Flight distance causes LV fare hikes

Tuesday, Aug. 9, 2005 | 10:59 a.m.

While airfares to and from Las Vegas are notoriously low and McCarran International Airport keeps costs down for air carriers by generating revenue from slot machines, ticket prices are climbing faster here than in most U.S. cities.

But even those price hikes may be a blessing in disguise, since the reason fares have climbed dramatically in the last 10 years is that the city now has more long-haul flights than it once had.

Las Vegas was 10th nationally among 85 markets ranked by percentage change over the past decade on the Bureau of Transportation Statistics' Air Travel Price Index.

A government report issued last week said ticket prices have increased 19.5 percent from the first quarter of 1995 to the first quarter of 2005.

The federal government first issued its Air Travel Price Index in March 2004. Statistics are not adjusted for inflation.

Experts say ticket price boosts are more prevalent in the West where competition isn't as great as it is in East Coast markets. Of the top 10 markets for increases, seven are in markets west of the Mississippi River. Four of the top 10 ticket price increases occurred at airports in Hawaii as airlines boosted prices to account for increased fuel costs.

The biggest increase was shown on tickets to and from Lihue on the Hawaiian island of Kauai, where the price of tickets have more than doubled in a decade.

Tickets to and from Kona, Hawaii, and Honolulu ranked second and third on the list with increases of 83.2 percent and 59.2 percent, respectively.

The average increase nationwide over 10 years was 3.9 percent, a reflection of low-fare carriers grabbing a larger market share away from so-called legacy carriers.

Twenty-four markets showed decreases in plane ticket costs, with Manchester, N.H., having the greatest decrease, a 22.1 percent drop in fares in a decade. The decrease is attributed to Manchester becoming a larger market for Southwest Airlines, the nation's largest discount flier.

The only other Nevada airport studied, Reno-Tahoe International, ranked 37th among the 85 markets with an 8.6 percent increase overall.

Las Vegas tourism rival Orlando, Fla., saw its air fares decrease by 2.9 percent over 10 years while convention rival Chicago saw its fares fall by 1.2 percent.

Fares to and from the airport serving new furniture market rival High Point, N.C., are up 16.3 percent in 10 years.

Most recently, ticket prices at McCarran have fallen 1.2 percent from the first quarter of 2004 to the first quarter of 2005. Nationally, the average price fell 4.3 percent. Among the 85 markets studied, Las Vegas had the 26th largest increase during that period.

Randy Walker, director of the Clark County Department of Aviation, said while yield -- the amount of money airlines make in a market -- has climbed for airlines serving McCarran in recent years, the real reason tickets cost more is that there are more flights to markets farther away.

"When Southwest got some of those (Boeing) 737s that can fly coast to coast, they added several flights that are going to have higher ticket prices," Walker said. "It costs more to fly from here to Boston than from here to Los Angeles."

Southwest has upgraded its fleet with more fuel-efficient 737-700 aircraft which have greater range, resulting in the addition of nonstop flights to Baltimore; Manchester; and Islip, N.Y. In addition, several other airlines have added long-haul flights to Las Vegas on their schedules.