In his June 14 op-ed column Robert Kuttner criticizes USAirways for eliminating hot meal service on its Boston-Washington flights -- which he blames on a lack of competition -- but fails to note that hot meal service is also unavailable on flights in the San Francisco-Los Angeles corridor, a market he holds up as a model of airline competition.
Kuttner asserts that the "demise of regulation has brought monopoly power and monopoly pricing" to many airline markets. Yet numerous studies by the Brookings Institution, the Department of Transportation and the General Accounting Office (among others) have shown that since deregulation in 1979 the number of city pair routes served by two or more competitors has increased almost fourfold and airfares have declined some 35 percent in real terms. Likewise, studies have shown that deregulation has resulted in more frequent flights to communities of all sizes.
Contrary to Kuttner's assertion, USAirways does not have a monopoly on the Boston-Washington route. It competes with Delta at National and with United at Dulles. In addition, Southwest and Metrojet both offer frequent, low-fare service from Providence, R.I., and Manchester, N.H., to Baltimore-Washington International Airport. Kuttner complains that using these alternative airports might require some additional time, but the same objection applies to using Oakland-Los Angeles fares when traveling between San Francisco and Los Angeles. Nor does Kuttner mention that fares from secondary airports -- Oakland, Burbank, Ontario, Long Beach, San Jose -- in the California corridor are typically lower than fares between Los Angeles International and San Francisco International airports, just as fares in the Northeast corridor tend to be lower at Dulles, BWI, Providence and other secondary airports.
Kuttner also ignores basic economic principles: While the Boston-Washington and San Francisco-Los Angeles distances are similar, the number of flights at Reagan National (as well as LaGuardia, O'Hare and Kennedy) has been restricted by the federal government to levels substantially below the operating capacities of those airports. Not surprisingly, artificially limiting the supply of airport capacity has driven up the price of service to those facilities.
Kuttner is apparently oblivious to the fact that airlines constantly adjust their prices in response to changing market conditions, typically by increasing or decreasing the number of discount seats available on each flight. As a result, the average fare earned by airlines serving the same route often varies significantly more (in percentage terms) than even the nominal car rental prices.
Unlike Kuttner, the architects of deregulation recognized that permitting airlines to compete subject to the antitrust laws would produce a competitive array of price and service options, improve efficiency and thereby generate substantial benefits for travelers, communities and the national economy.
-- Daniel M. Kasper
The writer, director of a consulting firm in Cambridge, Mass., serves as an adviser to the Air Transport Association on airline competition issues.