Frank Borman is taking a wait-and-see attitude about weather New York Air's new competitive service will have a negative impact on Eastern Airlines' Air-Shuttle.
But so far, passenger traffic on the shuttle as increased, not decreased, since New York Air began its service between Washington and New York almost seven weeks ago, Borman, Eastern's chairman and president, says.
"New York Air may well increase the size of the market," Borman said in an interview at Eastern's headquarters here. "The only way to determine that is to let time tell," he said.
New York Air began its Washington-new York service on Dec. 19 and has announced plans to invade the other shuttle route -- New York-Boston -- on Feb. 15. In both December and January, however, Eastern's shuttle traffic exceeded traffic in the same month a year earlier and exceeded Eastern's own forecasts, Borman said.
At the same time, New York Air reported that it carried 37,676 passengers in January, its first full month of operation. The new entrant on the nation's most heavily traveled air route filled 58.1 percent of its available seats during January, considered a very good performance for a new service.
In conjunction with its new Boston service, New York Air announced yesterday that it will offer travelers between Washington and Boston five flights a day with a stop in New York. The fare on NYA, a subsidiary of Texas Air Corp., will be $59 each way, compared with the regular nonstop coach fare of $103.
Like New York Air Chairman Frank Lorenzo, Borman says the two airlines are offering "different products." Eastern offers an on-board ticketed service that guarantees a seat -- but no amenities -- to everyone at the gate by departure time. New York Air offers a lower-fare, reserved-seat service with amenities, but with fewer flights a day.
Eastern officials don't know how much of its recent shuttle traffic was generated by the on-board distribution of its "California bonus coupons." The coupons, which were distributed throughout January, give the holder a 50 percent discount on a one-way regular or first class cross-country ticket. But traffic has undoubtedly been heavy. Last Thursday, for instance, the East Coast shuttle -- counting both Washington-New York and New York-Boston -- ran 55 extra sections in addition to the regularly scheduled 60 daily flights, Eastern officials said. About 40 of the extra flights were between Washington and New York.
Borman said Eastern assigns 19 airplanes to the shuttle, 11 for the daily scheduled service and eight more as back-up planes. He said the shuttle is profitable but rejected the contentions o some that it is a virtual money-machine. The costs of keeping the extra planes and crews for back-up purposes to provide guaranteed seats during peak periods io high, he said. They are utilized an average of 2 1/2 hours a day instead of the nine-plus the would be used on other routes, he said. But it's worth the expense, he added. "If we just ran a high-frequency service, the costs would be lower -- but then we wouldn't have as much of a market," Borman said.
The shuttle, 20 years old this April, has already carried more than 51 million passengers. Some changes are in store for the well-traveled service this spring. On March 4, Eastern will begin operating from its new $25 million terminal at New York's LaGuardia Airport. Borman said he also hopes to put one of the quiet Airbus A-300 airplanes on the Washington shuttle route on May 1 after a Department of Transportation rule permitting widebodied aircraft at National goes into effect.