Go to the mobile version of this Web site.

Login | Contact Us | Site Map | Paid archives | Electronic edition | Subscription Questions | Extras

Fare promises kept

Data also show Southwest boosted DIA travel

Chris Walsh, Rocky Mountain News

Published July 26, 2006 at midnight

Text size  

More Airlines & Aerospace

More stories »

Southwest Airlines promised to boost air travel and lower fares in Denver when it launched flights here earlier this year.

Mission accomplished.

The nation's largest discount carrier helped spur double-digit passenger growth and double-digit airfare declines from Denver to each of its initial three markets during the first quarter, according to recent data from the U.S. Department of Transportation.

Southwest started flights Jan. 3 from Denver to Chicago, Las Vegas and Phoenix.

"To come in and be able to lower prices and increase service is exactly what we try to do," said Paula Berg, a spokeswoman for Dallas- based Southwest. "Obviously we are benefiting by being in Denver, but it's the consumer who really wins. Lower fares allow more people to travel."

Traffic between Denver International Airport and the three cities likely would've increased even without Southwest, as United Airlines and Frontier Airlines already had boosted the number of seats available on the routes.

But Southwest appears to have been a key driver. In the carrier's first three months here:

• Overall passenger traffic from DIA to the destinations ballooned 62 percent compared with the same period in the previous year.

• Traffic from Denver to Phoenix surged 70 percent, while average fares plunged 37.5 percent. One-way fares to Phoenix before Southwest's arrival cost about $128. They averaged $80 in this year's first quarter, which means consumers were paying roughly $100 less for a round-trip flight than a year before.

• The number of passengers flying from Denver to Las Vegas and Chicago jumped 55 percent. The average fare to Las Vegas fell 28 percent, while prices to Chicago dipped 18 percent.

• Southwest carried nearly 26 percent of the total traffic to the three cities and garnered a 5.28 percent market share in Denver, according to the data.

Industry observers say they are not surprised by Southwest's effect in Denver. The carrier often lowers fares dramatically when it enters a new city, helping generate more traffic on other airlines, which typically reduce their prices to match Southwest's fares.

United and Frontier - Denver's dominant carriers - saw large passenger gains on the routes as well, some of which can be attributed to Southwest's presence.

"I can say that we saw an enormous increase" in passengers on those routes, said Jeff Potter, Frontier's chief executive officer. The carrier boosted its capacity by 16 percent to the three cities, and its planes were more full than in the same period the previous year, according to DOT data.

Southwest doesn't release financial numbers for individual markets. But if its rapid growth is any indication, the company is performing up to its expectations. By next month, Southwest will fly 32 daily nonstops between Denver and nine markets. That compares with 13 daily nonstops to three cities in January.

Southwest's presence has been good news for DIA, which has seen its passenger traffic rocket nearly 12 percent through the first five months of the year.

"How much of that is attributable to Southwest, we just don't know," said DIA spokesman Chuck Cannon. "Obviously, though, they've had a very positive effect here."

Some observers say Southwest's real challenge in Denver lies ahead. The airline will have to keep growing as it phases out its super-low introductory prices, meaning it will have to take more passengers away from other airlines rather than relying on generating more overall traffic.

Mike Boyd, an Evergreen-based aviation consultant, compares Southwest's entry here with the arrival along the Front Range of legendary Southern doughnut chain Krispy Kreme a few years ago.

Krispy Kreme generated a tremendous amount of buzz at first, and hundreds of doughnut aficionados lined up early in the morning outside its new stores. But the novelty soon wore off, and several shops closed.

Southwest will have to find ways to avoid a similar fate in Denver.

"People lined up at Krispy Kreme like crazy because it was new and they had heard so much about it, but it was still just a greasy doughnut," Boyd said. "Southwest has done fine here because of the fare levels and their reputation. But when the dust settles, will people shove themselves onto a Southwest flight? We'll see."

Boyd thinks Southwest's long- term success here depends on whether it can build a following among Denver travelers as opposed to getting its followers in other cities to fly here.

"Right now they can do well flying people in other cities to Denver," Boyd said. "Ultimately they will have to take more market share from United and Frontier. There's going to be a shootout here, and at some point someone is going to get wounded, if not killed."

or 303-892-2744

Comments

  • March 7, 2008

    3:32 p.m.

    Suggest removal

    jtormey3 writes:

    The smallest bit of research about Southwest Airlines flack Paula Berg tells us this:

    http://www.blogsouthwest.com/2007/06/...

    Now, never mind "wacky", and "off-the-wall" - "behind-the-scenes Blog Queen" and "Nuts about Southwest" says it all for me.

    So, to Paula Berg of Southwest Airlines, the airline company’s "behind-the-scenes Blog Queen", who says, regarding the events of March 6-7, 2008, and the now-record US$10,200,000 in fines racked up by Southwest:

    "...this situation was never and is not now a safety of flight issue".
    Nonsense, Paula. Cracks in airplanes? Nonsense, Paula.

    I've been around publicists and other entertainment folk for over 20 years, and I have heard better publicity emanating from self-plugging screenwriters on acid.

    And, Paula, as for:

    "[t]he FAA approved our actions and considered the matter closed as of April 2007".

    Nonsense, Paula.

    It's not "closed", until WE the PUBLIC say it is closed! Take that back to your superiors for me - and tell them that we are just getting started.

    Oh – and, congratulations on staying behind the scenes.

    John J. Tormey III, Esq.
    Quiet Rockland