Flight Transportation Laroratory Air Service to Small Communities Directions for the Future Final Report of the Workshop on Low/Medium Density Air Transportation

&%$>£dF*

FLIGHT TRANSPORTATION LARORATORY AIR SERVICE TO SMALL COMMUNITIES DIRECTIONS FOR THE FUTURE FINAL REPORT OF THE WORKSHOP ON LOW/MEDIUM DENSITY AIR TRANSPORTATION

M.I.T. FLIGHT TRANSPORTATION LABORATORY

February, 1974 Edited by Joseph F. Vittek, Jr. This report was prepared under joint NASA/ DOT/FAA Contract No. NASW-2524. The views expressed herein are not necessarily the official opinions of the sponsoring agencies. Most photographs courtesy of Lou Davis, Director, Public Relations, Air Line Pilots Association, Int'l.

Portions of this report may be quoted without permission when credited. FLIGHT TRANSPORTATION LABORATORY MASSACHUSETTS INSTITUTE OF TECHNOLOGY CAMBRIDGE, MASS. 02139 TABLE OF CONTENTS

Executive Summary The Workshop 5 Summary of Recommendations and Comments 5 Epilog 10

Introduction The Workshop Concept 12 The Workshop on Low/Medium Density Air Transportation 13

Background Information The Federal Program 14 Subsidy 15 Development of the Carriers 17 Industry and Market Structure 23

Workshop Report National Transportation Policy Issues 27 National Air Transportation Policy Issues 32 Low/Medium Density Air Transportation Policy Issues 39 Technology Issues 43

Comments and Minority Views Modified Workshop Recommendations 50 Comments on Workshop Recommendations 53 Comments on the Text 64

Epilog 67

Appendix A Keynote Speeches ' 69

Appendix B Panels 69

Appendix C Participants 72 V, -.g, EXECUTIVE SUMMARY In the decade between 1962 and 1972, The recommendations which resulted certificated air service was deleted at about from the Workshop are documented in this 250 points in the United States. In some of report and, although not unanimous in all these cases, the service was no longer cases, they do represent the majority con- needed because of improved highway ac- sensus. Significant comments and minority cess to communities of interest. In other views are also presented, as is a concluding cases, the rapidly emerging commuter car- epilog written by the Workshop Director re- rier industry replaced certificated carriers at flecting upon the overall impact of the Work- marginal points. However, in many cases, shop and anticipated future results. the cities were left without adequate trans- It is hoped that this discussion and the as- portation. In addition, many cities that have sociated recommendations will provide never received air service now face a similar valuable input to transportation planning at plight. the national, state and local levels, par- The federal government, through the cre- ticularly for low and medium density areas, ation of the local service air carriers in the and that the referenced agencies will accept mid-1940s and their subsequent subsidy, them as constructive suggestions for further has attempted to provide better air service consideration. to the nation's smaller towns. But the questions persist: Is the federal subsidy program effective? Should federal regulation and/or Summary of Recommenda- subsidy be extended to commuter carriers? tions and Comments Indeed, should the federal government subsidize this type of service at all? What na- The issues raised at the Workshop were tional goals does subsidy support? Perhaps classified in four major topic areas: National most important, who should be formulating Transportation Policy Issues, National Air the answers to these questions? Transportation Policy Issues, Low/Medium Density Air Transportation Policy Issues and Technology Issues. This report follows the The Workshop same topical structure. In August, 1973, the Flight Transporta- NATIONAL TRANSPORTATION POLICY tion Laboratory of the Massachusetts Insti- ISSUES tute of Technology hosted a month-long The first issues considered were broad seminar at Aspen, Colorado, on the prob- policy concerns that affect all modes of lems of providing air service to low and transportation in all areas of the country. medium density points. This Workshop was These have a direct impact on low/medium jointly sponsored by the National Aero- density markets even if not specifically ad- nautics and Space Administration and the dressing their problems. Although some Department of Transportation. More than Workshop participants felt that the current 175 participants, including 130 panelists and and often conflicting profusion of federal speakers, represented various interest statutes, regulations and programs repre- groups and points of view. sented a Congressional policy of "non- Two predominant philosophical positions policy," the majority felt that a clear national held by participants often led to conflict. In policy for transportation was needed and general, federal officials and academics fa- that the federal Department of Transporta- vored policies that relied heavily on market tion had failed to provide leadership in forces. Government intervention was con- formulating such a policy. Therefore, the sidered necessary only for limited specific Workshop recommended that purposes. In contrast, state, local and industry participants often relied on the public The DOT should take an active, aggres- policy issue of a perceived need for service. sive role in the formulation and coordina- Inability to provide that service indicated tion of integrated national transportation that the market was not working and govern- policy. In taking the lead in transporta- ment intervention was required. This dichot- tion planning and coordination, the DOT omy is frequently reflected in the difference should consider modal economic effi- between the majority and minority views. ciency (including all private and public costs and benefits), modal energy re- service to the nation's smaller communities, quirements and consumer desires in recommending that formulating policy. DOT, as part of its planning process, The Workshop felt that a clear statement should attempt to strike a better balance on subsidy should be included in this policy. between rural and urban transportation Based on a conclusion that the rationale for services. present subsidy programs is often unclear The federal government should support and inconsistent and that the major benefit state or regional demonstrations for im- of these programs accrues more often to a proving transportation services to small particular area than to the nation as a whole, communities. the Workshop recommended that Several federal agencies responded that 1. Federal subsidies to transportation this was not appropriate for the federal should be paid only when government or, if it were, some other A. There is a clear national policy that agency, not theirs, should be responsible. the subsidy payments encourage The Workshop could not identify popula- or support; or tion dispersion as a clear national goal. Nor B. The subsidies are limited experi- was it clear that federally subsidized trans- ments to demonstrate the poten- portation would actually disperse popula- tial of new concepts to the private tion, although better transportation might market, which would take over im- prevent further concentration. It was there- plementation if the demonstration fore recommended that were successful. 2. This policy toward transportation sub- The DOT, with other government agen- sidies should apply to all modes. cies, should determine if in fact population dispersal is a valid national goal and Several comments were received on this how transportation aids or detracts from recommendation, with two major thrusts: that goal. 1. Since the nation is made up of individuals who live in local areas, what benefits those NATIONAL AIR TRANSPORTATION individuals benefits the nati6n as a whole; POLICY ISSUES and 2. There are specific national benefits that Although again the issues are broader accrue to the nation as a whole from good than low/medium density areas, there is a local transportation systems (e.g. popula- direct connection. The Workshop concen- tion dispersion). trated on the impact of national policy to- The Workshop did not totally disagree with ward air transportation as it affects the three these comments. It supported improved aviation segments that primarily serve the smaller communities: general aviation, local of locals to trunk status as present ex- service airlines and commuter carriers. cess capacity is absorbed with the con- comitant elimination of local service sub- General Aviation General aviation provides sidies and deletion of subsidized points. basic transportation service to smaller communities although it is not "public transpor- It was expected that commuter carriers tation" in the usual sense. But because of would provide service to many of the towns poor data, its true costs and benefits were deleted by local service carriers, although hard to quantify. Therefore, the Workshop local subsidies might be needed to ensure a recommended that commuter's success. The major objection to this recommenda- The FAA and DOT should obtain better tion came not from the carriers but from the statistics on general aviation. The first towns and unions. The Workshop felt both step is to better coordinate existing data sources of objection could be quieted. Once from various fragmentary sources. New the communities realized they might get bet- data acquisition programs should then ter service from a commuter, they would ap- be initiated to provide missing informa- prove. The incentive for the unions would be tion. the long-term potential for higher salaries and status that would accompany gradual The Workshop did agree in principle with expansion into trunk markets and larger air- the DOT Cost Allocation Study that some up- craft. ward adjustment in general aviation's con- The biggest concern of all parties was tribution toward the cost of the air system perhaps not so much the transition, but that was justified. The exact amount could not be the transition be orderly. determined until better statistics were available. The resulting recommendation was Commuter Carriers Although the growth of that this industry has been great over the past decade, it still faces many problems that The evidence seems strong, even with must be resolved if it is to play a significant faulty statistics, that some upward role in the nation's air transportation system adjustment of general aviation payments and particularly to improve service at small is in order. But this should be gradual in communities. Perhaps the major problem is order to avoid unnecessary disruption of the commuter's unequal treatment by other activities that rely on the present system. members of -the air community. Commuter schedules are not integrated with the certifi- This was disputed by the Aircraft Owners cated carriers in the Official Airline Guide. and Pilots Association. Tariffs are not published. Airports often rele- gate commuters to far corners of the field or Local Service Airlines Although far from terminal complex. Even government agen- trunk status in terms of size or resources, cies classify commuters as "general avi- the local service airlines have been moving ation" for many purposes. Therefore, the in that direction over the last decade, de- Workshop recommended that leting or reducing service at smaller communities. Their future success would seem The DOT, FAA and CAB should officially to depend on continued expansion and recognize and endorse commuters as a growth, not on small city service. Through a vital segment of air transportation not es- series of route awards and policy changes, sentially different qualitatively from cer- the CAB seems to have encouraged this tificated air carriers. The federal agencies transition. With all these factors in mind, the should impress these attitudes upon Workshop recommended that rather than state, local and airport authorities as well fight this trend and force local service car- as influence the certificated carriers to riers to serve markets they no longer are adopt more cooperative arrangements suited to serve with commuters. There should be a total and complete dis- The CAB should announce a policy of al- association of commuters from general lowing gradual expansion and evolution aviation and air taxis, including separate regulations where appropriate. subsidy should be paid at the local, not federal, level (at local discretion, the use of The Workshop was impressed by the federal revenue sharing funds would be ap- commuter industry's growth and felt that its propriate). freedom from regulation played an important Realizing that this would probably be un- part in that success. Able to enter markets, popular and might not gain political ac- terminate service and set rates without ceptance, the Workshop felt that as an al- costly regulatory proceedings, commuters ternative, new forms of federal subsidy have the flexibility to experiment and quickly should be tried that would require local par- respond to market conditions. Therefore, it ticipation. As a goal of such a program, the was recommended that Workshop recommended that

