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United States. Loniess. Senate. Committee all
" Carrano, Science, and Transportation, aroma the

on Ariation.

REGULATORY REFORM IN AIR TRANSPORTATION

HEARINGS

BEFORE THE

SUBCOMMITTEE ON AVIATION

OF THE

COMMITTEE ON COMMERCE, SCIENCE,

AND TRANSPORTATION
UNITED STATES SENATE

NINETY-FIFTH CONGRESS

FIRST SESSION

ON

S. 292
TO AMEND THE FEDERAL AVIATION ACT OF 1958 TO BRING
ABOUT THE PHASED AND PROGRESSIVE TRANSITION TO AN
AIR TRANSPORTATION SYSTEM WHICH WILL RELY ON COM-
PETITIVE MARKET FORCES TO DETERMINE THE VARIETY,
QUALITY, AND PRICE OF INTERSTATE AND OVERSEAS AIR
SERVICES, AND FOR OTHER PURPOSES

AND

S. 689
TO AMEND THE FEDERAL AVIATION ACT OF 1958 TO ENCOUR-
AGE, DEVELOP, AND ATTAIN AN AIR TRANSPORTATION
SYSTEM WHICH RELIES ON COMPETITIVE MARKET FORCES
TO DETERMINE THE VARIETY, QUALITY, AND PRICE OF AIR

SERVICES, AND FOR OTHER PURPOSES

MARCH 25, 28, AND 29, 1977

Part 2

Serial No. 95–10

Printed for the use of the
Committee on Commerce, Science, and Transportation

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1977

88-737 O

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COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

WARREN G. MAGNUSON, Washington, Chairman HOWARD W. CANNON, Nevada

JAMES B. PEARSON, Kansas RUSSELL B. LONG, Louisiana

ROBERT P. GRIFFIN, Michigan ERNEST F. HOLLINGS, South Carolina TED STEVENS, Alaska • DANIEL K. INOUYE, Hawaii

BARRY GOLDWATER, Arizona ADLAI E. STEVENSON, Illinois

BOB PACKWOOD, Oregon WENDELL H. FORD, Kentucky

HARRISON H. SCHMITT, New Mexico JOHN A. DURKIN, New Hampshire

JOHN C. DANFORTH, Missouri
EDWARD ZORINSKY, Nebraska
DONALD W. RIEGLE, JR., Michigan
JOHN MELCHER, Montana

EDWARD A. MERLIS, Staf Director
THOMAS G. ALLISON, Chief Counsel

JAMES P. WALSH, General Counsel
ROBERT E. GINTHER, Professional Stat Member
MALCOLM M. B. STERRETT, Minority Staj Director

JOHN C. KIRTLAND, Minority Staff Counsel
W. DOUGLAS BUTTREY, Minority Staff Counsel

SUBCOMMITTEE ON AVIATION

HOWARD W. CANNON, Nevada, Chairman DANIEL K. INOUYE, Hawaii

TED STEVENS, Alaska ADLAI E. STEVENSON, Illinois

BARRY GOLDWATER, Arizona EDWARD ZORINSKY, Nebraska

BOB PACKWOOD, Oregon JOHN MELCHER, Montana

(II)

CONTENTS

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958

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1015
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Lorenzo, Francisco, chairman, Association of Local Transport Airlines;
accompanied by Edwin Colodny, Allegheny Airlines; Gary Adamson,
Air Midwest; Haymond Rasenberger, North Central Airlines; and
Charles S. Murphy, Frontier Airlines ---

Prepared statement of Mr. Lorenzo..
Prepared statement of Mr. Colodny-----
Prepared statement of Mr. Rasenberger...
Prepared statement of Mr. Murphy -----

Prepared statement of Mr. Adamson.-

Maurer, R. S., senior vice president, general counsel and secretary, Delta

Air Lines; accompanied by James W. Callison, vice president, law and

regulatory affairs..

Letter of April 21, 1977.--

Summary statement.--

Prepared statement.--.

Appendixes I-IV...

Miles, Thomas S., president, Commuter Airline Association of America;

accompanied by Janet St. Mark, executive vice president; John Siebold,

chairman of the board; Paul Jones, chairman, Federal and State affairs

committee; and Theodore I. Seamon, general counsel ----

Prepared statement-

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ADDITIONAL ARTICLES, LETTERS, AND STATEMENTS
Beckman, Robert M., chairman, and Lee M. Hydeman, vice chairman,

American Bar Association, letter of February 6, 1976. --
Fitzsimmons, Frank E., general president, International Brotherhood of

Teamsters, statement-

Kendall, Richard J., attorney, letter of April 6, 1977.

Lorenzo, Francisco, chairman, Association of Local Transport Airlines,

letter of May 2, 1977----

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REGULATORY REFORM IN AIR TRANSPORTATION

FRIDAY, MARCH 25, 1977

U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE AND TRANSPORTATION,

SUBCOMMITTEE ON AVIATION,

Washington, D.C. The subcommittee was reconvened, pursuant to adjournment, at 9:40 a.m. in room 5110 of the Dirksen Senate Office Building, Hon. Howard W. Cannon (chairman of the subcommittee) presiding.

Senator CANNON. The hearings will come to order.

Today we complete our first week of hearings on regulatory reform in air transportation. It has been a very informative and interesting week, and I hope this trend continues throughout the next week and a half.

Our first witness this morning is Arthur Kelly, chairman of the board and chief executive officer of Western Air Lines.

Senator Inouye, we are happy to have you here today.

Senator INOUYE. I regret I could not be here for the hearings. I have my Merchant Marine hearings this morning discussing rebates, but I would like to join you in welcoming the chairman and chief executive officer of Western.

Mr. Kelly, as you know, Western Air Lines has been servicing Hawaii for many years now and is providing the people of Hawaii fine service. I read your statement and it is one of the best I have seen. It is very detailed and I think it will be most helpful to us.

Thank you very much.
Thank you, Mr. Chairman.
Senator CANNON. You may proceed.

STATEMENT OF ARTHUR F. KELLY, CHAIRMAN OF THE BOARD

AND CHIEF EXECUTIVE OFFICER, WESTERN AIR LINES; AC-
COMPANIED BY GERALD O’GRADY, SENIOR VICE PRESIDENT,
LEGAL; AND JAMES MITCHELL
Mr. Kelly. I have with me James Mitchell and Gerald O'Grady.

I will go through my text skipping some part of it for the sake of time, but I will try to highlight when I consider the important items of my comments today.

I am proud of Western's heritage as the oldest continuously operating airline in the industry. As such, we have more years of experience in the domestic airline business than any other carrier.

Staff members assigned to these hearings: Robert Ginther, John Kirtland, and W. Douglas Buttrey.

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