Denver International Airport plans for loss of hub carrier

Half of current traffic at Denver International Airport would migrate to remaining airlines were one of the airport's three hub carriers to disappear, according to a contingency plan submitted to the Denver City Council in February.

The news from the Denver Post, came less than a week after Republic Airways Holdings CEO Bryan Bedford, citing higher fuel costs, sent a letter to Frontier employees saying the company was not viable without concessions. Denver International Airport set in motion its contingency plans for the loss of the airline.

While the low-cost carrier is far from dead at this point, it is not as if the airport hasn’t been here before given the 2008 bankruptcy of the troubled carrier. Republic wants to trim its current holdings to a minority position in the next few years. In the meantime, it is asking for USD120 million in concessions, trying to raise USD70 million in capital and hopes to increase equity offerings, all by the end of the year.

Speculation is already rampant that Denver may not be able to retain service as a three-airline hub. It also suggested airfares will rise, more than airfare increases imposed since the beginning of the year.

Airport authorities are talking with the carrier about a new lease since its 18-gate lease expires at the end of this year. Its contingency plan cited a reduction in leased space, loss of connecting traffic and local traffic, according to the newspaper. Even so it anticipated half of the disrupted passengers would move to other carriers including the other two hub carriers – Southwest and United Continental. Whether the airport retains the other half of the traffic expected to be disrupted by the loss of one of its three hub carriers, depends on whether or not the remaining hub carriers raise fares.

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