Low-fare airlines, which have for years competed with regional airlines in dense, short-haul markets, are serving more longer-distance markets than in past years, according to a report issued by the U.S. Department of Transportation (DOT).

These new services have provided price competition for incumbent carriers, driving down average fares in numerous markets.

DOT's Domestic Airline Fares Consumer Report notes that AirTran Airways [NYSE: AAI], ATA Airlines [Nasdaq: ATAH], Frontier Airlines [Nasdaq: FRNT], JetBlue Airways [Nasdaq: JBLU], Southwest Airlines [NYSE: LUV] and Spirit Airlines have recently expanded into long-haul, transcontinental markets.

These carriers were operating in 26 percent more long-haul markets in the third quarter of 2002 compared with the same period of 2000, while they expanded their presence in short-haul markets by less than 5 percent during this period.

In these long-haul markets, average fares declined about 29 percent over the two years, while the low-fare carriers' passenger traffic increased 179 percent, according to the report, which covers July to September 2002.

The report also provides information on airfares for the top 1,000 city-pair markets in the 48 contiguous states, including the average one-way fare, the number of one-way passenger trips per day, and the nonstop distance for each city pair. The information is useful for regionals exploring potential new markets.

Also included is fare and market share information for the airline with the largest market share, and the airline with the lowest average fare.

The report also includes:

• Price and traffic information about city-pair markets that experienced increases or decreases in average fares of at least 30 percent compared with one year ago.
• Detailed fare information for the highest and lowest fares for city-pair markets, including the percentage of passengers paying the minimum fare, the maximum fare and three times the minimum fare.
• Information on fare premiums and fare discounts -- measures of an airport's average prices compared to those of other similar markets, demonstrating the impact of low-fare service and hub domination on fare levels -- for 77 cities.

>>Contact: Bill Mosley, DOT, 202-366-5571, Web: http://www.dot.gov/affairs/dot07202.htm, or http://ostpxweb.dot.gov/aviation/<<