Nate Silver: OKC one of America's most overpriced mid sized airports

[adaniel]

So I'm a big reader of the blog 538, which is now part of the New York Times. If your not familiar its published by statistics wiz Nate Silver, who tabulates everything from baseball stats to NCAA tourney odds, but focuses a lot on political polls. I came across this post:

Which Airports have the Most Unfair Fares?
http://fivethirtyeight.blogs.nytimes...-fares/#charts

Acording to the model he made, OKC ranks as having the 8th highest premium of the 51-100 busiest airports in the nation, with an average ticket premium of $57. Also, Lawton, is the 5th most overpriced small airport in the country with a whopping $150 ticket premium.

Nate explains how he derived is calucualtions and you are free to look at it. Personally it is way above my head. You can disagree with his methods, but most people who travel frequently out of OKC will tell you that ticket prices are much higher than whats offered at other airports. The thing I don't understand is that mid sized airports in TUL and ICT (Wichita) are so much cheaper than flying out of OKC. Would anyone care to guess why this is?

[Kerry]

It appears to be a volume deal for most airports. The more passengers the less airlines can make on each ticket to make a profit. Interesting the Florida had nearly half the 15 cheapest.

[Spartan]

It is odd that I too have noticed that Wichita has really cheap airfare. OKC does have expensive airfare. It especially used to kill me to fly from OKC>DEN>YYC (Calgary) several times a year.

What can you do? I wonder if it's like Europe, where airports have their own taxes and charges which comprise a large portion (or in the case of Europe, most) of the airfare. But if you shop around for the best airports, you can fly cross-continent (ie., from Stockholm to Barcelona) for €20. :-)

[SkyWestOKC]

It's very much market driven. What works in OKC will not work in TUL, what is working in Wichita will not work in Little Rock. Prices often go down and are very cheap to Florida because a huge part of their demand is leisure travel. Leisure travel very rarely pays a high fare, and will relentlessly find the lowest fare possible. Markets where it is mainly business demand oriented usually have higher fares. Business travelers are often booking through the company credit card, and don't mind booking a more expensive flight if it gets them there nonstop, or with a shorter connection time -- whereas the average Joe would go for the $30 cheaper flight that gets them there 5 hours behind the business traveler with a stop. Another thing that drives fares up are fuller planes. If all of your planes are selling out too quickly, you most likely can charge a higher fare and go out with a couple seats open and make more money than by cramming the flight full of deep-discount fares (what most people buy).

It is good from a marketing standpoint that OKC does have a higher yield and passenger base who is used to more expensive fares. It is much easier to sell a market to an airline when you can demonstrate that all of the passengers don't always buy the cheapest fares, and will often pay more for a ticket. Airlines don't want a plane full of deep-discounted fares. You will lose money. The deep-discount fares are there to fill the plane with people who would not normally fly.

From a consumer standpoint, that's not a great list to be high up on. But from an airline point of view, higher paying markets get the first glance more often than not.

[venture]

Wichita is probably cheaper thanks to having AirTran, Frontier and Allegiant. Whereas OKC only has Southwest and Frontier (who Southwest is beating up). THe more low fare carriers the better because it keeps the others honest. Southwest dominates OKC, so the fares are going to be higher because they can charge more. It will be interesting to see the impacts on ICT once the Southwest/AirTran merger is done. Considering AirTran is subsidized up there, they may very well pull out or Southwest will run the others out and raise fares. Allegiant typically avoids competing against Southwest on any route, so they will probably tell Wichita it was fun shortly after the merger is done.

[ljbab728]

The thing I don't understand is that mid sized airports in TUL and ICT (Wichita) are so much cheaper than flying out of OKC. Would anyone care to guess why this is?

I deal with airfare prices on a daily basis. It's not often that Wichita figures into the equation because of the distance from OKC but I can tell you for sure that prices from Tulsa and OKC are normally almost identical. There can be occasional differences but that is not the norm. And surprisingly to most people, OKC is often less expensive than DFW.

[OUman]

I know some people here do not like Southwest, but it's actually because of Southwest that the fares even stay at the level they are at. If OKC did not have Southwest to begin with, the other carriers would have pretty much gone with whatever they wanted to. You could argue that competition would still keep fares down but I guarantee that they would be higher than what they already are. Not to, mention, when I fly Southwest, it's almost always to Austin, but while Southwest has always been $5-10 cheaper than the other two alternatives, Continental/Continental Express or American, they charge for checked bags, $15 minimum.

As for people driving to DFW and then taking a nonstop to wherever they wanted to go to, that would've worked better 10 years ago. Now with gas prices rising and checked bag fees (pretty much a guarantee at DFW unless you're flying without checked bags), that trip just got a whole lot more expensive. Not to mention DFW's parking rates are at least 1.5-2 times higher than OKC's.

