Kenai market still noncompetitive

Carrier raises airfares

Posted: Friday, May 10, 2002

The cost of flying between Anchorage and the central Kenai Peninsula is not cheap. On May 2, coming and going by air on Era Aviation became even more expensive.

A 25 percent price hike took effect May 2, with Era officials citing the high price of insuring passengers and rising fuel and operation costs as a reason for the increase.

Walk-up fares, with taxes included, increased from $70 going each way to $87, with round-trip tickets doubling accordingly to $174. Seven-day advanced round-trip tickets jumped from $113 to $140. The coupon books, which sell an equivalent of four round-trip flights, or eight one-way trips, increased from $479 to $599.

In an April 29 letter distributed to passengers buying tickets, Era President Charles Johnson elaborated on the need for the price change.

"Insurance rates in aviation have skyrocketed," Johnson wrote in the letter. "Many air carriers in Alaska have reverted to cargo-only service due to the increased premiums associated with passenger carriage.

"Fuel prices are again on the rise and the heightened security requirements on our industry have forever altered how we run our business. These factors, coupled with the escalation of repair and maintenance, labor and other operating costs have had a tremendous impact on our operation."

Several passengers arriving on an Era flight from Anchorage Thursday afternoon expressed their surprise and discontent with the new rates.

"It's a big jump in a short time," said Kenai resident Earl McKibbon. "I'm definitely hoping for some competition."

Mike Holland of Kenai commutes between the North Slope and home every two weeks for work, which includes stops in Anchor-age.

He said he has to pay for his own flights, so he is displeased with the new prices.

"I'm pretty disappointed," he said. "It caught me off guard. If it didn't cost so much to store a car in Anchorage, I'd drive."

Caryn Colgan splits time living between Kenai and Anchorage and said she was hearing about the price increase for the first time.

"(I'll) be driving a lot more," she said, reflecting on how prior knowledge of the change could have benefited her. "I should've bought my coupon book before now."

Phil Bray, Era's director of operations, said although there has been some backlash from customers over the phones and by e-mail, some recognized the need for the increase.

"It's been mixed messages," Bray said. "Not surprisingly, we are getting any number of feedback that people are not happy. From some of our longtime customers, they've said (price hikes) are long overdue -- those who understand the cost of doing business."

Alternatives do exist to flying Era to Anchorage, although no air carrier has stepped to the plate to offer competition out of the Kenai Municipal Airport.

Frontier Flying Services Inc. begins service between Anchorage and Homer next Thursday and has explored opening service in Kenai, but the Fairbanks-based company remains in an indefinite holding pattern over that decision.

"I'm sure people want competition, but we need to have at least 50 percent of seats guaranteed," said Frontier spokesperson Marina Jarvis. "The availability and the cost of starting up in Kenai are reasons for need of guaranteed seats."

She said in spite of lower airfares, her company still could see unfavorable business, due to Era's connection to larger airlines.

"Unfortunately, our prices could be cheaper, but we don't have the connection to Alaska Airlines for mileage," Jarvis said. "People are more eager to have the mileage than the price."

Those who choose not to fly must contend with a 157-mile drive, which could take anywhere from two-and-a-half to three-and-a-half hours.

Shuttle service is also an alternative, with two companies -- Homer Stage Line and Kachemak Bay Transit Co. -- offering service between Homer and Anchorage with stops in Soldotna, Cooper Landing and even in Kenai. These van trips could take anywhere from three to six hours depending on stops, and prices range from $30 leaving or arriving in Cooper Landing to $60 leaving or arriving in Homer, one way.

Bray said, ultimately, the choice comes down to the traveler as to which will work best. He said the company is aware that the road system is its biggest competition, but the ease of air travel is a consideration he believes many value.

"I thought how convenient it was to spend 25 minutes to get here," he said. "I guess it depends on people's priorities."

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