Competition at Denver International Airport has driven airfares down from the time the airport opened in 1995.
According to data released Wednesday, DIA posted the largest fare decline among the nation’s 100 largest airports compared with 12 years ago.
Fares at DIA have declined 5.2 percent compared with the second quarter of 1995, according to the Air Travel Price Index compiled by the U.S. Bureau of Transportation Statistics.
The expansion of Frontier Airlines in recent years and the entry of Southwest Airlines at DIA last year have contributed to stiff competition with United Airlines, the largest carrier in Denver. DIA opened in February 1995 with United as the overwhelmingly dominant carrier.
With Frontier growing, “they cut your airfares, but they didn’t have to go as deep as Southwest Airlines because everybody thought they were getting a pretty bargain-basement fare anyway, compared to what United was charging.” When looking at average fares, a different measure, domestic fares in Denver declined to $311.62 in the second quarter of 2007, down 6.8 percent from the year-ago quarter. The 2007 second-quarter average fare was down 29.6 percent from the 2000 second quarter.
The Air Travel Price Index measures changes in fares, while the average-fares data take into account the level of fares and the number of passengers purchasing fares at different levels. More passengers are using lower airfares even though fare levels continue to rise, and average fares show the increased use of low fares, according to the Bureau of Transportation Statistics.
That trend is driven by an increase in low-cost carrier presence and influence and customers’ ability to shop for low fares on the Internet.
Nationally, average fares were down 4.5 percent in the second quarter compared with a year ago. The average domestic itinerary fare nationally was $326 in the second quarter for a round trip or one-way with no return. The second-quarter record high was $346 in 2000. The cities with the highest average fares in the second quarter were Cincinnati; Anchorage, Alaska; Greenville/Spartanburg, S.C.; Knoxville, Tenn.; and Charleston, S.C. The cities with the lowest average fares were Lihue, Hawaii; Kona, Hawaii; Kahului, Hawaii; Dallas Love; and Chicago Midway
