After a two-month hiatus, legislation designed to reduce federal regulation to the nation's airline industry appears to be moving once again, at least in the Senate.
This week, Senate staff have begun briefings on the outlines of a new draft bill which has the bipartisan support of key senators and is to serve as the vehicle for a make-up session by the Senate Commerce Committee during the next few weeks.
Pressure of such legislation is also coming from the White House.In a speech to a group of business leaders in New York Monday night Vice President Walter E. Mondale said reducting regulation of the economy where it is "in the public interest" is an important part of the Administration's anti-flation program. "Forty years ago when the airline industry was only beginning, comprehensive regulation of prices and protection against competition was necessary," the Vice President said in a speech prepared for delivery to the Business Roundtable. "But now it is time to take the industry away from government regulators and put them where they belong - into the hands of men and women such as yourselves."
President Carter made a pitch of his own for the legislation Tuesday in a statement released in conjunction with his approval of Laker Airways' application to provide low-fare "Skytrain" service between New York and London. "I believe that low-cost air service should also be available to passagers traveling within the United States," the president said, reaffirming his "strong commitment to legislation currently before Congress to guarantee that proposals to offer low fare service in domestic markets receive prompt and favorable attention by the CAB."
The draft measure was produced by staff working at the direction of Senate Aviation Subcommittee chairman Howard W. Cannon (D-Nev.), Senate Antitrust and Monopoly Subcommittee chairman Edward M. Kennedy (D-Mass.), Sen. James B. Pearson (R-Kansas), ranking minority member of the Senate Commerce Committee, and Sen. Ted Stevens (R-Alaska), ranking minority member of the Senate Aviation Subcommittee.
Robert E. Ginther, counsel of the Aviation Subcommittee, says the draft bill incorporates into one of the features of an earlier bill co-sponsored by Cannon and Kennedy and a bill co-sponsored by Pearson and Howard H. Baker (R-Tenn.).
Ginther characterized the measure as a "strong" bill which would significantly relay the Civil Aeronautics Board's authority to regulate the airlines' rates and routes but would, at the same time, protect the public and the carriers from a "too swift" transition from strict regulation to an environment in which competitive market forces would play a great role in determining what variety of fares and services are available to the public.
Under the new bill:
The current protectionist entry policy would gradually be replaced by a much less restrictive one. In addition to opening the doors wider to new carriers, existing carriers would be given rights to expand their systems automatically each year by a certain mileage and number of markets. Smaller carriers would be allowed a greater expansion than the big five airlines, which collectively control about 70 per cent of the domestic passenger market. The small er carriers would get an addiitonal protection during the first five years by being able to designate a limited number of markets - no more than three in any one year - in which no new competition would be permitted.
Airlines would given the right to change their fares - doen by up to 35 per cent and up by as much as 10 per cent - without CAB interference on routes where there is some competition. Another provision would allow without board approval an additional 20 per cent discount for off-peak fares.
Airlines would be able to drop cities they no longer wanted to serve by giving 90 days' notice, which could be extended another 90 days by the board if it wanted to use the time to find another carrier to fill in.
A small community service program would be set up to guarantee that no community would lose air service because of the bill, and even new communities would be eligible for federally-subsidized service if they met new air service criteria to be developed by the board.
Strict procedural guidelines would reguire the CAB to consider every application for new service and take action within 10 months.
The bill will not be introduced formally prior to the committee mark-up session, but will be introduced afterwards with most Senate Commerce Committee members as co-sponsors, Ginther said.
The staff was instructed to work out a new compromise measure after three weeks of hearings before the Senate Aviation Subcommittee this spring convinced subcommittee chairman Cannon he wanted a measure with a greater emphasis on transition and moderation during the first few years of a changing industry structure.
While the Senate appears to be moving on the measure, little is happening in the House. No measures have been introduced by the key members of the aviation subcommittee or its parent public works and transportation committee.
The subcommittee has, however, just scheduled two days of hearings in Harrisburg and Williamsport, Pa., Friday afternoon and Saturday to take testimony on the effects of the yet unintroduced legislation on small communities.