Lost Somewhere Over Capitol Hill: A National Flight PlanSeth Payne
It has been 13 years since Congress decided to get government out of the business of micromanaging the U. S. air-transport system. But Capitol Hill still hasn't reconciled itself to its loss of control over the air lanes. Much of the lawmakers' angst is understandable: The industry they deregulated has run into serious trouble. What's hard to figure is why Congress has done so very little to help fix it.
The crisis is evident everywhere: U. S. airlines have lost $4 billion over the past six months. Eastern Air Lines Inc. has collapsed, and five other airlines have defaulted. The gulf crisis hurt, but problems run deeper. Operating costs and debt are sky high. Airport capacity is perilously inadequate.
Capitol Hill can't do much about costs and debt--it can't save failing airlines. Congress can, however, spur healthy competition by moving to relieve airport overcrowding, while lifting other impediments to the growth of smaller airlines. It can, that is, if it ever looks beyond parochial concerns.
ST. LOUIS BLUES. Take the recent flap over creaky Trans World Airlines Inc. Led by Senator John C. Danforth (R-Mo.), a phalanx of lawmakers loudly protested the proposed sale to American Airlines Inc. of TWA's London routes. The deal, they argued, would gut TWA of its most prized assets, threatening the carrier and its St. Louis hub.
Transportation Secretary Samuel K. Skinner insisted American should have the best routes, and for good reason. TWA has crumbled so badly since raider Carl C. Icahn bought it in 1986 that it isn't likely to survive under any circumstances. Danforth supported a sketchy bid for TWA by Las Vegas financier Kirk Kerkorian and the carrier's unions. Kerkorian vowed to keep TWA intact. But letting one raider take over from another to prop up an uneconomical hub is just pork-barrel politics, not good public policy.
The brouhaha over TWA epitomizes Congress' misplaced priorities. Instead of wringing their hands about protecting jobs (and votes) at home, lawmakers could help a lot by providing fertile ground for smaller competitors--airlines that can pressure United, American, and Delta.
Bills have recently been introduced in the House to aid the cash-strapped industry while trying to eliminate some of the advantages of size. One measure would allow greater foreign equity investments in U. S. airlines under certain conditions. Another would improve other carriers' access to the powerful computerized reservations systems that United and American use to dominate their rivals. But history teaches that forging a consensuson such issues is nearly impossible.
Equally troublesome have been efforts to free up federal funds for airport expansion. Last year, Congress ruled that local airports could levy a $3 ticket tax if they used the proceeds to improve facilities. Meantime, however, a far richer treasure trove--the surplus of the federal Airport & Airway Trust Fund--is being held hostage.
GOLDEN EGG. A 10% federal excise tax on every ticket sold raises nearly $5 billion a year. But since 1982, the fund's income has exceeded appropriations by $11 billion. The reason is simple. Every dollar of trust-fund revenue not spent comes straight off the budget deficit. Congress and the Administration alike see skimping on aviation as an easy deficit-reduction tool.
Crowing about saving jobs may garner votes in the short run. But if lawmakers are really worried about a viable airline industry, they should stop squabbling and start making the hard decisions on how to do some real good.