ANALYSIS: Fares were 45% less at US airports where LCCs dominated in Q1

Washington DC
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Air travellers flying from US airports where low-cost airlines have sizable operations paid roughly 45% less for domestic tickets than customers flying from airports dominated by legacy airlines in the first quarter of 2013, according to data from the US Department of Transportation (DOT).

The agency, which tracks both round-trip and one-way fares at the 100 US airports with the most originating passengers, reports that consumers nationwide paid an average of $378.69 to fly domestically from US airports during the quarter.

But at the 10 most expensive airports, the average domestic fare during the period was roughly $200 more than at the 10 least expensive airports.

DOT's data does not include ancillary revenue from services like checked baggage or upgrades to economy seats with more legroom.

An analysis of those airports by Flightglobal shows the degree to which the presence of low-cost operators, particularly Southwest Airlines, correlates with lower fares.

Legacy-dominated airports

During the three month period, customers travelling from the ten most expensive airports in the US paid an average of $492 for their domestic ticket, shows DOT's data, released in July.

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US DOT and Flightglobal/Innovata

At all of those airports the four legacy US carriers - Delta Air Lines, US Airways, United Airlines and American Airlines - control at least 75% of available seats, according to Flightglobal/Innovata data.

At some of those airports, such as Houston's George Bush Intercontinental airport, Cincinnati/Northern Kentucky International airport and Dane County Regional airport in Madison, Wisconsin, four legacy airlines controlled more than 90% of available seats.

Customers paid an average of $503 at the Houston airport during the quarter, $519 at Cincinnati and $473 at Madison, says DOT. United operates a hub at Houston and Delta has a hub in Cincinnati.

At two of the ten most expensive airports - Huntsville International Airport in Alabama and Savannah/Hilton Head International airport in Georgia - American, Delta, United and US Airways have 100% market share.

Huntsville's average of $543 was the highest on DOT's list, while customers travelling from Savannah paid an average of $493.

Also among the ten most expensive airports was Washington Dulles International, where United has a hub, and Memphis International Airport, a Delta stronghold.

The 11th most expensive airport was Delta's hub at Minneapolis-St. Paul International Airport.

Airports where LCCs rule

By comparison, travellers flying from the ten least expensive US airports on DOT's list paid an average of $268.64.

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US DOT and Flightglobal/Innovata

All of those airports have significant presence from low-cost airlines, and Dallas-based Southwest Airlines is the dominant carrier at six of them.

The airports include Southwest strongholds like Dallas Love Field, where Southwest has 97% of seats, Chicago Midway International airport, where Southwest has 87% of seats, and Burbank Bob Hope airport in California, where Southwest has 78% marketshare, according to Flightglobal/Innovata data.

Travellers paid $315 or less for tickets from those airports during the first quarter, says DOT.

Atlantic City International airport was the least expensive airport on DOT's list, with an average fare of $167 in the quarter. The airport has only one carrier: Miramar, Florida-based Spirit Airlines.

JetBlue Airways has 80% of capacity at the second least expensive airport on DOT's list, Long Beach Airport in California, where the average fare during the period was $220, according to the DOT.

The ten least expensive airports also include those with service from a multitude of low-cost and legacy airlines.

Las Vegas' McCarran International airport, for instance, where the average fare was $274, is served the four legacy carriers, plus JetBlue, Spirit, Las Vegas-based Allegiant Air, California-based Virgin America, Denver-based Frontier Airlines, Minnesota-based Sun Country, Southwest and AirTran Airways, a Southwest subsidiary.

Lower fares despite rising costs

Fares at airports with notable presence from low-cost operators continue to be below average despite upward creeping costs at the two largest low-cost carriers.

Southwest's cost per available seat mile (CASM) was 12.85 cents in 2012, up from 9.10 cents in 2008, according to securities filings. The airline's CASM now straddles the industry, slightly lower than US mainline airlines and slightly higher than other low-cost carriers.

JetBlue's CASM was 11.34 cents in 2012, having climbed from 8.99 cents in 2009, according to securities filings.

Airlines' rising costs have largely correlated with rising fuel prices.