Mr. TIPTON. That virtually is our position, Senator Schoeppel. Several years ago, it is perfectly true, as some gentleman testified yesterday, at least one of the airlines proposed to the Civil Aeronautics Board that it provide reduced rates for the clergy. Since that time, in considering this legislation as a matter of fact, the problems arising out of the selection of one class for special treatment have been considered by the airlines, and I have been instructed by the airlines to appear here and say what I have. Of course, we want to emphasize that this is not the airlines against the ministers. We would certainly not take that position; but it is a much broader point of view of avoiding discrimination with respect to one class. Does that answer your question, Senator? Senator SCHOEPPEL. That answers it in a general way, yes. Mr. TIPTON. Subsidy administration. There is, as the committee knows, an additional amendment proposed by Senator Magnuson which deals primarily with the administration of mail pay and subsidy. In view of the position we have already taken on the provisions of the two bills relating to that subject, we shall not discuss the amend ment. There are two additional problems which we should like to call to the committee's attention. Senator MONRONEY. Your idea is to leave the subsidy separation alone? Mr. TIPTON. Yes, sir. Mr. SWEENEY. Mr. Tipton, there is a second part of the section dealing with section 408. Do you have anything to say on that? Mr. TIPTON. Unfortunately, I am not in position to take a position on that. The airlines are still studying that, and I cannot state a point of view with regard to it. I would hope before the record is closed by letter or other communication to take a position on that. Area certificates. The first relates to the authority of the Civil Aeronautics Board to issue what have come to be known in the industry as "area certificates"; in other words, certificates of public convenience and necessity which authorize operations within or between general areas, rather than between designated terminal and intermediate points. The Board's authority to issue such certificates has been debated off and on for a number of years and the Board has, in some cases-notably cases involving Alaskan carriers-issued area certificates. At the same time, the Board's authority to do so has been hotly contested in other cases. The examiners, in the report recently issued in the large irregular air carrier investigation, concluded that the Board does not have the power to issue area certificates authorizing the performance of charter services. As a result of their conclusion, the examiners recommended that the Board issue exemptions for such operations, in lieu of the certificates applied for. We believe that the question as to the Board's authority to issue area certificates should be settled. Rather than leave it as a subject for litigation, we recommend that Congress clarify the Board's authority by amending the act. Inasmuch as we are not aware of any considerations which would dictate the conclusion that area operations are inherently uneconomic or damaging to the air transport system, we suggest that section 401 (f) of the act be amended to make it perfectly clear that the Board does have authority to issue area certificates. We have prepared a draft of amendments to accomplish that purpose which we shall be glad to make available to the committee for its consideration. Senator MONRONEY. That would be particularly important in consideration of freight, would it not, where you would not have a regular accumulation of freight sufficient for a freight stop regularly, but they would stop on a flag basis? Mr. TIPTON. I think that is particularly important, and particularly in the case of certificating charter operations, where the operator under the certificate is to conduct charter operations. It would be very difficult there to say that he must operate his charter between a pair of points or several pairs of points, because his charters may run in all directions. Consequently, when certificating a charter operation, area specifications might be preferred. Mr. SWEENEY. Would you limit it to charter operations, or would this new authority be quite general? Mr. TIPTON. The amendment which we have drafted, and are still reviewing, for presentation to the committee would be of general applicability and would not be restricted to charters. Mr. SWEENEY. Would it be applicable to the metropolitan helicopter services, or something of that nature? Mr. TIPTON. I have a statement to make on the helicopter services, which I think will answer your question completely. There is one special problem in connection with area certificates which I should like to mention. That concerns the three helicopter operators. Their certificates authorize service over routes between designated points. However, because of the highly experimental nature of the operations and in order to permit maximum flexibility, the Board issued, in addition to the certificates, an exemption under section 416 of the act which would permit the carriers, with the consent of the Post Office Department, to modify their service-patterns within designated areas. Section 20 of S. 1119 might have the effect of terminating those exemptions a year after the effective date of the amendment. Section 23 of S. 308 would permit continuation of the exemptions as long as the helicopter operators do not place in service aircraft having a maximum gross takeoff weight of not more than 12,500 pounds. However, these carriers desire to use larger aircraft as soon as such aircraft are available and, consequently, the effect of S. 308 might also be to terminate the exemptions when such aircraft went into service. Moreover, since these exemptions were issued in conjunction with certificates of public convenience and necessity which are temporary and which will be coming up for renewal, it would be a hardship on the operators to require them to go through separate certificate proceedings simply for the purpose of converting their exemptions into area certificates. This problem can be dealt with rather simply, we believe, from a drafting standpoint and the draft of amendments which we have prepared will take care of the problem. It seems clear that it should be taken care of, to avoid either an unnecessary interference with the helicopter experiment, or the imposition of an additional burden on these carriers. Mr. TIPTON. Does that answer your question, Mr. Sweeney? Mr. TIPTON. The last problem I would like to present to the committee is air traffic control responsibility. There have been increasing signs in recent months that the basic responsibility for providing air traffic control throughout the United States needs to be clarified by law. At the present time, the Administrator is authorized by section 302 of the act to provide facilities and personnel for traffic control purposes. There are many locations, however, at which the military services provide their own traffic control, and, in some cases, the military traffic control extends into areas where there are substantial numbers of civilian operations. As a result, there