I wanted to just share one last thing (“last” – yeah right) about the DoJ and the US Airways merger. There’s been lots written about how with consolidation has come an increase in average fares. Let’s take a look:
Check out this chart. It compares average Q1 airfares in 2000, and then again in 2013 for the top 100 airports in the US. You may remember that during that time period we have seen Northwest, Airtran, America West and others disappear, leaving us with 4 major airlines. Certainly we would have seen airfares jump significantly during that time period – with all that consolidation and a 4X increase in the cost of fuel during that period, right?
No. Of those 100 airports, only 16 show an inflation-adjusted increase in fares, and only 6 show a double-digit increase in fares (Sorry, Dallas-Love, Spokane, Reno, Houston-Hobby, Burbank, and Tulsa!).
Hold on – wait just one minute there. Those 6 cities have shown significant (or “significant”) increases in fares over those 13 years. What is similar about those cities? Hm. What is it? I can’t find market share info for Dallas-Love, but Southwest flies the 10 busiest routes out of there.
Spokane – no market share info, but Southwest flies 5 of the 10 busiest routes out of there.
Reno: Southwest has 56% market share.
Houston-Hobby – Southwest has 85% market share.
Burbank: No market share info, but Southwest flies 6 of the 10 busiest routes from there.
Tulsa: I don’t have recent info, but from what I can tell they had the largest market share with roughly 35%.
Dear God, no. No. Those evil, evil passenger-hating fare-raising bastards at Southwest Airlines are causing all of this trouble, while the other poor, poor consumer-loving executives at Delta and United have been driving down fares for 13 years? It can’t be! It just can’t!
Oh, and while we’re talking about fares. Remember flying back in 2000 when things were really crazy? And it used to cost $2,200 to fly transcon at the last minute? I can fly nonstop to LA tomorrow for (a still admittedly ridiculous) $1200.
And in advance? You can fly NY-LA for $325 roundtrip, sometimes less.
It seems to me that the cheapest fares in many markets are hovering around where they’ve always been. The top fares in those markets that were ridiculous have come down a bit. And the vast middle range of fares has crept up in many cases. To the average leisure consumer, they can still fly from New York to Florida for $99 each way much of the year.
Consolidation has not caused fares to go up – unless you’re stuck in a market served by Southwest.