Elizabeth E. Bailey nominated by President Carter to be the first woman member of the Civil Aeronautics Board, yesterday strongly endorsed pending legislation to reduce federal regulation of the airline industry.
"I think we should rely more on market forces to determine the price and variety of air services," she told the Senate Commerce Committee during confirmation hearings yesterday.
"I believe that with new entry and with more pricing flexibility, the consuming public will benefit with service more suited to their needs and pocketbooks," she said. Noting that she had just taken her two children to California on vacation using the low cross-country fares now available on the scheduled airlines, she said she "can't help but believe" that the fares weren't "a direct result" of the low-fare proposals of others.
Passage of legislation is necessary if reform is to be successful, she told the committee. "While current board members - and especially the chairman, Alfred Kahn - have a reform orientation, the legislation will last 40 or 50 years while the current members of the board will not," she said.
Bailey dismissed two major contentions of the airlines and unions that are fighting the bill. Under the bill, carriers would not all go into the same routes but would pick carefully "where market demands can sustain them," she said. Replying to the claim that airline employees would lose their jobs under a less regulated environment, she said she would expect "a substantial increase in demand for their services" as passengers who cannot now afford to fly are attracted to the airlines by the lower fares that may be possible.
If confirmed, as expected, Bailey, 38, will be the second economist on the board. She has worked for Bell Laboratories since 1960, first as a computer programmer. Since 1975, after a succession of other jobs, she has been head of Bell Labs' Economic Research Department.
She told the committee she had no experience in airline regulation but her profession career has been devoted to the study of regulation of telecommunications and electricity, and she believed some economic principles apply across industries.
Bailey was introduced to the committee yesterday by Kahn, who used more superlatives to describe her - including "superb reputation" and "marvelous analytical mind" - in two minutes than most committes hear in hours.
A nominee for a Republican vacancy on the board, she was asked by Sen. Ted Stevens (R-Alaska) if she had the "steel" to be a Republican on the board. "I'm tougher than I look," she replied.
Two questions were raised about the financial statement she submitted to the committee and the board. She told the committee her husband would dispose of $20,000 worth of Citicorp stock he holds if it is deemed necessary: the bank corporation is a large lender to airlines. Also, a question was raised about the propriety of $7,800 in severance pay from Bell Labs: Bailey said there was no understanding at all that she would go back to Bell after federal employment and would like to accept the money unless it is found to be unlawful.