| Show s I DEREGULATION RAISING MANY QUESTIONS The fate of federal deregulation as a whole could well hang on what happens to airline deregulation legislation now making its laborious way through Congress The Senate version of the bill billIs billIs billis is about ready for floor debate but the 1 House louse has barely started its draft The whole process has been slowed by the need for especially careful drafting of a measure that is expected to be a model for deregulation legislation affecting other industries and segments of the economy Also and surprisingly since deregulation sentiment is so strong strung there is considerable considerable con con- concern lest freedom from trigger unwanted problems perhaps even profits declines Highlights of oC Senate St-nate Dill Bill The measure soon to come before the full Senate is specifically tailored to increase competition among airlines by giving them more power to set rates and to choose routes without any contravention of the Civil Aeronautics Board The bill would permit airlines to boost fares on competitive routes by as much as 5 percent per year slash them by as much as 59 percent during off seasons without CAB approval Further it would allow the carriers to add or drop routes on their own authority under certain circumstances procedures that now require lengthy commission hearings pending final CAB decisions Finally it would provide that government subsidies for routes to small communities henceforth henceforth henceforth hen hen- be based on need for service rather than the cost of providing the service It is thought this last qualification would result in savings to customers as well as companies by reducing the number of big jets flying into the smaller airports and increasing commuter air traffic between small cities not too far apart Several Hurdles Ahead When the House bill is finally ready for floor debate our guess is that it will not differ too much from the Senate version The House however seems prepared to let the Senate carry the ball ballon on this and will likely defer final action until the Senate has voted The airlines have used the CAB as a crutch for so long that no one really knows exactly what would happen if the crutch were removed Airline managements t themselves are re divided on the merits of deregulation Some are convinced it would encourage long long- overdue competition allow much- much needed cost cutting Others insist that it would imperil the entire economic structure of the industry especially endangering the already low profitability Naturally public sentiment heavily favors airline and other deregulation and the reason is clear People have a agut agut agut gut feeling that if you could just get the government out of the business of regulating fares and fees set by the once regulated industries would decline Organized labor thinks this is a likely possibility too But in proffering its support for deregulation of the airlines it sought ought and won from sponsors of the Senate bill a promise that jobs lost because of the measure would be tie compensated for by Uncle Sam 1978 Passage not at atall atall atall all Sure The Senate will probably pass an airline deregulation bill fairly promptly promptly promptly albeit one encumbered with some weakening amendments If it does so soby soby soby by a relatively close vote as we expect the House may decide to put the issue aside for the present to allow more time for the sentiment of Members to jell So theres there's little more than a 50 SO chance that well we'll get an airline deregulation measure this year that the President will accept If we do not the Research Department Department Depart Depart- ment of Babson's Reports thinks enactment would come in early 1979 Congress will not dare delay beyond that because despite Administration distaste for it federal regulation of business is on the rise and something must be done to allay public irritation over ver regulatory cost red tape |