The commuter industry should retain its Under any new federal subsidy proposal, unregulated free competition status. the government should concentrate on minimizing costs for a specified service The CAB's right to exempt commuters is level or maximizing service for a speci- currently being challenged in the courts. In fied subsidy level. anticipation of a decision adverse to the Workshop's position, the recommendation TECHNOLOGY ISSUES also stated that The final major topic area was tech- If regulation is forced upon the industry nology. In general, it was felt that tech- by the courts, Congress should enact nology was not a major component of the specific legislation to exempt commuters solution to providing better service to small from regulation or amend the Federal communities. Aviation Act of 1958 to allow the CAB to insert conditions in commuter certifi- Aircraft The Workshop was asked whether cates that essentially retain the present the federal government should support the Part 298 in another form. design and development of a new jet aircraft specifically designed for small community LOW/MEDIUM DENSITY AIR TRANS- service. The Workshop found that such an PORTATION POLICY ISSUES aircraft would not be useful in the low density subsidized markets, but could im- Perhaps the most controversial recom- prove local service carrier profitability in mendation of the Workshop was that medium density markets. But since such markets are already profitable and receive Direct federal subsidy of air service to good service, no justification for federal in- small communities should be eliminated volvement was found. Other public policy and the responsibility for subsidizing air concerns such as foreign trade and interna- transportation, where necessary, should tional leadership were raised to justify fed- be delegated to the lowest governmental eral support of such an aircraft, but were not level capable of assessing the costs and discussed in detail. Therefore, the Work- benefits of the service. shop recommended that After discussing various rationales for Although foreign trade and international transportation subsidy, the Workshop felt leadership concerns might justify gov- several justified the commitment of public ernment subsidy of the design and de- resources. However, none justified the velopment of a family of new small jet direct commitment of federal resources. Al- aircraft, such a program cannot be justi- though there were some general benefits to fied on domestic considerations alone. small community air service that accrued at the national level, they were not different The major objection to this position was from benefits arising from many non-sub- voiced by those who felt higher profits on sidized activities. The major recipients of the medium density routes could offset subsidy unique benefits of this air service were the need and that the resulting reduction in residents of the area receiving the service. operating subsidies would justify the use of Therefore, in the view of the Workshop, federal funds to support design and development of the aircraft. The Workshop felt that, rier costs. The recommendation was that though this was true, such cross-subsidization could be achieved more efficiently by The FAA should develop separate ap- route awards or fare increases. The Work- proach procedures for large and small shop did endorse continued government- aircraft. sponsored research that might be applicable to future aircraft. In particular, it was An additional concern was the wake vor- recommended that tex hazard that may accompany the future generation of powered-lift STOL aircraft. It Studies are needed on "design-to-cost" was recommended that engineering, new manufacturing techniques and new materials to stress low The FAA should investigate the use of cost and reliability rather than high cost wake vortex size as a criteria for aircraft technology. separation rather than weight or STOL capability or speed. Air Traffic Control As long as the use of the federal airway and navigation system was Operations at Smaller Airports Presenta- free, people wanted more of everything. tions indicated that commuter carriers often Now there is a chance that user charges experience worse ATC problems at small might be imposed and operators, particu- uncontrolled airports than at hubs. A lack of larly in low density areas, are questioning local procedures and interference between what is really needed. The fear expressed at commuters operating IFR and general avi- the Workshop was that the complicated ex- ation operating VFR were the major causes pensive ATC system designed for high traffic of ATC delays. Even if local procedures corridors would be imposed on low density were implemented, they would not be widely areas and operators would have to pay for a known and would thus create a hazard un- system that far exceeds their needs. There- less the information were widely distributed. fore, the Workshop recommended that Therefore, the Workshop recommended that The FAA should not extend the full high ATC centers should initiate letters of density ATC system to low density agreement and local procedures at low points and it should drop services that density terminals and the FAA should users do not wish to support financially. publish local procedures in the Airman's The FAA should balance safety with cost Information Manual. effectiveness in low density areas. A final recommendation, applying equally The Workshop did not intend that safety to hubs and low density airports, was that be compromised, but that safety dollars be spent where the highest return would be The FAA and NASA, guided by NTSB realized and that features not be added to statistical studies, should conduct ad- the system that had little use in low density ditional research into the causes of ap- areas. proach and landing accidents. The potential use of new navigational techniques in low density areas was also ex- Safety A presentation made at the Work- plored and, though more research is shop on military safety coordination pointed needed, the Workshop recommended that out the benefits of a similar civil program. The Workshop recommended that The FAA should move to certificate VLF RNAV for IFR and DOT/TSC should con- Congress should authorize $3-5 million tinue research on DME/DME RNAV and per year for a five-year period to initiate a VLF hybrids. joint civil coordinating group for aviation safety. Operations at Larger Airports Because of the short field capability of many commuter aircraft, they could potentially be separated This group would not supplant other agen- from the regular traffic flow, increasing cies or their responsibilities, but would pro- capacity at the airport and speeding up vide a focal point for formal information ex- commuter operations thereby lowering car- change and coordination to avoid duplication. In addition, it could recommend projects to participating agencies. An example of how such a group could be used arose in the commuter safety area. No one actually knows what the commuter safety record is since it is statistically compiled in the same category as air taxis. Also, commuters do not have the resources of the large airlines to devote to safety. Therefore, the final recommendations of the Workshop were that The NTSB should initiate a program to improve published safety statistics on commuter airlines. NTSB should perform statistical research on accident causes in commuter airlines and the recommended joint civil coordinating group for aviation safety working with the NATO should assist the commuters with safety education, organization for safety and safety programs based on the NTSB results.

