page two
ffiEomamrae
March/April, I977
Who stands where?
Airlines fly different directions on deregulation
During the course of the recently concluded
Senate hearings on deregulation proposals many
different opinions' were offered and not too
much agreement was noted, even among the
airlines.
The Association of Local Transport Airlines
(ALTA) asked in its testimony that Congress
confine deregulation at first to this country’s
major high-density markets in order to protect
small and medium sized markets from invasion
by the larger trunk carriers. Generally speaking,
most of the regional airlines opposed the pend
ing legislation.
Here are comments made by some of the
airline executives who testified at the hearings.
C. E. Meyer, president, Trans World:
“I must express deep concern that one of
the major stated purposes of the proposed
legislation is a desire to increase competition in
what has been and increasingly is a highly com
petitive industry. The airlines have long suf
fered from the unfortunate conflict of being
highly regulated and, at the same time, highly
competitive. The proposed legislation worsens
the situation ...
“Basically, I urge that additional time be
taken . . . before changes in the system are
finalized. In the interim, encourage price compe
tition, by establishing a zone of reasonableness
that permits carriers to raise or lower fares
and rates up to 15 per cent in any given year.
“Additional changes in the regulatory struc
ture should only be made if it can be demonstrat
ed that the nation’s basic air system will not
be jeopardized.”
Arthur F. Kelly, chairman, Western:
“We believe that the current statutes which
have fostered air transportation rnust be
retained, understood and properly administered
. . . Regulation is essential to the operation of
a dependable air transport utility designed to
serve the public .. .”
Frank Borman, president. Eastern:
“The odds are that the bills you are con
sidering, as written, will not promote a more
efficient system, will not result in lower air
fares and will not promote effective competition
within the industry.
“In fact, we could have another railroad
industry on our hands, with old, inefficient
equipment it can’t afford to replace and the
disappearance of all but a few large carriers
with a tremendous amount of economic
power . ..
“Gentlemen, Eastern wants change; indeed
we must have it. But I warn you that, in the
final analysis, we dare not make the basic mis
take of confusing progress with motion.”
L. B. Maytag, chairman, National:
“Any major revision in the fundamental
rules which have successfully guided the
development of our airline system for 40 years
will generate vast uncertainty . ..
“I recognize that much of the enthusiasm
for reform stems from the natural desire for
lower fares. I, too, share that desire. Unfor
tunately, I see no provision in this legislation^^
which will lower the costs for fuel, labor or^r
equipment. Nor do I see how the industry’s
efficiency can be improved to offset the ever-
increasing inflationary spiral. We would be
less than candid if we held out to the American
public the possibility of fare reductions without
dealing with the root problem of inflation .
“Presently we are bound by law and school
through years of regulation to respond to the
public interest. With adoption of this legislation,
I would expect less influence upon the industry
from the public segment. There would be more
concentration on economic survival instead . .
“The simple fact is the present law is
sound.”
Imaginable incidents
by Jack Brandon
(
TWERE WOW... 5INCF VOu'VE BEEN DEREGULATED,
FREOULNCy OF SERVICE AND
LOWER YOUR EKRtS.
TOB GONE..
RETIREMENT BENEFITS GONE..
LOST OUR MOME ...
WIFE SICK. MO HOSPITALIZATION .
WHO BENEFITED FROM DEREGULATION P
©PFoeii
I LtT us MELP YOU
LIKE WE lAtLPED'
GUI? T^AILI^OADS...
ITS CALLtD
ruiS TRIP USt TO
COST ME '*50.00...
WUAT UAPPENED/^
DEREG
AKl'T '/A RE-AD.^
what's
THATySj (jBROTHER AGAIN.
ddod
Odd
on
UTTLE
BUSINESS
THE KREQULATION COMMirTEE BORROVvtl) T-HiS
IDEA TROM TWE OLP -RAILROAD CONCtPT, IN ORDER
to LOWER FAJ^tS... AND VOU KNOW LIOW
bUCCtSSfUL TME -RAILROADS TURNED OUT
TME OPERATION WAS A SUCCESS,
BUT TMH PATIENT -piEO.
F SALES CONTINUE BRISK^ WE
MAY BE ABLE TO AFFORD SOME
MEW JETS IN ABOUT 20 YEARS
AIRUNE
loams
Nior
CAME DOWN WITH PERE&ULATION
COMPLICATED WITU -REFORM...
AND WENT TU5T LIKE THAT.