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Deregulation of airlines works, Skinner says

Published Oct. 16, 2005

Department of Transportation officials agree with congressional investigators that airline passengers in hub cities often pay higher fares, but they do not agree that the federal government should do anything about it. Legislation designed to promote competition or increase federal regulation "would do more harm than good," Transportation Secretary Samuel K. Skinner said Wednesday as he released his department's nine-month study of airline competition.

The study found that average air fares were 14 percent higher on 698 city-to-city pairings served by only one airline in 1988. But those routes, Skinner said, accounted for only 10 percent of the total revenue-passenger miles in the nation.

In the eight cities most dominated by a single airline - Dayton, Ohio; Charlotte, N.C.; Memphis, Tenn.; Cincinnati; St. Louis;

Pittsburgh; Minneapolis; and Salt Lake City - fares were nearly 19 percent higher than average. But Skinner said those airports - each a hub at which passengers often switch from one flight to another on the same airline - account for only 5 percent of the market.

The study, Skinner said, proves that airline deregulation is working. He added that even though passengers at some hubs are paying more, passengers overall are paying less for more service under deregulation since they have a broader choice of destinations and flights.