EPILOG After the draft report was distributed for comments, many letters were received and discussions held with participants and other interested parties. Some recommendations were changed as a result. Some were not changed, but specific comments were noted. After viewing the Workshop itself and the post-Workshop review process, the Workshop Director has concluded that, although many of the Workshop's recommendations may eventually be implemented separately, the desired federal leadership for solving the problems of air service to small communities will not emerge without a Congressional mandate stimulated by state action. In the interim, states must be prepared to go forward on their own with a minimum of federal help and support. >M

rNI kN SI A/ V ^

INTRODUCTION

In 1971, the joint Department of Trans- short-haul market (p. 2-6, emphasis portation/National Aeronautics and Space added). Administration Civil Aviation Research and In response to this policy statement, Development Policy Study (CARD) Report NASA has undertaken a number of technical identified the problems of providing air serv- and systems studies as outlined by George ice to low density, short-haul markets as the W. Cherry, Deputy Associate Administrator third most pressing difficulty facing the for Aeronautics and Space Technology United States aviation industry. In the words (Programs), in his 1972 testimony before the of the report, Subcommittee on Aeronautics and Space Low-Density Short-Haul: While lower Technology of the U.S. House of Repre- in priority than noise and congestion, sentatives Committee on Science and Astro- solutions to the problems of low- nautics. density, short-haul service will be im- In FY 73, NASA programs relating portant to the future of civil aviation and specifically to low-density, short-haul to its ability to contribute to the goals~of will fall into three main categories: the Nation. This service of civil aviation a. Continuing an effort begun in FY can be a positive force in future region- 72 which is identifying technology prob- al development. In order to obtain a lems associated with providing eco- better definition of the problems and po- nomical air service to sparsely-settled tential of low-density, short-haul serv- regions. ice, a program should be established to b. Continuing an effort begun in FY determine accurately market sensitivi- 72 which will investigate and develop ties to changes in service, fare, fre- very-low-frequency navigation tech- quency, and equipment. A government- niques for en route and terminal area sponsored market demonstration is re- navigation for civil aviation, especially quired for this purpose. Concurrent and low-density, short-haul service. integrated with this demonstration, the c. Increasing knowledge of eco- Government should fund studies for the nomic and operational factors which conceptual design and analysis of eco- bear upon technology and aircraft re- nomical vehicles for the low-density, quirements. Studies will be undertaken

11 to fit existing and hypothetical aircraft The Workshop Concept into realistic low-density, short-haul arenas and to identify where and why Workshops have been used for many economic short-comings appear. Those years to bring together a group of people that can be improved by technology will knowledgeable on a particular subject for an be identified. In addition, programs will intensive period of discussion and inter- be undertaken to investigate: ride- change of ideas. Guest speakers make pre- quality improvement as it influences sentations on current activities, research aircraft design and passenger accept- projects, operational problems and the like. ance, crosswind landing characteris- As many representatives of different per- tics, and operational techniques. spectives and viewpoints as can practically As part of NASA's program, the Flight be expressed are invited to participate at all Transportation Laboratory of the Massachu- levels of the program. Some participants setts Institute of Technology studied Aircraft come for only one session, some attend the Requirements for Low/Medium Density entire program. A core group provides con- Markets (FTL Report R73-4). In the course tinuity throughout and is responsible for col- of this study, M.I.T. staff visited local serv- lecting all the viewpoints and formulating the ice and commuter airlines, aircraft manu- issues and recommendations at a final facturers, industry and trade associations presentation. This presentation is then con- and government organizations at the fed- verted into a report by the Workshop Di- eral, state and local levels. As more people rector and staff and a draft is distributed to were contacted and preliminary results dis- all participants for comments. The final re- cussed, it became apparent to both M.I.T. port represents the consensus of the prob- and NASA that technology was only one lems and issues raised and recommended aspect of the problem and that a much actions. If there are strong divergent opin- broader program was needed. As a reslilt, ions, these are also documented. the Offices of the Department of Transpor- The length of the Workshop is dictated by tation's Assistant Secretaries for Policy, the complexity of the problems addressed. It Plans and International Affairs, Systems De- requires one week to form the consensus velopment and Technology and the Federal and prepare the final briefing which serves Aviation Administration's Quiet Short-Haul as an outline for the report. From one to Air Transportation Systems Office joined three weeks may be required to present all with NASA to support M.l.T.'s organization the viewpoints and study them in depth. and management of a summer workshop on An important element is the human chem- the broader problems of air transportation to istry that takes place during the program. the nation's smaller communities. After several days, those who have attended 13 all or most of the sessions begin to shed their institutional personalities and react with the other participants on a more individual basis. Organizational barriers are lessened and eventually the man or woman on the other side of the table is no longer a potential adversary from another agency or company. This "chemistry" is perhaps the most important aspect of a workshop and cannot be forced or rushed. To aid this interaction, a remote but attractive site is chosen. Participants are isolated from the day-to-day pressures of their offices and normal way of life so they can concentrate on the specific problem at hand. They are encouraged to bring their families and to enjoy the recreational aspects of the site when the workshop is not in session. The Workshop on Low/ Medium Density Air Transportation

This Workshop was designed to fit the pattern described. Over 175 participants, panelists and speakers attended all or part of the program. Throughout a three week period, 130 presentations were made, then government and other groups and a final briefing was presented at the end of comments and suggestions were noted. the fourth week. (Thirty speakers and After all parties had an opportunity to panelists submitted their remarks for the respond, the draft report was revised based record. These are reproduced in a separate on the discussion, briefings, phone calls and volume.) Participants came from universi- letters received. The final draft is re- ties; federal, state and local governments; produced in this report and represents a regional planning groups; airports; airlines; majority viewpoint on the issues discussed aircraft manufacturers and suppliers; equip- and the recommendations made. ment manufacturers; unions; consulting There were a number of divergent companies; civic action groups; the railroad minority opinions expressed. The most perti- industry; the banking community and other nent of these comments are also repro- sectors. They included career civil servants, duced in a separate section of this report. lawyers, regulators, planners, engineers, Taking a strong position and citing strong financiers, economists, marketing men, dissent was considered preferable to modi- pilots, public relations men, etc. (All speak- fying the draft report to suit everyone, ers, panelists and participants are listed in thereby creating extensive compromise and the appendices to this report.) Over 20 dilution. people attended for a period of two or more In conclusion, the Workshop Director has weeks and participated in the discussion written an epilog commenting on not only groups and working sessions that led to the the Workshop itself, but also the reactions of final briefing. others to it as perceived during the dis- After the briefing, a draft report was pre- cussions and briefings that followed the dis- pared by the Workshop Director and sent to tribution of the draft report. He also dis- all participants and other interested parties cusses what actions may be expected after for comments and review. Briefings based viewing the entire Workshop-review process on the draft report were presented to in perspective. BACKGROUND INFORMATION In 1971, the problems of providing air subsidized by the carriers' profitable long- service to low density, short haul markets haul markets. The trunks claimed that "skip- were stated to be the third most pressing is- stop" schedules would provide service at sue facing the U.S. aviation industry (sur- the small communities in accordance with passed only by noise and congestion).1 traffic volume while their use of comfortable More recently this problem was again high- modern aircraft and the possible provision of lighted in the 1973 Presidential Aviation Ad- single-plane through-service would stimu- visory Commission report.2 late demand at many small points.10 These The major concern is that the number of same arguments were later advanced by the points in the United States receiving certi- local service carriers as justification for re- ficated service is decreasing. In 1961 there laxing conditions on their certificates and for were 729 certificated points.3 By 1971 this the use of larger aircraft. The CAB finally number had decreased to 479.4 About 100 adopted that very policy as well as awarding of these points were marginal from the be- local service carriers profitable long-haul ginning and were never able to generate the routes as part of the route strengthening 5 passengers per day upon which their cer- program of the mid-sixties. tificates had been conditioned.5 Commuter The examiner suggested in 1943 that if carriers have replaced certificated carriers special feeder carriers were to be estab- in 42 of these markets and serve a total of lished to provide local service, consequently 174 airports not receiving certificated serv- limiting the growth of the trunks in those ice, 6 But many of these commuter markets markets, then a balancing limitation should are near large cities. The area of concern is be imposed on the feeder carriers. They the smaller, isolated point. The Aviation Ad- should be strictly limited to feeder service visory Commission estimates that 300 to 500 and "an inclination to grow in the other di- isolated communities exist (those requiring rection, that is, to nonstop smaller cities and more than a one-hour drive to certificated reach out for big city traffic to the detriment air service) and are candidates for subsi- of other carriers should be discouraged at dized air service. 7lt is difficult to estimate the outset."11 the total bill for such a program. A similar Initial CAB discouragement was in the proposal made in 1943 that would have pro- form of operating restrictions in the local vided direct air service to all urban com- carrier certificates. These operating restric- munities was estimated at $109 to $150 mil- tions reflected the two theories concerning lion dollars annually (in 1943 dollars.)8 Infla- traffic flows that existed in 1943. An analysis tion would more than double that amount of rail and air traffic showed that "the pre- today. ponderant movement of the traffic of small communities is to and from large cities, The Federal Program rather than between numbers of small

