Listen in as Aviation Week editor Aaron Karp talks with Tim Kroll, airport director at Atlantic City International Airport, and Nick Johnson, vice president and head of revenue for Landline, at TakeOff North America, Routes' air service development forum dedicated to the North American marketplace.
Aaron, Tim and Nick analyze how motor coach services could change the landscape for regional air travel, with implications for passengers, airlines and the environment.
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Rush Transcript
Aaron Karp: Hello, everyone, and thank you for joining us for Window Seat, our Aviation Week Air Transport podcast. I'm Aaron Karp, a senior editor with Air Transport World and a contributing editor to the Aviation Week Network. Thanks for being with us today, and welcome on board.
Today on the Window Seat podcast, we're talking about buses. Yes, that's right. You heard me, buses, not Airbuses. And we're here at TakeOff North America, the Aviation Week Network/Routes Conference, in Atlantic City, New Jersey. And I'm here today with Nick Johnson, the vice president and head of revenue for Landline, and Tim Kroll, the Atlantic City International Airport Director. And I thank both of you for being with us on Window Seat today. And I met Nick yesterday, and he said to me, "I'm not the grim reaper." And I was pleased to hear that, but the reason he said that is that his company that he's representing, Landline, is operating bus services in conjunction with American Airlines. And he fears that airports, there are a lot of small medium-sized airport directors here, thinks he's coming after their air service. I'll let him explain. I think we'll start just by talking about how this works exactly. So I'm someone who wants to come to Atlantic City, I'm somewhere in the country, and I see that I can't fly directly into Atlantic City. How does this work? How does someone book on Landline?
Nick Johnson: The way that the Landline American Airlines service in Atlantic City works is that you book it just like a normal flight. So you book your Chicago to Atlantic City itinerary and you fly from Chicago to Atlantic City, and then you connect airside in Philadelphia, your bags are transferred just as if you were connecting onto a traditional regional jet. But instead, you're connecting onto a luxury motor coach where we have wifi, power, a lot of legroom per passenger, and you have your seamless hour connection onward to Atlantic City.
Aaron Karp: It was joking, I know, but why the Grim Reaper reference?
Nick Johnson: So I think referencing jokingly that air service is declining, and some people will say that it's because Landline's coming. Well, the reality is that economics of increased supply chain costs, airframes that are reaching their end of life, and resource allocation where airlines are deciding to reallocate pilots, block hours, aircraft into other markets that make more sense. Small, short-haul markets are generally relatively unprofitable. And so regardless of whether Landline existed or not, a lot of network airlines have been pulling back from short-haul markets in recent years, and that will continue. And so we actually view ourselves as a measure to reverse the tides there and allow smaller communities that are within 150-ish miles of connecting hubs to regain service and actually grow their service and frequency back to the hub.
Aaron Karp: And one thing that's come across in conversations, including the panel we did here at the TakeOff North America conference, is that these buses, in some ways, are just another fleet, and you're just another regional airline, just another aircraft. I mean, I say that somewhat facetiously, but explain that again in terms of how it works with the airlines in terms of you actually lease the buses and you're basically, as you said, an E175 on the ground.
Nick Johnson: Yeah, so we're a capacity purchase operator just like SkyWest. And when we partner with our partner carriers, so United, American and Sun Country, their network planning teams are ultimately responsible for choosing the routes and determining the schedules that are optimal for their network connectivity. So in a sense, just like you mentioned earlier, we are just a different fleet type that happens to not fly, but they can programme in their scheduling softwares that load into their out-for-sale systems, and that customers can ultimately buy the connections just as if you were connecting onto a airline-branded, but SkyWest-operated flight.
Aaron Karp: Tim, here in Atlantic City, the service is operating between Philadelphia and Atlantic City. Talk about what it means to Atlantic City and how you view it compared to how you view airline service.
Tim Kroll: Currently, I'll just to give you a background on the environment we operate in. Prior to Landline, Spirit was our main commercial carrier. It provided about 90% of our service, mainly to outbound leisure markets in Florida and Myrtle Beach, the other 10% was made up of charter flights. People, the casinos, chartering some of their more high-rollers into the market via Sun Country or Ultimate Jet. So we view this service as that option to get that legacy carrier with hub connectivity into the market that we've been missing. That is something we don't have.
And it's a key for this market because it allows people not only to visit this region, but it gives our local community, which our catchment area is about 1.2 million people, the chance to go anywhere in the world via this service through there's over 90 connections in Philadelphia this local community can make. And in return, we can bring people from all over the world directly into Atlantic City, which is a huge benefit not only for the casinos and the conventions we have here, but also there's 100 miles of beaches in this area that are popular in the summer season.
