The Civil Aeronautics Board is expected to decide today to let two new interstate airlines begin low-fare service in and out of Chicago's Midway Airport from six Midwestern cities.
A thorny issue must be resolved by the pro-competitive board, which appeared to be divided on the matter during a three-hour discussion of the issue on Friday.
That is whether the CAB can. or should give the new airlines a head-start of a year or two at Midway before letting the established airlines in as well to provide low-fare service.
The carriers scheduled to get the new interestate operating authority. rarely granted in the board's 40-year history, are Midway Airlines, a new company headed by Irving Tague, former president of Hughes Air West, and Midway (Southwest) Airway, a subsidiary of Southwest Airlines, a successful Texas intrastate airline. Their competitors are Delta. Northwest and North Central Airlines.
The new carriers have told the board they will provide nonstop air service at fares 32 to 47 percent below existing coach fares between Midway Airport and Cleveland, Detroit, Kansas City, Minneapolis/St. Paul, Pittsburgh and St. Louis.
The CAB, the Department of Transportation, and the city of Chicago had been trying for years without success to revitalize Midway and relieve congestion at O'Hare Airport. WIth the exception of Delta Airlines, which maintains a minimum level of air service between Midway and St. Louis, all other airlines had abandoned the once-busy Midway and moved to O'Hare.
Both the Transportation and Justice Departments urged the CAB in oral arguments last week to enable the two new carriers to get off the ground before letting in all the others.
While Justice urged that a grace period be granted to both new carriers. Linda Heller Kamm, DOT-S general counsel, argued that Midway Airlines, the first carrier to come foward with an innovative application, ought to get up to a year's headstart before Midway (Southwest) is allowed in.