Although President Carter indicated last week that his administration plans to support legislation designed to reduce regulation of the nation's airline industry. Transportation Secretary Brock Adams appears to be going along somewhat reluctantly.
In an interview yesterday, Adams expressed reservations about the "disruptive effects" he says will be part of reduced regulation, and he called into question some of the studies produced over the last two years which suggested that consumers might benefit from reduced regulation.
Meanwhile, Sen. Edward M. Kennedy (D-Mass.), was has joined with Senate Aviation Subcommittee chairman Howard W. Cannon (D-New.) in sponsoring legislation to reduce airlines regulation, yesterday released a General Accounting Office report which cast doubt on an airline industry trade group study. The study concluded that many small communities would lose air service if there were less regulation.
GAO said the assumption and methods used by the Air Transport Association were often faulty, and that conclusions drawn from its study - that air services available to the public could be markedly reduced - should not be relied on as estimate of the consequences of a deregulated air environment.
Adams said yesterday that he is worried that, with reduced regulation, consumers living "in the interior areas, outside the great concentrations of economic power [may] get more and more shut out of the system."
In respone to a question about studies by DOT staff indicating that many of the cities dropped by the regulated airlines over the last 15 years now are being served more frequently and in many cases more cheaply by unregulated commuter airlines, Adarms said, "I don't accept that study. That came out of the old administration.
"The whole administration before was dominated by people who were not in the business or ever served in the business or represented the smaller communities," he said. They were economists and "people who dealt with theoretical aspects of it as opposed to people who've been out in those communities and saw what happened.
"We 've had eight years of an administration whose sole purpose was to let the market forces run," he added.
Studies by the Civil Aeronautics Board - which has concluded that the public and the carriers themselves would be better served with less regulation - also are suspect because its chairman favors deregulation, Adams suggested.
Reiterating his position that there is a "public utility aspect" to transportation Adams said that "regulation is the protection of the consumer against very powerful economic forces in the transportation business - whether it is the transport company itself for someone who has the ability to distort the transportation system to his advantage."
Adams said his reservations don't mean he won't be supporting the administration position "I think reform is due and you'll see me coming out along with the President on more specifics in the future." Adams said. I'm just very concerned about the disruptive effects which I know will happen out of many of the changes that are proposed, and I want to be certain that they're addressed . . ."
"We went out to create an airline system," Adams said. "Our theory was to try and get airline service - because we have a very large country - into as many communities as possible and to let those communities have it at a fair price so that they were not shut out. We've done that."
In releasing the GAO report yesterday Kennedy said its findings "should lay to rest the ghost of lost air service" GAO said that ATA's conclusion that 1,198 air routes risk abandonment by carriers with less regulation was "questionable." The assumptions ATA used - that federal subsidies on 826 routes would end and that the remaining 372 are unprofitable - are invalid, GAO said. For one subsidies of some sort undoubtedly would continue even after deregulation, although the form might be changed, the GAO said. In addition, most of the 372 routes called unprofitable by the ATA could be dropped by the carries now if they wanted to, so they probably are bringing enough revenue for for carriers to want to keep them.
GAO said ATA's flight reductions estimates were overstated because they did not provide adequently for passengers of any discontinued flights being diverted to other flights, thus increasing their load factors and profits.