Denver International Airport’s recent expansion agreement with Frontier and United Airlines is good news for the airport and even better news for consumers and the community.
The pact will help maintain competition among DIA’s air carriers, which will help to hold down prices, give customers more choices, allow the air carriers to implement their growth strategies and expand the destinations that can be reached nonstop from from Denver.
Denver learned the hard way the importance of having more than one hub airline. In the 1980s, consumers benefited from a dogfight at the old Stapleton airport among United, Continental, People Express and the original Frontier (no relation to the current airline.) But by the time DIA opened in 1995, industry-wide woes had left United as the city’s only major airline. Ticket prices reflected the near-monopoly. So Denver flyers cheered the 1994 birth of the new Frontier and this year’s arrival of Southwest Airlines.
Logically, the city’s strategy today is to keep all the carriers happy at DIA, and the airport has obligingly managed to lower its costs.
The pact the city announced this week will give both United and Frontier room to grow at DIA in the very market segments they crave. By the end of next year, DIA will build United a long-delayed, $41.5 million regional jet facility at the east end of Concourse B, opening the door for United to put more passengers on efficient regional jets rather than larger airliners. United also will move its discount carrier Ted from its gates on Concourse A to Concourse B, making it easier for passengers to reach connecting flights.
Frontier will take over United’s former A gates, growing from 16 to 22 gates on Concourse A. The pact means DIA will benefit from Frontier’s growth, allowing the carrier to realize economies of scale.
Denver is engaged in a complicated juggling act to benefit these airlines’ hubs while also satisfying the ambitions of Southwest and other airlines. It’s possible that DIA will negotiate other deals to maintain a competitive balance.
That goal is key to the overall community: DIA generates millions of dollars in revenues for the city and in property taxes for Denver Public Schools.
DIA, says the Denver Metro Chamber of Commerce, “is Colorado’s No. 1 economic driver.” Overall, the Metro Denver Economic Development Corp. says DIA’s annual economic impact for the state is $17 billion. The airport will prosper most, though, if it can provide carriers the growth and flexibility to also thrive.
