Business

Cincy airport's fares are back among highest

HEBRON — Cincinnati/Northern Kentucky International Airport once again has the dubious distinction of being among the priciest airports in the nation for passenger air travel.

CVG and Memphis International Airport tied for the highest U.S. domestic airfares during the second quarter of 2011, according to new federal data from the U.S. Bureau of Transportation Statistics.

Average round trips from each airport cost $476 from April to June, an increase at CVG of nearly 12 percent from the same period last year. The national average was $370, an increase of 8.5 percent from the same period last year.

Nationally, second-quarter fares — not adjusted for inflation — were the highest in any quarter since 1995, when the Bureau of Transportation Statistics started keeping records. The previous high was $359 in the third quarter of 2008.

"This report underscores the significance of the airport's objective to increase air service — both domestic and international — and stabilize airfares," airport spokeswoman Barb Schempf said. "There is unprecedented collaboration among the chambers (of commerce) and businesses in the region to support additional air service at CVG."

Fares are on the rise across the airline industry as it struggles to cope with increased jet fuel costs and other financial pressures. Delta Air Lines, the dominant carrier at CVG, announced in early April that it would raise fares after a 30 percent spike in fuel costs during the first quarter of the year. Additional fare increases were announced in July, following the second quarter.

At the same time, business and public officials have been growing increasingly concerned that diminishing service at CVG is hurting the region's ability to attract new business and keep existing companies happy. Non-stop service to Europe is down to one destination, Paris, from five in 2005. The airport offers non-stop service to about 50 U.S. cities, compared with 130 in 2005.

Business leaders have formed a task force to survey the air service needs of area businesses. A consultant is analyzing the data and could issue recommendations by early next year. Two weeks ago, that collaboration saw its first major success when Delta announced it would add a handful of flights at CVG in early 2012 to destinations and at times requested by area companies.

Airport officials also are working to lure a low-cost carrier. Ultimately, officials say, increased competition is the key to reducing fares at CVG.

"When you have an airport that has one very significantly dominant carrier, they can very much control prices," said Steve Stevens, president of the Northern Kentucky Chamber of Commerce.

Delta said fares are determined by a variety of factors, including customer demand for service, and time, date and route flown.

"During the past year, costs, particularly jet fuel, have risen significantly. Delta currently estimates that it will spend $3 billion more on fuel in 2011 than it did in 2010," said spokesman Trebor Banstetter.

Despite the rising fares, CVG officials saw some good news in the data: The $476.06 average domestic fare is nearly 20 percent lower than in the second quarter of 2008, when the average domestic fare at the airport was $594.87. Further, through the second quarter of 2011, fares at CVG increased at a lower rate — 2.2 percent — than the 3.9 percent national average.

High airfares are nothing new to those who fly out of CVG. Since the Bureau of Transportation Statistics began compiling fare data in 1995, the airport has routinely ranked among the 10 most expensive in the nation, even during the boom years of the 1990s.

In 2007 and 2008, CVG had the most expensive fares in the United States for nine straight quarters until Delta reduced fares in early 2009. The airport subsequently dropped out of the top 10 for several quarters before climbing back up the list.

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