I-Team: RDU emerging as low-cost hub, but costs aren't always low

MORRISVILLE, N.C. (WTVD) -- Their market share is taking off to new heights, but the increasing presence of budget airlines at RDU isn't always a direct route to saving money.

According to RDU CEO Mike Landguth, a record 12.8 million people traveled through RDU in 2018, and this year that number could surpass 13 million. A big reason for that traffic is the growth of what are called low-cost carriers (LCCs) and ultra-low-cost carriers (ULCCs): airlines known for no-frills, minimized costs and a la carte pricing for passengers.

Frontier Airlines, which now offers a mix of seasonal and year-round non-stop service to 32 destinations from RDU, this year surpassed Delta Airlines as the airline offering the greatest number of non-stop routes from the Triangle.

"We are proud to have made a dramatic impact on air travel for Research Triangle area travelers - making flying more affordable and convenient," Daniel Shurz, Senior Vice President for Frontier, told ABC11. "We are providing more options than ever for our customers to travel and make unforgettable memories."

Along with Frontier, Allegiant Airlines and Spirit Airlines are also increasing their footprint at RDU, with the latter beginning daily non-stop service to seven markets on May 2.

Together, the three carriers service more than half of RDU's 66 total non-stop destinations; add-in Southwest, JetBlue and Alaska, the percentage is even greater, a remarkable statistic considering there are 11 airlines now arriving at RDU's gates, including the major legacy carriers Delta, American and United.

"I actually fly American for work and have mileage, but (my wife) looked at this airline and it looked great," Stephen Baker said before boarding Spirit for the first time. "I'm even thinking about changing this for work as well. We saved a lot."

Which is the Fare-st of them all?

When compared side-by-side to Charlotte-Douglas International Airport, a major hub for American Airlines, RDU is clearly the cheaper option. According to federal data analyzed by the I-Team, RDU's average round-trip fare in fall 2018 was $345.36 while CLT's was $429.66.

A year-by-year analysis also supports the claim that LCCs and ULCCs are making a positive impact at RDU: when adjusted for inflation, the 4th Quarter 2018 average fare of $345.36 is cheaper than in 2014 ($417.25).

Industry insiders, however, explain that fares are one of the more challenging gauges, as everything from oil prices, distance and seasons, among other factors, can make a dramatic impact on what a passenger pays to fly.

Zach Honig, Editor-at-Large of The Points Guy, a leading worldwide travel website and blog, told ABC11 that RDU does not have the kind of competition that is driving down airfares at places like Orlando ($255.99 for a domestic round-trip), New Orleans ($304.99) or Denver ($310.83).

Despite its 11 airlines, 52 of RDU's 66 non-stop routes -- nearly 80 percent -- have only one or two airlines offering service, while only five routes (Chicago O'Hare, New Orleans, Orlando, Fort Lauderdale and Cancun) have four or more airlines competing against each other.

"I was just looking up Raleigh to San Juan, Puerto Rico, and the fares are very high. We're looking at more than $600," Honig said. "These are not bargain basement fares. There's no competition on that route and if there was we would see some lower fares."

"Unbundling"

According to Frontier, in the 13 markets the airline started in the spring and summer of 2018 (Austin, Buffalo, Cincinnati, Detroit, Houston, Kansas City, Milwaukee, Minneapolis, New Orleans, Portland (ME), San Diego, San Juan and Syracuse), the average one-way fare dropped from $181.42 to $135.44 (25.3 percent) between 2017 and 2018, while total passengers flying on those routes grew from 1,531 per day to 2,219 per day (up 45 percent).

These fares, though, are what Honig calls "unbundled," and he thinks they may be misleading to a family thinking about putting together a budget for a trip.

"That's taking those seat assignments, those carry-on bags, checked bags, snacks, everything like that, pulling that out and making them a-la-cart additions. What you're seeing is the base fare plus taxes and fees," he explained. "You really have to be prepared for some sticker shock, especially if you're traveling with a family. You need those seat assignments together. You need probably a couple of checked bags and it can really get expensive."

Unbundling, or "Bare Fares" as Spirit likes to call them, are also becoming industry standard. In fact, Spirit was the first ever U.S. airline to start charging passengers for checked bags.

"You're nickeled and dimed from the moment you book that ticket," Honig lamented. "Don't just buy the cheapest fare that you see. It does pay to take 15-20 minutes to do the research you need to and tally it all up. Make sure in the end you're getting the best product for you and the best price."

Fare Assessment

Like almost any products, consumers consider a brand's reputation - for better or worse.

Frontier, whose growth would not be possible without increasing demand and consumer confidence, clearly has made its mark on the Triangle traveler. Some travelers, though, may be buying those tickets - and that of other low-cost carriers - knowing the struggles some of these carriers have experienced when it comes to things like cancellations and customer service.

The Points Guy, a website that attracts some seven million visitors each month - places Allegiant, Spirit and Frontier at the bottom of its 2019 List of Best and Worst U.S. Airlines.

Applying data from the U.S. Department of Transportation, TPG actually said Frontier is the "best value" among all airlines, but "Frontier's passengers are giving up cabin comforts and - most notably - on-time flights. It also bumped more passengers than any other airlines, on average. Not surprisingly, Frontier Airlines had the highest rate of complaints per passenger."

Honig also said passengers on any of the low-cost carriers should be cognizant of the lack of frequency for many of those carrier's flights.

"They don't have flights all that frequently, in some cases you might have one flight a week," Honig warned. "If you miss that flight, if the flight is canceled, you could end up stranded. I'm always going to be one that pays a little bit more for that security."

The I-Team reached out to Allegiant, Spirit and Frontier for a response to The Points Guy's rankings, and only Frontier responded:

"We are proud to have made a dramatic impact on air travel for Research Triangle area travelers, making flying more affordable and convenient. Our average fare in 2018 was only $45 and with 25 nonstop destinations from Raleigh-Durham International Airport (RDU) this summer, we are providing more options than ever for our customers to travel and make unforgettable memories. Frontier is focused on improving its operation after a challenging period in 2018 and in the most recent DOT data available leads the industry in baggage handling, part of its commitment to deliver Low Fares Done Right every day."
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