Thune presses for lower airfares

Thune presses for lower airfares

Airline officials to talk with Sioux Falls board

Ledyard King
Brenda Wade Schmidt

WASHINGTON – Sen. John Thune said Delta and United are planning to talk with the Sioux Falls Regional Airport Authority about ways to improve service and lower fares after he aired concerns with executives from both airlines.

Thune, a Republican member of the Senate Commerce, Science and Transportation Committee, which oversees the airline industry, said he’s been hearing many complaints from passengers coming through Sioux Falls that prices are too high and flights too few, forcing them to drive to airports hours away in Omaha and Minneapolis that offer more options and cheaper fares.

“We’re losing 45 percent of the market in Sioux Falls. It’s leaking to other communities because of these high fares,” Thune said on his weekly conference call Wednesday. “I am hoping in the coming weeks, we will see both Delta and United as they re-evaluate this process and service levels to come up with ways to provide more economical travel options out of Sioux Falls.”
Dan Letellier, executive director of the Sioux Falls Regional Airport, said he met with United executives a couple of weeks ago and on Tuesday met with Delta executives in a video conference that included Thune’s office.

Both airlines are interested in testing promotional pricing to see whether it makes a difference, Letellier said.
“We understand we’re not Omaha,” he said.

Sioux Falls doesn’t have lost-cost competition from Southwest and Frontier airlines, for example.

But out of 100 top cities, Sioux Falls is in the top five for highest fares, he said.
“We think they’re unusually high,” Letellier said.

He has had several follow-up calls with United’s pricing people and said, “They’re certainly looking at options for us.”
Adding weight
Having Thune push for lower prices and better service helps, Letellier said. United will need the support of Congress and the commerce committee, which Thune is on, to get its proposed merger with Continental approved.

“It adds a lot of weight, certainly. He’s a United States senator. They definitely listen to all of our congressional delegation when they have concerns or issues,” Letellier said.
He is hoping to hear from the airlines within a month.

“There’s no guarantees. I think it’s a good dialogue, and it’s important to have the support of our congressional delegation,” he said.
Merger’s losing end
The issue is particularly sensitive, Thune said, since Continental and United want to merge. When Delta and Northwest joined forces, officials predicted that service to communities such as Sioux Falls would improve, but the senator said that hasn’t happened.

“I think if you ask any traveler out of Sioux Falls, you would get a very opposite view,” he said. “We have a responsibility in terms of oversight to make sure that these mergers and acquisitions don’t create all kinds of complications and problems for the traveling public. Seems to me at least that we have certainly gotten the short end of the stick as a result of the Delta-Northwest merger.”
Thune said both executives he spoke to – Glen Hauenstein, an executive vice president with Delta, and Mark Anderson, a vice president with United – told him their companies would submit proposals to the airport “that would look at ways to provide some fare relief” and to increase boardings.

“I was encouraged by what I heard,” Thune said.
Key to growth
It requires somebody with power in government to try to persuade airlines to lower fares, said Mike Luce, a member of the Airport Authority board.

“For this town to grow economically, it requires an airline service that is reasonably priced,” Luce said. “If the tickets are twice as expensive coming out of here, it does make a difference.”
Airlines are going to charge what they can get away with, he said. There’s not enough competition for free enterprise.

“The government’s ability to oversee the airline industry makes a large difference in addressing the inequities in pricing between large metropolitan areas and cities like Sioux Falls,” Luce said.

In other news Wednesday, Sen. Tim Johnson announced that the Sioux Falls Regional Airport Authority will receive a $2.98 million federal grant for runway rehabilitation, construction of an airport ramp and an environmental assessment of runway improvements.
Mayor’s approval
Mayor Mike Huether said pressure from Thune, Johnson and Rep. Stephanie Herseth Sandlin is an important part of his plan to get better service for Sioux Falls.

Huether, who has met with Thune’s staff in Sioux Falls about air travel, has said he would be willing to provide incentives to bolster better fares and more competition in Sioux Falls.
“Senator Thune has got a very, very good position that could help us ultimately change the way we do business here in Sioux Falls,” Huether said.

“How do you go out and market holding your national convention in Sioux Falls when airfares are high? It makes it very, very difficult,” he said.

The issue will take time to fix, Huether said.
“This is not going to be an overnight deal. We’ll continue to work with the airport authority, with the chamber, with our delegation in D.C., along with the city. Combining forces, I believe we can make some good things happen.”

Additional Facts

Other airports

More than 45 percent of Sioux Falls area travelers are flying out of other airports, according to a leakage study last fall. Here’s how it breaks down:

28 percent fly out of Omaha 9 percent fly out of Minneapolis 8 percent use other airports such as Fargo Source: Sioux Falls Regional Airport Authority

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