The Civil Aeronautics Board's enforcement division has begun an investigation to determine whether certain airlines have been engaging in illegal fare-fixing.
In an order instituting an informal, nonpublic investigation, the CAB's Bureau of Consumer Protection said it had received information that "various" airlines that compete in some markets may have joined to set or change fares or agreed to reduce or limit the services provided in those markets.
Although the CAB in the past has sanctioned uniform fare levels arrived at through CAB proceedings, the agency recently has encouraged varied pricing and increased competititon among the airlines and its efforts have been bolstered by the recently enacted Airline Deregulation Act.
"Price-fixing and similar anticompetitive practices cut to the heart of the regulatory scheme" envisioned by Congress when it amended the airline statute this year, the bureau's order stated yesterday. "Under the revised statute, it is essential that competition in air transportation markets be real and vigorous."
The investigation is intended to determine whether some airlines have acted to reduce or eliminate competition in violation of the law. Based on the information it secures during the probe, the bureau may recommend that the board take formal remedial action, or it can stop there.
Yesterday, Bureau Director Reuben B. Robertson pointed out that the investigation may turn up no evidence of wrongdoing or serious violations of the law. And he said there should be no assumptions of a nationwide conspiracy involving a lot of airlines.
"Issuing the order doesn't mean a capital case," he said. "It means we are looking at something. I don't know what's going to turn up."
In another development, the CAB tentatively decided to give National Airlines and Trans International Airlines new authority to offer scheduled services to Zurich, Switzerland, and Tel Aviv, Israel.
The board's tentative action, which also would give TIA authority between Amsterdam and the two cities, is designed to take advantage quickly of new bilateral agreements giving the United States the right to make multiple designations of U.S.-flag carriers to serve those countries. The board also invited additional applications from U.S. airlines for new Tel Aviv authority.
If adopted by the board after a twoweek public comment period, National would be allowed to extend its existing transatlantic service beyond Paris and Amsterdam to its new cities, with passengers boarding smaller planes at those intermediate points.
Trans International would offer service from Los Angeles, Chicago and New York to Tel Aviv via Amsterdam and Zurich. TIA was granted authority to fly to Amsterdam in October.
Right now, Zurich is not served directly from the United States by any U.S. airline, and although Trans World Airlines provides New York-Tel Aviv service, El Al Airlines carries more than 90 percent of the U.S.-Israel traffic.
In other actions, the CAB:
Vacated a restraining order it had issued earlier against Flying Tiger Line, thereby allowing the airline to increase its 15.6 percent holding of the stock of Seaboard World Airlines to a maximum of 25 percent. Until the board decides whether to approve the proposed merger, however, the stock obtained must be insulated by a trust similar to the ones set up by Pan American World Airways and Texas International Airlines in the pending acquisition case with National Airlines.
Announced it would give sympathetic consideration to any airlines wishing to operate large aircraft in competition with Hughes Airwest between San Francisco and Eureka, Calif., in light of Airwest's recent 40 percent increase in its coach fare.
Over the years, Airwest's fare in that monopoly market has been held to a level comparable to intrastate fares through California by the California Public Utilities Commission; it is a level substantially below the formula fare level applicable in interstate markets of comparable distance, according to the board. While the PUC was holding the fare level down, it was also protectively keeping other airlines out of this market.
With the passage of the Airlinee Deregulation Act, however, the state no longer has authority over Airwest's fares and cannot bar entry by other airlines to the route.
The board said it was disturbed by Airwest's 40 percent fare increase since Airwest is a monopoly operator. Although it favors reliance on the marketplace, the board said it has a duty to prevent the transition from state utility regulation to federal jurisdicton from leaving the public vulnerable to monopoly power.