Everglades shortly after takeoff, killing all 100 souls on board. The flight, which had already been delayed due to weather and mechanical issues, had suffered an in-flight fire that had originated in one of the aircraft's cargo holds. One of 144 chemical oxygen generators ignited, spreading from canister to canister, and quickly reached the cabin. The airplane impacted the ground at over 500 mph, so severely that virtually nothing remained of the aircraft in the debris field. Everyone on board either died of smoke inhalation or as a result of the impact.
The NTSB's investigation revealed that the chemical oxygen containers were expired and packaged improperly by a maintenance contractor. Further, the ValuJet flight crew was not notified that the canisters were live. Assuming they were empty, the canisters were cleared to fly as COMAT (industry term for “company material”), typically stored in cargo bays for transport. Startling findings elsewhere were revealed in the crash investigation, including maintenance records showing one aircraft operated over 140 times with a hydraulic leak. Finally reaching a breaking point, ValuJet was grounded only a year later.
Part II: AirTran
Callsign = "Citrus"
If you are a millennial plane nerd east of the Mississippi River, odds are you remember AirTran. Serving as both the launch and final customer of the Boeing 717, AirTran was the only operator of the type in the contiguous United States - that is, until Delta purchased their scraps in May 2012 to replace their aging fleet of Douglas DC-9s. Many things made AirTran unique, which is why they are missed by so many aviation professionals today.
The origin of AirTran dates back to 1993 when, much like ValuJet, a group of former Eastern Air Lines employees collaborated to launch a low-cost carrier they coined Conquest Sun Airlines. Based out of Orlando-MCO, the airline launched service utilizing Boeing 737-200s. The carrier eventually grew to a fleet of eleven Boeing 737-200 aircraft, enough so that AirTran Holdings (the same holding company as Mesaba Airlines, a sizeable regional affiliate for Northwest Airlines at the time) acquired the carrier in 1994 and renamed it to AirTran Airways.
Photo: Dennis HKG on Flickr.
If you have not caught the gist of Part I, ValuJet was at a crossroads in 1996. Bad press was relentless as thousands of passengers drove away from the carrier. Emerging from their government-mandated grounding, ValuJet was severely constrained and could only resume operations with 15 of their 52 aircraft. Financially, the airline began seeing their circumstances' repercussions and quickly needed an answer. Seeking a rapid acquisition, ValuJet executives identified AirTran as the most viable candidate, and in July 1997, a merger was announced.
Clearly, in 1996 ValuJet was a much larger brand than AirTran. Typically in mergers, the surviving brand is almost always the larger one. Understandably, however, ValuJet sought a fresh start and elected to keep AirTran's branding. Additionally, the headquarters for the new AirTran moved from Atlanta to Orlando (however, their extensive Atlanta network would remain their most significant and left, for the most part, untouched). In mid-1998, the consolidation reached completion, and AirTran began operations under a single certificate.
While initially, most of AirTran’s management was composed of former ValuJet executives, they did what they could to distance themselves from their previous mistakes. The safety record improved almost overnight as maintenance was moved to in-house and more operational oversight was implemented. The public certainly did not buy it at first as the merger drew significant criticism; however, skepticism began to dwindle with each successful takeoff and landing over time.
In 1999, now under new management, AirTran began to right the ship financially. In October of that year, the airline introduced the Boeing 717 to its fleet, enabling them to start retiring its troubled DC-9 fleet. This effort was headed by C.E.O. Joe Leonard, previously of Eastern Air Lines, who wanted to financially stabilize the organization and build a culture of trust and safety. Now seemingly headed in the right direction, AirTran's stock began to trade on the New York Stock Exchange in 2001 under the ticker “AAI.”
In 2002, the airline began to get creative. AirTran, feeling that their Boeing 717 aircraft were too large capacity-wise for specific markets, launched a regional affiliate they named AirTran JetConnect. Using 50-seat Bombardier CRJ-200s operated by Air Wisconsin, the carrier expanded to a fleet of 26 aircraft over 18 destinations. In March 2004, only two years later, AirTran's economic analysis determined they could be more profitable in short-haul markets with their Boeing 717s. Thus, the agreement with Air Wisconsin was terminated, and aircraft returned to their fleet operating for other affiliates.
