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"Business Competition pays off for Duluth air passengers"

Saturday, May 5, 2012

Business Competition pays off for Duluth air passengers
By Candace Renalls
The Duluth (MN) 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

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.

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