Few airport executives watch the headlines more closely than those at Denver International, where the news has been big, writes David Field. Denver’s largest carrier has just come out of bankruptcy, the largest low-fares carrier in the nation has just started up service and its plucky little hometown airline seems to be doing quite well, thank you.
Denver, which celebrated its first decade in 2005, had weathered United’s three-year long reorganisation, in which the carrier cut service throughout its system. This did not hit Denver as badly as it did some United cities because the carrier chose to base its low-cost experiment, Ted, in the “Mile High City”.
Over the three years, though, Denver’s local carrier, 12-year-old Frontier Airlines grew, and United, Frontier, the airport and many observers were surprised when Dallas-based Southwest announced it would make Denver its 62nd city. It started in January with nonstops to Phoenix, Las Vegas and Chicago Midway, all major points in the Southwest network. The airport had just completed a record for passenger traffic in 2005, with more than 43 million people, up 2.6% annually.
Breaking that record seems all the more likely now that Southwest plans to double its number of Denver gates by June, giving it as many as 40 daily flights, up from 13 at its inaugural. This was actually a return to the city; it had served the old Stapleton airport between 1983 and 1986 but left because of the operational constraints that the new airport was designed to alleviate.
The response to Southwest was strong enough that the carrier added routes this weekend (4 March) between Denver and both Baltimore/Washington (BWI) and Salt Lake City.
None of this has halted Frontier. The airline’s chief executive, Jeff Potter, says: “We’ve got our first sense of what [Southwest’s] impact has been. Obviously fares came down (on competing routes)…but we saw stimulation in passenger numbers.” The airline carried a third more passengers on those routes in January than it did during the January of 2005, Potter says. That came on a 22% capacity increase, even though average revenue per seat mile fell by about 12% on the routes. Potter said Frontier’s differentiated product – LiveTV, new aircraft, assigned seats and competitive fares – enable it to compete against both Southwest and network giant United.
The reinvigourated United says it is more than ready for any and all comers at its second largest hub (after Chicago O’Hare), where United adds 40 new flights and about 7% more capacity by June. By then, it will have 455 daily Denver departures including new Ted flights to Reno and Las Vegas, and new service to Toronto.
Source: Airline Business
