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Study: Indianapolis Airfare Increases As Flights Decline

By Gretchen Frazee

Posted November 25, 2013

airplane

Airfare has increased at the Indianapolis International Airport since 2005, while the number of flights has fallen, according to a USA Today study released today.

The study shows the average fare has increased 23 percent from $316 in 2005 to $389 this year.

However, the number of flights has dropped from 18,376 flights in the first three months of 2005 to 11,851 in the first three months of this year.

Indianapolis-based ATA airlines filed for bankrupcty in 2008, which the Indianapolis Star reports had a significant negative impact on the city's airport.

Only now is Indianapolis starting to recover from the fallout over the departure of ATA, which in 2004 was the city's largest air carrier with 25 percent of passenger traffic.

The city's air service continued to decline after ATA closed down when another airline, Northwest, reduced the mini-hub it had been building in the city after its merger with Delta in 2009, said Chris Matney, air service director at Indianapolis International Airport.

Other mergers also ended up reducing flights and keeping airfares higher by reducing competition, Matney told The Indianapolis Star (https://indy.st/1cj0C8s ).

"When it came time to take the medicine the airlines were doling out across the whole U.S., we took more than our share," he said.

Indianapolis International Airport spokesman Carlo Bertolini says says the numbers can also be attributed to airline consolidations.

"Just like any other consumer product, when you take things off the shelf, it reduces choice and tends to elevate fares. So here in Indy, we've lost several brands if you will, Northwest and Delta were involved, United and Continental, you had Frontier and Midwest Express," he says.

Bertolini adds that more consolidations are happening. Southwest Airlines and AirTran Airways are in the process of combining and American Airlines and United Airlines plan to merge services in the near future.

Many companies also blame higher ticket prices on increasing gas prices.

As NPR reported in 2011, airlines have been trying to make up the cost by implementing fuel surcharges and making deals with fuel companies to pay a fixed price no matter how the market price of gasoline fluctuates.

But Bertolini says the airport is still doing pretty well considering jet fuel prices have gone up about 66 percent since 2005.

He also says if you look at airfares from 2000 and adjust for inflation, prices have actually gone down about 5 percent.

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