Frontier Airlines hasn’t even taken off from the Northwest Arkansas Regional Airport yet, but it’s already saving Denver-bound passengers big bucks.
Northwest Arkansas travelers have been able to purchase Frontier Airlines’ summertime flights to Denver for prices that generally fall in a range of $100 to $250 roundtrip if they occur after June 26. The airline’s competitors — American, Delta and United — have all reduced their prices to stay competitive.
The Northwest Arkansas Council started tracking airfares in the days before Frontier Airlines announced on April 8 that it would be flying between XNA and Denver. The first flight occurs June 27.
The Council’s checks showed the American, Delta and United roundtrip fares from XNA to Denver generally exceeded $500 in the first week of April and that remains true for trips prior to June 27.
But after Frontier’s announcement, United and American adjusted and started charging much less for Denver trips that occur June 27 or later.
What’s happening with XNA fares to Denver occurs at airports across the U.S. when legacy carriers like American, Delta and United face competition from low-cost carriers like Frontier.
The practice of other airlines reducing fares when low-cost competition arrives is most often referred to as the “Southwest Effect,” and the reference to Southwest Airlines and how its presence drives down fares through competition dates back to a 1993 study by the U.S. Department of Transportation. A second aspect of the Southwest Effect is how it stimulates the number of passengers to certain destinations, and the 1993 study certainly showed the number of people taking advantage of low fares caused more people to travel.
A University of Virginia study completed in 2017 suggests the Southwest Effect still exists, reducing fares overall and increasing travel to certain markets.
That fare-reducing impact can carry over to other low-cost airlines, including Frontier.
A June 10 check of roundtrip fares revealed the best deal available in the coming months was Frontier’s $107 roundtrip fare for travel on July 30 and Aug. 6. United had a great fare, too, for travel on the same days ($177) as did American ($187).
The best deal was even better this morning.
The website Kayak showed Frontier wanted $96 for a roundtrip that departs XNA on July 2 and returns July 9. United ($183) and American ($226) were offering great fares on those same days, too.