Airlines Pan Proposed Competition Guidelines

The airline industry gave a collective thumbs down to a proposal the Transportation Department says is aimed at ending unfair competition. The Air Transport Assn., which represents the nation’s major carriers, released an array of legal papers, economic studies and personal testimonials that said the policy would stifle airline competition, not promote it. That, in turn, would lead to higher air fares rather than lower ones, the ATA predicted. In April, the Transportation Department announced plans to crack down on airlines that engage in practices aimed at driving start-up carriers out of business. The guidelines include three triggers: when a major carrier adds more flights, sells more seats or offers discount fares to more customers than a start-up carrier could possibly serve. The department promised to block conduct that is not “a reasonable alternative response,” with penalties that include a cease-and-desist order or a fine of $1,100 a day. The ATA and its supporters said terms such as “a reasonable alternative response” were vague and would inhibit competition.