Local air service to small communities 1. National Aeronautics and Space Administra- began with the Civil Aeronautics Board's In- tion, Department of Transportation. Civil Avia- vestigation of Local, Feeder, and Pick-up Air tion Research and Development Policy Study Service initiated in March, 1943, and since (CARD) Report, DOT-TST-10-4, NASA-SP-265 (1971), p. 2-6. then the CAB has instituted a number of 2. Aviation Advisory Commission. The Long policies in the attempt to place these serv- Range Needs ol Aviation (1973), p. VI-144. 9 ices on a sound economic basis. Many of 3. Civil Aeronautics Board. Annual Report, 1962, the CAB policies and suggestions for solving Annex 4 (1962). the local air service problem were con- 4. Civil Aeronautics Board. Annual Report, 1971, Table 1 (1971). sidered in the original 1943 investigation and 5. Anon. Flight Magazine, Vol. 56 (June, 1967), have been revived periodically through the p. 67. years. 6. The Long Range Needs ol Aviation, Supra, p. VI-144, 146. During that investigation, the already cer- 7. Ibid., p. VI-146. tificated trunk carriers proposed that small 8. Civil Aeronautics Board. Investigation of Local, community air service should be ac- Feeder, and Pick-up Air Service, 6 CAB 1 (1944), p. 49. complished on a "self-sufficient" basis by 9. Civil Aeronautics Board. Docket No. 857, Ibid. authorizing additions to existing routes. 10. Ibid., pp. 29-30. Service to the new points would be cross- 11. Ibid., p. 55.

14 cities."12 On the other hand, bus data indi- advanced aircraft. In 1953, an application cated that on relatively long routes con- by Pioneer for increased subsidy due to the necting two major market centers a sub- operation of Martin 202s was disallowed by stantial amount of the traffic was of an "on- the Board and may well have been one and-off" nature travelling between inter- factor leading to that carrier's later merger mediate points.13 The conclusion was that a with Continental.18 However, following reasonable feeder service would cater to permanent certification in 1955, the CAB re- both types of traffic, travelling between two laxed its position and the local service car- large terminal cities with a number of inter- riers began to operate substantial numbers mediate points. Nonstop service was proof more modern aircraft in place of the hibited between two points designated on DC-3s used previously. These aircraft were the certificate of an existing trunk carrier.14 larger than the DC-3s and more expensive to Although the examiner recommended that operate, requiring more passengers to break feeder carriers have some degree of leeway even. Without a suitable DC-3 equivalent, in arranging skip-stop schedules the CAB the carriers started to decrease and dis- initially required feeder carriers to stop at continue service at "marginal" communities every designated point. This has been which could not support the larger aircraft. gradually liberalized but, even with subse- The acquisition of jet aircraft beginning in quent segment realignments, this policy re- the mid-sixties accentuated the problem of mains evident in most local-service routes. small-city service and accelerated the with- The 1943 investigation also found that a drawal. specially designed airplane was necessary for local service. The requirements en- Subsidy visioned were for a 12 passenger (3,000 Ib. payload) multi-engined aircraft with a 150- In section 406 of the Civil Aeronautics Act 180 mph cruising speed-and operating cost the CAB is directed to fix and determine of about 40 cents per aircraft revenue "fair and reasonable rates of compensation mile.15 Twenty years later in 1963 the for the transportation of mail by aircraft." Association of Local Transport Airlines This must be done in such a manner as to (ALTA) Small Plane Design Committee is- "maintain and continue the development of sued requirements remarkably similar call- air transportation to the extent and of the ing for an 18 passenger airplane, a cruise character and quality required for the com- speed of greater than 300 mph, pressuriza- merce of the United States, the Postal Serv- tion (which did not exist commercially in ice, and the national defense." From 1938 1943 on any aircraft) and operating costs of until October 7, 1953, the Postmaster Gen- 40 cents per aircraft mile (although the CAB eral paid the total compensation to meet the felt that 60 cents was a more reasonable "needs" of the air carriers as calculated by goal).16 Aircraft of this type finally became the CAB. Since then, airmail service com- available in the late sixties with certification pensation and subsidy have been formally of turbine-powered DeHavilland of Canada separated with the CAB responsible for Twin Otters and Beech 99s, which have sub- payment of the subsidy element through sequently played an important role in the Congressional appropriation. rapid development of the commuter carriers Prior to January 7, 1961, the CAB de- who operated 171 of these aircraft in termined all subsidy needs on an individual 1971.17 The Twin Otter was primarily de- carrier basis. Due to the rapid expansion . signed for service in rough terrain and isolated areas by bush pilots. Its commercial 12. Ibid., p. 14, success in the U.S. was almost an accident. 13. Ibid., p. 18. Otherwise, no aircraft has ever been specif- 14. Ibid., p. 55. 15. Ibid., p. 41. ically designed to meet the requirements of 16. CAB Bureau of Operating Rights Staff Study. local air service. As a result, local service Service to Small Communities: Part II (March, carriers have used aircraft unsuited to the 1972), p. 18. markets which the carriers were certificated 17. Civil Aeronautics Board. Commuter Air Car- rier Traffic Statistics — Year Ended Decem- to serve. ber 31, 1971, Table 15 (August, 1972). The CAB discouraged early attempts of 18 Service to Small Communities: Part II, Supra, the local service carriers to acquire more p. 12.

