The Civil Aeronautics Board yesterday proposed new rules which would require the airlines to classify separately all lobbying expenses and exclude them from the operating costs used in calculating air fares.
The board also decided to ask the public whether it should also act to exclude some advertising expenditures from the rate base.
Yesterday's actions were in response to a petition filed last December by the Aviation Consumer Action Project. The project is a Ralph Nader connected group which prods the board on consumer issues, seeking new rules requiring the airlines to disclose and classify an non-operating expenses all sums directly or indirectly spent for lobbying or institutional advertising.
In the past, board has allowed the regulated airlines to include lobbying as well as all advertising costs in their operating accounts. The CAB calculates the permissible fare level by a complex formula based in operating expenses.
"Allowing the cost of lobbying and institutional advertising in operating expenses automatically increases fares paid by every passenger, for every carrier, in every market," ACAP told the board. "All passengers, regardless of their views, must pay for airline political activities."
The board was unanimous in its views about lobbying expenses, but the question of distinguishing between various kinds of advertising appeared to pose a more difficult problem. Board members seemed to agree that ads that inform the public about a carrier's prices, schedules and other services should be allowable as operating expenses. The board was less clear on how to defene legitimate promotional ads designed to attract passengers and shippers "institutional" ads designed to create or enhance an airline's image without specifically generating passenger traffic.