D/FW Officials Feel the Sting of Multiple Airline Rejections
Southwest Airline's Denver service is the latest in a series of frustrating rebukes from low-fare airlines, including JetBlue's choice for Austin flights.
American spokesman Tim Wagner said the Denver decision is "a little strange." But he added that Denver has clearly benefited from having a single airport.
"It's a good example of a city recognizing that competition between airports is a negative thing," he said.
Regardless of the challenges that Southwest will face in Denver, some analysts opined that the airline's competitors are the ones most at risk.
Michael Linenberg, a Merrill Lynch airline analyst, downgraded his rating on Frontier stock from buy to sell soon after the Southwest announcement.
"The entry of Southwest plus United's expected emergence from bankruptcy in spring 2006 could represent a formidable competitive challenge for Frontier," he wrote in a report to investors. He noted that more than 90 percent of Frontier's flights go through Denver.
Investors dumped Frontier's stock (ticker: FRNT) Thursday on the news. The stock fell $3.08 per share, or nearly 29 percent, to close at $7.68 per share.
Southwest shares ( LUV) also dipped, although the drop was much smaller. Shares were down 51 cents, or about 3 percent, finishing at $15.07 per share.
"Denver is a market that makes sense for us," Kelly said. "We're very excited about being there."
IN THE KNOW A tale of two airports
Southwest Airlines is launching new service at Denver Airport while continuing to refuse to fly from Dallas/Fort Worth Airport.
| D/FW | Denver | |
| On-time arrivals (1) | 81% | 82% |
| Total departures (2) | 27,000 | 18,000 |
| Hub market share (3) | 84% | 74% |
1 January - August 2005
2 August 2005
3 American Airlines and American Eagle operate hubs at D/FW. United Airlines, United Express, Ted and Frontier Airlines operate hubs at Denver.
SOURCES: D/FW Airport, Denver Airport, U.S. Department of Transportation
IN THE KNOW A tale of two airports
Southwest Airlines is launching new service at Denver Airport while continuing to refuse to fly from Dallas/Fort Worth Airport.
| D/FW | Denver | |
| On-time arrivals (1) | 81% | 82% |
| Total departures (2) | 27,000 | 18,000 |
| Hub market share (3) | 84% | 74% |
1 January - August 2005
2 August 2005
3 American Airlines and American Eagle operate hubs at D/FW. United Airlines, United Express, Ted and Frontier Airlines operate hubs at Denver.
SOURCES: D/FW Airport, Denver Airport, U.S. Department of Transportation
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