15 16

and continuous modification of the local years ago, the local service subsidy was $67 service carriers' route structures after their million as compared to approximately $60 permanent certification, this method proved million in 1973 without adjustment for infla- inappropriate for these carriers, often leav- tion.^ The subsidy bill per passenger was ing their subsidy rate undetermined for long $8.44 ten years ago as compared with $3.10 periods of time. This impaired the carriers' per passenger in subsidized service today as ability to operate efficiently and plan for the estimated by the local service industry. 26 If future. Effective January 1, 1961, the Board all passengers carried by local service car- established a "class subsidy rate" based on riers are considered, the subsidy bill is only the average costs of the local service in- $1.90 per passenger or 1.3 cents per pas- dustry and standard investment criteria de- senger mile.27 During approximately the veloped by the CAB from analysis of the car- same period, revenue passengers increased riers' requirements. 215%, revenue passenger miles 258% and Since its adoption, the class subsidy rate available seat miles 217% (all in subsidy formula has been modified many times.19 eligible service alone).28 Like those of its predecessor, the objectives On the other hand, the CAB staff study on of the present class rate are "to relieve the service to small communities estimated the industry's still critically depressed financial average subsidy payment per passenger at condition; to equitably distribute the subsidy smaller points to be between $21.23 and payments consistent with the changing $23.92 per passenger, the range of the needs of the individual carriers; and to average fare paid out-of-pocket by a local establish a class rate formula that will service passenger. For some individual identify the subsidy related to service at and cities, the estimate ran much higher, peak- between communities and provide positive ing at $206.13 per passenger at Martins- incentives for the local service carriers to burg, West Virginia.29 In contrast, com- maintain adequate services to the small muter carriers, with their lower overhead communities."20 A further objective is to and smaller aircraft, estimate their average encourage small aircraft service at low- subsidy need at $5 per passenger for all traffic-generating communities.21 those markets in which they are currently In spite of these objectives, the last two losing money.30 (Whether commuters can class rates have not encouraged local serv- maintain their low cost structure as their ice carriers to either improve service at industry matures remains in question.) smaller communities or use small aircraft Citing changes in the small community (although some aircraft experimentation has taken place). Cross-subsidization through 19. Civil Aeronautics Board. Subsidy lor United route strengthening has also proven inade- States Certificated Air Carriers (August, 1972), quate and, although three local service car- pp. 9-10. 20. Civil Aeronautics Board. Docket No. 23682, riers earned enough in 1971 on their in- p. 2. eligible routes to provide a degree of cross- 21. Ibid., p. 23. subsidization, the industry is not expected to 22. Subsidy for United States Certificated Carriers, become subsidy free in the near future.22 Supra, p. 5. The only other group of carriers currently 23. Ibid., Appendix VII. receiving subsidy are the Alaskan airlines, 24. Ibid. whose requirements have slowly decreased 25. Rasenberger, Raymond J. Problems and from a high of $9.7 million in 1963 to their Issues Facing the Local Service Industry, Work- shop on Low/Medium Density Air Transporta- current level of approximately $4.5 million, 23 tion: Supporting Papers, M.I.T. Flight Trans- less than 7% of the total federal payment. portation Laboratory Report R73-5A (August, Due to pressure from Congress and the 1973), p. 66. Executive branch, subsidy to the helicopter 26. Ibid. carriers was eliminated after 1965, to the 27. Adams, Joseph P. Executive Director, ALTA. Hawaiian carriers after 1967 (except for Letter to The Honorable Robert H. Binder (Sep- 1969 when Aloha received $0.8 million) and tember 18, 1973), p. 3. to the last trunk on subsidy, Northeast Air- 28. Ibid., p. 2. lines, after 1968.24 29. Service to Small Communities, Supra, Part I, p. 37, Appendix P-4, p. 3. There is a continuing debate as to what 30. The Long Range Needs of Aviation, Supra, the local service subsidy is buying. Ten p. VI-148. transportation system over the past decade and difficulties in assessing the effectiveness of the present subsidy program, the CAB in its 1972 Annual Report to Congress proposed a new method for providing air service to small communities. This would take the form of a contract bid system between the CAB and the carriers for services determined by the Board. The amount of subsidy would be predetermined through the carriers' bids with no renegotiation permitted and no follow-on contracts assured, while the performance of the carrier during the life of the contract would be ensured by required financial guarantees. As with the original 1943 "experiment" in local air service, the new system would initially be conducted on a limited 3-year basis in various areas of the country.31 With changes in Board membership and staff, however, this proposal has fallen into disfavor. A more recent proposal has been for "flow through" subsidy.32 Payments would be made by the CAB to a certificated carrier, which would in turn make payments to a commuter who would provide substitute service. The CAB subsidy would thus "flow through" the certificated carrier to the commuter. Aside from legal objections, the major problem with the proposal is that it would apply only to points already certificated. Subsidy could not be given to a commuter for service to an uncertificated point where there would be no certificated carrier to "flow through." Development of the Carriers Several classes of carriers have evolved over the past 30 years and currently serve the smaller communities of this country: local service airlines, commuters and air taxis, "other" carriers and intrastate carriers.

LOCAL SERVICE When the CAB resumed its normal functions after the initial emergency of World War II, the number of applications for "local" and "feeder" air transportation

31. Civil Aeronautics Board. Annual Report, 7972 (1972) pp. 10-11, 84. 32. Anon. CAB Chairman Endorses Flow Through Subsidy Plan, Aviation Daily (September 19, 1973). 18 were so numerous that a general investiga- (Essair, which later became Pioneer Air- tion into these services was instigated on lines, had been previously awarded authority March 22, 1943, to determine ". . . the pro- on November 5. 1943, which was chal- priety of extending air transportation to com- lenged in the courts. Service was not begun munities and localities throughout the con- until April 19, 1945.) In the first of these tinental United States to which such trans- cases, the CAB stated as its "guiding princi- portation may not appear warranted under ples" in awarding local air service authority: usual economic considerations or existing prospects for success; benefit to the com- standards of operation, and the coordination munity; distance to the normal metropolitan of such transportation with air transportation trading center; time of travel by surface presently authorized under usual considera- modes compared to air, including travel tions and existing standards." 33 time to and from the airports used; the com- The Investigation of Local, Feeder, and parative frequencies of surface and air Pick-up Air Service was not particularly schedules; geographic conditions, es- optimistic in its determination of ". . . the pecially mountainous terrain; and the finan- extent to which small cities need and would cial cost to the Government.36 In awarding use air service. . . ,"34 However, the CAB authority for these expanded air services to felt that its obligations to promote and en- new carriers over existing airlines, the CAB courage civil aeronautics under the 1938 expected local operators with small aircraft Act, together with the enthusiasm of the ap- to expend greater effort and ingenuity in plicants and the general lack of experience meeting the needs of small communities. with this type of air service, warranted a trial By the mid-fifties the local service car- experiment on a subsidized basis. Because riers were faced with the second and third these short haul, low density air services renewals of their temporary certificates and would face severe competition from surface sought more permanent status. In hearings modes of transportation and as a safeguard before the House Committee on Interstate against static or increasing dependence on and Foreign Commerce, they argued that the Government, temporary three-year cer- permanent certification was necessary be- tificates were authorized confined "... to cause of the difficulties and increased costs operations which show a justifiable expecta- tion of success at a reasonable cost to the 33. Civil Aeronautics Board. Annual Report, 1943 35 Government." (1944), p. 11. Following its decision of July 11, 1944, 34. Ibid., p. 1. 35. Ibid., p. 3. the CAB held a series of consolidated area 36. Civil Aeronautics Board. Service in the Rocky proceedings and by 1949 twenty new local Mountain States Area, 6 CAB 695 (1944), service carriers had been certificated. p. 731. 19

