Carriers Increasingly Picky About Where They Fly

Choosing routes is a complex, time-consuming task that ultimately boils down to figuring out which flights will be profitable.

United Airlines operates its second-largest hub at Denver International Airport, providing well over 400 daily flights to dozens of cities.

Yet the carrier doesn't offer nonstop service from Denver to any of its coveted overseas destinations.

Frontier Airlines flies from Denver to nearly 50 cities in the United States, and recently announced its expansion into Canada. Yet it doesn't offer flights to Boston, Charlotte or Miami, creating a noticeable hole in its route map.

For the average traveler, trying to figure out why airlines fly - or don't fly - to certain cities can be an exercise in futility.

No wonder: Choosing routes is a complex, time-consuming task that ultimately boils down to figuring out which flights will be profitable.

Carriers must analyze everything from demand and competitive issues to aircraft capabilities and airport costs. They also must weigh whether to add service to an existing market or start flights to a new city.

Each carrier uses its own methods and criteria to determine whether or not flights will be profitable because a route that works for one airline doesn't always prove successful for another.

"It's a very eclectic process," said George Hamlin, a Washington, D.C.-based airline consultant. "As much as it may seem to be true, airlines don't randomly select cities. They choose them very, very carefully."

There are good reasons airlines take route planning so seriously. It's an integral part of their business, and they can sink or swim financially depending on where they fly.

That's especially true today, when high fuels costs and intense competition are putting a squeeze on the industry.

U.S. airlines have lost more than $40 billion in the past five years, and most carriers continue to hemorrhage money. Two of the nation's largest, Northwest Airlines and Delta Air Lines, are in bankruptcy protection. Two others, United and US Airways, recently emerged. The industry's financial problems also have spilled over to low-cost airlines, which traditionally have been profitable.

With that as the backdrop, making sure a new route or flight is profitable is as important as ever.

"Obviously, airlines are doing a lot of other things, but they're fundamentally flying people from point A to point B," said Webster O'Brien of industry consulting firm SH&E in Boston. "Understanding how to do that profitably is on the short list of activities critical to success."

Frontier, for example, does not offer service to Boston, even though some of its competitors fly there from Denver. The carrier, which is based in Denver and is the city's second-largest airline, isn't sure it can make money on the route and believes it has better opportunities in other cities.

"We've looked at Boston, and every time we do it doesn't quite cut it," said John Happ, Frontier's senior vice president of marketing and planning. "It's too far, and the market is quite competitive. The downside exceeds the upside."

For one, Boston is farther away from Denver than most of Frontier's other markets, meaning fuel expenses take a bigger bite out of profits, Happ said. Mix in what Frontier sees as a high number of flights already serving the city in relation to demand, and the route just doesn't make sense for the carrier right now.

A city that Frontier determined does make sense, however, is Calgary, Alberta. The carrier recently announced it will launch two daily nonstop flights there from Denver starting in late May, citing strengthening business ties and an increase in demand for travel between the two cities.

Frontier also feels it can lower fares and, therefore, glean passengers from carriers that currently serve the route.

As in every business, demand is one of the primary requirements for attaining profitability in the airline industry. An airline, after all, won't make money flying empty planes.

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