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A. Because the best flights are available there. Nonstop flights cost more, and a lot of people choose them. If you are in Dallas-Fort Worth and you want to go to La Guardia, you can fly nonstop and pay a premium for that convenience. Or you can save some money by flying a connecting flight, say through Chicago. The notion that we're gouging people is crazy. It's sort of like asking, What's the average room rate at the Ritz Carlton and Motel 6? Well, it's higher at the Ritz Carlton. It's nicer there. You get what you pay for. If you want a lower price, you can go to Motel 6.
Q. You have defended the fact that the seats are so much closer together . . .
A. Because that's what the public wants.
Q. Cramps?
A. We can only provide the service that the public is willing to buy. The public selects airlines on the basis of three factors: price, price and price. So it is imperative that we do all we can to offer the maximum possible service for the lowest reasonable price. Deregulation works. There are more flights, and there is more competition than there was in 1978.
Q. And yet after 10 years, American, United and Delta control almost 60% of all U.S. air traffic, and will soon control about a fourth of all world traffic. The big carriers keep getting bigger, and most of the small ones are going out of business.
A. Look around the world: almost every other country has one airline. Why? Because airlines are enormously expensive to operate. They are not a business that can be practiced in just one place. We have to buy a lot of airplanes and move them across a vast network to carry people from many places by way of interchange points to other places.
Q. What about concerns that the financial stress of deregulation has hurt safety?
A. Anyone who says that is wrong. The FAA is responsible for safety. Safety was not deregulated. The safety record of the airline industry is materially and dramatically better than it was during regulation.
Q. Now that American is so big, now that you've won the game, you're insisting , that fares must rise.
A. Well, of course they've got to. The airline business is losing billions of dollars. Last year was the worst this industry has ever had. Right now, almost 30% of our airline service in this country is being provided by carriers that are bankrupt or nearly so. Now how can you possibly say the fares are too high? They must go up, or we're not going to have an airline industry at all.
Q. But air traffic has fallen this year. If your fares go too high, don't you drive away consumers?
A. No question about it. More than half of airline travel in this country is for leisure. As airline prices rise, people who would like to travel are going to stay home. They're going to buy more lawn mowers, more tickets to the local ball game, and fewer airline tickets. But we cannot continue to produce and sell a product for less than its full cost.
Q. Why is it so difficult to bring your costs in line with your revenues?
A. Running an airline is not like making dog food. In the dog-food business, if you get a recession, you just close a couple of plants and make less dog food for a while. Nobody cares where you make it. They buy it in all the same places.