Denver passes 50 million passenger milestone; Southwest now has 17% share of capacity

Image: Southwest cake
Southwest has developed a network from Denver to 32 destinations, all of which are served at least daily. It is catching Frontier for number 2 status, with its capacity share now within four points of Frontier.

Among America’s top 10 airports (it ranked 5th in 2008), Denver was one of only four airports (the others were Atlanta, New York JFK and San Francisco) that reported traffic growth last year. By increasing passenger throughput by 2.8% the airport went from 49.86 million passengers in 2007 to 51.25 million in 2008. While United and its affiliates remain the dominant force at Denver last year’s continued growth can mainly be attributed to Southwest (whose passenger numbers at the airport increased from 2.64 million in 2007 to 4.75 million in 2008) and Frontier who also increased their domestic passenger numbers by 15% from 9.73 million to 11.17 million.

Chart: Denver airport traffic 1996-2008 (Annual passengers (millions))
Source: Denver Airport

United’s low-cost subsidiary Ted was wound-up during 2008 resulting in its passenger numbers falling by 44% to just over two million.

Southwest catching Frontier for #2 status

According to the latest schedule data for March, United and its partners still account for almost half of all flights and almost half of all seat capacity. Its network includes 103 non-stop domestic destinations and 10 international routes, six in Canada and four in Mexico. Frontier and its regional partner Lynx Aviation serve 55 destinations including five in Mexico and one in Costa Rica.

Airline Frequency
Share
Capacity
share
Destinations
(Dom/Int)
United 49.2% 46.9% 113 (103/10)
Frontier 19.3% 20.7% 55 (49/6)
Southwest 13.1% 16.7% 32 (32/0)
Delta/Northwest 3.8% 4.6% 7 (7/0)
American 2.2% 2.8% 4 (4/0)
Continental 1.2% 1.7% 3 (3/0)
US Airways 1.3% 1.7% 3 (3/0)
Great Lakes Airlines 7.2% 1.4% 27 (27/0)
Source: OAG Max Online for w/c 2 March 2009

Southwest’s capacity share is now within four points of Frontier and it has rapidly developed its network to 32 routes all of which are served at least daily. Great Lakes Airlines operates a fleet of 19-seat Beech 1900s and 30-seat Embraer Brasilias.

Denver’s “big3” compete on five of the top six routes

Image: United at Denver Airport
According to the latest schedule data for March, United and its partners still account for almost half of all flights and almost half of all seat capacity. Its network includes 103 non-stop domestic destinations and 10 international routes.

Denver’s three biggest airlines (Frontier, United and Southwest) compete head-to-head on five of the top six busiest routes from the airport. In terms of weekly frequency Salt Lake City, Phoenix and Los Angeles are the top three most served destinations, though in terms of seat capacity the top three routes are Los Angeles, Phoenix and Las Vegas.

Colorado Springs and Aspen, both in Colorado, are typically served by much smaller aircraft which are used to feed the Denver hub. United and Frontier compete directly on the top 11 routes. The busiest route on which Frontier does not compete is to Chicago O’Hare (another United hub), where the only competition is provided by American Airlines.
Among other carriers both AirTran and jetBlue have a minor presence at the airport as they both serve their main hubs at Atlanta (AirTran), Boston (jetBlue) and New York JFK (jetBlue).

Chart: Top 12 routes at Denver airport
Source: OAG Max Online for w/c 2 March 2009

Only two routes to Europe and none to Asia

While Canada and Mexico are reasonably well served (Air Canada, AeroMexico and Mexicana all have services to the airport), longer-haul international destinations are rather less abundant. Last year Lufthansa carried 317,000 passengers on its flights to Frankfurt (down 3.7%) while British Airways transported 151,000 people on its London Heathrow service (down 6.8%). Asian and South American destinations are conspicuous by their absence.

Southwest helping to drive down average fares

The rapid growth of Southwest at the airport appears to be having a positive impact on average fares. Between the last quarter of 2007 and the second quarter of 2008 Denver’s ranking among the country’s most expensive airports fell from 33rd to 54th while its average fare premium went from plus 3.6% to minus 3.4%.

Period Average Fare Fare Premium
All Markets
Fare Premium
Short-Haul
Fare Premium
Long-Haul
2007 Q1 (#61) $160 -5% -17% 0%
2007 Q2 (#52) $169 -1% -14% +3%
2007 Q3 (#30) $179 +5% -8% +9%
2007 Q4 (#33) $177 +3.6% -8.8% +7.6%
2008 Q1 (#47) $174 -0.9% -10.5% +2.4%
2008 Q2 (#54) $175 -3.4% -15.8% +0.7%
Source: US DOT Office of Aviation Analysis

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