Southwest Airlines Coming to Denver

Southwest Airlines will resume service in Denver next year after a 20-year absence. Good news, indeed, for everyone wanting to visit Colorado.

Although Southwest has shunned Denver International Airport for more than a decade because of its high costs, the Dallas-based carrier - in the midst of an expansion - reconsidered because those costs have declined.

It will compete head-to-head against United Airlines as it emerges from bankruptcy and Denver-based Frontier Airlines, which combined have about 75 percent of DIA's market. Frontier's stock dropped 29 percent on the news, closing at $7.68 a share on the Nasdaq Stock Market. Representatives of both United, which operates the low-cost carrier Ted, and the low-fare Frontier noted they already face Southwest in other cities and that they will be competitive on ticket prices when Southwest is in Denver.

Southwest will start small with plans to expand as the traffic builds. Details on when it will start, schedules, fares and gates will be released next week.

"We've been concerned about the costs at DIA in the past but they have done a remarkable job in getting their costs downs to levels that make sense to Southwest Airlines," Southwest Chief Executive Officer Gary Kelly said. Another factor was current ticket prices at DIA, which he called high. "We'll have a modest start in Denver early next year and we'll just have to take it from there," Kelly said during a conference call with the news media.