2 Legislators Seek Inquiry Into Airline Fares in California

Two state senators, displaying a blow-up of a $378 airplane ticket for a round-trip flight from Los Angeles to Sacramento, introduced a resolution Tuesday calling for a state investigation of California airline fares.

Sens. John Garamendi (D-Walnut Grove) and Art Torres (D-Los Angeles) said they want the Public Utilities Commission to determine if California air carriers may have flouted antitrust laws by rapidly increasing fares on certain routes.

The two senators conceded that the commission has no authority to take action against the major carriers but said they hope that a long public hearing and the threat of further legislative action will pressure the airlines into lowering fares.

Garamendi, chairman of the Senate Revenue and Taxation Committee, said that while lawmakers themselves have no direct jurisdiction over airline fares, they could punish the major carriers by increasing taxes on airplane fuels and offering other tax incentives to entice smaller, more competitive airlines to move into California markets.

“Right now we want the airlines to understand that their day of being unimpeded in setting their rates any way they want is all over,” he said. Torres said the goal is to prompt an investigation by the Federal Aviation Administration, although he said he is not certain what, if anything, that agency could do about the fares, which no longer are regulated.

“The only other power that we have is to increase the fuel tax on airlines, which they are extremely fearful of us trying to do,” he said. “That may very well be our only alternative to hold as a stick in order to get some kind of support from the airlines.”

Describing the California market as “extremely competitive,” airline officials said they were not aware that the resolution had been filed and were surprised by the senators’ criticism.

Airlines’ Response

“This a competitive marketplace,” said Alan B. Wayne, legislative coordinator in California for the Air Transport Assn. of America. “The great percentage of our passengers still travel on a discount, on some routes as much as 90%. There are still very deep discounts available even with an increase in fares over the past year.”

The senators said they are particularly concerned about the fares charged by the major airlines for flights between Los Angeles and Northern California. They said customers who cannot book in advance are now being charged $378 including tax for a Los Angeles-Sacramento round-trip ticket and until recently had been charged nearly $300 for a round-trip ticket to the San Francisco Bay Area.

“The airlines have consistently argued over the years that a tax break on fuel was necessary for them to stay in California,” Garamendi said. “For a $400 ticket they can just damn well leave any time they want to leave. We’ll get somebody in here that’s willing to provide the service at a reasonable price.”

He acknowledged that legislators are able to take advantage of greatly reduced fares the airlines offer the state because of the huge volume of business it generates. He said state employees, for example, can travel round-trip from Sacramento to Los Angeles for about $79.

Research on Fares

Ruth Holton, legislative advocate for California Common Cause, a public interest agency, said her research into airline fares shows that fares skyrocketed on routes dominated by the airline giants--USAir, Delta, American and United. On the Los Angeles-Sacramento route, for example, she said fares that 2 and 3 years ago were only $140 for a round trip had risen 190%.

She attributed the escalating costs to airline deregulation and the recent acquisition of small, low-cost airlines by the giants. In the last few years, USAir has acquired PSA, American has bought AirCal and Delta has taken over Western.

Rates are competitive, she said, only on the routes served by Southwest Airlines, a Dallas-based regional carrier that offers low-cost fares. Until recently, she said the best bargain in California air travel was the San Diego-San Francisco route. On that route, which is served by Southwest, customers can book a one-way flight for $49.

In the last two weeks, after an announcement by Southwest that it was moving into the Oakland market, airlines began offering that same fare between Los Angeles area airports and Bay Area airports.

Wayne, however, said the acquisition of the small carriers by the airline giants had stabilized the industry in California and saved jobs that might otherwise have been lost had the smaller companies gone into bankruptcy.