Dec. 4--GULFPORT -- AirTran Airways is pulling out of the Gulfport-Biloxi market in January because it says the casinos are ending their contract with the low-cost carrier.

The last day of service will be Jan. 5. The airline has two daily flights to Atlanta, one to Fort Lauderdale and one to Tampa.

"It is an unfortunate but necessary decision to discontinue AirTran Airways' service to Gulfport-Biloxi," the airline said in a statement. "We have flown under a contract with the casinos since we began the market in 1999, since that is the bulk of the business flying into the market. The casinos have made the decision to operate without a contract for flying, and the market is just not financially viable for us without that support -- especially in today's volatile economic times."

AirTran began service to Gulfport-Biloxi as a joint venture with Beau Rivage. The first flight in March 1999 coincided with the casino's opening.

Current service is also subsidized by IP and Harrah's Biloxi Grand casinos.

George P. Corchis Jr., president and chief operating officer of MGM Mirage's Mississippi operations, said in a statement, "We have enjoyed working with AirTran since 1999, when daily nonstop scheduled service began in conjunction with the opening of Beau Rivage. For nearly 10 years we have subsidized the airline and in this economy, we simply can no longer afford to do it alone."

John Payne, president of the central division for Harrah's Entertainment, said, "We are going to work very hard to find some new partners," among the other Coast casinos. "This was a program we liked," he said, and it was in the budget to continue in 2009.

LuAnn Pappas, vice president of marketing and non-gaming operations at Harrah's Grand Biloxi Casino, said, "We were flying an average of 1,500 customers a month. They were great markets because they were short, direct flights."

The news that AirTran would discontinue the flights "came as a complete surprise and a shock," Pappas said. "There was no evidence we weren't working toward a successful contract."

Bradley Rhines, vice president of marketing for IP Casino Resort, said, "Unfortunately, our partnership was unable to reach an agreement with AirTran that was economically feasible for our casino partnership."

Bruce Frallic, executive director of the airport, said AirTran makes up about 25 percent of scheduled traffic. "We will probably be able to backfill the majority of that within a month or two with charter passengers," he said.

Historically, when a discount carrier pulls out of a market, airfares rise.

Pappas said the loss of AirTran's commercial flights also affects non-casino travelers.

"It's a loss to this community," said Pappas.

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