The Boeing 717 was the perfect fit for their business model. However, they saw the potential that exceeded the range it offered. In 2003, AirTran ordered 100 Boeing 737-700 aircraft that would seat an additional 20 passengers, a total of 137 overall. However, since the first Boeing 737s would not arrive in their fleet for another year, AirTran leased four Airbus A320 aircraft from the charter operator Ryan International Airlines to commence service to the west coast.
In 2006, it came to public light that AirTran had been in talks to acquire Midwest Airlines but was facing competition in the form of Texas Pacific Group’s TPG Capital, a joint venture with Northwest Airlines. Discussions were intense, and several offers were made that tilted the favorite back and forth. Eventually, in 2007, it was announced that TPG would emerge as the victor.
Still, AirTran continued its impressive growth. At their peak, AirTran saw over 700 daily flights - 200 of which were in and out of their hub in Atlanta. In 2009, AirTran became the first airline to have equipped its fleet with in-flight WiFi.
In 2010, after a failed acquisition of competitor Frontier Airlines, Southwest Airlines was on the prowl for another acquisition target. Historians will tell you their failed attempt to acquire Frontier played out for the best as a merger with AirTran provided much more synergy. With the Boeing 737-700 fleet in their fleet, AirTran would also provide Southwest access to larger airports and infrastructure to meet their desired growth in market share for business travel.
Like Southwest, AirTran had a large base out of Baltimore, including a handful of international destinations. To this point, Southwest had been only a domestic carrier with little desire to test international markets. However, AirTran’s Caribbean routes were performing well, allowing Southwest to venture into international markets with little risk.
On May 2, 2011, the consolidation agreement between the two carriers was finalized. Less than a year later, on March 1, 2012, the airline began operating under a single certificate. On Valentine’s Day in 2013, Southwest and AirTran began to merge their networks by offering codeshares on specific routes. This codeshare network continued to grow as the network planning analyzed which AirTran routes would live on.
Initially, Southwest intended to incorporate AirTran’s Boeing 717 aircraft into its fleet. In 2013, Delta Air Lines had recently announced their intention to acquire Air Canada’s former fleet of Embraer 190 planes. Southwest had a change of heart, and so did Delta. Instead of the Embraer 190s, which were nearing delivery, Delta turned to AirTran’s fleet of Boeing 717s to accommodate their desire to serve 100-seat markets. Slowly, AirTran began leasing aircraft from Southwest. Currently, a mix of these aircraft is still leased from Southwest, while others Delta ultimately owns.
On December 28, 2014, the final AirTran flight operated from Atlanta to Tampa as “Critter 1,” an homage to the carrier’s early days. More than just a callsign, this route and flight number was the first flight that ValuJet operated over twenty years prior.
Photo: The Atlanta Journal-Constitution.
Marketing
Much like Southwest, AirTran desired to be a high-quality, low-cost carrier. At first, this arose from the need to separate themselves from their troubled ValuJet image. However, as the positive energy spread, so did their earnings, providing another example of how influential a company's culture can be to business success. Once new management took over, AirTran never looked back and preserved a reputation in the industry with a heart of high-measured positivity. Further, when hiring, AirTran valued a candidate's desire to mold into their unique culture over exemplary skills, creating another synergy point when they merged with Southwest.
AirTran also was known for using its fleet as a unique way of sparking partnerships. For example, AirTran painted a handful of “logo jets” (see Appendix) supporting local professional sports organizations in cities with operating bases. After completing the installation of XM Radio on their aircraft, AirTran painted Elton John’s face onto twenty of their Boeing 717s and allowed aviation enthusiasts to track these aircraft on their website (this was before the FlightRadar24 days when spotting aircraft in the wild was more an accomplishment of luck than anything else). In 2008, after Danica Patrick won her first race, AirTran also painted her face on the side of an aircraft they called “AirTranica Won.”
