A new, leaner Braniff takes on its old rivals
Braniff is back. The snip of the ribbon at the Dallas-Fort Worth airport this morning was to mark the beginning of a new Braniff Inc. - a carrier that now wants to cater to the business traveler.Skip to next paragraph
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The traditional ribbon-cutting ceremony was for the public. Employees, returning to work at an airline that spent the past 22 months grounded in bankruptcy reorganization, are celebrating in their own way. On Saturday night Braniff workers will be treated to a Beach Boys and Lynn Anderson concert put on by management. Employee morale ''is going through the roof,'' Stephen Spurgeon, a Braniff spokesman, comments.
That's good, because Braniff will need every ounce of enthusiasm it can get in its Texas hub, where American and Delta are firmly entrenched. Both airlines are likely to put up a tough fight. They have recently matched Braniff's introductory discount fares, and now it looks like American is getting set to undertake a major expansion of routes and planes. As it expands, it will be hiring new workers at lower wages, thus improving its overall cost position - an edge that Braniff now has.
Geared-up workers are a plus for this airline, but the bottom-line benefit is that they cost Braniff a lot less now than they did almost two years ago. Braniff pilots now earn 60 percent less and flight attendants 50 percent less, compared with their previous wages.
''The new Braniff does have low-cost structure, mainly because of using entry-level wages,'' says Alfred Norling, an airline analyst at Kidder, Peabody & Co., the New York brokerage house.
The new Braniff was the result of Jay Pritzker's efforts. Mr. Pritzker is chairman of the Hyatt Corporation, which owns the hotel chain. Braniff is a subsidiary of the Dalfort Corporation, which is controlled by Hyatt. Through Pritzker's efforts, Braniff now has about $70 million in capital to start its operation.
It is starting with a new image. The designer-painted planes are gone. Instead, the Boeing 727s all look alike, decked out in a uniform red, white, blue, and silver design. Braniff has shrunk: It dropped its international routes; it's down to serving 19 domestic cities; it employs 2,200 people, compared with 9,200 in the old days; and its fleet size is 30 planes, compared with 75. It has peeled back overhead costs enough so that it need only fill about half its seats to break even.
With competitive costs and a forward-moving economy under its wing, Braniff will be concentrating on marketing strategy.
''We will be 25 to 30 percent more efficient than our competitors, and as such, we will translate those efficiencies into more comfortable arrangements (for travelers) at existing, competitive fare levels,'' says W. Thomas Lagow, Braniff's senior vice-president of marketing.
''They have chosen to be competitive on a service basis,'' says Mr. Norling, who doesn't see Braniff's business strategy as unique.
''It's another example of how start-up airlines are atempting to offer more for primarily the business traveler . . . ,'' he says. The strategy is to give the business person, who doesn't have time to arrange discount fares in advance, more service and more comfort than he or she would get with a traditional carrier, but at the same coach fare. Right now, this strategy is being pursued - with mixed results - by such airlines as New York Air, Air 1, and Midway.
What does Braniff offer the business traveler? Its ads tick off a list of items: more legroom, more luggage room, softer, leatherlike seats, and a business cabin just for the briefcase-toting crowd. On both sides of the plane, a table folds out of the middle seatback, so when that seat is not being used, passengers on each side can fold down the table and get extra working space. In the business cabin, fliers also get upgraded food service, says Mr. Lagow.
Separating the business cabin from the discount area is a movable partition. Discount passengers, who can get their discounts by arranging for them in advance and following a number of travel restrictions, receive the same seat comfort but not the same service, Lagow says. And in the discount class, the middle seat might be occupied, not allowing for the extra work area.
Nancy Strong, president of A. Strong Travel, a Dallas travel agency, says that so far the agency has taken ''a moderate amount of bookings'' for Braniff. She says that there has been ''a lot of interest locally'' and that one Dallas lawyer called up, insisting that they book him on Braniff: '' 'I want to see them make it,' he said. Now, if they can only bottle that kind of loyalty,'' she says with a laugh, and keep out of fare wars, ''I see no reason why they can't make it.''
Norling notes that Braniff has the advantage of specialized service in some markets, but nationwide airline competition is intense.
''There's no way of defining what the odds are for (Braniff's) success or failure,'' he says.