The Senate Commerce Committee yesterday gave what appeared to be very tentative approval to a measure which would reduce Federal regulation of the nation's airline industry over a phased period.
Committee members agreed to take print of the measure in what Aviation up after the August recess a new Subcommittee Chairman Howard W. Cannon (D-Nev.) called its "tentative final form," incorporating the changes made in the measure in the dozen markup sessions held since June.
"Any part of the bill is subject to amendment when we come back," Cannon, the committee's chief proponent of the measure, explained after yesterday's meeting. "We're not bocked in, but I would hope it's just about locked in."
The bill, endorsed by the Carter administration as it was by the Ford administration, is designed to loosen the Civil Aeronautics Board's hold over the airlines during a transition period in order to give the airlines greater freedom in making decisions on where to fly and what to charge. They currently must ask the CAB's permission for both in often lengthy and costly proceedings.
The bill's supporters believe the measure will result in lower air fares on many routes as the carriers seek to attract new passengers to fill now empty seats. In a more competitive environment, the bill's sponsors believe, the carriers will become more efficient and more profitable than they have been.
Most of yesterday's session was spent discussing what has become the bill's most controversial provision - how much authority the airlines should be given to move into new routes each year without CAB interference, and which classes of airlines, if any should be protected - and to what degree - from new competition from other airlines.
The bill was originally drawn up to allow the smaller airlines a greater expansion of their route systems than the five big airlines and to afford them greater protection from encroachments by the larger carriers by allowing them to designate some routes which would be "off-limits" to other carriers and by limiting the total number of routes on which they could face new competition.
The purpose of the provision was to dispel the smaller carriers' fears that their routes might be "gobbled" up by the larger carriers.
As it will be printed for September consideration, the Committee agreed yesterday to include a compromise automative entry provision drawn up by Cannon and Sen. John C. Danforth (R-Mo.) who has worried aloud that some carriers like Trans World Airlines, the second largest employer in his state and one of the five largest carriers which has nevertheless been in a precarious financial position for some years, might in fact need more protection in a more competitive environment initially than some smaller carriers.
Under the compromise:
All carriers, regardless of size, would be able to add two new routes up to a total of 3,000 miles a year, for five years.
All carriers, regardles of size could place off-limits to new competition three routes the first three years, two routes the fourth year, and one route the fifth year.
For each of the first three years after passage, the smaller airlines, such as Frontier and Piedmont, could face new competition on only two of their routes. The next size airline - like Allegheny, Braniff, National and Northwest - could face new competition on three routes the first year, four routes the second year, and all but the off-limit routes after that. The large carriers - American, Delta, Eastern, TWA, and United - could face new competition on any routes right from the start, except for the few designated off-limit routes.
However, the committee also agreed yesterday to include in the new print an addendum containing two proposals for changing the entry provisions: a proposal by Sen. John Melcher (D-Mont.) to instruct the CAB to draw up an automatic entry provision, and a proposal by Sen. Harrison H. Schmitt (R-N. Mex.) to severely restrict the entry provision by letting carriers move to only one new route a year for the first years and to limit carrier vulnerability to new competition to only one route a year.
In other actions yesterday, the committee approved:
An amendment sponsored by Committee chairman Warren G. Magnuson (D-Wash.) which would allow the airlines the flexibility to raise fares 5 per cent above a base which includes their costs each year, instead of 10 per cent.
An amendment sponsored by Sen. Donald W. Riegle, Jr. (D-Mich.) to require the Federal Aviation Administration to monitor the industry exceptionally closely during the transition to dispel any fears that carriers might cut any corners in safety in a more competitige environment.
Amendments sponsored by Sen. Ted Stevens (R-Alaska) to include Puerto Rico in the bill, at its request so that airlines could automatically add passenger and air cargo routes there, and amendments designed to preserve air service in Alaska.