of operation on a temporary basis.37 They more enplaned passengers per day was stated that renewal proceedings consumed necessary to receive certification.39 time and money which could be better spent The CAB then embarked on a series of improving the operations of the carriers, twelve area cases "to determine the over- while their uncertain future discouraged air- all needs for local-service air transportation craft manufacturers from designing an air- and the extent to which the local air carriers craft tailored to the requirements of the could fulfill these needs."40 In the Seven local-service airlines. They also claimed that Srates /Area Investigation, decided on temporary status precluded the economic December 8, 1958, the "use it or lose it" advantages of long term arrangements for policy was introduced. Liberal route awards hangars, navigational equipment and main- were granted. If for the year following the tenance facilities. (Many of these same initial six-month start-up period the com- claims are made today by commuter car- munity met the minimum standard of an riers who seek some form of certification.) average of five enplaned passengers daily it The CAB opposed such a move asserting would retain its air service, although con- that local air service had not yet reached tinued service was not assured to cities maturity and that permanent certification enplaning the bare minimum. would make improvements in the route sys- At the same time, "skip-stop" operating tems of the carriers much more difficult.38 authority was granted to the local service It was felt that permanent certification would carriers. As long as two daily round trips lessen the carriers' incentive to increase were scheduled to intermediate points, the revenues and hold down costs and an an- carriers could provide nonstop service be- nual subsidy bill of "over $20 million" for the tween non-competitive terminal points or indefinite future was predicted. The Board one stop between competitive terminal argued that many of the costs of operation points. Trunkline carriers were allowed to were held down precisely because of tem- delete markets where local service could porary status. With permanent certification, provide ". . . equal, additional, or im- labor and airport service costs would in- proved. . ." air transportation to the com- crease substantially. At 47 percent, the CAB claimed that the average proportion of subsidy to total revenues was too high. Evi- 37. House Committee on Interstate and Foreign dence was presented that the costs of re- Commerce. Hearings on Permanent Certificates tor Local Service Air Carriers (1955), pp. 30-31. certification were not excessive. Rather, it 38. Ibid., p. 135. was the accompanying requests for ex- 39. Civil Aeronautics Board. Handbook of Airline panded authority which were expensive. Statistics (1971), p. 485. Finally, the CAB argued that it was the 40. Ibid., p. 487. market, not the carriers, which determined the development of new aircraft and that the Board would favor legislation to help local- service airlines finance new equipment. In spite of the CAB objections, Public Law 38 was passed on April 19, 1955, amending the Civil Aeronautics Act to allow permanent certification of the local service airlines under "grandfather" provisions. The CAB then moved to expedite such certification to the 13 air carriers then in existence: Al- legheny, Bonanza, Central, Frontier, Lake Central, Mohawk, North Central, Ozark, Piedmont, Southern, Southwest, Trans- Texas and West Coast. The law required that all terminal points and at least one-half the intermediate points should receive permanent authority. Other points could be added at the discretion of the Board, which subsequently determined that an average of five or 20

munities involved, even though the local for modification or removal of certain stop carriers required subsidy which the trunk did restrictions in local service carriers' not. 41 certificates. The merger of Mohawk with Al- As a result, by the end of 1963 the legheny in 1971 concluded a period of unduplicated route miles ot the local service carrier consolidations leaving the present carriers had increased by 37% and their eight local service carriers: Allegheny annual subsidy requirement had more than (Mohawk, Lake Central), Frontier (Central), doubled over its 1958 value, reaching $67.7 Hughes Air West (West Coast, Bonanza, million or about $7.64 per scheduled Pacific, Southwest), North Central, Ozark, passenger enplaned. 42 In his April 1962 Piedmont, Southern and Texas International message to Congress on transportation, (formerly Trans-Texas). President Kennedy called for reductions in the subsidy payments to the local carriers COMMUTERS AND AIR TAXIS and requested a specific step-by-step program from the CAB by mid-1963. In Shortly after its creation, the CAB response to the President, the CAB stated adopted Regulation 400-1 on October 18, that the most subsidy saving would come 1938, exempting all carriers engaged only in from increased local-service revenues as a non-scheduled operation from the economic result of a period of stabilization after recent and safety provisions of the Act. In its Inves- rapid route growth and equipment tigation of Non-scheduled Air Services modernization, but that savings would also begun in July 1944, the CAB concluded on come from a gradually reduced subsidy May 17, 1946, that the distinction between standard on high density routes, a scheduled and nonscheduled carriers was consolidation of airports and a continuation fundamental. As a result, a new class of of the "use it or lose it" program. carriers called "noncertificated irregular The subsidy requirement began fo come carriers" was created with minimal report- down and by 1966 the policy had been ing requirements. Carriers operating aircraft further broadened by awarding certain high- of under 10,000 pounds gross take-off density short and medium haul markets to weight (later amended to 12,500 Ibs.) were the local service carriers on a subsidy ineli- classified as "small irregular carriers." Only gible basis "even in instances where such a letter of registration was required but any an award may involve competition with regular service between two points was pro- trunkline service."43 Other routes, margin- hibited. ally profitable for the trunks, were trans- In 1952 the Board enacted Part 298 of its ferred to the locals and many existing seg- economic regulations. Recognizing that the ments were consolidated in a number of small irregular carriers were not competitive realignment investigations. The operating with the certificated route carriers, the CAB authority of the local service carriers was authorized them to provide regular service thus extended into regions outside their connecting small communities not served by historic markets, giving them access to ad- the scheduled carriers with certificated ditional high traffic-generating hubs. points. This authority was virtually unlimited Finally, in 1967 the CAB authorized the within the continental United States and first commuter airline substitution agree- between the U.S. and foreign and overseas ment. A commuter actually provides the points, prohibited only between points service in these markets. However, the local receiving helicopter service. Operations service carrier continues to bear the respon- were restricted within U.S. territories and sibility of ensuring adequate service as possessions and banned entirely in Alaska required in its certificate and must be prepared to reinstitute service if the commuter 41. ibid., p. 487. should fail. By October 13, 1970, the CAB 42. Ibid., p. 54; Civil Aeronautics Board. Annual had authorized local service carriers to sus- Report, 1968 (1968), p. 113; Subsidy lor United pend service at 39 points where a commuter States Certificated Air Carriers, Supra, Appen- dix VII. replacement provided an adequate level of 43. Civil Aeronautics Board. Annual Report, 1966 service.44 On January 15, 1968, Subpart M (1966), p. 4. of Part 302 of the CAB's economic regula- 44. Service to Small Communities, Supra, Part II, tions was adopted to expedite procedures p. 29. 21 where it was felt that the need for supple- sively by certificated carriers. 478 points or mentary service was amply met by the 47% receive service from both. 110 com- various existing classes of Alaskan air muters publish their schedules in the Official carriers. Part 298 also changed the name of Airline Guide. It is estimated that com- these small carriers to "air taxis" to more muters carried 5.9 million passengers, 74.4 nearly reflect the nature of the services per- million pounds of cargo and earned formed and to encourage their use by the revenues in excess of $136 million in fiscal public. 1973. Commuters are flying 165 airmail The authority to carry mail was initially routes with an annual pay rate of $23 withheld from air taxis but in 1965 Part 298 million.45 Although these figures are small was amended to allow mail service on an compared with the certificated industry, unsubsidized basis for a three year period they represent rapid growth and expansion within the continental United States and since 1965. Hawaii in markets where no certificated car- On July 17, 1967, Apache (a scheduled rier held active authority. air taxi) was authorized to provide substitute Further amendments that year eliminated service for American Airlines at Douglas, prior restrictions on passenger and cargo Arizona.46 Since then suspension of certif- operations within U.S. territories and icated carrier operations at marginal points possessions, removed the prohibition on in favor of commuter carriers has grown regular services between points served daily rapidly. As of October 13, 1970, substitution by a certificated carrier and liberalized oper- had been permitted at fifty-five points, thirty- ating authority in Hawaii. nine for local service carriers and twenty-six Since 1965 Part 298 has been further for trunks.47 amended several times extending and In many cases, the application for expanding the operating and airmail suspension/substitution authority has been authority of the air taxis, including coupled with a contractual service permission to carry mail in competitive agreement between the commuter and the markets. Most notable was the 1972 certificated carrier. These agreements have modification permitting the use of aircraft varied, but the most comprehensive involve with up to thirty passenger seats and a the "Allegheny Commuter" program.48 payload capacity of 7,500 pounds, although Subject to CAB approval, Allegheny selects prior to this time the use of large aircraft had its commuters, awards them ten-year been specifically authorized in a number of contracts and guarantees a breakeven special markets and areas. financial position during the first two years. In 1969 another amendment to Part 298 Participating commuter carriers are called required all air taxi operators to register an- "Allegheny Commuters", paint their aircraft nually and created "commuter air carriers," in Allegheny colors and offer joint fares. i.e., "those operators which perform, Allegheny provides its computerized reser- pursuant to published schedules, at least vation service, inter-line ticketing and bag- five round trips per week between two or gage handling and includes the complete more points," as a separate subcategory of schedules of the commuters in its own air taxi. Commuter air carriers are required timetable. Allegheny requires the commuter to file quarterly reports of their operations. to maintain the same level of liability Apart from the restrictions discussed, the insurance as it does itself, a uniformed CAB exercises no other regulatory control captain and first officer and a 95% com- over commuter carriers. pletion factor. With freedom of entry and exit the turn- over rate for commuters has been quite "OTHER" CARRIERS high. However, the industry has been both growing and becoming more stable each Prior to giving air taxis scheduled service year. Out of the 1015 points receiving scheduled passenger air service in the 50 45. Nation Air Transportation Conferences. Clear- ing the Air (August, 1973), p. 33. states, Puerto Rico and the territories and 46. Annual Report, 1968, Supra, p. 119. possessions of the United States, 213 or 47. Service to Small Communities, Supra, Part II, 21 % are served exclusively by commuters p. 29. as compared to 324 or 32% served exclu- 48. Ibid., pp. 35-38. authority in 1952, the CAB had temporarily state. To retain this status, it cannot par- certificated a number of commuter services ticipate in interstate air commerce, i.e., it in the forties on a nonmail (nonsubsidy) cannot carry mail, interline interstate freight basis. Most of the certificates were never or exchange passengers or baggage which renewed nor scheduled services initiated. are interstate. Separate ticketing and way More recently a few commuter-type opera- bills are usually used, normally purchased in tions have been certificated under the CAB the state. The fact that the passenger or classification of "other" carriers. cargo actually moves as part of an interstate On January 11, 1960, Avalon Air Trans- trip is immaterial as long as the carrier and port was authorized to carry passengers, traffic comply with the intrastate/interstate property and mail without subsidy assist- technicalities. ance between Santa Catalina Island and the As an intrastate carrier, the airline is ex- Los Angeles area. This service had previ- empt from all federal economic regulations ously been abandoned in 1955 by Catalina (but must comply with federal safety Air Transport, certificated under the "grand- requirements) regardless of the size aircraft father" provisions of the Civil Aeronautics it operates. Thus Southwest Airlines in Act. Avalon itself operated as an "other" Texas and Pacific Southwest Airlines (PSA) carrier only until its temporary certificate ex- in California can operate large jets while pired, after which time it continued service retaining their exempt status. The operators as a regular air taxi. In 1966 Aspen Airways, of small aircraft have the option of having operated as an air taxi since 1953, registering with the CAB as an air taxi or requested a certificate for its operations be- commuter or not registering and maintaining tween Denver and the Aspen ski resort. A an intrastate system. Small operators often certificate was granted on a nonsubsidy shift back and forth from one status to basis in June 1967 and since then two other another, which is frequently what has carriers have been similarly authorized: Tag happened when a commuter disappears Airlines in November, 1969, and Wright Air from the CAB's files. Lines in July, 1972. Tag later suspended Many states now regulate intrastate oper- operations in August, 1970. ators at the state level. The regulations can be either quite detailed (resembling full CAB INTRASTATE CARRIERS regulations), minimal or anywhere in between. State regulations may also apply An intrastate carrier by definition provides to the intrastate portions of an interstate service totally within the borders of one carrier's operations.

