Sunday, July 25, 2004
To Bill Mays, air travel is not so much about flying from Point A to Point B.
For the president of Indianapolis-based Mays Chemical Co., flying is an exercise in evaluating the array of options between Point A and Point B.
Mays, 58, Fishers, travels on business so often -- he flies to Chicago, Detroit, New York or Washington at least once a week -- that he has become adept at sifting through fares and routes for the best deal.
So he was elated when ATA Airlines and Northwest Airlines announced last week that they were adding routes, including new nonstop flights, in what has the makings of an escalating price war.
More choices. Cheaper fares. In a word, competition.
"I know all the combinations if I have to go somewhere," he said. "And as the competition heats up, it will make more of a difference pricewise."
As Indianapolis International Airport experiences its first major service expansion in more than a decade, travel agents and industry experts say air travelers could benefit in the form of lower fares and direct service to more cities.
Indianapolis-based ATA on Monday added six new flights to its timetable. A day later, Minneapolis-based Northwest Airlines announced the addition of 19 flights beginning Oct. 31, including the city's first nonstop routes to Raleigh-Durham, N.C., and Hartford, Conn.
When the routes are added, Indianapolis will have nonstop flights to 41 cities, airport spokesman Dennis Rosebrough said.
On top of the added flights, Independence Air, a new low-cost carrier that has been generating significant buzz among East Coast business travelers, is set to begin service Aug. 15 from Indianapolis to its hub at Dulles International Airport in Washington. And more low-cost carriers, such as JetBlue and AirTran, may soon follow.
"It means more nonstops from Indianapolis to different places, and that's going to facilitate travel," said Nettie Hughes, a travel agent for Access Travel on the Northeastside. "It's going to be a plus for Indianapolis."
The long-term impact of the changes on Hoosier travelers, however, is less certain.
Travel agents such as Hughes predicted few downsides from the sudden spike in competition. What's more, the airport is on pace to exceed its best year ever, 2000, when nearly 8 million passengers passed through Indianapolis.
But industry experts say ATA -- whose reign as one of Indianapolis' largest carriers is threatened by financial woes -- could wither in a fare feud with other low-cost carriers and larger full-service airlines such as Northwest, a company known for aggressively pursuing the markets of ailing airlines.
Observers pointed to Northwest's recent large-scale push into General Mitchell International Airport in Milwaukee, which was once dominated by Milwaukee-based Midwest Express.
"With Northwest, if they smell blood, they are there like a shark," said Darryl Jenkins, a professor at Embry-Riddle Aeronautical University in Daytona Beach, Fla., and one of the nation's leading experts on the aviation industry. "If there is any hint that you're going to take one of their passengers, Northwest will fight to the death."
Should a full-blown price war break out, analysts say the surviving carriers could dictate fares. And with jet fuel prices hovering around an all-time high and full-service carriers saddled with long-term financial problems, analysts warn that consumers -- despite the competition -- might not see a noticeable drop in ticket prices.
"In any price war, there are casualties," said David Stempler, president of the Washington-based Air Travelers Association. "If a price war breaks out, someone may fall by the wayside. In the short run, there is a flurry of activity and lower fares. But in the end, it could mean less service and higher fares."
Though it's a metro area of more than 1.6 million, Indianapolis has long struggled to establish itself among the nation's largest airports. The Circle City's proximity to major hubs such as Chicago, Cincinnati and St. Louis has made it difficult to generate significant connecting air traffic -- fuel for further airport growth.
That, in turn, has limited the number of nonstop flights to and from Indianapolis, with many airlines choosing instead to run many connections to places such as Chicago.
"Indianapolis is so close to Detroit and Cleveland and Cincinnati and Chicago. It doesn't make for a good hub," Jenkins said. "The top 25 markets will account for 80 percent of the nation's traffic."
The Indianapolis metropolitan area ranks 28th in population, but its airport ranks 40th in flights and 46th in departing passengers, according to the U.S. Department of Transportation. In contrast, the Denver area ranks 19th in population, but its airport is fifth in flights and sixth in departing passengers.
"Indianapolis has always been, sort of, a stepchild as far as nonstop flights," said David Marsh, a travel agent for Sunshine Travel in Fishers. "Obviously, nonstop flights are very desirable. Families traveling with small children don't want to have to fight their way through the airport to a connecting flight. Elderly people don't want to be worried with connections. And there are cruises and tours where people absolutely have to be there on time."
But flight options are limited. Indianapolis tallied roughly 74,000 flights last year, according to federal statistics. In contrast, neighboring Cincinnati/Northern Kentucky International Airport, a Delta hub, had nearly 227,000, figures show.
"Pluses and minuses to being a hub airport," Stempler said. "The minus is that fares tend to be a little higher, and it's more of a hassle. The plus is that there are lots and lots and lots of flights."
Still, as new flights from Indianapolis are added and the busy summer travel season gives way to the doldrums of autumn, experts agreed that fares could fall because of increased competition. Even now, there are signs.
Northwest intends to match ATA's introductory airfares in the five cities where ATA and Northwest overlap, said Northwest spokesman Kurt Ebenhoch. Those cities are: Orlando and Fort Myers, Fla., New York-LaGuardia, Los Angeles and Las Vegas. With the added flights, Northwest will have the most jet service out of Indianapolis, a title currently held by ATA.
ATA spokeswoman Roxanne Butler said the airline is countering by bolstering its presence among business travelers.
"We are reaching out to the business travelers on the routes that fit their needs," she said.
Fay Beauchine, Northwest's vice president of sales and customer service, meanwhile, dismissed assertions that the added flights are an attempt to muscle out ATA.
She said the plan to add flights from Indianapolis was hatched in 2001 as part of a broader strategy to expand service beyond Northwest's primary hubs in Minneapolis, Detroit and Memphis, Tenn.
"We have a good base of customers (in Indianapolis)," she said. "Indianapolis is a city that is large enough to support some new flights."
In that regard, airport officials view the added routes as a sign of high passenger interest and rising prospects for profitability.
"Airline service is not provided as a charity," said Rosebrough, the airport spokesman. "The question is: Will a route be profitable? Is there enough demand, or will enough traffic be generated between your city and another city?"
Taking advantage of lower fares sparked by any new competition, however, is a task that even veteran travelers such as Mays might find daunting, given that prices can fluctuate hundreds of times a day based on fuel costs, demand, length of stay and many other factors.
An online fare search on Orbitz to various cities for a July 27 departure and an Aug. 3 return turned up a broad range of prices. For instance, round-trip fares to Orlando, a popular vacation destination for Hoosiers, ranged from $237 on ATA to $673 on Midwest. Roundtrip fares to Las Vegas, another trendy leisure spot, varied from $205 to $402.
While the possibility of lower fares and more choices is nice, the hassle of it all has Mays, the business traveler, harboring dreams far beyond just snagging the best fare.
"I can understand why busy executives want to have access to their own planes," he said. "If I could afford it, I'd have one."
Nonstop passengers by origin for 2003
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Top 3 |
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Midwest cities |
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Sources: U.S. Department of Transportation, Indianapolis International Airport