Large Northwest Arkansas employers have a strong interest in seeing daily low-cost air service create competition on Northwest Arkansas Regional Airport routes to Atlanta, Chicago, Dallas/Fort Worth and New York, a survey shows.
The Northwest Arkansas Council’s key survey findings were shared with the Northwest Arkansas Regional Airport Authority at its monthly meeting on Wednesday. The Council is a private nonprofit organization focused on improving economic opportunity and quality of life in Northwest Arkansas.
The employers surveyed by the Council’s staff put a combined 63,135 passengers on commercial flights leaving the Northwest Arkansas Regional Airport (XNA) last year. They accounted for 11.7 percent of the airport’s 541,000 paying passengers in 2012.
The Council addressed pursuit of low-cost carriers because the regional airport is widely recognized as having one of the highest average airfares in the nation. The nation’s average roundtrip fare during the first nine months of 2012 was $375, but XNA’s average was $529.
That $154 difference per passenger times the number of paying passengers in 2012 means XNA passengers pay $83.3 million more than if the airport had average fares.
The Northwest Arkansas Council, as a part of its five-year strategy, identified attracting new air service, particularly low-cost service, to the Northwest Arkansas Regional Airport as one of the Council’s top objectives. The objective is being pursued aggressively this year in support of XNA administrators.
Research by the Council’s staff confirmed that low-cost carriers drive down fares on most routes when they start service to a new airport. That was the case in Pittsburgh, Richmond and Wichita, where those airports’ average roundtrip fares decreased by $40 to $100 soon after new low-cost carrier service began.
Each $20 decrease in the average fare at XNA would save XNA passengers about $10.8 million annually.
Airport administrators at Wednesday’s meeting acknowledged that one of the key challenges will be convincing employers to shift some of their traffic to the new carrier. Most of the surveyed employers said they are willing to move portions of their travel to a new low-cost service.
Airlines offering daily low-cost flights include Frontier, JetBlue, Southwest, Spirit and Virgin America. While low-cost carrier Allegiant Air does serve XNA, its service to Las Vegas and Orlando isn’t daily.