[SkyWestOKC]

Unfortunately there are still a ton of people I know who drive to DFW to catch flights. I wish the OKC Airport would spend some marketing money on TV, newspaper, and print ads throughout the city and parts of the state to encourage fliers to use OKC.

"OKC. Affordable. Convenient. Local." would be a good catchphrase to use.

[Kerry]

Unfortunately there are still a ton of people I know who drive to DFW to catch flights. I wish the OKC Airport would spend some marketing money on TV, newspaper, and print ads throughout the city and parts of the state to encourage fliers to use OKC.

"OKC. Affordable. Convenient. Local." would be a good catchphrase to use.

They could save a ton of money and just use billboards along I-35 south of Adrmore and in north Texas. They could use billboards that say. "Going to DFW, If you use WRWA you would already be there" or "DFW Parking $19 per day, WRWA parking $7 per day", or maybe a map of the US showing non-stop destination from WRWA. As a kicker they could show photos of the lines at the security check points at DFW and WRWA.

[bombermwc]

Actually, it's faster to drive to Dallas from OKC. Even if you're going to south Dallas. Otherwise you have to get to the airport early, then fly, then get to a rental car....then do everyhing, then return the car, then go through security, then come home, then get your car then drive home. etc.

We've timed it several times. So if Dallas is the destination, screw the flight.

[soonerguru]

I admire Nate Silver. Here's my take. I am going to be traveling to NYC in late May with my family. I researched multiple airlines and points of departure, including Tulsa, OKC, Wichita, Northwest Arkansas, and of course, DFW. Here's what was weird. It was cheaper to originate my flight from OKC and connect at DFW, then travel to LGA, than it would have been for me to simply fly direct from DFW to LGA. Confused?

It's the market. OKC is booming economically and the flights are largely full at these prices; that's why they are charging what they are. In a similar vein, DFW travelers have even more money so they are charged even more for the same flight. Bizarre, I know.

In my research, Wichita was slightly cheaper and Northwest Arkansas was the cheapest. Supply and demand.

[SkyWestOKC]

I fly to Dallas a few times per month, quicker for me to fly then drive. At OKC you don't need to be at the airport 2 hours in advance, even with checked bags. I normally depart on the 1045am AA flight to Dallas. I am entering the parking garage at 9:45 and am through security by about 1010am at the latest. AA starts boarding 30 minutes before departure. I am in Dallas by noon, and my friend usually picks me up by 12:15. Rental car wouldn't add too much time on to that. No point being there and then waiting for 1 1/2 hours to board. Other airports I get there ASAP and don't fool around. Plus someone else is doing all of the work to get me to Dallas, I'm not concentrating on driving for 3 hours straight, plus a few pitstops and nature breaks = not fatigued.

And if you are connecting in Dallas, there really is no point driving to Dallas to catch the connection flight. You spend the same amount of time, plus miles and fuel costs for your car, in addition to $20 parking per day, and often the flights originating at hubs are more expensive than the same flight via connection. OKC-DFW-DEN is normally $75 each way. DFW-DEN (same exact flight) normally runs $100 each way.

[ljbab728]

As strange as this might sound, I have assisted at least one traveler who had to leave from DFW who saved money by flying to OKC first and then flying back to DFW for a connection.

[soonerguru]

As strange as this might sound, I have assisted at least one traveler who had to leave from DFW who saved money by flying to OKC first and then flying back to DFW for a connection.

Yes. This is exactly my point. It's cheaper to fly from OKC to NYC when connecting through DFW than it is to fly from DFW direct. Strange. If I were a Metroplex resident I would be pissed at American.

[ljbab728]

Yes. This is exactly my point. It's cheaper to fly from OKC to NYC when connecting through DFW than it is to fly from DFW direct. Strange. If I were a Metroplex resident I would be pissed at American.

Unfortunately, that has little effect when you're flying from a fortress hub and dealing with the only major airline that has continued to lose money.

[SkyWestOKC]

The only real cheap fares out of Dallas/Ft. Worth are when Southwest does a major deep-fare sale from Dallas and AA drops to match it, or on airlines that compete with AA out of DFW. For example, Delta has a good number of cheap flights out of Dallas to various markets.

[HOT ROD]

I was going to 'challenge' some of the large airports on the list as I'd hardly call some of them large (and even some of the medium ones, medium - Little Rock, Wichita?). However, I did notice he used pax numbers so no problems there I suppose.

As for Seattle, we get a lot of cheap fares due to competition. There are a rather large number of flights and the competition coming from Vancouver (for International) and Portland (for Domestic) is typically negated by offering a connection (usually for International/Vancouver). For example, on my current trip to China (that I NORMALLY fly from Vancouver International nonstop), I instead flew from Seattle and connected in Vancouver. The price was around $750 to Beijing (and on Air Canada at that).