are overlaps between civilian and military traffic control in some areas, and there are other areas in which the Civil Aeronautics Administrator has, in effect, delegated to the military services the job of providing whatever traffic control is provided. We do not have a sufficiently detailed knowledge of the facts to feel justified in suggesting any specific solution to the problem. We do believe that potentially, at least, the problem is a serious one. It would be our suggestion that the committee undertake to ascertain the facts. from the Civil Aeronautics Administration and the military authorities, and with them in hand determine whether legislative action is required. I am embarrassed, Mr. Chairman, not to be able to suggest a solution in that instance, but we just do not have the facts to do it. That concludes my statement, Mr. Chairman; but I would like to request permission to file for the record a statement commenting on the amendments which have been suggested here. There have been a number of statements presented this week that we have just not had time to analyze and comment on. Rather than request the committee for additional time to testify before the committee, I would like to have permission to put in a memorandum on that subject. Senator MONRONEY. That will be granted without objection. We would also like to know if the committee desires to have you return for further elaboration, we may ask you to appear back again. Mr. TIPTON. I would be very glad to appear again at any time the committee wants me. (The above-mentioned document is to be inserted later by the committee.) Senator MONRONEY. Senator Bible, do you have any questions? Senator MONRONEY. Senator Schoeppel? Senator SCHOEPPEL. No. Senator MONRONEY. Mr. Sweeney? Mr. SWEENEY. Mr. Tipton, I would like to be certain that your additional comments will include comments on those offered by the Air Force. Mr. TIPTON. I would probably do so. I do not have a copy of the Air Force amendments yet. I am sure we will want to comment on the Air Force suggestions. Mr. SWEENEY. I have one fundamental question to ask on your discussion of the position of the airlines as a public utility. How do you square that concept with the statement you made a few minutes ago that you do not feel the law should require the airlines to extend service when the Civil Aeronautics Board finds it desirable to do so? It seems to me that you would accept that as one of the obligations of being classified as a public utility. Mr. TIPTON. I think the obligation of a utility is to serve the area for which he has authority and to serve it well and to provide adequate service for it. The question involved in the extension of service is whether there shall be imposed a further obligation on this particular public utility not only to do that with respect to the services he is voluntarily undertaking to perform but also with respect to the services that may be foisted on him without his consent. It was our thought that even though the carriers have no objection and willingly carry out their obligations on their routes, they have, we believe it is just going too far to say that you must assume those same obligations with respect possibly to very extensive new operations. Mr. SWEENEY. Of course, we have one example now, I believe, of one major airline refusing to put in service to serve intermediate points to 2 or 3 cities upon order of the Board. Mr. TIPTON. I think that is a very special problem, which I am not sufficiently familiar with to comment on. I think it arises out of the form in which the particular certificate was granted which made it a completely uneconomic operation. I think that is a good example of the instance in which a carrier could be directed to operate a route, which its studies have indicated would just not work. Mr. SWEENEY. It has always been my understanding that there is certain power in the Board in the section 401 (h) to modify certificates, perhaps to provide additional services. Mr. TIPTON. I think you are right; I think there are powers in the Board under 401 (h) to amend a certificate to require some additional operations, but I regard that as a very limited power. Mr. SWEENEY. It is your position that the power of the Board should not be extended beyond its present power and that to do so it is not necessary under your concept of the airlines as a public utility? Mr. SWEENEY. That is right, to the extent that the new amendment would go beyond the present power, we believe it goes too far. Senator MONRONEY. Do you have any further questions? Senator SCHOEPPEL. No. Senator BIBLE. No. Senator MONRONEY. Thank you very much, Mr. Tipton. The Committee will stand adjourned until Monday morning at 10:00 o'clock. (Thereupon, at 12:03 p. m., the committee was adjourned to reconvene at 10 a. m., Monday, May 1, 1955.) CIVIL AERONAUTICS ACT AMENDMENTS OF 1955 MONDAY, MAY 2, 1955 UNITED STATES SENATE, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, SUBCOMMITTEE ON AVIATION, Washington, D. C. The subcommittee met, pursuant to adjournment, at 10 a. m., in room G-16, United States Capitol, Senator A. S. Mike Monroney (chairman of the subcommittee), presiding. Present: Senators Monroney, Schoeppel, and Payne. Senator MONRONEY. The Subcommittee on Aviation will be in order. We appreciate very much, Mr. Rothschild, your appearing here before us today and we deeply appreciate your giving us your statement in your own way. STATEMENT OF HON. LOUIS S. ROTHSCHILD, UNDER SECRETARY FOR TRANSPORTATION, DEPARTMENT OF COMMERCE Mr. ROTHSCHILD. Mr. Chairman, I have a statement here which has been filed with the committee and with your permission I should like to read it. Senator MONRONEY. You may proceed. Mr. ROTHSCHILD. The Department of Commerce appreciates this opportunity to present its views with respect to S. 308 and S. 1119, bills to amend the Civil Aeronautics Act of 1938. These bills deal with the promotion and regulation of the aviation industry-a subject of vital importance to the Nation's economy and defense. It is a subject in which this Department has a major interest, both because of our direct operating and enforcement responsibilities in the aviation field, and because of our more general interest in overall transporation policy. Recent trends in air transportation provide renewed evidence of the remarkable vitality and growth potential of this industry. Traffic and earnings are increasing at a rate which exceeds even the more optimistic expectations of a few years ago. Subsidy needs are gradually declining. The dynamic nature of this industry makes it especially appropriate to review periodically the basic statutes in this field, to make sure they are properly adjusted to current conditions. Both of the pending bills propose omnibus revisions of the Civil Aeronautics Act, affecting in varying degree all of the main sections of that law. We believe that each bill contains many desirable provisions. In particular, we favor the general objectives of those portions of the bills which deal with airline subsidy, contract carrier regulation, control over international rates, and the regulation of supplemental air services. |