Misleading apologies for airline-industry practices that were articulated by two Brookings Institution fellows in the June 17 Viewpoints ("Californians Getting a Fair Deal on Air Travel") merit my response.
* The authors suggest that airline "profits amount to only about 4 cents out of every fare dollar." But where are the profits coming from? Not the Los Angeles-to-New York market, where fares are about 3.3 cents per seat-mile. The profits are coming from the Los Angeles-to-San Francisco market, where fares have been running 65 cents per mile. The fact is, California fares amount to a de facto subsidy for out-of-state fares, and that's unfair. The Public Utilities Commission report revealed that air fares in California, adjusted for inflation, rose 40% from 1979 to 1988.
The experience of Southwest Airlines, one of the few low-cost airlines today, exposes the fare-gouging practices of the rest of the industry. Before Southwest entered the Burbank-to-Oakland market, fares were averaging $186. After their entry, the unrestricted fare dropped to $59.
* Contrary to what the article suggests, air fares have very little to do with what it costs to provide service. Even the airline industry itself, at a Senate committee hearing I sponsored on April 2 at Los Angeles International Airport, admitted that air fares are based on what "the market will bear."