Sky-high fares expected to descend

San Francisco International Airport had the fifth-highest domestic fares in the first quarter of 2007, despite an influx of low-cost carriers clamoring to its terminals.

Flights to and from Cincinnati, Anchorage, Honolulu, John F. Kennedy International Airport in New York and SFO took the top five spots, respectively, for domestic flight cost, according to figures released last week by the federal Bureau of Transportation Statistics.

The average domestic fare, one-way or round trip, for travel to or from SFO was $479.27.

United Airlines, which has a hub at SFO and remains the airport’s largest carrier, contributes to the higher fares because it’s a major carrier out of SFO and has, historically, not been forced to compete with cheaper carriers, said Bob Harrell, aviation consultant and principal at New York-based consulting firm Harrell Associates.

However, the influx of low-cost carriers should offer relief to SFO travelers as a price-cutting war hasbegun with the entrance of JetBlue Airways into the SFO market and Wednesday’s arrival of Virgin America.

The newest low-cost carrier to take up residence at SFO is offering one-way flights of $139 to popular airports such as JFK, forcing JetBlue Airways and Southwest Airlines — which is matching fares to the greater Los Angeles area out of its Oakland International Airport hub — to follow the trend.

Harrell said fares dip when major airlines, such as United and American Airlines, are forced to duke it out, even with low-cost carriers. Southwest entered the low-cost market last year and prices dropped dramatically, he said. The three low-cost carriers competing with one another at SFO could help force the legacy airlines to drop their fares as well, said Rick Seaney, analyst and CEO of farecompare.com.

But Seaney said the low-cost carriers must add new cities to their route schedules in order for fares to dip in the long term.

“Legacy carriers won’t dip their fares if there isn’t a lot of competition,” Seany said.

But since plane capacity is at least 90 percent full, a trend expected to continue through the summer, Harrell expects legacy airlines won’t be too keen on reducing their fares, since they won’t have to compete for customers in the summer vacation season.

Fares are typically high for mid-country airports, such as Cincinnati, which act as a hub for a major airlines but also have a dearth of low-cost carrier options.

Priciest airports

 ares shown reflect average first-quarter 2007 data.

City/Airport » Average domestic fare

Cincinnati » $531.48

Anchorage » $526.13

Honolulu » $489.35

New York (JFK) » $479.52

San Francisco » $479.27

Source: Federal Bureau of Transportation Statistics

tramroop@examiner.com

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