Delta Air Lines can't reduce its prices at Piedmont Triad International Airport because its costs are higher than at neighboring airports, the airline has told the chairman of the airport authority.
The airline's fares are consistently cheaper from Raleigh-Durham and Charlotte because those airports have more passengers to make operations more efficient, a Delta official said in a recent letter to Henry Isaacson.
The executive was responding to Isaacson's angry October letter that said Delta charges artificially high prices at the airport and is largely responsible for declining passenger numbers there.
Isaacson said he's not sure the exchange has done any good, and he is waiting to see what will happen as Delta deals with an $8 billion hostile takeover offer US Airways announced Wednesday.
Many details of that proposal are unknown, including what it would do to the number of flights.
A consolidation of PTI's two largest airlines could limit competition and lead to higher prices. But Isaacson noted that the airport has an excellent relationship with US Airways, which lowered its fares here and in other cities earlier in the year.
"We don't know how it's going to shake out," he said.
Isaacson said there's room for hope on Delta's prices. A recent ad in The New York Times featured discount fares between PTI and La Guardia for $89 on limited flights. He said it is the first time he's seen the Triad ever mentioned in a Delta sale ad.
A month ago Isaacson fired off a letter to Delta Chairman Gerald Grinstein citing the hundreds of passengers who leave the PTI area for Raleigh-Durham and Charlotte in search of fare deals. He suggested Delta could retain those passengers with more affordable prices.
Glen Hauenstein of Delta told Isaacson in his reply that the market, not Delta, is ultimately in charge of prices.
"Delta does not determine the prices that will prevail in any given market. That is determined by the prices that consumers are willing to pay, the level of service they demand, and competition," wrote Hauenstein, an executive vice president.
Other prices from PTI are dropping, according to the airport's research. A round-trip flight to Atlanta bought 30 days in advance, for example, costs $238, compared with $475 four months ago.
But News & Record research shows that fares are still substantially higher in many instances compared with Raleigh-Durham and Charlotte. A one-day business trip to New York, La Guardia, on Jan. 6, for example, costs $778 from PTI, compared with $98 from RDU.
A trip to Orlando, Fla., between Feb. 11 and 17 costs $284 from PTI, compared with $152 from Charlotte.
Hauenstein makes no apologies for the differences, though.
"While in some cases we choose to match fares offered at Raleigh-Durham or Charlotte with similar fares in GSO," he wrote, "we must ensure that we charge fares which economically support our operation out of your city."
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All carriers serving PTIA except Northwest and Delta airlines had better boardings last month compared to May 2005.
In December, daily flights at Piedmont Triad Int'l Airport dropped to 80, down from 92 last month, after Delta Air Lines Inc. and US Airways cut a combined 12 flights.
Piedmont Triad Airport Authority officials traveled to Tempe, Ariz., last week to discuss lowering fares and improving service with US Airways officials.
The new lower airfares by US Airways Group Inc. at Piedmont Triad International Airport have been well-received, but it's not clear yet what effect they are having on traffic at the airport.