Competition helps hold down fares

Tom Gardner

Tuesday, June 8, 1999 | 9:05 a.m.

RENO, Nev. - Airline passengers at both ends of Nevada benefit from low-fare carriers that help hold down the cost of flying on the major lines, one of the nation's top air travel monitors told a tourism summit.

Patrick V. Murphy Jr., deputy assistant secretary of transportation, said his agency was working with Congress and the Justice Department to encourage competition and to crack down on carriers that abuse their size.

He said last month's federal civil lawsuit against American Airlines accusing the carrier of monopolizing and attempting to monopolize passenger service to and from Dallas-Fort Worth International Airport could be followed by additional suits aimed at thwarting apparent efforts to put low-cost competitors out of business.

"Prices are higher in areas where one airline is dominant," he told the Reno-Tahoe International Airport's 1999 Air Service Summit on Monday.

He said 40 percent of all airline passengers live in areas served by low-fare carriers like Southwest and Reno Air and they save $6.3 billion a year because of the competition the other 60 percent misses out on.

Murphy said a 328-mile flight between New York City and Pittsburgh costs $192 because there's no cheap competition, while a 500-mile flight between Reno and Las Vegas can be booked for $59.

"You're lucky. You can fly out of here for 13 cents a mile compared to the national average of 17 cents a mile," he told the gathering.

The highest per-mile cost is out of Richmond, Va., at 32 cents.

"They don't think they have a problem. They're in denial," he said.

Murphy, who reviews all commercial airline orders and decisions of the department, said Reno Air got a taste of the downside of deregulation when it launched service to Minneapolis a few years back, only to see St. Paul, Minn.-based Northwest Airlines duplicate its routes and undercut its fares.

"I believe we're making progress in enhancing service and competition, but as you can see, we have a lot more to do," he said.

Monday's summit also emphasized marketing and expansion of passenger and cargo service to a gathering of local officials, state lawmakers, tourism leaders and travel agents from northern and western Nevada.