22 Industry and Market Structure the types of markets served ,rather than characterize the problems by industry. Grouping airlines as local service or commuter carriers does not adequately ROUTE STRUCTURES describe either the characteristics of a particular carrier, the markets served, the Ideally, an airline selects the aircraft best route patterns used or the services suited to its route structure. If there is no provided. For example, local service car- appropriate aircraft, the airline will select riers can be divided into at least three the next best option. Once this non-optimal subgroups. First, Allegheny stands by itself aircraft is in the fleet, however, the airline as by far the largest and most trunk-like will try to modify its route structure to take local service airline. (In fact, it boards more advantage of the aircraft's specific passengers than several trunks.) The characteristics. Thus route structure and second group is composed of Frontier, aircraft type are intimately connected. Hughes Airwest and North Central. Each of Several route structures can be identified. these is characterized by extensive route The classic route patterns of the local mileage (6,500 to 8,500) and a high number service industry are the hub-to-hub of stations (70 or more). The third group is multistop feeder patterns. In the hub-to-hub the four smaller carriers: Ozark, Piedmont, case, the aircraft leaves the initial hub with a Southern and Texas International. Each has fairly high load. A number of these original a route network of less than 6,000 miles and passengers get off gt the first stop, some at serves 50 to 55 stations. These smaller car- the next, and so on, until few if any get off at riers also tend to be concentrated in one the destination hub. However, a few pas- geographic region even though they do have sengers for the destination hub may get on some long haul routes. This makes their at the first stop. More board at the second choice of equipment easier since most and succeeding stops until the plane arrives points in their systems have similar weather at the destination. Since few passengers and geographic features. In contrast, a travel between the smaller cities by air, larger carrier like Frontier must operate in most are travelling to or from the smaller Montana winters, Texas summers, Arizona city and the hub at either end. Thus, al- deserts and Colorado mountains. though each stop may not produce many The commuter industry is also quite boardings or departures, the overall diversified. Some of the carriers are in fact load-factor for any segment does not vary as "mini-airlines," operating multi-aircraft much as might be anticipated. fleets throughout regions several hundred In contrast, the multistop feeder flight miles square. At the other extreme are the does not serve a hub at both ends of the "mom and pop" operators with one or two route. It picks up a few passengers at each aircraft serving a single market. Some small stop on its way to the hub and drops commuters provide basic air service to them off at the hub. Other passengers are small isolated communities. Others offer air then picked up at the hub and dropped off at service as a convenience to travellers in the small stops on the return trip. Therefore, dense population areas who want to save the multistop feeder flight does not accumu- time getting to the airport for connecting late additional passengers as passengers flights. Operators in these dense markets from the hub deplane. As a result, there may already provide high frequency service and be high load factors for the segments near are now looking for aircraft in the 30 seat the hub but low load factors at the extrem- range to meet peak demand (particularly ities. where airport slots may be limited). Other Both of these service patterns present an operators are looking toward the day when aircraft sizing problem. The plane must be their markets will support more than a few able to accommodate the traffic on the peak flights per day and they may be able to use segment. As a result, the aircraft is too large 15 to 19 passenger aircraft like the bigger to economically serve less dense markets. It commuters. has been argued that the CAB's early policy Because of the diversity in both the local of requiring local service carriers to provide service and the commuter carriers, it is bet- multistop service created this "segment ter to discuss problems in terms of route flow" problem and is the primary reason that structures, the type of service offered and an economical smaller aircraft has not been

