Come fly away

I needed to book an airline ticket for my husband to Washington, DC recently.  Since he didn’t have the option of staying longer or traveling over a weekend, there were few options for cheap flights. It doesn’t significantly alter the price if you fly from Fargo to Minneapolis and then to Washington or if you fly from Grand Forks. It would be cheaper to fly from Minneapolis, of course, but the cost of gas quickly eats up any savings in ticket prices. The extra day or more of travel makes that option even more unattractive.

Of course airline fares are crazy anyway. They are not based on the actual miles flown. The price depends on lots of things like how many days until you return, what day you fly, how busy the airport are you fly to and from. If you were to buy a ticket from Grand Forks to Minneapolis and back in the middle of the week and fly with the only airline providing that service, the ticket would cost you about $600 round trip. The ticket to Washington, DC from Grand Forks and back on the same days costs $536. You would be riding on the same plane to Minneapolis regardless of your final destination.

For just a little more one could fly from Minneapolis all the way to Hawaii.

Until 1978 airlines were regulated by the Civil Aeronautics Board. The CAB mandated that airlines fly busy routes as well as low traffic routes. They told airlines how much they could charge for a ticket and together with the airlines the CAB determined when and how a new company could enter the market for each route. The proponents of deregulation maintained that doing so would make airlines more efficient, increase competition and drive the cost of flying down for travelers.

Forty years later, some of the predicted benefits of getting rid of the CAB have been realized. There are estimates that airline travel is 40 percent cheaper now than in 1978. For some destinations, there is a robust competition between airlines. The fears of opponents of deregulation in 1978 that competition would result in fewer airlines in the long run has also come true.There are fewer airlines in the skies today than in 1978 as major companies merge and smaller start-up companies go out of business.

For small airports like all of those in North Dakota, deregulation has not meant more competition and lower prices. At one time there were at least four airlines one could choose to buy a ticket from in Grand Forks. There now is one which flies to Minneapolis and one which flies to Las Vegas and Pheonix only on some days of the week. Tickets from Grand Forks are not cheaper than they used to be in spite of subsidies intended to make sure small markets are served by airlines.

Deregulation has worked for some airlines and for passengers flying to and from busy places. How long will the benefits of unfettered competition last? When the last merger possible has happened and one or two airlines have out-competed everyone else, will their increased efficiency result in cheaper tickets or will their monopolies allow them to charge whatever customers will pay?

One of the cuts in the federal budget that has been proposed is the reduction or elimination of the subsidies to airlines which serve cities like those in North Dakota and South Dakota. That will complete the airline deregulation act of 1978.

Will we still have option of flying to Minneapolis? What will the price for such a ticket be?

Copyright © 2011 Janet Jacobson and Sustaining the Northern Plains


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