In 2009, comedian and writer Mark Malkoff partnered with AirTran to overcome his fear of flying. For 30 days straight, Malkoff would live on AirTran aircraft traveling from city to city, providing content such as videos, tweets, and live-blogging his experiences straight from the plane. Taking advantage of the opportunity, AirTran used this to promote that they were the first airline to offer WiFi fleet-wide, having recently completed their installation process. And, of course, they painted an aircraft for the occasion. The videos survive on YouTube, which you can check out here.
Photo: EventMarketer.com.
Business Model
Most low-cost carriers had some hub-and-spoke system in their route network. However, AirTran was by far the largest, with a broad network in Atlanta and Baltimore. Additionally, they were the only low-cost carrier at the time to offer a premium class, featuring twelve seats in a 2 x 2 business class configuration, making them the carrier of choice for several corporate business partners. Most low-cost carriers focused on cramming as many living beings onto a flying tube as possible, that is most except AirTran. Their Boeing 717s only seated 117 (still an impressive number of passengers for the type), and, as previously mentioned, the Boeing 737-700s only sat 137.
With fewer seats required to fill, many smaller cities sought service from the carrier to give their community a low-cost option for business and leisure travelers. A comparable carrier today with this model is Breeze Airways, an ultra-low-cost carrier operating a fleet of Embraer 190/195 and Airbus A220-300 aircraft. Not having to provide almost 200 passengers per flight puts less pressure on the markets to fill seats, which is usually met with a more attractive cost structure for carriers like Breeze and AirTran to operate.
Nearly all markets served by AirTran continued to live on. Cities that were marginal with Boeing 717 were terminated, which was only a handful. Other unique came down to more than just profitability, such as AirTran’s network out of Westchester County Airport. The station was profitable. However, the airport was unwilling to negotiate Southwest’s in-house ground handling nor accommodate the airline’s unique boarding process. Further, the airport has a complicated lottery process limiting competition and growth opportunities. In the end, even though Southwest announced the combined carrier would continue to serve Westchester, the station was closed in 2013.
AirTran Today
I miss hearing Citrus. Though I wish AirTran were still around, it is hard to argue that Southwest was not the perfect fit for their merger. Many former AirTran employees continued to work with Southwest, assumingly a significant reason they continue setting the bar for creative marketing. Thanks to AirTran, Southwest has retained market share for business travel, particularly on the east coast. At airports that served more as focus cities, such as Indianapolis and Milwaukee, Southwest continues to fly many of AirTran’s former routes that performed well.
While Delta continues to fly the former AirTran Boeing 717s, they are expected to be withdrawn from use and retired by the end of 2025. Old AirTran birds still fly for Southwest to date - while not an exact science, many former AirTran aircraft hold registration with four numbers after November and end with Alpha, such as N7719A. Not every single Boeing 737-700 was transferred to Southwest, as some went on to fly for carriers such as Enerjet (which I just blogged about) and Arik Air. Three were converted to Boeing Business Jets and fly for the well-known private charter operator Hillwood Airways, pictured below.
N737AT
This airframe was never taken up but was intended for AirTran. Before being acquired by Hillwood in July 2017, this aircraft flew for the U.S. Department of Defense.
N959BP
N660CP
This airframe spent time flying for oil company Conoco-Phillips before being acquired by Hillwood in October 2019.
As you can see, AirTran was not the story of an airline that fell apart. It takes some organization not just to coexist but also to compete at one of the largest airline hubs in the world. For this reason, in their later years, AirTran became an attractive acquisition target for larger airlines looking to expand into larger markets quickly. If anything, their story should be considered a success.
Appendix: AirTran's LogoJets
N891AT, Atlanta Falcons
N936AT, Indianapolis Colts
N932AT, Milwaukee Brewers
N949AT, Orlando Magic
