September 30, 2010

Colorado Springs Airport, Not Worth It

This article describes the shrinking number of passengers moving through the Colorado Springs Airport. It explains how this is hurting the local economy, and that the airport is trying to get airlines to send more flights through their airport. The Colorado Springs Airport feels that getting airlines (several of whom have stopped service to COS in the past few years) to bring more flights in will fix their problems.

If the Colorado Springs Airport were to look at their situation from an economics point of view they would find that fixing their financial situation is definitely not as easy as sending more planes through.

First, the reason so may airlines have stopped flying to Colorado Springs, or decreased the number of flights, is because marginal cost of stopping in Colorado Springs does not exceed the marginal benefit. DIA is a much bigger airport and even though airlines charge less for people to fly out of Denver, the airlines save money. Airlines save money because they are only stopping at one place in CO, and DIA has many more customers than Colorado Springs. This means an airline operating a flight leaving Denver uses less, larger, and more full planes; compared to the Colorado Springs Airport.

Second customers are also leaving the Colorado Springs Airport. For many customers traveling on a budget, it makes more sense to just drive to Denver and receive cheaper airfare. It is often $50 to $100 cheaper per ticket, to fly out of Denver especially on a last minute flight. If traveling as a group or family this really adds up. So what is happening is the added convenience of not driving to Denver is not worth the extra cost to many people.

In short, the Colorado Springs Airport will not be able to get more flights to move through their airport. Simply based on the marginal cost/benefit for the airlines they have no reason to add more flight to Colorado Springs. Furthermore the marginal cost/benefit of the customer suggests that the Colorado Springs Airport will continue to lose business.

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