Airfares are on the rise in Denver this summer as carriers lift ticket prices to combat escalating fuel costs.
But travelers are starting to push back, and competition remains intense, making for a turbulent market.
Average airfares out of Denver to 50 domestic destinations are up 13.5 percent year-to-date and 7.5 percent from last June, according to data from .
“Everything is on an upward trend, big time,” said Graeme Wallace, chief technology officer of the airfare research site.
FareCompare’s prices don’t include security and passenger facilities charges and add-on charges for once-free services like meals and checked baggage, so the actual hit to consumers’ pocketbooks is even bigger.
Routes with the largest increases are those with the least competition, a trend that should intensify after airlines cut their capacity by 10 percent or more this fall, travel experts said.
Round-trip fares to Honolulu from Denver, which averaged $636 a year ago, last week averaged $854, a 34 percent increase, according to FareCompare. Blame long distances and a 25 percent reduction in capacity to Hawaii after Aloha Airlines and ATA ceased operations earlier this year.
Prices from Denver to Orlando and the Carolinas this summer are higher, and once dirt-cheap fares to Phoenix and Las Vegas aren’t as cheap. But getting to Dallas costs about the same and Seattle fares are down from last June.
“In some markets, you have seen an increase of up to 25 percent and in other markets there has been no change,” said Chris Russo, president of the Rocky Mountain chapter of the American Society of Travel Agents in Denver.
Record oil prices are making jet fuel more expensive, pushing airlines to raise fares. But intense competition limits what they can get.
Every $1 increase in the price of a barrel of oil adds $5 million to Frontier’s operating costs, said Steve Snyder, spokesman for the Denver discount carrier.
Oil has risen from $107 to $136 a barrel since Frontier sought bankruptcy protection April 10. That translates into $145 million in additional costs the struggling airline must shoulder.
“It has had an enormous impact on us and all carriers,” Snyder said.
Aiming for efficiency
One answer is to travel lighter. United Airlines and US Airways announced Thursday they would charge flyers $15 for the first checked bag. Most airlines already charge customers for checking a second bag.
Frontier is loading enough beverages for a one-way instead of a round trip, replacing cloth seats with lighter leather ones, and taxiing planes when it can on one engine, Snyder said.
But efficiency measures can only go so far. Tom Parsons, chief executive of . in Dallas, said American Airlines executives recently told him they need at least $80 more per flight per passenger to cover the fuel hit.
At the same time, they also fear a deepening economic downturn will cut demand for air travel in the fall.
After six successful airfare hikes, the major carriers rolled back price increases last weekend when travelers resisted.
“Airlines are desperately looking for a balance,” said Robert Polk, chief executive of Polk Majestic Travel Group in Denver.
Unable to pass on across-the-board fare hikes, airlines are charging the add-on fees instead. They are pushing up fares or adding fuel surcharges on those routes with limited competition.
Flights between Denver and New York, a competitive route, can be had for the mid-$300s, although specials will take it lower.
United is charging $650 for a nonstop Boston-Denver flight in August, a route where it faces minimal competition.
Working in Denver’s favor, low-cost carrier Southwest, which has locked in fuel at lower prices, is opening up more routes, and Frontier is managing to hang on despite bankruptcy.
“When you look at the rest of the country, Denver has been able to keep its airfares more in control,” Parsons said.
Flying from Denver to New Orleans runs about $340 for a round trip. Southwest is running promotional fares to open up the route Aug. 4 at $140 and those fares are being matched, Russo said.
Southwest begins a nonstop San Francisco-Denver route Sept. 2, taking $300-plus fares common on United down to $158, at least for a while. Those who can’t wait for cheaper fares should consider flying into Oakland.
Paying for distance
Flights longer than 1,500 miles are more likely to face fuel surcharges, which are running around $290 for flights to Central America, $140 to Mexico and $200 to Hawaii, Parsons estimates.
Russo said he is starting to see more requirements for Saturday-night stays to get the lowest fares, which could hit business travel budgets.
And reaching smaller cities still served by the major carriers will get more costly, especially once airlines take more planes out of service this fall.
In the past week, United has lowered airfares out of Chicago and Washington, D.C., and lifted them sharply to smaller cities, Parsons said. “If you are going to the small regional airports, you are going to still pay a pretty penny,” he said.
Although higher airfares sting, they are coming up from unusually low levels, and Polk advises travelers to keep a longer-term perspective.
“If you go back, the airfares this summer are virtually identical to those in the summer of 2001,” he said.
An index of average airfares from the Bureau of Transportation Statistics showed the average fare out of Denver in the fourth quarter was virtually unchanged from 10 years ago.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
