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North Texas airfares down dramatically since Wright Amendment ended

Southwest initially added 15 nonstop routes out of Love Field after the Wright Amendment ended in October 2014.
Southwest initially added 15 nonstop routes out of Love Field after the Wright Amendment ended in October 2014.

A $63 round-trip fare to Denver on Frontier Airlines. A $106 round trip to Miami on American Airlines. A $140 round trip to Chicago on Southwest Airlines.

These are some of the cheap airfares available to North Texas travelers looking to travel out of Dallas/Fort Worth Airport or Dallas Love Field over the next few weeks.

The great deals are indicative of how the cost of flying out of North Texas has come down dramatically since the Wright Amendment restrictions were eliminated in late 2014. But other factors are also contributing to the best airfares in years.

According to government data released this month, average fares at Love Field dropped 6.5 percent in the second quarter of 2015, compared with the same period of 2014, as Southwest Airlines added nonstop routes and flights. To compete, American Airlines and other carriers lowered their prices at DFW Airport, driving average airfares down at the region’s major airport by 6 percent during the period.

In addition to the “Southwest effect” from its expansion at Love Field, the growth of low-cost carrier Spirit Airlines at DFW and plummeting fuel prices prompted American to aggressively match competitors, leading to the cheapest average airfares at North Texas airports since 2010.

“Dallas is absolutely the cheapest place to fly in the entire United States,” said George Hobica, founder of Airfarewatchdog.com.

Based on the government data, Love Field had the third-cheapest average airfare of the top 50 airports in the U.S., with Las Vegas and Fort Lauderdale reporting slightly lower fares.

Hobica and others say that as long as fuel prices remain low, so will airfares.

What the data shows

When the Wright Amendment restrictions, which limited direct flights at Dallas Love Field to several nearby states, were lifted in October 2014, industry analysts were unsure how much airfares might fall with the new competition from Southwest Airlines on nonstop routes.

Southwest initially added 15 nonstop routes out of Love Field, mostly on routes it had served previously with one-stop service. Reviewing nine months of average airfare data that is now available, fares have dropped anywhere from 3 to 48 percent on those 15 routes out of Love Field and 3 to 26 percent on the same routes out of DFW.

Dallas to Tampa is the only Love Field route where fares have increased, up 2 percent. Similarly, looking at the same 15 destinations out of DFW, only Chicago Midway and San Diego have seen average fare increases, up 8 percent and 3 percent respectively.

The most dramatic decrease has been on flights to Reagan Airport in Washington, D.C., where airfares have dropped 48 percent from Love Field and 26 percent from DFW. Fares to Atlanta have also declined at Love Field and DFW, 25 percent and 23 percent.

The data, released by the Bureau oferansportation Statistics, lags by about six months and includes about 10 percent of all tickets sold for flights that departed in a specific quarter. For example, if a passenger paid $200 for a DFW-to-New York ticket in the first quarter for a flight in the second quarter, that ticket price is recorded in the average airfare for the second quarter.

Farecompare.com founder Rick Seaney say the government airfare data is not surprising as it mirrors what he has seen through his website when people shop for tickets.

“Before, if you found a ticket under $400 from Dallas nonstop to Los Angeles or San Francisco, you were lucky,” Seaney said. “Now if you don’t find a ticket under $300, it’s unusual.”

Why so low?

The lifting of the Wright Amendment is only one reason airfares gave fallen so much. Several other factors, primarily the low cost of jet fuel due to plunging oil prices, have encouraged airlines to be more competitive with their fares on selected routes on certain weekdays to stimulate demand.

Atmosphere Research analyst Henry Harteveldt said Fort Worth-based American Airlines has aggressively lowered fares at DFW when its flights compete against a low-cost carrier such as Spirit or Frontier.

“A low-priced fuel environment allows American to be more responsive to low-fare offerings by competitors,” Harteveldt said. “American has always had aggressive revenue management software that would allow it to optimize the number of seats sold at any price point, but in a low-fuel price environment it can make more seats available.”

The airfare data also reflects promotional pricing on new routes introduced by Spirit, Frontier, Virgin America and Southwest in the market. For example, fares between Memphis and Love Field were down 45 percent in the second quarter, partly because of sales Southwest was offering to launch its Memphis route on April 8.

“The promotional period is anywhere from four to eight months and you see prices drop 30 to 40 percent on nonbusiness fliers and then you see that compress down to a 15 to 20 percent decline,” Seaney said.

Love Field limits

A federal judge said this month that he believes the 20-gate limit at Love Field should be eliminated while ruling that Delta Air Lines can keep operating out of Love Field while a dispute over gates is settled in the courts.

Allowing more airlines to fly out of Love Field could push airfares even lower and give consumers a bigger choice on routes, analysts say.

“The restrictions themselves are just political gamesmanship that should have never happened to begin with,” Hobica said.

However, Congress is unlikely to remove the gate limit or restrictions on international flights out of Love Field. Even with those restrictions staying in place, analysts say, consumers benefit from cheap airfares at both North Texas airports.

“What you’re seeing is Love Field has been successfully serving more travelers without having any meaningful negative impact on DFW,” Harteveldt said. “Competition helps keep fares reasonable.”

Andrea Ahles: 817-390-7631, @Sky_Talk

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