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June 27, 2010 09:55 PM

Airport Price Wars

Omaha, NE

Plane tickets to fly out of the Omaha airport can be hundreds of dollars cheaper than tickets from Sioux Falls.
Lowering those ticket prices is one of Mayor Mike Huether's main agenda items, and its why efforts are already underway to bring the price down.
The crowded concourse at the Omaha airport is an example of what happens when ticket costs are kept low. 

"Omaha is very direct and inexpensive, and very efficient," South Dakota traveler Leslie Hershkowitz said at the Southwest Airlines ticket counter in Omaha.

"Definitely it's a lot cheaper, and its not a bad drive," Catherine Napier of Sioux Falls said as she unloaded her bags at the Omaha airport.

Napier is just one of the many Sioux Falls travelers who drive to Omaha to fly. Napier packed $150 more to San Diego just by flying out of Omaha instead of Sioux Falls. 

"I like to spend my money on fun things not an overpriced airline ticket," Napier.

She's not the only one. Officials with the Sioux Falls Airport say 45 percent of the travelers who could fly out of Sioux Falls, leave from other cities. 

"Because of the competition to keep the fares low it's worth folks effort to drive to Omaha," Stan Kathol with the Omaha airport said.

Kathol is the Director of Finance at the Omaha airport and says the airport doesn't spend a dollar on advertising.

"We actually have no budget for marketing and advertising. Our marketing is the draw," Kathol said.

The draw is the lower prices, thanks in large part to Southwest Airlines that started flying out of Omaha in 1985.

"The three years following Southwest arrival here, Eppley Airfield's passengers grew by 70 percent. And again, Southwest realized they could serve this whole region here in Omaha," Kathol said.

Two other low-cost carriers, Frontier Airlines and AirTran, also started flying out of Omaha around the same time, driving down costs. Prices stay low because of that competition and the fact that Omaha is not a hub-airport dominated by one airline. 

"In a city like Minneapolis, or other hub cities that are dominated by a primary carrier they lack a lot of price competition that several carriers bring in," Kathol said. 

About 90 planes fly out of the Omaha airport every day and officials say more passengers and more planes also equals lower costs for customers.

"And so, its a combination of factors, and its working. It's worked very well for us for the past number of years," Kathol said.

Sioux Falls is trying to turn that trend around. The first phase of an expansion project opened up in May at the Sioux Falls Airport with more room for ticket counters and airlines.

"We continue to work with the Chamber and the Convention and Visitors Bureau that's putting together money through Forward Sioux Falls to help us put together a very good incentive package for someone like Frontier that could offer some low fares to Denver," Dan Lettlier, Executive Director of the Sioux Falls Airport said.

Lettlier says incentive packages help draw low cost airlines to communities because they know they can make a profit. 

"There's a lot of risk involved for any new carrier to a new city. They're worried about that risk, especially in this environment, so they look for help from the community," Lettlier said.

It's one of the things Sioux Falls is working on right now.

But, the city is also working with the Congressional delegation to lower costs. Just recently Lettlier and Senator John Thune met with United Airlines to see what it would take to lower fares.

"Working with them to point out areas where we think they could modify some of their fares. Certainly we have a lot of support from our Congressional delegation in working with United and Delta trying to modify some of their fares here," Lettlier said.

And they hope it helps to drive costs down in Sioux Falls, so that more and more travelers aren't driving two and a half hours to Omaha to fly. 

"Some people say time is money, but I have time," Napier said.

Especially when the trip can save you some money.

Sioux Falls Airport officials say all of those passengers who travel to other airports could actually be an advantage in trying to attract a low-cost carrier to town, because it shows those airlines there's opportunity to grow if they can keep prices low.

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