Yes, air fares have increased for travelers in and out of Salt Lake International Airport. No, the hikes in ticket prices are not a conspiracy by Delta Air Lines to take advantage of its dominant presence in the local market.
That's the clean bill of health that a new Salt Lake Airline Fares Study gives Delta and other airlines operating out of Salt Lake City. The study was conducted this winter by Kurth & Company Inc. for the Utah Air Travel Commission.The increase in fares at Salt Lake International is part of a national trend, particularly among so-called "hub" cities, says the report, and is not targeted exclusively at Utahns.
"Although Delta's Salt Lake City fares were modestly (5.7 percent) above average during the fourth quarter of 1987 (the period studied)," says the report, "Delta Salt Lake City fares in 24 of the markets analyzed were below average, primarily as a result of competition.
"In fact, Salt Lake City fares were less than those of its primary hub competitor Denver, below population-contemporary hubs of Memphis, Nashville, Charlotte and Dayton and below other Delta hubs."
The study by the Kurth & Co., aviation marketing and management consultants based in Washington, D.C., was made available to the news media Tuesday morning by the Air Travel Commission's Executive Committee. It will be discussed by the full commission at its monthly meeting scheduled for noon Wednesday.
Until then, executive committee members said they would have no comment on the report and noted that it has not been adopted by the commission and "no conclusions should be drawn" regarding the commission's position on it.
The Utah Air Travel Commission is a citizens group sponsored by the Utah Department of Transportation, Salt Lake City Corp. and the Salt Lake Area Chamber of Commerce. It is termed "the official organization responsible for improving Utah's air service."
Last December, the commission authorized ex penditure of up to $15,000 for the air-fares study in response to numerous complaints from the public on the escalating cost of air travel.
Although the study did not single out Delta, that airline has taken most of the heat because of the large number of flights it operates out of Salt Lake following its merger in 1987 with Western Airlines and its creation of a regional hub here. Hub cities operate like the hub of a wheel with the spokes representing outgoing and incoming flights. Hubs generate significantly more flights for a city that it otherwise would have.
The study says Salt Lake City "has not been significantly disadvantaged by Delta's fare structure and, in fact, has benefited in comparison to other major carrier hubs."
Despite "rigorous testing," Kurth says Delta's Salt Lake fares do not rank at the top of any fare analysis. "Salt Lake City is being treated like virtually all similar hubs, with single-plane fares averaging modestly (5.7 percent) above industry averages overall and Delta/Salt Lake City fares in 24 of the 47 markets were below average."
As expected, says Kurth, the abnormally high fares encountered by Salt Lake travelers involve the "shorter-haul monopoly markets." However, says Kurth, the "convenience value" of having several flights a day to shorter-haul cities such as Denver, Boise, Phoenix, Los Angeles and San Francisco must be considered, particularly since Salt Lake does not generate the passenger volume of other hubs due to the small size of the local market.
In other words, without its hub status, says Kurth, Salt Lake would be in the greatest danger of any competing hub of losing frequent jet service to short-haul cities.
"Thus, relatively higher fares in these markets may be part of the price for having access to frequent jet service.
What to do?
The Kurth & Co. study makes four recommendations to the commission and the city:
-Establish an ongoing program to inform and educate consumers on the current fare system and the requirements for obtaining lower fares.
-Monitor fares and service quality, including levels of competition, in its major markets.
-Establish a mechanism to communicate fare and other service problems directly to Salt Lake carriers' senior pricing management.
-Establish an air service management program to ensure that Salt Lake City receives competition in those markets that can sustain it profitably.