AIRLINE COMPETITION: WHAT WASHINGTON CAN DO

The Transportation Research Board has concluded its long-awaited report on airline competition. The study, commissioned by Congress and funded by the U.S. Department of Transportation, examines the current competitive environment in the airline industry.

The TRB report meets neither the fondest hopes nor the greatest fears of those on either side of the competition issue. The report finds that deregulation has made the industry more competitive. Yet TRB recommends that the federal government take ''decisive steps'' to preserve and boost competition.

Interestingly enough, the TRB finds that DOT's proposed competition policy is ''flawed,'' and does not recommend the proposed policy. (Remember, it was controversy over this proposal that spawned the report in the first place.)

One hopes that the TRB finding will drive a final nail in the coffin of the DOT competition proposal and turn the attention of policy-makers to issues that can really have an impact on competition - namely, quantum leaps in improved efficiency, access and safety through air traffic control reform.

Fixing the air traffic control system is the one major step that would really improve the competitive environment, foster entry, and greatly enhance the efficiency of the entire air transportation system. If the air traffic control system is not fixed, none of these other ideas will matter much.

At least six federal reports have been issued in the past decade calling for air traffic control reform. Airlines must build large cushions into their schedules to account for air traffic control inefficiencies. These inefficiencies mean that the air transportation system is often operating at half speed.

As FAA Administrator Jane Garvey recently said, airlines might as well be flying some routes with 50-year-old DC-6s.

This issue has been on the aviation-policy radar screen for a long time. But little of real importance ever seems to get done for several reasons:

* Congress seems reluctant to embrace any fundamental change that will reduce its ''daily control'' over the system.

In a hearing on this issue a few years ago, for example, one member of the House Aviation Subcommittee wondered how he would respond to his constituents, after some future accident, if he had voted to change the way the system is financed and operated.

Others stressed their displeasure with the current state of the system and expressed equal displeasure with every specific idea put forth to change things. They seemed content to keep control and hold more hearings.

* The administration lacks a coherent focus on air traffic reform.

The administration did propose a plan in 1994 to create a government corporation to run the system, and has proposed a Performance Based Organization this year. In neither case was Congress or any element of the industry enthusiastic.

In the meantime, the administration has pursued its proposed competition policy as a way of addressing mounting complaints about access and inefficiency. This is the policy the TRB brands as flawed.

* And what about the industry? It doesn't exactly have clean hands on this topic.

Recent speeches by Gordon Bethune of Continental, Gerald Greenwald of United and Herb Kelleher of Southwest favoring fundamental change were welcomed. Each pledged the best efforts of the airline industry to push for real change.

But the record of the industry in supporting air traffic control reform is spotty, at best. When the National Airline Commission called for air traffic control reform in 1993, the airlines publicly endorsed the call but, privately, made it clear that tax reductions and regulatory reform issues were the industry's real interests.

One example: An airline lobbyist recently stated in a speech that air traffic control delays were his company's biggest problem. Yet, in 1993 he told some of my airline-commission colleagues that air traffic control reform was not a priority for his company. The airlines cannot have it both ways. Their commitment must be visible, vocal - and real.

The good news is that we have another report stating that the basic competitive structure of the airline industry is sound, and that the way to increase access is to change antiquated rules and improve infrastructure.

The most important piece, however, is fixing the air traffic control system. We must modernize it in the short run, while re-structuring it so that it is capable of financing long-term needs.

There isn't a competition policy that can be written, or a capacity system that can be devised, that will overcome our failure to act on fundamental air traffic control reform.

For the full story: Log In, Register for Free or Subscribe