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Aviation History
1978
1978 - 2437.PDF
FLIGHT International, 14 October 1978 1381 Air Iranspi rt Bermuda 2 is "restrictionist," says CAB chairman Kahn ' "I REGRET Bermuda 2, but we will have to live with it." So said Alfred E. Kahn, chairman of the US Civil Aeronautics Board, when he spoke to Flight while passing through London last week. Kahn believes that Ber- | muda 2 "embodies restrictionist prin ciples which I am opposed to, but we will have to live with the agreement and hope that we can persuade the UK not to operate it too restrictively." He is particularly bothered by the capacity restrictions in last year's air service agreement between the US and UK, and would also like to see a relaxation of the limitations on charters. On the plus side, Kahn thinks that , progress on low fares between the US and UK has gone "moderately well." He would very much like to see more ' US carriers operating into the UK but doubts whether it will be possible to persuade the British to allow this to happen. The CAB chairman makes it clear that his role is to increase competition between airlines. He sees no differ ence, in economic terms, between air transport and any other industry: "Air travellers are just as much en titled to the benefits of free competi tion as buyers of salt." This principle underlies the current drive towards deregulation, both on US domestic routes and in bilateral negotiations with other countries. % On deregulation, Kahn says that i "with the President on our side we shall be able to open up the US market quite quickly ... I can't say how long deregulation will take, but in a year's time we should have pro gressed far enough to say that US I domestic markets are opened." j "Internationally, the process will take longer," says Kahn. He admits that countries have flag carriers to protect, but points to the "good agree ments" which have been obtained with Belgium, South Korea and Singapore as examples of how international markets can be opened up to the benefit of consumers and airlines alike. Even when restrictive agree ments like Bermuda 2 are in force, Kahn thinks that it is possible to negotiate around them. In support of this contention he cites the "small victory" won by the US in March of this year, when the UK was persuaded to modify its stand on the Braniff fare between London and Dallas/Fort Worth. The CAB chairman considers the fare proposed by the British for this route to have been "ridiculously high." The US will not force the rest of the world into agreement imperialis- tically but will try to persuade other countries of the benefits of free com petition . . . We are even willing to give up some sovereignty as long as competition gains." As an example, Kahn quotes how the US "bribed" Israel into agreeing to lower trans atlantic fares by offering four extra US points to El Al. He is sceptical of arguments that US carriers would, by virtue of American domestic feeder networks which are denied to foreign airlines, have an in-built advantage in a liberal ised international air transport sys tem. Kahn points out that the same disadvantage applies to US carriers operating out of Europe. Neither is he worried about the possibility of US airlines being "swamped" by subsi dised low-fare and capacity competi tion from state-owned airlines. "The answer to too much competition should not be the re-imposition of un- discriminating Iata-type agreements, but the use of selective countervailing duties by the US." Apart from the implementation of President Carter's "open skies" policy, Kahn's other major preoccupation is IN pressing for a say in the aircraft certification process, the US Airline Pilots' Association is more interested in increasing employment for its members than in air safety, according to FAA Administrator Langhorne Bond. Bond, giving evidence before a Congressional investigating commit tee last week, commented that A!pa was committed to certification of the McDonnell Douglas DC-9-80 with a three pilot crew, and its present cam paign to participate in the certification process was "directed towards that end." Earlier models of the DC-9 are certificated for two-pilot crews, with out a flight engineer. Bond said that outside participation would adversely affect safety. It would also seriously undermine the US lead in world aviation by making US manu facturers' proprietary information available to foreign competitors. the current wave of airline merger proposals in the US. He claims that each merger will be considered on its merits, but is sceptical about their necessity and feels that it will be up to the airlines concerned to prove their case. "It may well be that some mergers are desirable in terms of better service and more efficiency, but I am very sceptical whether they are necessary for carriers and desirable for the public. "They are moves toward protection ism rather than a grasping of com petitive opportunities, and as such represent a diversion of commercial effort. It is up to carriers to prove their case because all are competitors to some degree and certainly potential competitors. If the industry were really open—which it is not yet—and if all the non-scheduled carriers were ready to move in to a freer market, then mergers would be OK. But while the system is being opened up there is a need to' maintain competition." • Chairman Kahn approves of "bucket shops" (travel agencies dealing in tickets at sub-Iata rates) as an ex ample of free enterprise. His current visit to Europe is a holiday with some business mixed in, and he says that he has taken advantage of bucket shops to reduce his travelling ex penses. According to Bond, Alpa's request that the airworthiness decision-making process be opened up so that it could participate "has the appeal of a Lorelei—a sort of Wagnerian mer maid—and the substance of smoke." Earlier, Alpa president John. O'Don- nell had testified before the commit tee. He said that "the FAA doesn't require safety improvements because this might place a manufacturer at a competitive disadvantage or increase the cost of an aircraft." He added that, despite Congressional recom mendations for public participation in the certification process, the FAA con tinued to conduct its business behind closed doors and attempted to balance safety against short-term economic factors. According to O'Donnell, the FAA "still allows manufacturers to largely regulate themselves without critical oversight from the agency." Pilots more interested in jobs than safety, says FAA chief
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