ECONOMIC INTELLIGENCE REALLY, AIR TRAVEL HAS IMPROVED
By Joseph Spiers

(FORTUNE Magazine) – ''The hassle of the hub and spoke is a major negative,'' says air passenger Frank Shrontz. Though he happens to be CEO of the world's largest aircraft manufacturer, Boeing, plenty of ordinary passengers would agree. Trouble is, argue researchers at MIT, these fliers are measuring today's experience against a mythical golden era predating deregulation in 1978. Nonstop jet service, as they argue in the current Sloan Management Review, is ''better than ever.'' Operations research professor Arnold Barnett and his associates tested the common complaint by looking at 500 randomly chosen routes between the nation's 100 busiest airports. In 1977, they found, nonstop jet service was available on only 17% of these routes. By 1989 the share had risen to 27%. Reason? Besides the greater competition that deregulation brought, the growth of the hub-and-spoke system produced a major expansion of nonstop service between hubs. A further result: Flying is safer, since nonstop flights are less risky than those that make stopovers. The researchers didn't count the expansion of commuter flights by prop-driven planes, which surely would have revealed still greater gains in convenience -- though not safety. Their study complements earlier work by a National Academy of Sciences panel, which found that deregulation has increased competition, expanded service, kept fares from rising as fast as costs, and cut accident rates. But the panel also recommended against further mergers or acquisitions where carriers serve the same areas or share a hub. -- J.S.