The not-so-friendly skies
Stats ace tabs Houston's Bush Intercontinental as the most overpriced airport inAmerica
If you're in Bush Intercontinental Airport, you may be paying a premium.
With gas prices near record highs and showing no sign of coming down, airfare bargains are few and far between. But according to New York Times stats guru Nate Silver, Houston travelers are getting the worst deals of all.
In his Five Thirty Eight blog, Silver examined average airfares to look not just for the highest overall fares but what places had fares that were higher than the market suggested they should be. Using data from the Bureau of Transportation Statistics, he threw out mitigating factors like airports that often held long-haul flights, airports in smaller markets with less demand and airports in places like Seattle where the distance between major cities creates excess demand. (For his full methodology, click here.) As Silver notes,
"Prices are higher the more the legacy airlines dominate an airport, but they also tend to be a bit higher where Southwest has a large share as opposed to other low-cost carriers like AirTran and JetBlue. (Southwest is cheap, but it isn’t quite as cheap as some of these up-and-coming airlines and now represents something of a middle ground.) Also, prices tend to be higher when any one airline dominates an airport, regardless of whether it is a legacy carrier or a low-cost one.
"These somewhat complex mechanics allow me to estimate what each airfare 'should' have been assuming the airport had an average degree of competition between and among the legacy carriers, Southwest, and the other low-cost airlines. I can then compare these 'should' fares to the average prices that passengers actually paid."
With all the data crunched, the most overpriced airport in the country is Houston's Bush Intercontinental. According to Silver the average fare is $445 but a "fair" fare would only be about $360, representing a mark up of $85, or about 20 percent of the ticket price.
IAH has the legacy carrier hub that correlates to higher prices, but doesn't include Southwest, which uses Houston as a base but flies out of Hobby. (Hobby, in case you're wondering, has a mark up of only $8.)
Other bad-deal airports include Newark at No. 2, followed by DFW in Dallas, Minneapolis/St. Paul International and D.C.'s Reagan airport. For an underpriced, fare, on the other hand, Silver says head to Florida: Fort Lauderdale, Orlando, Tampa and Miami are all in the top six, along with Milwaukee and Las Vegas.
Silver postulates that the fare premium is part of a strategy that makes business travel rather than vacation travel destinations more expensive.
"While a casual traveler can probably forgo a weekend in Las Vegas, a last-minute client meeting in Houston may be unavoidable (plus, someone else is probably paying for the ticket)," Silver says.
