Congress Takes Up the Plight Of Chattanooga's Air Travelers
Since 1978, the cost of flying out of many mid-size cities has gone up. New plan may help lower fares.
The 1978 deregulation of the airline industry led to lower air fares and better service for millions of American travelers - but not for everyone.
Out in many of America's small- and medium-size cities, residents may have their seat belts buckled and tray tables in the upright position, but they also have seen their service curtailed and air fares soar.
Take upstate New York, for example. Travelers to Los Angeles, Orlando, Boston, and Washington pay nearly four times as much per ticket if they leave from upstate rather than from New York City, according to a recent report. A different survey by the Transportation Department found that the lowest "walk up" fare from Buffalo to Washington costs $664, while a Chicagoan can fly to the capital for only $236 under the same conditions.
The economic implications are not hard to find. Rep. Louise Slaughter (D), who represents the Rochester, N.Y., area, says the Eastman Kodak Company plans to move its marketing headquarters to Atlanta, Ga., because it can get cheaper and more-frequent flights from there.
Today a House subcommittee is set to consider a bill to bring more flights to places like Buffalo, Rochester, or Chattanooga, Tenn. The problem is widespread: The General Accounting Office, Congress's investigating arm, says since 1978, the number of departures decreased in seven of 38 medium-sized cities, while average fares rose in 14 of them.
"A common characteristic of those communities in which air service has not improved as a result of deregulation, or in fact has been harmed by it, is the complete absence of service by low-cost carriers," says a summary by the House Aviation Subcommittee.
Subcommittee chairman John Duncan (R) of Tennessee is sponsor of the House bill, while his Senate counterpart, Bill Frist (R), also of Tennessee, has introduced a similar measure in that body.
Rather than return to the days when the federal government approved every fare and flight nationwide, Representative Duncan seeks to use free-market incentives to help disadvantaged airports. He would grant additional takeoffs and landings - called "slots" - at four key airports where the government controls them: New York's LaGuardia and Kennedy airports, Chicago's O'Hare, and Washington's Reagan National.
Under the plan, these extra slots would be taken by smaller carriers that would presumably provide cheaper direct flights to those fields from cities without such service. Currently, United Airlines, Delta, US Airways, and American Airlines control about 85 percent of all slots at the four airports.
The bill would also provide loan guarantees to commuter and small airlines to purchase aircraft to serve underused airports. Observers believe new 50-seat "regional" jets now coming on the market can make air service to smaller cities more cost-effective.
"It became very apparent that [there are] market-based things that you can do, such as grants, such as loans, such as regional jet aircraft.... In the past there has just not been the market for it that there is today," Senator Frist says.
One industry observer, who spoke on condition of anonymity, said the loan guarantees are not likely to be controversial. But their funding could be. The Duncan bill would pay for them from a tax on foreign overflights of the US that has been struck down in court. "Currently that is a subsidy without a funding source," he says.
Likewise, adding takeoffs and landings at Reagan National may be a problem. "Local politics are complicating the issue of [six] additional slots at National," says the source. He says Virginia congressmen have objected to lifting the limits on flights, which local residents demand in order to ease noise and congestion.
US airlines are reportedly split on the issue. United and US Airways would take the biggest hit from more competition and are lobbying heavily against the bill. In testimony before the Commerce Committee last June, a senior United official argued that the flying public would benefit more if the new slots - at least in Chicago - were given to United. He said that while United would use them to connect another city to United's Chicago hub, smaller airlines would just transfer to O'Hare an existing flight that currently lands at Chicago's Midway airport.
Key to the bill's prospects will be the attitude of House Transportation Committee chairman Bud Shuster (R) of Pennsylvania, whose former chief of staff is lobbying for United. Sen. John McCain (R) of Arizona, chairman of the Commerce Committee, says it's uncertain when he can get the bill to the floor until the smoke clears from the tobacco measure currently before the Senate. Supporters are hoping for early July.