The Herald Bulletin

Morning Update

Local Business

April 15, 2014

Indianapolis-San Francisco flights have good start

INDIANAPOLIS  — New nonstop flights between Indianapolis and San Francisco have been filling up with passengers during their first months in the air.

The new year-round route with United Airlines started in early January after the Indiana Economic Development Corp. agreed to provide up to $1.5 million a year in revenue guarantees as several central Indiana tech companies sought to make business travel to Silicon Valley easier.

Those flights were three-quarters sold in January and February, the two slowest months for air travel, Chris Matney, air service director for Indianapolis International Airport, told the Indianapolis Business Journal. That jumped to 90 percent sold in March with more spring break leisure travelers.

Exact Target CEO Scott Dorsey said the Indianapolis-based company, which was recently acquired by San Francisco-based Salesforce.com, already has booked hundreds of flights on the route.

"The times I've been on the plane, virtually everything is full," he said.

The agreement with the state agency calls for it to cover any gap between United's quarterly revenue and a contract minimum, not to exceed $1.5 million for the year. The dollar amount of the minimum revenue requirement is redacted from the contract document released publicly by the agency.

United uses a 120-seat Airbus A319 for the route. With only one flight canceled in February, that would translate to about 7,900 round-trip tickets sold since the route debuted Jan. 7 from San Francisco.

"The demand for the service is currently meeting our expectations, although we usually like to have a longer period of time to assess the performance," said Mary Clark, a spokeswoman for the Chicago-based airline.

Ticket prices are reflecting the demand for business travel. Booking a flight last week for a round trip in May, prices ranged from $1,124 for a departure on Tuesday, May 20, to $422 for a departure on Saturday, May 10.

Scale Computing CEO Jeff Ready said the convenience factor is important.

"The lack of a direct flight before caused me to have most of my board meetings in the Bay Area ... and it made recruiting executive board members very difficult," he said.

 

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