CVG Leads in Fare Increases

By Kerry Duke

Airfares at Cincinnati/Northern Kentucky International Airport were not only the highest among the nation’s 100 largest airports during the first quarter of the year, but they also saw the largest percentage increase, a new report by the U.S. Department of Transportation finds.

Airfares at Cincinnati/Northern Kentucky averaged $531.50 over the first three months of the year, according to the report issued Wednesday by the department’s Bureau of Transportation Statistics. That was 14.7 percent more than average fares during the same period in 2006 and was the largest increase among the nation’s top 100 airports.

The increase in what passengers had to pay to fly out of Cincinnati/Northern Kentucky came as the average airfare across the nation fell by .6 percent compared with the first quarter of 2006. The average airfare charged here was nearly 40 percent higher than the national average fare of $379.80.

Airports in the surrounding region all boasted average airfares for the quarter lower than the national average and well below Cincinnati/Northern Kentucky’s figure. It’s estimated that nearly one out of every five local travelers chooses to depart from airports in neighboring communities because of the steep air fares here.

Columbus offered the best average price among airports in the region with an average airfare more than $200 below what was charged here. The average airfare of $329.87 there for the first quarter was down 5.9 percent compared with the same period last year. The Columbus airport also boasted the largest year-to-year decrease in a statistical measure called the Air Travel Price Index that the bureau has used to track airfare changes since 1995.

Indianapolis had the second best deal with an average airfare for the quarter at $332.62, up .6 percent. Louisville’s airfares averaged $343.24 during the first quarter, up 2 percent over the same period last year. Dayton’s average airfare ran $349.77, down 1.4 percent over the same three-month period in 2006.

The lowest average airfare in the nation was found at Dallas Love Field, base for low-cost airline Southwest, where passengers paid $238.10.

Fares at Cincinnati/Northern Kentucky are chiefly influenced by Delta Air Lines, which, with its Comair subsidiary and other Delta Connection carriers, operates nearly 80 percent of the flights at the airport.

Delta spokesman Kent Landers noted that airfares have been impacted by fuel costs. Beyond that, he said there is a premium associated with the additional service that operation of Delta’s second largest hub affords and that the adjustments of both flight schedules and fares that have taken place since 2005 — moves the airline has called “right-sizing” — have made the hub economically viable.

“The good news for Cincinnati is that the Cincinnati hub has continued to be successful, that the flights are full, that the customers are continuing to use the Cincinnati hub and that it’s positioned for long-term viability thanks to our restructuring,” said Landers.

Kevin Mitchell, chairman of the Radnor, Pa.-based advocacy group Business Travel Coalition, said passengers using Cincinnati/ Northern Kentucky have faced the same problem for the past 10 years.

“Because Delta faces low-cost carriers on 75 to 80 percent of its routs nationally, the fact of matter is that where it does have a strong position, it’s going to have to seek what the market will bear,” he said. “That’s the situation in Cincinnati.”

Mitchell said the airport would need to attract low-fare carriers providing more than 10 percent of the flights at the airport to break the control Delta has on prices there.

The airport is considered a major economic driver and critical to the region’s economy. A study two years ago found Cincinnati/ Northern Kentucky generates $4.5 billion of economic activity each year directly and indirectly.

Landers said Delta’s hub operation here provides more than 400 daily flights with non-stop service to 122 destinations.

“For a city of Cincinnati’s size to have one of the top 10 airline hubs in the country is an enormous benefit for the business community and for customers,” he said.

“Fares are based on supply and demand. And when we see strong demand, as we have continued to see, that does drive the fare environment.”

Airport spokesman Ted Bushelman said airport officials would like to see cheaper fares here but that there is great value in the service provided at Cincinnati/Northern Kentucky, particularly to business travelers.

“We offer 122 non-stop cities, which is more than all of the five cities around us, so that makes a difference to the business community,” Bushelman said.

Still, he acknowledged the high airfares are of concern although the prices charged are completely up to the airlines. He noted that to help travelers find cheaper airfares, the airport’s Web site www.cvgairport.com highlights last-minute bargains.

“We have nothing to do with their pricing,” Bushelman said of the airlines. “It’s strictly what the airlines think they can make and, as you know, our planes are leaving full.”

While the U.S. Department of Transportation report found the national average airfare of $379.80 for the first quarter of the year down slightly from the same period last year, it was up slightly from the fourth-quarter of 2006 average of $379. Still, at a time when fuel costs have soared, a nearly constant national average airfare was good news.

The Bureau of Transportation Statistics calculated the average airfares based on domestic itinerary fares, round-trip or one-way for which no return is purchased, and matches up itineraries flown in each quarter for price comparison purposes.

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