Charles Kurth doesn't expect his comprehensive Salt Lake City Airline Fares' Study to convince every hard-liner in Utah that Delta Air Lines isn't taking advantage of its dominant position as the state's major "hub" carrier by charging exorbitant fares.
Those people, said Kurth, will continue to feel ill used by Delta in the face of rising air fares nationwide. And they aren't going to let a little thing like a $15,000 study by Kurth & Co. Inc., an aviation marketing and management consulting firm based in Washington, D.C., change their minds.Nevertheless, said Kurth, the facts are there for people to study for themselves: not only is Salt Lake City not being discriminated against by Delta, or by any other airline, it is actually better off than many other hub cities - Denver, Memphis, Nashville, Charlotte and Dayton were among the examples cited.
Kurth's study was released to the news media Tuesday and was the primary subject of discussion at Wednesday's meeting of the Utah Air Travel Commission, which commissioned the study last December in response to citizen complaints of escalating air fares and charges that Delta was the primary culprit.
No so, says the report, which was unanimously adopted by the commission at the end of the meeting. "While fares have increased both at Salt Lake City and hubs around the country," said Kurth, "this action is part of a national trend, not an isolated event targeted exclusively or primarily on Salt Lake City passengers."
Although Delta's fares in Salt Lake were "modestly" (5.7 percent) above average during the period studied (the fourth quarter of 1987), says the report, those same fares in 24 (half) of the specific markets analyzed were below average, primarily because of competition at the Salt Lake hub.
Fred Rollins, Salt Lake district marketing manager for Delta, told commissioners that addresses what he and his airline have been saying all along: contrary to popular belief, Delta "has a ton" of competition in Utah.
"We keep hearing how we have 75 to 80 percent of the market here, but that's absolutely incorrect," said Rollins. In reality, he said, Delta handles only 56 percent of travel originating in Salt Lake City and travelers can choose among Delta competitors on most of the routes Delta flies.
Not surprisingly, Rollins praised the findings of the Kurth report and said he hopes it puts the talk of "monopoly" and "price gouging" to rest.
"Throughout the past several months, when criticism of our fares mounted, we made every effort to inform the public that our prices are fully competitive with any other market," said Rollins. "This report, prepared at the request of a state agency by an independent, impartial third party, fully backs our position."
Rollins pointed out that the report ranks Salt Lake City second only to Charlotte in daily jet departures for hubs of equivalent size and the number of non-stop markets served per capita. "Thus, Salt Lake City has achieved an admirable position in terms of service growth, carrier retention and service quality and quantity, particularly for a city of its size," said Rollins quoting the study.
He said Delta is the nation's "most consistently profitable and financially sound carrier" and "remains committed to providing the city and state with an exceptional level of air service while offering fares that are competitive with any other major city. This level of service is crucial to economic expansion and the development of tourism."
Kurth was questioned as to why he chose the last quarter of 1987 - year-old figures when he began the study - to use for his comparisons. He said that was the latest period for which figures were available in the industry. He said the industry has always had a year or longer lag time in assembling such statistics.
However, he pointed out that while the '87 figures were based on fares actually paid by air travelers during those three months in 1987, his firm also considered fares available to passengers at competing sized hubs during February 1989 - last month. But he acknowledged the study looked at only the broad, overall market.
"It is important to recognize that, in an industry which produced an average of 190,000 price (fare) changes daily in 1988, it is impossible, either for this study or for the airlines, to eliminate all fare anomalies," said Kurth.
Hubs dominated by lower cost airlines, such as Phoenix and Las Vegas, produce such anomalies, he said, and "persistent passengers" who are willing to endure circuitous routings or use advance purchase promotions to get limited seating produce even more. The Kurth report, he said, does not address those "oddball" fares but sticks with the routings used by the majority of travelers.