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If you’ve booked flights out of Wichita lately, you know airfares are up.
One-way fares from Wichita rose 17 percent to $234.70 in the fourth quarter of 2011 compared with the same period in 2010.
Fares on discount carrier AirTran Airways from Wichita rose 28 percent during the same time.
Still, at $178.52, AirTran’s one-way average fare is lower than the Wichita average.
The discount airline’s operations are subsidized by the state, county and city, which worked to make fares more affordable by bringing AirTran to town a decade ago.
The subsidies underwrite AirTran’s losses in the market.
And a look at airfare data suggests Wichita’s fares and fare increases are in the ballpark with national averages, said Boyd Group airline analyst Mike Boyd, especially given the size of Wichita, its location and the fact that it’s not a vacation destination.
“You’re not getting ripped off,” Boyd said of Wichita airfares.
Still, don’t expect fares to decrease anytime soon, not even with the entrance of Southwest Airlines.
Southwest bought AirTran in May 2011 in a deal valued at $3.4 billion and is in the midst of folding AirTran into Southwest’s operations.
Many travelers think Southwest’s arrival in a market automatically means lower fares, Boyd said.
But that’s not the case.
Southwest isn’t a low-cost carrier anymore, he said.
“The belief that Southwest will come in and relieve the city of high fares across the board is akin to telling the city that the Easter Bunny really lays eggs,” Boyd said. “Here’s a hard fact: Southwest is in the business to make money, and today a lot of those really, really cheap, all-the-time, every-time fares are gone.”
In addition, Southwest’s operating costs are higher than AirTran’s.
Southwest is an older carrier; its employees have more seniority and higher pay rates.
It also has more restrictive union rules, he said.
For example, AirTran flew into Harrisburg, Pa., with one flight a day from Orlando and made money, Boyd said.
But Southwest, with its work rules and its model, can’t make it work. It’s dropping the service.
That’s because Southwest employees must work a full eight-hour shift, Boyd said.
“They don’t have part-time help, and they’re not allowed to outsource it to anybody else,” Boyd said.
Southwest will have to make some decisions about its Wichita service.
“At the very least, they have to make some decisions on fares,” he said.
Southwest will sell a seat for what it can get for it.
“They’re not here to be Mother Teresa,” Boyd said.
Not a ‘bum deal’
AirTran Airways began serving Wichita Mid-Continent Airport in May 2002.
It operates three daily flights from Wichita to its hub in Atlanta.
AirTran’s arrival immediately lowered fares in the markets AirTran serves, as competing airlines dropped fares to match.
Before AirTran started operating in Wichita, fares were 23 percent higher than the national average, according to the airport.
Wichita Mid-Continent Airport had the 10th highest fares in the nation.
Studies at the time found that 44 percent of the airport’s potential passengers drove out of state to catch a flight or didn’t fly.
Today fares remain lower than they were back in 2000, despite the increases, said Valerie Wise, Wichita Airport Authority air service and business development manager.
During the recession and as fuel costs rose, airlines cut the number of seats available and the flights they operate.
But people are flying again.
“Our flights are full,” Wise said. “With fewer seats available, airlines are able to charge a higher fare.”
Passenger traffic in May was the second-highest on record.
AirTran has had a big impact on the Wichita market, said Dean Headley, Wichita State University associate professor of marketing and co-author of the annual Airline Quality Rating, which ranks the nation’s largest airlines.
“As long as we have a low-fare player in that mix, we are going to be right in there with most other airlines,” Headley said about Wichita airfares.
“Wichita’s not getting a bum deal,” Headley said.
Fares from Wichita are in line with those in the region.
One-way average fares are lower than those from Tulsa and Oklahoma City, but higher than those in Kansas City. They’re also slightly higher than the national average.
The better indicator for comparison purposes is the average-per-mile costs paid per passenger, Boyd said.
Wichita fares average 17.4 cents per mile. That’s close to the 17.07 cents per mile from Kansas City and lower than Tulsa – at 21.68 cents – and Oklahoma City – at 21.45 cents per mile.
It is higher than the national average of 15.92 cents per mile.
Help for AirTran
In January, Gov. Sam Brownback announced that AirTran will remain in Wichita and transition to Southwest in 2013.
Chamber and city officials said at the time that hundreds of local companies made verbal commitments to support Southwest.
“It’s an important day, a great day for us,” Brownback said then.
Southwest has not announced what routes it plans to fly from Wichita. It could be next year before that will be known, said an airline spokesman.
Southwest doesn’t typically operate with subsidies.
But the airline’s officials made it clear in a January meeting with state and Wichita representatives that it was important that Southwest have access to the state’s affordable airfares program.
To help AirTran underwrite its losses in the Wichita market, the airline has received yearly annual revenue guarantees from the city, county and state.
The Kansas Legislature approved $5 million in funding for the 2013 fiscal year, which begins July 1, during this past session.
The city of Wichita and Sedgwick County add $1 million each to the state money.
As long as it received the subsidy, AirTran was going to serve Wichita, Headley said.
Including Wichita, Southwest said it is keeping service to 22 cities that AirTran serves.
It’s dropping service to 15 AirTran destinations.
If Southwest ever decides to pull the service, fares from Wichita would immediately increase, Headley said.
There are no other low-cost carriers to recruit to Wichita to replace the service.
“It’s very scary when you look at it,” Headley said. “When they leave, we’re dead meat.”
Southwest Airlines spokeswoman Ashley Dillon said the airline doesn’t plan to change its mind about serving Wichita.
“We don’t want to come in and start service in a market and pull out in a year or two,” Dillon said. “That’s not how we do business.”
She didn’t yet have the details on when Southwest will integrate into the Wichita market.
Of the 22 airports the airline must fold into its network, five have been completed.
“Integration takes a while,” Dillon said. “It’s a process.”
Wichita shouldn’t take Southwest for granted, said Boyd, the airline analyst.
Sarasota-Bradenton International Airport officials in Florida felt sure they were going to be OK, Boyd said.
But the airline decided to stop AirTran’s service there, and that market is much larger than Wichita’s.
Southwest will make every effort to stay in Wichita, Boyd said.
Still, “if at the end of the day, they found out it isn’t going to work, they’ll leave,” he said. “That will be only after they go through incredible gymnastics to try to stay.”
Headley said that Wichita must embrace Southwest.
We just better make sure that Southwest works. Period,” Headley said.
