Shift in Service by Jet America Stops Losses : Move From Oakland to Orange County Pays Off

Jet America Airlines’ decision in April to pull much of its service out of Oakland, where it was “bleeding” money, has resulted in a financial turnaround for the Long Beach-based carrier, its chairman, J. Thomas Talbot, told the New York Society of Airline Analysts on Wednesday.

Jet America was granted two slots at the John Wayne Airport in Orange County and began scheduled service to Chicago from there in April.

Talbot said that, in the first nine months of last year, Jet America had a “hefty profit,” but it lost a “pile of money” in the fourth quarter and $5.5 million in the first quarter of this year. For all of 1984, the airline lost $3.7 million on revenue of $90 million. In 1983, it had earned $7.9 million on revenue of $60 million.

Profitable Load Factor

Jet America’s load factor--its percentage of seats filled--on the route between Orange County and Chicago is a little more than 60%, on a 57% break-even point. In June, its systemwide load factor, including its flights between Long Beach Airport and Chicago and Dallas, was 73.4%, Talbot said.

Talbot said that, where Jet America competes with United Airlines, it has benefited from that carrier’s month-old pilots strike, in which a tentative agreement was reached Wednesday. On its one route between Oakland, Chicago and Detroit, he said, the airline has carried an extra 200 passengers a day, representing a $600,000 increase in revenue for the month.

Frederick R. Davis, vice president for marketing, told the analysts that Jet America is about to begin a frequent flyer program. When passengers make 36 trips with the airline, they will receive free trips to such places as Mexico, Hawaii and the Caribbean. Each free trip will cost Jet America about $500, he said, while the 36 trips, at an average cost of $140 per ticket, will generate revenue of about $5,040.