The Senate last night passed the airline deregulation bill by a vote of 83 to 9, giving President-Carter a major victory in his anti-inflation campaign.
The legislation now goes to the House where considerable opposition is expected. If enacted, the bill would represent the first major reform in government control over the airlines since passage of the 1938 Civil Aeronautics Act.
In a separate action, the CAB yesterday approved emergency measures aimed at liberalizing restrictions on charter flights. The move came in response to complaints from tour operators that they were losing business because of several new low-fare plans approved for scheduled airlines in recent months.
The passage of the degulation bill marks the first major change of a federal agency's policy by the Carter administration. Action toward airline deregulation was begun under the Ford administration.
The bill's chief sponsor, Sen Howard Cannon, (D-Nev.) called the action "the first significant reform we have pushed through."
He said that he hoped the House, which is still considering its version of the bill, would take note of "the tremendous vote and support for the legislation in the Senate."
Cannon said the bill, if passed by the House, will be "a great accomplishment from the standpoint of the consumer, who will get better service, particularly a lot of small communities. It will do away with monotpoly type routes and create actual fare and service competition."
He said airfares will continue to drop because carriers have acted "in anticipation of this legislation."
In the White House statement, Carter said the bill "will put an end to a form of government regulation of business that is not only unnecessary, but also counter-productive from the public's point of view."
He singled out three senators for credit on the bill's passage, Sen. Edward Kennedy (D-Mass.), Cannon, and James Pearson (R-Kan.), the ranking Republican on the Senate Commerce Committee.
The bill will open up the airlines to price competition for the first time and allow virtually open entry of carriers into new markets.
Earlier in the day, the Senate passed an amendment proposed by Kennedy that places the burden of proof on existing airlines to show why a new airline should not be allowed to enter a market. Previously, the burden was on the new entry to show why it should be allowed in.
Prior to that, the Senate defeated by 72-21 an amendment offered by Sens. George McGovern (D-S.D.) and Barry Goldwater (R-Ariz.) that would have severly reduced the number of route segments that an airline could add without CAB authorization.
That amendment would have made it "virtually impossible for any carrier to qualify" for automatic entry into a new market, according to Sen. Cannon.
Automatic entry, the ability to enter a new route without having to obtain CAB approval beforehand, is considered a key element of the Senate bill. That aspect of the legislation has met stiff resistance in the House sub-committee studying the proposal.
White House aides said last night, however, that there were indications that the House would accept the total bill. Sen. Cannon said he had high hopes that final legislation would be passed by the House before the end of the year.
The action on charter restrictions actually is a 90-day waiver of key charter rules and goes into effect immediately.
It includes provisions that would allow charter operators to pay carriers 15 days before the flight instead of the present 30 day: allow discounted fares for advance booking - in other words allowing a charter operator to sell seats for significantly less if they are purchased far in advance; allow creation of one-way charters that have never before been permitted, and allow one-way passengers on roundtrip charters that could fill the return seats with other one-way passengers.
In addition, the new rules would allow charter operators to substitute up to 15 percent of its passenger load at the last minute with new passengers, permit charter operators who cancel flights to place passengers on regularly scheduled flights, and allow partly-sold charters to fly.
Finally, the CAB also dropped the minimum requirement on the number of people that can make up a charter group from 20 persons to one.
In another action, the CAB also chose Los Angeles to be one of only two U.S. cities, the other is New York) allowed to serve London directly by two U.S. airlines.
That action means that both Pan American World Airways and [WORD ILLEGIBLE] World Airlines will fly the Los Angeles-London Route, but Pan American be forced to pull out of its [WORD ILLEGIBLE] London route. This action was [WORD ILLEGIBLE] by the Bermuda II air transportation agreement signed last summer between the United States and England.
The CAB also tentatively approved a proposal that would allow Southwest Airlines of Texas to start [WORD ILLEGIBLE] frills, low-fare commuter airline to the Midwest.
A Southwest subsidiary to the [WORD ILLEGIBLE] Midway will be given access to [WORD ILLEGIBLE] points in the upper Midwest, centered on Midway Airport in Chicago [WORD ILLEGIBLE] including St. Louis, Cleveland, Detroit, Kansas City, Pittsburgh and Minneapolis-St. Paul.
The CAB said, though, that it would not keep other airlines from [WORD ILLEGIBLE] using Midway airport Chicago second airport after O'Hare.