Richmond Airport Ads Tout Lower Fares

Feb. 23 -- You don't need an economics degree to comprehend the TV commercials touting Richmond's air service.

The 30-second spot starts with "Economics 101: The Law of Supply and Demand."

Some round-trip airfares flash on the screen, taken from two years ago when Richmond had some of the nation's highest ticket prices. At the time, as the ad notes, six airlines served the airport. The result were the kind of business, or walk-up, fares in the commercial: "Atlanta $1438. New York $708."

This is followed by a frame showing last month's fares with two more airlines -- AirTran and JetBlue -- at the airport, for a total of eight carriers: "$328 Atlanta. $218 New York."

Set against a piano-and-trumpet soundtrack, the commercial declares, "Help keep down the fares. Fly 8 Richmond."

The ads, which began in late January, will run through April on local TV stations.

Some radio spots started recently, and print ads will follow in Richmond International Airport's $500,000 marketing campaign.

"This is completely targeted to our home region," said airport spokesman Troy Bell. The commercials were developed by Barber Martin Advertising, with input from the Greater Richmond Chamber.

The goal is to increase awareness about fare competition, Bell said, especially among small to midsize firms that lack the ticket purchasing power of corporate giants such as Philip Morris USA and Wachovia Corp.

This week's radio spots tout the potential cost savings for any firm that takes the time to book the best fares, asking, "What would your business do with a few extra thousand dollars?"

About 60 percent of the campaign -- or $300,000 -- was paid with an air-service development grant from the U.S. Department of Transportation. The rest of the tab was picked up by the Capital Region Airport Commission.

The print ads will "go into a little more depth about the fares," and show how they can help improve the area's economy, Bell said.

A 2005 chamber study projected that the entrance of low-fare carriers AirTran and JetBlue would create 950 jobs and result in business travel savings of more than $31 million a year.

In 2006, the airport set a record with nearly 3.3 million passengers, a 13.4 percent increase from the year before.

The message to consumers is to "broaden their planning horizons, and take a look at all of the options from Richmond," Bell said. "It's all about competition."

But is the commercial right -- is this really "Economics 101"?

Not exactly, said George Hoffer, an economics professor at Virginia Commonwealth University who studies the airline industry.

"It's very catchy, but technically not correct," Hoffer said.

The airline industry "is in no sense a perfectly competitive market," so it can't be analyzed by using "supply and demand curves" used by economists.

But the ads' basic premise is correct, Hoffer said. New, low-cost entrants into a high-priced market usually help drive down prices.

Class dismissed.

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