Data Show 'Southwest Effect' Took Hold at Denver Int'l

Denver recorded the nation's second-biggest drop in airfares during the first quarter, despite a significant spike in prices nationwide, according to federal data released Wednesday.

Fares from Denver fell 2.2 percent during the first three months of the year compared with the same period in 2005, thanks to the arrival of Southwest Airlines in January and growth at Denver's two main carriers, United Airlines and Frontier Airlines.

Denver was behind only Honolulu, which saw fares drop 4.6 percent, according to a quarterly airfare index released by the Bureau of Transportation Statistics. Kahului, Hawaii, was the only other city that saw a decline.

The Air Travel Price Index, a quarterly measure of changes in airfares compiled by the U.S. Department of Transportation Statistics, is the latest evidence of how Southwest's entry into Denver has helped lower fares and spur more traffic. Other federal data have shown that overall traffic from Denver to Southwest's initial three markets soared 62 percent in the first quarter, while average fares to those destinations dropped by up to 38 percent. Southwest started service Jan. 3 from Denver to Chicago, Las Vegas and Phoenix.

The BTS index is based on fares paid by travelers and compares price changes for identical service levels, using a 10 percent sample of tickets. It includes taxes and other fees but doesn't correlate exactly with other government data on average fares, which are based on published prices.

The index shows that fares in Denver during the first quarter were just a bit higher than in 1995, despite inflation. Fares also were 20 percent lower than in the first quarter of 2001.

Prices across the country rose a whopping 10.3 percent in the quarter, the largest year-over-year increase since the government began tracking such data in 1995. Cincinnati saw a 36.6 percent increase in fares, the highest in the nation, while Colorado Springs saw a 5 percent increase.

Experts attribute the national increase to the industry's numerous fare hikes spurred by soaring fuel costs. Previously, carriers had tried to raise fares but had to pull back when other airlines didn't follow.

"Most of the recent fare increases that airlines proposed actually stuck," said Steven Anderson, a transportation specialist with the BTS.

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