Originally created 08/30/97

Cut prices and they will fly



WASHINGTON - Fares plummet and passenger loads skyrocket when a low-price airline starts flying between a pair of cities.

Baltimore and Cleveland, for example.

Just 12,790 people flew between those cities in the last three months of 1992, at an average fare of $233.

Then Southwest Airlines entered the market.

In the last three months of 1996, 115,040 people flew between the cities at an average fare of $66.

Curious about the exact impact of low-cost carriers, the Transportation Department analyzed fares and passenger flow across the country. The Baltimore-Cleveland figures were one result.

"The fares that many low-fare carriers charge can greatly expand the air travel market, enabling many who would otherwise not travel by air to do so," the department reported.

Indeed, there are a huge number of Americans who want to fly if they can get low enough prices, a department analyst said.

Take the Kansas City-San Francisco connection, for another example.

In the last quarter of 1994 some 35,690 people made the trip at an average fare of $165. Two years later, after the arrival of Vanguard Airlines, fares had dropped to an average of $107 and traffic had nearly doubled to 68,100.

Or the Baltimore-Providence, R.I., route, where the average fare fell from $196 to $57 and the number of passengers carried jumped from 11,960 to 94,116.

The department found 52 routes where fares had come down at least one-third between the fourth quarters of 1995 and 1996. On those routes, traffic jumped 123 percent with more than a million additional passengers carried.

The study also found 19 routes where things went the other way.

Between Kansas City and Minneapolis, for example, the average fare rose from $92 to $187 between 1995 and 1996. The result: Traffic fell from 52,624 to 43,946.

The dropoff was even more dramatic between Atlanta and Detroit, with traffic falling from 125,212 passengers to 90,160 as the average fare rose from $107 to $193.

Overall, in the 19 cities with fare increases of at least onethird, the number of passengers dropped 9.1 percent.