Follow-up: Spin Control?

Jun 25 2010 Follow-up: Spin Control? BY sgf-admin TAGS How the Airport Works


Jason has explained the logic behind his thought that the Branson airport caused last year's upswing in Springfield passenger numbers:

"Prior to Branson Airport opening in May 2009, out of the top 150 commercial service airports in the country, Springfield consistently ranked in the top 15 as one of the highest airfare airports in the country. Those are DOT numbers not mine. Branson Airport brought low fare competition to the region and effectively lowered fares from Springfield."

Jason... Your overall premise here is that the Springfield airport is in a state of denial. It is not. We have consistently said in public, and on this blog, that competition in the market is a good thing because it could lower fares. We have also said that the Branson airport has created competition in the market. We just think it’s inaccurate to say that it was responsible for last year’s overall drop in Springfield air fare—the notion isn’t supported by fare data.

Fare data does show that the Branson airport created competition on one Springfield route: the American service to Dallas. It was short lived, but it sure was sweet while it lasted. The competition was created by the Sun Country service between Branson and Dallas. While that service was running (and it was only for a few months), American was matching the Sun Country fare. During that time customers could fly from Springfield to Dallas for less than $200. In 2008 and 2007 that fare was typically between $400 and $600.

Bottom line: the overall decline in fares last year was a national phenomenon. It was driven by the fact that airlines faced terrible advance sales early in the first quarter ’09. Their response was to cut fares across the board in an attempt to fill the seats. In the Springfield market the national fare decline was given an extra bump by the short lived competition on the Dallas route.

As time goes on, and as more fare data come in, it’s our hope that we’ll see strong evidence of Branson competition driving down Springfield fares down. At this point, however, we’re not particularly optimistic that it will happen. With the economy on the mend fares are trending up and they’ve been doing so (with a vengeance) since the first of the year. 


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