Airlines to Get Immunity to Act to Cut Flight Delays
In an effort to reduce the serious and increasing delays affecting U.S. airline passengers, the government plans to give airlines immunity from antitrust laws to allow them to talk about schedules, the Department of Transportation announced Wednesday.
Secretary of Transportation Elizabeth Hanford Dole, in announcing the action, said also that the agency plans to determine whether the airlines “routinely misrepresent their schedules to consumers,” thus contributing to the delays.
“The department proposes to grant antitrust immunity to the airlines to permit them to conduct joint discussions aimed at adjusting schedules to reduce delays,” Dole said. “I hope this action will encourage the airlines to move some flights to less congested times and reduce delays.”
A high-ranking official of the department who refused to be identified by name said in an interview Wednesday that the Justice Department was not consulted on the antitrust aspects of the action. The Transportation Department has authority for the move under the Civil Aviation Act, the official said.
Airlines and other interested parties, such as members of Congress and consumer groups--as well as the Justice Department, if it desires--have 15 days to file objections or other comments. Then, the department will have 10 days to challenge those objections. As a result, it is expected that the airlines’ schedule talks could begin in about a month “if everything goes smoothly.”
However, most large carriers, although they refused to comment on the proposal Wednesday, are expected to oppose such talks. One industry source, who asked not to be identified, said that, when talks of the type now proposed were held in 1984, most airlines “went kicking and screaming to the table.”
“It was not in the spirit of deregulation,” he added. “We did not want the government to be doing our scheduling.”
However, the previous situation was somewhat different. At that time, the airlines asked for the immunity only because the Federal Aviation Administration had warned them that, if they did not act to resolve the delay problem themselves, the government would impose flight restrictions at airports.
Fare Rise Held Possible
Scott Drysdale, airline analyst with the San Francisco investment firm of Birr, Wilson & Co., said such talks could easily lead to higher airline fares.
“If one can arrange airline scheduling in collusion with other airlines,” he said, “that is an effective way of controlling supply and demand within the market, which is an indirect way of setting prices. It is clearly not in the best interests of competition. If the government is concerned about congestion, a much better way to deal with the delay situation is to put airport landing rights up for bid . . . .”
A spokesman for American Airlines said that, although airline executives had not seen the Department of Transportation’s order, “our response, as always, is to welcome any effort to improve the nation’s airport transport system. . . . But we do not agree that the problem is exclusively one with the airlines. It is not in our best interest to operate with delays. That costs us money and consumer good will.”
Order to Be Studied
William F. Bolger, president of the Air Transport Assn., the industry trade group, said that his organization and the airlines will study the order “to determine whether the proposed actions will lead to alleviating the inordinately high incidence of delays. . . . But what must be accomplished on a long-term basis is to have a system which will accommodate not only current demand but also the (expected) added growth in commercial aviation.”
Dole said the Transportation Department will also investigate to determine whether and how airline scheduling processes contribute to the delays. The investigation, which will ultimately include 13 airports that have serious delay problems, will begin with Atlanta’s Hartsfield Airport. A department spokesman said Wednesday that San Francisco will be investigated but that Los Angeles International Airport is not one of the airports to be studied.
The department’s announcement said flight delays have increased “substantially” in the last year “to the increased frustration of the traveling public.” At the 22 busiest airports, it said, 387,000 flights were delayed in 1986, compared to 295,000 in 1985.
Although an estimated 65% to 70% of the delays were related to weather, it said that “there is increasing evidence that, at many busy airports, airlines are scheduling more operations at peak hours than the airports can handle in good weather.” A “delay” occurs when a plane arrives or departs more than 15 minutes late.
Previous Immunity
Similar immunity from antitrust laws was granted to the airlines in September, 1984, after delays had plagued travelers for most of that year. The talks were aimed at adjusting flight schedules at six busy airports--three in the New York metropolitan area and airports in Atlanta, Chicago and Denver. The immunity was granted then by the now-defunct Civil Aeronautics Board.
The 1984 talks “significantly helped to alleviate the delay problem at the time,” the Department of Transportation said Wednesday.
Dole said the department’s Federal Aviation Administration will provide technical support, using computer traffic models, to help airlines adjust their schedules to avoid congestion.
She said that, over the long term, airline delays will be alleviated by programs initiated by her department, including a $12-billion effort to modernize and increase the capacity of the nation’s air traffic control system. Funds for that program are coming from an 8% surcharge now imposed on passengers on domestic fares and $3 on international flights.
