Monday, May 11, 2009

Monopoly money in the Ozarks?

When the new airport in Branson, Missouri, opened the other day, most writers raved and ranted about the fact that it is a private facility, one taking no federal money, and so free from federal red tape. Then they noted that one snippet of that red tape is the non-discrimination condition: airports that take federal funds have to treat all airlines equally and can't give one carrier special treatment that the airport denies to others. Freed from this enforced fairness, Branson can do one thing really special: it can grant exclusive rights to a given route to a given airline. So Branson was able to lure AirTran with the promise that no one else would be allowed to link the Ozark Mountain music resort with AirTran's home base at Atlanta, for instance, and it was able to guarantee that Sun Country would be the only carrier to fly to Minnesota's Twin Cities.
This non-compete clause, came the cry, was a guarantee of high fares; any monopoly would be. It's only competition between airlines that keeps fares down. But that is where the argument goes off the rails: airlines that fly to Branson are not selling just transportation between Point A and Point B (for Branson). They're selling the resort itself, and in doing so, they're selling against every other resort in the middle of the country. People will be choosing between Branson and Las Vegas or between Branson and Atlantic City. No one has to go to the Ozarks, and they know this at Sun Country and at AirTran. And they also know that if they charge a monopoly fare, Branson will lose.

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