Seattle has a non-stop to Beijing but it is a premium (over $1300). Vancouver has several daily nonstops to each of Beijing, Shanghai, Guangzhou, Hong Kong (you get it. ....), huge supply - but the lowest fair (Air China) was $1100. Lower than Seattle due to the incredible supply in Vancouver but still higher than the Air Canada connecting routing. ...

Going the other direction, Vancouver passengers pay HUGE premiums to fly 'international' or transborder into the US. You can bet that there are 5,000,000 pax numbers that pad SeaTac's numbers are originating passengers from Vancouver. It is such a big market, that Bellingham airport (arguably in Metro Vancouver, just south of the border) is now getting in on the game offering Air Tran flights and now even Alaska Airlines 757 flights to Hawaii at significant savings from doing similar non-stop routings on the plethora of airlines at YVR-Vancouver Int'l. Vancouver has another regional airport in Abbotsford (25 km from downtown Vancouver) but this airport didn't take advantage of the YVR situation (or didn't do it quick enough) so it is still relatively small.

I can start to tell, that Bellingham (and to a lesser extent, Abbotsford) are having an effect on Seattle - as prices that are normally quite low with the flux of Vancouver *domestic US passengers, are chosing those airports closer to home.

I agree with SkyWest and others, that OKC should really seize on this opportunity - like the many little airports around Vancouver have done. Advertise!!! Connecting via OKC to DFW is faster and more seamless than connecting via SeaTac to YVR and OKC has way more flights than Bellingham or Abbotsford. You would think, if OKC could grab a 10% transient increase (stop people from driving to DFW AND get a few DFW/S OK people to come up) that could make a huge difference on OKC retaining its flight schedule and even increasing frequencies and/or equipment sizes.

Connecting isn't really that big a deal anymore, as long as your time allots for it. Im not sure of the international situation in DFW/OKC but that could also be a marketing opportunity for OKC (even if OKC doesn't have Int'l flights, it could be cheaper to start from OKC and connect Int'l at DFW similar to what I experienced last month SEA-YVR-PEK). ...

[venture]

I know some people here do not like Southwest, but it's actually because of Southwest that the fares even stay at the level they are at. If OKC did not have Southwest to begin with, the other carriers would have pretty much gone with whatever they wanted to. You could argue that competition would still keep fares down but I guarantee that they would be higher than what they already are. Not to, mention, when I fly Southwest, it's almost always to Austin, but while Southwest has always been $5-10 cheaper than the other two alternatives, Continental/Continental Express or American, they charge for checked bags, $15 minimum.

That is half true. It is also because of Southwest why no other low cost carrier (LCC) can get established here. In markets with multiple LCCs, the fares are lower overall. When one dominates, there is little to any incentive to drop fares all that low. You are looking at only one market, whereas there are 16 other markets where Southwest is the market share leader but isn't the lowest fare. Unfortunately fares won't drop unless we can attract airlines like JetBlue, Allegiant, or Spirit. AirTran is out of play now thanks to Southwest gobbling them up.

So looking at the Q3 2010 report from the DOT, which doesn't take into account the numerous fare increase airlines (including Southwest) have initiated since then, there are some routes were people are being taken for a ride by Southwest.

The biggest Southwest (WN) dominated route where people are being ripped off is Phoenix. Southwest is over $40 (on average) more expensive than the low fare leader Frontier. Portland and Baltimore are the same where Delta and United, respectfully, are the low fare leaders by over $30 cheaper.

Now it wouldn't be fare to just single Southwest out. Other airlines take peoples money while charging tons more than the lowest fare carrier. I look at this to where either the airline is failing in making the market aware or people are set into spending habits.

Boise, Rapid City (SD) and Atlanta are the 3 biggest routes where the market share leader is over charging by over $100 compared to the lowest fare carrier. Boise you can save nearly $120 taking Frontier, same to Rapid City. Atlanta -Delta controls 70% of the market but they are charging a $114 premium over lowest fare provider American.

What is the most expensive city to travel to from OKC? Memphis. In fact, if you look at the top 25 most expensive cities from OKC, vast majority of the cities are to the east. Something AirTran would have helped with, but now that option is gone. Assuming Southwest axes most of the small markets which they say they won't do, but their history with buying Morris Air proved otherwise.

[venture]

Unfortunately there are still a ton of people I know who drive to DFW to catch flights. I wish the OKC Airport would spend some marketing money on TV, newspaper, and print ads throughout the city and parts of the state to encourage fliers to use OKC.

"OKC. Affordable. Convenient. Local." would be a good catchphrase to use.

It depends on the market on how many people are stuck in their ways and attached to their carrier of choice. I've seen many campaigns of trying to "guilt" the locals in supporting the local economy but people are extremely hard to retrain. The best thing that would really help is to get someone like JetBlue in here that would create a buzz and attract attention. Of course, the airport would also have to do their part and have a sustained media blitz.