Era of Cheap D/FW Flights Stranded at Gate As Fares Take Off

By Trebor Banstetter, Fort Worth Star-Telegram, Texas

Jun. 15–When the Wright Amendment was revised in 2006, it sparked a fare war between American and Southwest airlines that meant unusually cheap ticket prices on many flights from Dallas/Fort Worth Airport.

But the era of cut-rate fares from D/FW is over, at least for now. Fares for business and leisure travelers are up nearly 50 percent this summer compared with a year ago, according to an analysis performed for the Star-Telegram by FareCompare.com, a Dallas firm that tracks ticket prices.

“It was higher than I expected,” said Rick Seaney, the firm’s chief executive. He said that fares nationwide are up about 16 percent.

The analysis looked at the top 50 markets from D/FW, and gauged prices on tickets bought this month within seven days of the flight — typically by business travelers — as well as advance-purchase tickets popular with leisure fliers.

The cheapest published fares were up by 48 percent for business and leisure travel compared with a year ago, he said. It’s a notable difference from the trend that began in late 2006, after the Wright Amendment was revised, allowing American and Southwest to compete on flights to cities nationwide.

“There was a big dip [in prices] that occurred after the Wright reform,” Seaney said. “American didn’t want to give up any market share, so they were matching Southwest on all sorts of routes.”

But the rapid increase in the price of jet fuel “has put that to bed,” he said. Jet-fuel prices have risen about 67 percent so far this year, according to the Air Transport Association.

Seaney’s findings mirror those of a recent study by BestFares.com, an Arlington travel firm that also monitors ticket prices. Although BestFares didn’t compile an average, its analysis did find a big jump in prices on many popular flights from D/FW.

“They’re [raising prices] because they can,” said Tom Parsons, CEO of BestFares. “American has been wanting to increase prices for years now.”

The biggest increases from D/FW, however, weren’t on American. For ex ample, the biggest leisure jump was on a U.S. Airways flight to Cincinnati, which was selling for $158 a year ago. Today, that flight averages about $539, according to FareCompare — nearly 3 1/2 times higher.

For business travelers, the biggest price increase was on Continental, for a flight to Newark, N.J. That trip was $208 a year ago; this summer, it’s $1,126, almost 5 1/2 times more.

“The long-haul routes are the ones that got it the worst,” Seaney said.

Still, American’s D/FW fares have gone up. The cheapest available leisure prices are up about 34 percent, while the cheapest business fares have risen 37 percent.

That has a major impact at the airport, where American operates a hub and accounts for about 85 percent of the airport’s market share.

Analysts are already predicting that higher fares may dampen demand for travel, particularly as the economy slows.

Chuck Sharp, president of the Dallas-based American Small Business Travelers Alliance, said many small-business fliers are already watching their budgets.

“People are definitely talking about it,” he said. He added that “you still need to travel for business, but is every flight necessary? Maybe not.”

Seaney of FareCompare cautioned that the numbers don’t necessarily mean there aren’t cheap fares available at D/FW. He points out that prices to some cities have declined during the past year.

For example, an American flight to New Orleans dropped 24 percent, while a Northwest fare to Indianapolis was down 34 percent.

“The averages can be a bit misleading in that sense,” he said. Consumers have the best chance of finding cheap prices on routes that are competitive with discount airlines like Southwest or AirTran.

Some of the best fares from D/FW are in short-haul markets where Southwest offers nonstop service from Dallas Love Field, Seaney said. “The best prices are still when you see overlap with Southwest,” he said.

And connecting flights tend to be cheaper as well. “The airlines still can charge a premium for nonstops,” he said.

But while Southwest tends to set the low price on tickets, its fares aren’t as low as they used to be. During the first quarter of 2008, the average one-way fare on Southwest was $112, up more than 6 percent from the same period in 2006.

Sharp said most travelers seem to be adjusting to the idea that prices aren’t going down anytime soon.

“This feels pretty permanent,” he said.

Business fares

The biggest increases in business fares* from Dallas/Fort Worth Airport over the past year

Destination Airline 2007 fare 2008 fare Increase Newark, N.J. Continental $209 $1,096 424% Newark Northwest $199 $1,036 421% Cincinnati U.S. Airways $158 $679 330% Seattle Northwest $164 $638 289% Miami United $179 $684 282% *Cheapest price available if purchased on June 6 within seven days of travel date.

Leisure fares

The biggest increases in leisure fares* from Dallas/Fort Worth Airport over the past year

Destination Airline 2007 fare 2008 fare Increase Cincinnati U.S. Airways $158 $539 241% Boston Continental $208 $630 203% Fort Lauderdale, Fla. Continental $198 $574 190% Charlotte, N.C. Continental $248 $692 179% Miami United $179 $478 167% *Cheapest price available if purchased on June 6 more than 21 days before travel date.

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