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Aviation History
1978
1978 - 0070.PDF
96 FLIGHT International, 14 January 1978 Officer Kahn's first six months on the precinct Civil Aeronautics Board chair man Alfred E. Kahn's attitude to his job is probably best summed up by that old US Army Air Force expression: "The difficult we do immediately. The impossible takes a little longer." In Kahn's case the revolution in domestic aviation route and rate policy, always supposed to be difficult to achieve, has been accom plished immediately. The remaking of international aviation policy in the US image will probably prove impos sible, but Kahn is giving it a good try. On the domestic scene that has been easy. The CAB's decisions are not subject to review by President Carter when they deal strictly with the US, and Kahn's ideas about regu lation mesh with Carter's: "Don't regulate any more than you must." The revolution has already occur red. All that remains is for the losing side to find out. The stream of dis count and promotional fares which began under former CAB chairman John Robson has become a gusher. The Board has said that airlines filing for new route authority had better be prepared to accompany their applica tions with innovative low-fare pro posals, or run the risk of an unfavourable CAB response to their route service plans. Now the CAB is trying to parallel the rate revolution with an equally liberal entry policy. It is considering multiple awards of routes to carriers under this condition: "Fly them if you wish, but be prepared for the con sequences." Multiple competition is just the weapon that the CAB needs to implement what could be the most important part of the revolution: the elimination of the adjudicatory pro cess to such an extent that route applications would be examined for basic qualities (ability to offer; service and price options; competition re quired) and then authorised. The new procedure is now being examined by CAB lawyers to see just how many of the adjudicatory steps can be legally eliminated. The world outside the US is very different, however. Even so, despite the frustrations of having to submit Board opinions for White House approval, of having to deal with numerous agencies and of facing policies of sovereign countries differ ent from his own, Kahn sees pro gress ahead. True, he didn't like in heriting the policy contained in the Bermuda 2 bilateral. But, he insists, "that's past." Kahn admits that he was, to say the least, "slightly annoyed" when President Carter overturned the Board on Super-Apex fares. Flight talked to Kahn in early December, and the CAB chairman said that he would be "damned mad" if the same thing happened on another important issue such as the transatlantic case. He sounded as though he would seriously consider resignation if it did. (In fact he decided to stay on, saying that he was enjoying the job too much to quit). The Super-Apex argument has not been "totally futile," in Kahn's opinion, because it produced an Alitalia response in the form of lower normal fares. Moreover, he admits that he's not even "so certain of the correctness of my initial opinion." One of the problems is the fact that "we don't know what's happen ing to the supplementals" as a result of Super-Apex. No-one will know the effect on charter services until next summer, when charter prospectuses turn into nights. Kahn expects that "my fears will materialise because Super-Apex is so darn good." But, he thinks aloud, "maybe we have other devices to guarantee low fares other than the supplementals?" Kahn sees a low-fare trend (which started with ABCs and Freddie Laker before he came to the CAB) and he is going to encourage it as much as possible. For example, he is absolutely "delighted" with Laker's filing for a Los Angeles Skytrain authority. He sees fares such as Standby and Budget—which "give low-fare benefits and fill empty seats, meaning cost savings are possible and therefore saving scheduled service"— as producing "hundreds of millions of dollars of benefits." In an important departure from traditional American negotiating policy, he has obtained agreement from other agencies that the US is willing to award traffic rights formerly thought untouchable (for example, Sabena's new route to Atlanta) in re turn for US low-fare services. Kahn seems prepared to continue on that path in the Netherlands, Switzerland and Germany. A staff aide told Flight that the US is "planning to invite those three countries to the US for informal talks." The main topic will be what they want in return for liberal rules on US-originating charters and excursion fares. Kahn, of course, is trying to make an "end run" around: the UK. The Dutch also want Atlanta, and Kahn thinks that they and the Swiss will be more easy to deal with than the West Germans. Kahn believes that the British prob ably won't "cave" on charter liberali sation unless the West Germans accept the US rules. Lower fares and the inability of the lata rate-making machinery to deal with a "runaway" Carter Administra tion fare policy have moved the inter national organisation to set up a five- man' task force which is due to come up with recommendations by next summer. Kahn, invited by the task force to meet them privately in Lon don, felt that he couldn't accept such an arrangement. Now the task force is trying to set up a "sunshine" meet ing in Washington early this year to debate the whole issue, primarily through Umberto Nordio of Alitalia. Kahn has warned Nordio that he wants "concrete evidence, not deduc tive logic" to back up the latter's assertion that the low fares will drive out efficient carriers. The CAB staff was outdistanced during the US talks by the Trans portation Department, and will have to perform better if it wants to main tain its influence on international matters. (Transportation Secretary Brock Adams told Flight that his agency is "the only one with the tech nical qualifications" to form inter national policy.) To do that, Kahn has reorganised, though not for the sake of reorganisation. The new arrangement will reflect Kahn's talent-scouting efforts, and what he had to promise to get his men. Donald Farmer, head of the Bureau of International Aviation, came from the Justice Department with a reputation as an anti-trust/ free enterprise campaigner. Interest ingly, Farmer recently recommended against the adoption of a 15-day advance-purchase condition for Euro pean ABCs. A Board majority (which did not include Kahn) overruled Farmer's suggestion of 30 days. Also with international authority is the new Bureau of Pricing and Domestic Aviation, which will advise the Board on domestic route and rate matters and "in international route award cases involving innovative low- fare proposals." How well the two bureaux will co-operate in reality is still an unknown, but the Board's determination to provide the best talent available in international avia tion is not. As Flight was told: "In six months the Board will be produc ing analyses which the DoT can't." JOAN FELDMAN interviews CAB chairman ALFRED E. KAHN and assesses the record of his first six months in the job
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