Airfares at Greenville-Spartanburg International fell slightly in the second quarter — and have plummeted in the last decade — as the cost of flying dropped across the nation and GSP officials continue efforts to stem passenger defections to Charlotte and Atlanta.
New government figures show GSP passengers paid an average of $407.31 for a domestic ticket, down 0.2 percent from the second quarter of last year. GSP ranked as the nation’s 30th most expensive airport among the top 100, with higher average fares than Charlotte, Charleston and Atlanta.
GSP fares, however, are down nearly 40 percent since 2000, a drop that ranks just ahead of Charlotte and Charleston but substantially more than Atlanta, the figures show. Less than five years ago, GSP fares were among the two or three most expensive in the country.
Rosylin Weston, GSP’s vice president of communications, said airport officials expected the arrival of Southwest Airlines in 2010 to generate a competitive response among the airport’s carriers “and there was.”
Other airlines at GSP adjusted their fares and increased seat capacity with larger planes, Weston said.
“Airlines respond to how the market responds,” she said.
Southwest subsequently reduced its number of flights at GSP, with the airline saying the changes reflected adjustments to demand and airplane needs. Southwest also has expanded to Charlotte.
Airline officials said Southwest remains committed to the Greenville market. Airport, business and civic officials believe its presence is part of an air-travel equation at GSP that is an important catalyst for community and economic growth. More than 1.8 million passengers boarded or deplaned flights at GSP last year, airport figures show.
The U.S. Department of Transportation’s Bureau of Transportation Statistics said the average domestic air fare decreased to $378 in the second quarter of 2013, down 3.6 percent from the average fare of $392 in the second quarter of 2012, measured in constant 2013 dollars.
Highest fares in Huntsville
Huntsville, Ala., had the highest average fare, $547, while Atlantic City, N.J., had the lowest, $159, government officials said.
The officials said fares are based on the total ticket value, which consists of the price charged by the airlines plus any additional taxes and fees levied by an outside entity.
GSP officials have worked earnestly to stem the flow of passengers to Charlotte, Atlanta and other airports by those in search of lower airfares.
For companies such as Fremont, Calif.-based Synnex Corp., which has its U.S. distribution headquarters in Greenville, air travel is a critical part of doing business and lower fares can make a difference.
In previous years, customers attending the Synnex National Conference in Greenville would fly to Charlotte due to the cost of airline tickets to GSP, said Bob Stegner, Synnex’s senior vice president of marketing for North America.
Because the company provided customers with transportation from Charlotte’s airport to downtown Greenville hotels, “Our transportation costs were extremely high,” Stegner said.
Last year, Synnex stopped the practice and found almost 70 percent of the company’s customers flew to GSP, he said.
This year, about 97 percent of the 1,200 attendees flew to Greenville, Stegner said.
“That is good for all of us,” he said.
‘Critical for business retention’
Lower airfares are “critical for business retention and recruitment,” said Ben Haskew, president and chief executive of the Greenville Chamber.
At GSP this week, passengers scurried to check baggage and catch flights amid the din of construction.
GSP officials launched Wingspan, a four-year, $115 million terminal improvement program, in May 2012 to modernize the main terminal building, improve passenger flow and upgrade the facility.
Melani Rushing, an arriving passenger who works for a company opening a restaurant in Greenville, said airfares are more of a critical factor for personal trips than for business travel.
In checking prices to have a friend join her in Greenville, she found it would be less expensive — by several hundred dollars — to fly to Charlotte, Rushing said.
“For business, it’s not a factor,” she said. “But for personal, yes. I’d rather go for whatever’s cheaper.”
Other passengers agreed.
Ken Schneider, cq. who works for a General Electric supplier and flew to Greenville from Syracuse, N.Y., said while his options can be limited for business travel, he looks for airport alternatives to save $200 or more on the price of a leisure ticket.
In his case, that includes Rochester, Albany and Binghamton in New York, Schneider said.
GE manufactures natural gas-burning turbines at the company’s Greenville plant. Both Rushing and Schneider were using GSP for the first time.
GSP officials have said expanding nonstop options to major cities and increasing the frequency of flights to destinations such as New York, along with a more attractive terminal, could help reduce passenger “leakage” at the airport. That occurs when passengers bypass GSP for flights from such cities as Asheville, Atlanta and Charlotte.
More competition among the airport’s airlines could drive down fares further, GSP officials said. And attracting more passengers has a key monetary impact, financial statements show.
The Greenville-Spartanburg Airport District’s total operating revenues were $22.2 million for the fiscal year ended June 30, 2012, up 10 percent from $20.2 million compared with the prior year, according to an independent auditors’ report.
The increase primarily was the result of increased concession revenues — a byproduct of increased passenger boardings, according to the report.
Earlier this year, Dave Edwards, GSP’s president and chief executive, said the airport needs nonstop flights to Miami, Boston, Denver, Las Vegas and Phoenix and more service to New York airports.
Miami flights would provide a gateway to the Caribbean and South America and that would open new international markets to GSP, Edwards said.
“Those are some of keys for us as we move ahead,” he said. “Some of that is business-related travel and some of that is leisure-related travel. We have some opportunities on both fronts.”
He couldn't be reached for additional comment Thursday.
Federal officials said the second-quarter average domestic airfare was down 18.4 percent in constant 2013 dollars from the average fare of $463 in 1999, which was the highest of any second quarter, adjusted for inflation.
The 18.4 percent decline occurred while overall consumer prices increased 40.5 percent, the officials said.
Since BTS officials began collecting airfare records in 1995, inflation-adjusted fares declined 16.9 percent compared with a 53.1 percent increase in overall consumer prices, the officials said.
U.S. passenger airlines collected 70.6 percent of their total revenue from fares in the second quarter of 2013, down from 87.6 percent in 1990, the officials said.
Over the past three years, from the second quarter of 2010 to the second quarter of 2013, inflation-adjusted fares decreased 0.6 percent, according to government data.
Fares include only the price paid at the time of the ticket purchase and don’t include other fees, such as baggage fees, paid at either the airport or on board the aircraft, government officials said.
Meanwhile, GSP is still vulnerable to passenger leakage due its location between Charlotte and Atlanta, Weston said.
“That’s always going to be a concern for us,” she said. “It just has to do with where we’re located geographically.”
Yet, lower fares at GSP are “the right convergence of airlines at the right time in this market,” Weston said.
“The people of the Upstate and surrounding areas are the beneficiaries of that,” she said.