You have reached your limit of free articles this month.

Enjoy unlimited access to

Starting at just 99¢ for 8 weeks.


  • ePAPER

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and bonus content- exclusively for subscribers. Starting at just 99¢ for 8 weeks


Welcome to

This subscriber-only site gives you exclusive access to breaking news, in-depth coverage, exclusive interactives and bonus content.

You can read free articles of your choice a month that are only available on

Atlanta air fares change direction — down

New competition from so-called “ultra-low cost carriers” has driven down air fares in Atlanta, a surprise turnaround from the last few years.

Average leisure fares out of Atlanta are down about 23 percent year-over-year, according to data from Harrell Associates. The decline is part of a trend across the country, though airlines did push through a price hike at the start of the year.

The rise of carriers like Spirit and Frontier airlines that tout low fares is offsetting — to a degree — the industry consolidation that has produced four big players.

They offer a bare-bones style of service and charge extra for carry-on bags and sodas, but are also known for fares as low as $69 roundtrip between Atlanta and Detroit.

“These are carriers with fares much lower than Southwest,” said Bob Harrell, of airfare consulting firm Harrell Associates in New York.

In Atlanta, they step into a gap left by Southwest’s acquisition of AirTran Airways. Southwest has significantly shrunk its flight schedule in Atlanta, diminishing its role as a No. 2 competitor to dominant Delta Air Lines.

That created an opening for ultra low-cost carriers — so named partly for their fares and partly for the cost structures that make them viable. In part due to their expansion, Hartsfield-Jackson saw an unexpected 5 percent gain in passenger traffic in 2015.

“In terms of the consumer, this is all good stuff,” said Jay Sorensen, president of Shorewood, Wis.-based consulting firm IdeaWorks.

“The Atlanta community benefits tremendously from having a hometown airline. Sometimes the price of that is paying higher fares than you want to,” Sorensen said.

Competition puts pressure on the hometown airline to lower its fares on competing routes. “The legacy airlines lower their fares because they face competition, not to be nice to consumers,” Sorensen said.

Spirit, based in South Florida, adds two more routes this spring to make a total of 17 destinations from Hartsfield-Jackson. Denver-based Frontier is growing to 22 routes out of Atlanta starting in the spring.

Intense skirmishes

While those numbers aren’t enough to challenge Delta everywhere, they have produced some intense skirmishes. For instance, the Atlanta-Philadelphia route at one point last year had five airlines competing: Delta, Southwest, American, Spirit and Frontier.

That route also had one of the biggest decreases in average fare anywhere in the country: down nearly 35 percent in the second quarter of 2015 compared with a year earlier. The picture may be different this year, because Frontier discontinued the route, as well as flights to Minneapolis.

For its part, Delta has expanded its “basic economy” no-frills fares to compete with the low-fare carriers. Those fares do not allow advance seat reservations, upgrades or flight changes and are a level below regular economy on Delta’s fare ladder.

“We built it as a defense” to ultra low-cost carrier competition, Glen Hauenstein, Delta’s executive vice president of network planning and revenue management, said during the company’s investor day. “But we see also now it has broader implications,” allowing the airline to up-sell about 50 percent of customers into higher fares.

American Airlines also has said it will be more aggressive against ultra low-cost carrier competition.

But don’t expect a guaranteed bargain for every flight, even where there is competition.

The entry of an ultra low-cost carrier “doesn’t mean that American or Delta is selling every ticket at those levels,” Harrell said. “They’re selling those tickets at those levels where they need to be competitive on a time-of-day, day-of-week route.”

Some credit the decrease in fares nationwide to lower oil prices. Yet lower fuel costs alone wouldn’t drive Delta to lower fares. CEO Richard Anderson told investors the company aims for the fuel savings to translate into higher profits for the company — rather than lower prices for consumers.

But lower fuel costs make it easier for low-cost airlines to expand, and for competing carriers to match fares without posting losses.

A different style

To be sure, the new competitors’ style of service is different. Some of their routes are seasonal, meaning they don’t operate during the slower winter season. On many of Frontier’s new routes, it operates service just three times a week — offering less flexibility for customers to plan trips and making it more difficult to get somewhere when a flight is cancelled.

Most notoriously, Frontier and Spirit are known for charging extra to bring a roll-aboard as a carry-on and even for sodas on board. The limited service is not appealing to those who prefer to relish the few perks left in economy-class air travel and the option for traditional first class service.

Their impact in Atlanta is still limited. Frontier and Spirit combined make up less than 4 percent of the market at Hartsfield-Jackson, based on the most recent monthly traffic figures.

Yet their growth here and around the nation appears to be having an out-sized effect, with overall fares also down.

“As a low-cost carrier expands in a major city, there is a cascading effect,” where the dominant carrier may be less aggressive in charging high fares, Sorensen said.

Harrell thinks airlines may lower fares in a market with low-cost carrier competition to make it less attractive for a low-cost carrier to start flights there. And lower fares to a city like Fort Lauderdale, for example, could put downward pressure on fares to beach destinations throughout Florida, he said.

“It’s contagion,” he said. “Leisure travelers will go where the prices are low and the sun is shining.”

Reader Comments ...

Next Up in Business

Woodward Academy: Q&A with visual arts teacher Andy Cunningham

Andy Cunningham finds it strange to say out loud that he’s worked for Woodward Academy for 32 years. When he joined the city’s oldest private college preparatory school in 1985, he had no plan to be a high school teacher. Cunningham, who holds a bachelor’s degree and MFA from Georgia State University, was the first black male on faculty...
Executives believe in collaboration, balance

The leaders of the top small, midsize and large workplaces shared what makes them proud and advice for companies trying to improve their corporate culture. Answers have been edited for brevity and clarity. Q: What are key components of the company’s culture? Pat Flood, regional operating partner, Supreme Lending’s Southeast region: Our...
Woodward Academy: Top Large Workplace

Students and faculty whiz around President Stuart Gulley in the foyer of the light-filled renovated Thalia N. Carlos Science Center, which re-opened in 2016 at Woodward Academy in College Park. During a change in classes, Gulley stops a student dressed in a blue blazer and khakis, Woodward’s school uniform, and brags about his success in a recent...
What employees say ADC provides a spectacularly positive work environment and provides a frequent and detailed vision for the company! ADC is, hands-down, the best place I have ever worked! I am given complete freedom in deciding how to execute my work and the company provides the best resources to get the job done. The company culture is most inclusive... Q&A with Leisa Cudworth in product management

Leisa Cudworth often uses her lunch hour to exercise. It’s easy for her to work up a sweat since has onsite exercise programs and facilities. “You get to do it at lunch or different times (of the day), so when evening comes, you get to go home to your family,” she said. Cudworth, who has worked her way from inside...
More Stories