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Airfare turbulence is shaking up hubs

Delta Air Lines' "hub" operation at Salt Lake International Airport may be in for a bashing again in the aftermath of a massive study on hub operations published Monday in national newspaper USA Today.

The lengthy report declares air travelers' suspicions are confirmed: Airfares are climbing fast and nowhere faster than where the major carriers operate hubs.And what class of air traveler is getting hit hardest? You guessed it, business travelers.

USA Today said its special report, titled "Flying into pockets of pain," is the most extensive examination of ticket pricing at hubs ever undertaken outside of government. The newspaper analyzed 17.3 million tickets at 12 hub airports (Salt Lake was not among them) used by 435 million fliers.

The survey found that full coach fares, the unrestricted tickets used most often by business travelers, rose by double digits in many hub cities such as Denver which saw a 26 percent rise, while leisure fares increased just 2.3 percent at the hubs. Hub prices overall moved up 9 percent, triple the average for all airports.

Among the routes which saw the biggest fare hikes were flights between Denver and Salt Lake City. Travelers on that route - dominated by United Airlines, which owns 69 percent of the Denver market with its hub in that city - saw their fares increase 67 percent over the previous year. (The study covered the 12 months ending June 30, 1997).

In Salt Lake City, Delta currently has 69.64 percent of the market, only 5 percent short of what the U.S. Department of Transportaton terms a "fortress hub" where the dominant airline carries 75 percent of the passengers.

The issue of hub fares was a hot one in Utah back in the early 1990s after Atlanta-based Delta acquired Western Airlines and then chose Salt Lake City as a site for one of its national hubs. Utahns complained loudly to anyone who would listen as their airfares, especially those for business travelers, rose exponentially.

Among those who listened hardest to their complaints was the Utah Air Travel Commission, a citizen's group dedicated to improving air travel statewide. The commission paid for a study by aviation consulting firm Kurth & Co., based in Washington, D.C., and followed it up withs two more.

Those studies basically found that, yes, airfares had gone up in Salt Lake City but that the level of service available here - much higher than would otherwise be expected of a city its size - more than made up for it.

And that remains true today, said Monte Yeager, executive coordinator for the UATC and a planner for the Utah Division of Aeronautics.

"We wouldn't have the service we have today if Delta didn't have a hub here," said Yeager. "We can go practically anywhere in the world from here - not non-stop but one-stop - while staying on the same carrier and many times not even changing planes.'

Nor does Salt Lake City have the rising fares problems it had earlier in this decade, said Yeager, and for that, Utahns can thank the little Texas airline that could: Southwest Airlines and its no-frills, low-cost flights that have helped keep all airfares competitive in the markets it serves.

"Wherever Southwest goes, fares drop, that's a given," said Yeager. "Thank goodness they came here."

Although the UATC did not have anything to do with Southwest buying out Morris Air to create a major presence in Utah, Yeager points out that the commission made the first contact that brought Dallas-based Southwest into the local market.

"I suppose that if the commission never does another good deed, that one thing, getting Southwest here, was worth the effort," he said.

Delta spokeswoman Tracy Bowen told the Deseret News Monday that USA Today didn't tell the full story behind the rise in business fares at hub airports. She said Delta could sell all of its seats at a discount and fill their planes every time they take off.

But, instead, they keep seats available for last-minute business fliers, and it's no surprise that those seats carry a premium. Bottom line: "Yes, business fares are higher, but there is also service and convenience attached to it."

Also, she said, many people don't understand how expensive it is to operate a hub. "We have 5,000 employees in Salt Lake. You don't have that kind of support at most stations of that size."