Aaron Karp: So I know that people that came to this conference here to TakeOff North America use this service. Absolutely, I heard people talking about it. And so, talk a little bit about what it's like on the bus. We talk about half jokingly that it's sort of an E175 on the ground, but what is it like inside? How does it compare to an E175? And then talk a little bit about your services all around the country.
Nick Johnson: So I think I'll even correct you there. For the average customer, it's going to be even better than riding on an E175. So we take a conventional premium motor coach that seats 55, 60 passengers. We take off roughly half of the seats, and it's left with a 35-seat, two-by-one configuration with 36 inches of pitch. And so the average customer is getting a lot of legroom. One of the passengers on each row is sitting by themselves. And so there's just a lot. I think the first thing you'll notice is that it's really spacious. It's a great luxury product, on board restroom. And then there's free wifi, in-seat power, trade tables. So you can be doing work if you're a business traveller or just want to watch movies on your trip.
So it's really premium experience. We've talked a little bit about our partnership with American, where we run Philadelphia to Atlantic City, Allentown, and Lancaster on behalf of American Airlines, but we actually also have partners and locations in other parts of the country. So we operate out of Newark to Allentown with United Airlines and then Denver to Breckenridge, Fort Collins with United Airlines. And then finally, with our partner Sun Country, we operate for Spokes into their Minneapolis hub Fargo, North Dakota, Duluth, Minnesota, Eau Claire, Wisconsin, and Rochester, Minnesota.
Aaron Karp: And one thing we talked about, it's sort of ironic because Sun Country does not do connecting flights. That's not part of their business model, but you are a connector for them, and you're sort of a regional feeder for Sun Country. Talk a little bit more about that. That's fascinating.
Nick Johnson: Yeah, so Sun Country, great business model, great airline, they operate large-gauge narrow-body planes. They're never going to have 50-seat jets feeding into their network. But when we were originally designing the partnership, the vision was to have this mode feeding into their Minneapolis hub, providing and unlocking their low fares into different communities, and allowing customers who are focused on that budget travel experience, the lowest cost possible, get them from Duluth, Minnesota, down to Orlando, where it's sunny in the winter.
Aaron Karp: Tim, one thing you told me yesterday that I didn't realize, which is really interesting, is that part of the FAA reauthorization discussions, and there's so many things being discussed, but one of them is treating these passengers as in plane passengers, and I believe you're for that. Why is that so, and why does it make a difference?
Tim Kroll: In the current FAA reauthorization bill, which is yet to be approved, there is language to treat these passengers as in planing passengers out of Atlantic City Airport, where then we get to count those passengers towards federal funding. That is the big part. So our grant money we would receive each year would go up. There are some even smaller airports who currently do not get grant funding from the FAA because they fall below, I believe it's 10,000 employments a year.
If they had a service like this, they actually might be able to qualify to get federal FAA IP funding for this service. So I think it's key not only for our airport but for other airports in the country if they utilise this service to get additional money through the FAA to help improve the infrastructure of the airport, whether it be related to your runways or security. I think it's a big deal. We've roughly put 35,000 people, which is around 17,500 in plane passengers since we started this service. Currently, they don't count, but once this FAA reauthorization just through they would count to our funding we receive each year from the FAA.
Aaron Karp: You mentioned security. Nick, it seems this is a big appeal for this because we were talking about how you could fly into Philadelphia and rent a car and come to Atlantic City, fly to Philadelphia, take a bus that goes right to a resort. But the big benefit of the Landline service is that once you're leaving Atlantic City to go back to wherever your home is, you can go through security and start your journey in Atlantic City as if you were flying from Atlantic City to Philadelphia. Could you talk about that?
Nick Johnson: Yeah. So the concept of multimodal transportation is not new. Companies have been in airlines, have been connecting their flights onto trains, and buses, and helicopters for years. What's unique about this model is that we believe we're the first in the world to have a secure to secure operation connecting to an airline, namely that you can check in in Atlantic City, clear TSA, board your American Airlines-branded motor coach, and then ride securely to Philadelphia, where the passengers don't have to re-clear security, they arrive right at an aircraft gate in the regional concourse, and they connect onward to Americans destinations worldwide from Philadelphia. So it's a really unique experience for customers.
Not only do they not have to deal with driving themselves on the expressway out to Philadelphia, but they don't have to be subject to the risk of potentially having a really long TSA line once they get to the hub. We've talked about an experience here, the TSA line in Atlantic City and generally at smaller, mid-size regional airports is a lot shorter than hubs that are just going to keep getting more and more congested. So that's a really big value proposition to the customer.
