Outgoing Civil Aeronautics Board chairman John E. Robson yesterday urged Congress to "bite the bullet" and enact legislalaltion to reduce Federal regulation of the nation's airlines.
In his last scheduled testimony before leaving his post April 30, Robson presented the board consensus position - in favor of lessening its hold over the industry - and then delivered, in a separate statement, an even stronger pitch for change.
I believe the case for regulatory reform is compelling," he told the House Aviation Subcommittee. "I do not mean just tinkering with the law to bring about improved procedures; I mean a basic reduction in the role of government in the economic decisions of the airlines."
If Congress does want to see a more competitive airline indstry, he suggested it would be "unfair" to leave the board with its "ambiguous mandate and cumbersome procedures" and implicitly aks it to effect the basic long-term changes it has recommended.
He also urged the legislators to reject the idea that basic regulatory reform could be achieved without any change in the present law.
Robson, whose two-year tenure at the board was praised by committee members at the start of the hearing, was the only witness yesterday. Although the Senate Commerce Committee has completed 13 days of the hearings on proposals to alter the existing air regulatory framework, yesterday's session was the first House hearing this session on the subject. The hearing are to be resumed in late May.
During his testimony, Robson attacked one-by-one, predictions of doom being used by opponents of legislative change, which Robson called the "Six Horsemen of the Regulatory Reform Apocalypse":
Abandoned service to small communities. The regulated carriers have already stopped serving most small communiinties - they dropped 248 cities since 1950 for a net reduction of 36 per cent - and can leave most others, they choose. An improved subsidy program will guarantee small cities better and more frequent service than they now have and at a lower taxpaye expense, he said.
Capital starvation. The financial community already considers many in the industry poor risks because of past performance under regulation, Robson noted, but sound and efficient carriers now, and will under less regulation, be able to attract capital. Even with the threat of legislation, carriers have secured more than $2.7 billion of financing in the last eight months.
Possible bankruptcies. He expressed confidence and have demonstrated they can tighten their belts that existing carriers are experienced and skilled and achieve greater efficiency. Also present regulation hasn't kept carriers from "financial extremes" nor produced a financially strong industry.
Widespread unemployment. There will be more jobs in a healthier industry, he contended, and there are no guarantees now for airline employees should a carrier go bankrupt.
Industry concentration. No empirical data supports the thesis that more competition would lead to monopoly, he said, nothing that regulation itself may have "enhanced" concentration. Of 70 carriers certificated in the board's history, only 27 exist today. In addition, there are no economies of scale in the airline business, and the smaller and medium-sized carriers. Also, a new firm could enter the industry more easily than other industries like steel and cars where massive fixed investments are needed.
Destruction of the system. Federal regulation doesn't sustain the air system. Federal regulation doesn't sustain the air system; demand from air travelers does and that won't change with more competition.