A preliminary report on fares being charged by airlines operating out of Salt Lake International Airport apparently indicates that Utah air travelers are not being overcharged and may even be paying less than those using other "hub" airports.
According to Andrew L. Gallegos, a member of the Utah Air Travel Commission who has seen the draft report of Kurth & Company Inc., travelers flying out of Salt Lake on Delta Air Lines paid on average as much as two-thirds less than those using Delta's Atlanta hub - Delta's headquarters city - and only half as much as air travelers flying out of Cincinnati, another Delta hub.There is no question that air fares have risen dramatically over the past year or two, both locally and nationally. That's well documented. The question has been whether ticket prices locally have risen faster and higher than in other cities, particularly cities of comparable size to Salt Lake and with airline "hub" operations.
According to Kurth's preliminary data, said Gallegos, that is not the case. "We are apparently in a very favorable position compared to other Delta hubs," he said.
That conclusion, however, would seem to contradict a U.S. Transportation Department study released last week that indicated air fares have increased substantially since 1985 at more than a half dozen hub airports that are dominated by a single airline.
Salt Lake was one of the cities studied in the report, which said Delta's fares rose 26 percent at Salt Lake International where the airline had 77 percent of the market. Conversely, the Transportation Department study said Delta's fares in Atlanta increased only 5 percent and in Cincinnati 25 percent - apparently the opposite conclusion of the preliminary Kurth study.
The federal study said overall fare increases at Salt Lake and six other hub cities exceeded national averages from 1985 to 1988 and were generally two or three times greater than the air fare portion of the consumer price index during the same period.
The Utah Air Travel Commission appropriated $15,000 in December to fund the independent study by Kurth & Company, an aviation marketing and management consulting firm based in Washington, D.C. The action arose from complaints by Utah air travelers - particularly business flyers - that their travel budgets have soared over the past year or two.
Although the commission did not single out Delta in requesting the study, much of the blame for rising fares has centered on that airline because of its dominant presence at Salt Lake International since merging with Western Airlines in 1987.
Many Utah frequent flyers have charged that Delta's relative lack of competition in the local airline market has allowed it to "put the squeeze" on local travelers, particularly on certain routes. Mentioned most often are Los Angeles, Oakland and Boise.
Kurth's draft study came in last week and has been circulated to some commission members and discussed by the group's executive committee, but its contents have been kept from the media. Commission Chairman Yan M. Ross said the study is complex and that statements taken out of context could only confuse the issue.
He also indicated that the report does not answer some questions the executive committee believes are relevant and does not adequately explain the various parameters used in reaching its conclusions. The committee wants it clear that Salt Lake is being compared with other "hub" cities of comparable size.
While the preliminary study indicates that Salt Lake is "in a favorable position," as Gallegos put it, it doesn't say why, he said. "Is it that we are more competitive here than in Atlanta?" he asked. "Do the longer hauls out of Salt Lake bring fares down?" Ross said those questions would hopefully be answered in the final report.
In an interview following the commission meeting, Gallegos said that in reading the preliminary report, "I was favorably impressed that Delta isn't ripping us off. It looks (as though they have been) pretty fair (to Salt Lake) at this point." He said that, whatever the conclusions of the final report, Utah air travelers will feel better at having the independent study.
"The less you know, the more confused you are," said Gallegos, "so I'm convinced the commission is on the right track in having this (study) done. If people understand, they will accept the volatility of the market right now and why airline fare structures are as they are."
The executive committee's recommendations for the final report will be forwarded to Kurth as will comments of commission members. The final document is expected to be available for final approval and publication by the commission at its next scheduled meeting March 1.