Tim Kroll: And our wait times in Atlantic City for TSA is roughly three to four minutes on average as compared to Philadelphia. I don't have their exact numbers, but they're a larger hub. So there's going to be a longer wait and more stress going through that security as opposed to Atlantic City.
Nick Johnson: And as airlines continue to up gauge their hub flights in coming years and there's more passengers that run through the hubs, those lines will only continue to get longer. So this is a really cool longer-term customer experience for hub airports, Spoke airports, and airlines to improve the customer experience for customers who are coming in from their greater catchment area.
Aaron Karp: One thing that strikes me that's interesting about this conversation, and we're here in TakeOff North America and the Mexican market, is one where planes are replacing buses. It's sort of something that happens throughout Latin America: the transportation routes that were bus routes are now becoming accessible to more people as plane routes. Here, there's almost a reverse. So how does it fit in in the US market to have buses serving as a regional airline in a sense? Maybe we'll start with you, Tim, as an airport director and as someone who Landline serves, how does Landline and how do these types of bus services fit in as part of the US domestic airline market?
Tim Kroll: Yeah, so for an airport like us, it fits in. We do not have hub connection with a legacy carrier at all. We've been trying to get that for a while. Had discussions with American, United, and Delta in the past. American came to us with this opportunity and said, "Listen, we don't have the ability to put aircraft jet service in there today, however we can get this Landline service there, which provides the connection, and we're going to go secure to secure through TSA, make it a seamless transition for the passenger."
So we believe it's a step in getting to also eventually aircraft service within American Airlines once you have the ability to prove the markets and it works and develop other markets by looking at the data that the airline now has the ability to see where these people are coming from or where your passengers in your catchment area are going to, see, Hey, does it work throwing it to a Charlotte or Chicago, Phoenix, Dallas? Is there markets there where we can connect, which even make it more seamless and provide better opportunities for passengers to come to the region and for our local people to leave the region. So we believe it fits and it's a compliment through that jet service as well.
Nick Johnson: I'll tack onto that just in the example of our Allentown market. American actually operates nonstop Allentown to Charlotte in addition to the Landline service, Allentown through Philly. Why this is a really good thing for airports, for passengers, for the network airlines is that it just provides more opportunities and itineraries for passengers. If, let's say, you have a certain time of day where the flight doesn't work, but you can compliment that itinerary with a multimodal connection on Landline that's secure. It's operated just like a flight, basically. You can just provide more times throughout the day for business and for leisure customers to depart when they truly want to depart from the airport. So our service works in parallel with the flights that you can produce a connection on an aircraft on the way out of Allentown, and you can return via connection through Philadelphia on the Landline service. So the more itinerary options you give customers, the more chances that that shifts that share and that passenger to your airline when you provide more of those opportunities.
Aaron Karp: So we are here in Atlantic City at an aviation conference, and the Atlantic City Airshow is getting underway tomorrow, in fact. So this wouldn't be aviation in the year 2023 without talking about the environment. And Nick, as we talk about buses, there are a lot of solutions being bandied about to decarbonize aviation. There are a lot of really expensive technologies being developed, but when you think of a bus as operating an airline route, it's a lot, lot easier to decarbonize bus transport than air transport around the world. And so talk about the environmental benefit potentially of simply using buses to operate a lot of these airline routes.
Nick Johnson: Yeah. So it's not necessarily groundbreaking technology, and it's not going to require billions of dollars and decades of investment. It's a technology that's here today. It's pretty simple. Our buses, even in a super premium 35-seat configuration, can still remove 90 to 95% of the carbon footprint of a passenger travelling from a regional airport into a hub. So if you compare a bus, we're going to burn 10, 11 gallons of fuel on that itinerary, whereas a regional jet could burn hundreds of gallons while it's taxiing, taking off, cruising, and whatnot.
So just in comparison to a regional jet, it's a 90 to 95% CO2 reduction, but also even if there's not a regional jet, there's still 25 to 35 passengers who are driving their own cars or who are having relatives do the round trip to pick them up both ways. And so that's also a lot of emissions into the air. So using the Landline Motor Coach, even with a conventional diesel platform, is 90 to 95% more carbon efficient. And then in the future, which is relatively not that far in the future, there's the opportunity to switch to electric buses and potentially hydrogen-powered buses, which would've zero emissions. So that's in the very near future.
Aaron Karp: Well, I want to thank Nick Johnson from Landline and Tim Kroll, the director of Atlantic City Airport.
Thanks also to our listeners and to our producer, Cory Hit. If you enjoyed this podcast, make sure you don't miss us each week by subscribing to Window Seat on Apple Podcast or wherever you listen. This is Aaron Karp signing off from Window Seat.
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