Competition pays off for Duluth air passengersFlying out of Duluth costs more than the national average, but it has fallen, and business leaders say it’s not as bad as it could be thanks to their efforts to recruit new competition to Duluth International Airport.
By: Candace Renalls, Duluth News Tribune
Flying out of Duluth costs more than the national average, but it has fallen, and business leaders say it’s not as bad as it could be thanks to their efforts to recruit new competition to Duluth International Airport.
While the average airfare nationwide has increased about $35 in the past six years, in Duluth it has fallen about $26, according to figures from the U.S. Bureau of Transportation Statistics. As a result, the extra cost of flying from Duluth is now less than $80, making the airport more attractive to an increasing number of travelers.
“That’s what happens when you have competition in a market,” said Brian Ryks, executive director of the Duluth Airport Authority.
Much of the credit goes to the successful effort to draw United Airlines to Duluth, according to the Duluth Airport Authority and civic leaders who helped make it happen.
United’s flights were started in late 2009 thanks to a collaboration of business and economic leaders working to raise $200,000 to help cover the startup costs and expected initial losses of the new air service. That was accomplished through $5,000 and $10,000 contributions from about 25 Twin Ports companies and nonprofits, Ryks said.
Two-and-a-half years and 110,000 passengers later, United is adding a third daily flight to Chicago on June 7. And if the Chicago service continues to grow, Denver service could be added in the future.
Room for improvement
Prices might be lower than they could be, but the Duluth penalty still stings the flyers who pay it.
“Duluth is outrageous,” said Narda Boughton of Ashland, who was waiting with Mike Fitzgibbon for a flight to Minneapolis on Thursday afternoon, part of a regular business trip to Boston.
“We bailed out for a while,” Fitzgibbon said of prices at the Duluth airport.
But they are stuck with flying out of Duluth unless they take the long trip to Minneapolis. They also have driven to Milwaukee to get lower fares, but their options there have been limited, they said.
While individual travelers don’t always feel like they’re getting a deal, business leaders say the downward pressure on airfares does pay dividends. Ryks estimates that the 738,000 travelers who have used the Duluth airport since United started service have saved about $37 million. He bases that on a roughly $50 drop in average one-way ticket prices to top 10 markets between the first quarter of 2009, before United came to Duluth, and the first quarter of 2010, shortly after service began.
He said those numbers come from the U.S. Department of Transportation. Full-year statistics from the Bureau of Transportation Statistics didn’t show that large a drop in Duluth airfares.
“If United pulled out of the market, I guarantee you, those airfares would go up,” Ryks said. “When there’s competition, fares go down. When there isn’t competition, fares go up.”
The new competition has had such a profound impact on the regional economy that United’s regional air partner, SkyWest Airlines, was the first business to get the newly created APEX Summit Award, according to Rob West, outgoing CEO of the Area Partnership for Economic Expansion. The Duluth Airport Authority also received the award.
“We hopefully will be part of the Duluth community for a long time,” Ken Sanders of SkyWest said as he accepted the award during the agency’s board of directors meeting Thursday in Duluth.
And that $200,000 incentive SkyWest got to start service in Duluth?
SkyWest reimbursed nearly $60,000 of it, a move not usually done by a company enticed to a market, Ryks said.
“SkyWest was interested in our community but not to take us to the cleaners,” he said.