Access, Fares, Frequency: Effects on Airport Traffic

The effects of airport access, and of airline fares and frequency, on the number of passengers using an airport are examined through a case study of the Texas intrastate air market. During the early 1970's, when Southwest Airlines engaged in fierce competition with other carriers and when Dallas/Fort Worth airport opened, major changes occurred in one factor while others remained constant. This context provides several special, quasi-experimental, situations which make it possible to identify the effects of each factor. The analysis confirms that: (1)Airport access can have an important impact on short haul air travel (the move by most carriers from close-in Dallas/Love to the more distant Dallas/Fort Worth airport led to a drop of about 12% in this traffic); (2)the fare elasticity is approximately one for this domestic traffic; and (3)relative frequency of flights is an important determinant of an airline's market share, according to an S-shaped relationship, except when significant price and locational factors intervene and dominate this phenomenon.