If the Civil Aeronautics Board didn't believe it before, it does now: President Carter means what he says.
He favors price competition in international as well as domestic aviation and he intends to do what he can to promote it.
In April, the CAB sent the President a recommendation that he sustain a board decision not to allow Trans World Airlines to put into effect proposed rate reductions for cargo being shipped between the United States and the United Kingdom on grounds that the rates may by unjust, unreasonable, unduly discriminatory or otherwise unlawful. Under the law, the President is responsible for reviewing board decisions involving foreign rates or routes - he has the final say.
President Carter told the board he would go along with them that once, but only "reluctantly." In a letter to then chairman John E. Robson, Carter explained that he would accept the board's decision on the TWA matter since he had not previously made public his intentions and had approved similar board orders regarding foreign air carriers.
But he served notice that he would take a dim view of any future attempts by the board to prevent airlines from putting into effort lower international air fares or cargo rates.
Although he acknowledged that special circumstances sometimes exist in the international aviation environment, the President said that encouragement of price competition among carriers was "an important element" of his foreign economic policy, just as it is in domestic policy.
"As a general matter . . . I am opposed to suspensions or cancellations of fare or rate decreases in international aviation cases, and in the future I would expect to disapprove such suspensions in the absence of compelling circumstances," he said. "I would ask the board to keep this policy in mind as it considers future applications by carriers for fare or rate decreases."
Since that time, he has approved Britain's Laker Airways' proposal to offer travelers one-way air fares of only $135 between New York and London on "Skytrain" service, a decision many observers seep nippling throughout the international air world with increasing requests for similar fare cuts it, as expected, the lower fares increase travel.
In spite of the warning, on June 20 the CAB sent back to the President almost the identical recommended decision. In May, YWA refiled its proposal for the same cargo rate reductions, but this time extended the rates to include France, Italy and Spain as well as Britain. The board wanted to suspend the rates pending a one-year investigation on their legality.
Last week, the President made good on his promise. "Upon review, I have decided to overturn the board's decision for reasons related to our foreign economic policy, thereby allowing the rates at issue to be available during the pendency of the investigation," Mr. Carter wrote the board. He also said the board should conclued its investigation within 90 days.
The decision had to be a tough one, especially since CAB Chairman Alfred E. Kahn, a recent and highly-acclaimed Carter appointee, concurred in the board decision to send the matter back to the President with the same recommendation. Like the President, Kahn is a believer in as much competition as possible.
Essentially, the board contended that the case had the "compelling circumstances" he referred to in his earlier letter.
The board said it believed TWA's proposed rates would be below costs, would not generate sufficient traffic to offset the diversion of cargo moving at already higher rates, were proposed in order to combat similar rates which has been instituted by British Airways despite a board ordere denying them and to gain a larger share of the market at thte expense of other carriers.
For his past, Kahn used the occasion to express his "extreme dissatisfaction" with the procedures the board must follow to make its decisions and the limited time it has to make them. Kahn noted that he was presented for the first time with "an extremely controversial, complicated, and portentous case" on the afternoon of June 16 and was told the board was required to make its decision by noon the next day.
He also complained about the lack of evidence available for board members to make informed judgments on questions like these.
If the President has accepted the board's decision and suspended the rate, TWA probably would have given up and no investigation would have been made industry observers suggest. His decision to let the rates go into effect forces the board to investigate the matter in a more timely fashion than the one-year period it has suggested. A finding by the board that the rates "are" in fact "unjust, unreasonable, unjustly discriminatory, unduly preferential, unduly perjudicial, or otherwise unlawful," instead of "may" would undoubtedly be sustained by the President, administration sources say.
In the interim, he will have shown that he means what he says.