23 24 developed as a "DC-3 replacement".49 at the local airport. Joint and through fare Whether this is true or not, the multistop agreements with the certificated carrier are route structure has determined the aircraft also used to lower traveller costs. The size. passenger pays a small portion, if any, of With the acquisition of jet aircraft capable the normal commuter fare. The remainder is of serving longer haul markets, several of reimbursed to the commuter by the certifi- the local service carriers have developed cated carrier from the long haul revenues. route patterns defined as regional-bypass- By offering the package, the certificated to-distant-hub or bypass routes. Rather than carrier can capture more of the long haul feed traffic into the local hub and there lose traffic than another certificated carrier who it (or at best be forced to compete with a does not participate in a joint or through fare trunk carrier for the long haul flight to the arrangement. The commuter carries more distant hub), the local carrier makes one or traffic and the traveller receives better serv- two stops at smaller cities to accumulate ice for about the same cost. passengers and then flies directly to the Commuter carriers serving the low or destination, bypassing the regional hub. medium density markets face a different After acquiring DC-9s, Southern revamped problem. A higher percentage of their traf- its entire service, pattern to use this bypass fic is origin-destination, people from the concept where possible, an example of the small community going into the hub for aircraft shaping the route structure. personal or business reasons. This dictates A final route structure, most often seen in a different service pattern. The origin-desti- commuter operatons, is the hub-and-spoke nation passenger would like to leave the out- pattern. The carrier provides nonstop or at lying community in the morning and return in most one-stop service from outlying areas the evening. There is high demand during directly to the hub. Since the commuters do these periods, but much less during the rest not face a segment flow problem, they can of the day. As a result, aircraft utilization is size their aircraft for the specific run. Peak low unless the carrier can develop off-hour capacity is provided through scheduling markets. Cargo and mail contracts provide additional sections. offsetting loads in many cases. In other markets, the carrier may try to provide con- TYPES OF SERVICE necting service in a shorter haul market There are two basic types of air service. using his idle aircraft to provide frequency. The first is origin-destination service where In any case, the resulting service pattern will the traveller both starts and completes his not be the same as for high density feeder trip on one flight. The second is connecting operations. service. The passenger is transferred from Since a commuter carrier usually his community to the regional hub where he specializes in either high density hub-and- connects with a long haul flight (usually of a spoke feeder operations or low density trunk airline) to his destination. service, he can tailor his service patterns, Many commuter airlines have been routes and aircraft for one market or the created specifically to serve this connecting other. In contrast, the local service carrier traffic market, particularly in high density must serve both types of markets simultane- areas surrounding major hubs. In these ously. Cities closer to the air hub generate a areas, the carrier is competing with the au- high percentage of connecting passengers tomobile, the principal mode of airport ac- while more remote cities generate cess. To compete effectively, total trip time origin-destination traffic, probably because and cost must be competitive with the car. people closer to the hub are more likely to Therefore, the carriers have tailored their' drive into town for personal or business service to meet the connecting passenger's reasons than people several hundred miles needs. Flights are timed to match the long away who must depend more on air. Also, haul departure and arrival patterns at the hub airport. Service is frequent throughout 49. Eads, George. The Search for an Efficient the day in order to reduce waiting time at the Short-Haul Aircraft: A Case Study in Conflict- hub. ing Government Incentives, Workshop on Low/ To compete on a cost basis, the com- Medium Density Air Transportation: Support- muter may offer free or reduced rate parking ing Papers, Supra, p. 149. 25

there is a lower percentage of connecting they were created to serve. But if they were passengers on flights into the hub from com- to change their service patterns, they would munities that have air service to other lose more revenue from their better markets hubs since the connecting passengers from than they would gain from subsidized points. the small town are spread among several The resulting overall loss would increase connection points. overall system subsidy requirements and Because of the segment flow problem eventually lead to general decay of service discussed earlier, the local carriers use fair- to all points. ly large aircraft, at least compared to commuters. Since these aircraft cost more per MARKET STRUCTURE mile to operate than a commuter aircraft, a local is not able to provide as high frequency Markets can be defined in terms of the in a connecting market as a commuter car- number of passengers generated, the length rier using smaller planes. Likewise, a local of haul and the degree of isolation from must generate more passengers than a other cities or transportation hubs. The first commuter to. break even at low density and second elements of this definition points. indicate the economic condition of the Through the use of through and joint market. The first and third elements reflect fares, the local can offer some of the same the public benefit provided by the service. economic incentives as the commuters for In addressing the problem of market the connecting passenger. Likewise, the definition in the past, rather mechanical benefits of reduced parking rates can also approaches have been taken. For example, induce connecting passengers to use the the Civil Aeronautics Board under its "use it local carrier instead of driving. Unlike the or lose it" policy would allow a petition by a commuter, however, the local carrier carrier to delete communities boarding 5 or cannot tailor his service to connecting or less people per day from the carrier's certif- origin-destination traffic since he must serve icate, unless unusual circumstances could both types of markets at the same time. He be shown. In the 1971 Bureau of Operating must strike some compromise. Rights' study on service to small com- To maximize revenues under this complex munities, a test based on both the number of situation, many locals have developed an ef- boardings and the degree of isolation was fective strategy. Profitable markets receive proposed. The degree of isolation was excellent service: aircraft are used at prime measured on a sliding scale that factored in hours and with sufficient frequency to both the length of drive to the nearest air hub maximize passenger satisfaction, thus max- and the service level at the hub. imizing passenger revenues. The low This type of mechanical test offers com- density markets that don't support putational ease, but raises the issue of themselves receive the minimum service where the limits should be set. Since the de- needed to entitle the carrier to subsidy. cision must, by its nature, be somewhat Since the CAB does not specify when subsi- arbitrary, the limits will be too severe in dized service is to be rendered, the carrier some markets and too lax in others. How- fits its schedule around available aircraft, ever, the mechanical test is useful in es- often at off-peak hours, to serve the low tablishing a baseline or starting point for density points. This minimizes the cost of regulatory policy and procedures. serving these markets, maximizing the An economic market definition can also revenues derived from subsidy. be selected. For a given fare and cost struc- The resulting multistop or off-hour flights ture, the economics of a given market are do not satisfy the needs of these markets. determined by the number of passengers There is not enough frequency to satisfy the boarded and the length of haul. With this in connecting passenger and the times of ar- mind, a low density market can be defined rival and departure are not tailored to one- as one in which a carrier's revenues, ex- day round trips to the nearest air hub. cluding subsidies, do not meet its expenses, However, it is probably the best service while a medium density market is one in available under the regulatory circum- which the carrier can at least break even. A stances. Many of the local service carriers carrier can convert a low density market into have a real interest in serving the markets a medium density market by either raising the revenues generated or by lowering They are rarely willing to gamble on revenue expenses. Conversely, a medium density increases resulting from fare cuts or service market can erode into a low density market increases. The result has been a decline or if revenues fall or expenses increase. actual deletion of service to points that To decide whether revenues cover ex- might have the potential of supporting air penses, one must consider the impact of the travel if service were improved. particular market segment on the total sys- What is a low density point for one carrier tem and not examine it on its own merits could be a medium density market for alone. Often the people boarded at a small another. Commuters, with their lower cost community will connect to a more profitable structure, can serve points profitably that long haul flight on the same airline. Thus a would require a subsidy for a local service carrier that captures a high percentage of its carrier. However, there are some markets small town traffic for longer haul flights will that cannot support regularly scheduled air continue to serve a low density point even service by any type of carrier. These can be without external subsidy. defined as very low density markets and Revenues can be increased by either rais- would be most economically served by on- ing fares or increasing passengers. De- demand air taxi operators, if at all. pending on the fare elasticity in the market, The degree of isolation is not an economic a fare increase might actually decrease factor, but a political issue relating to overall revenue and so must be considered whether there should be service at all. This with caution. To generate more passengers, public service aspect of air transportation improved service and/or advertising may be was recognized by the CAB during the early required. But this could increase expenses 1940s and was a major factor in starting the which might offset any revenue gains, par- Local Service Experiment. ticularly if only a few additional passengers As with low and medium density, the are boarded. degree of isolation escapes precise defi- Expenses can be lowered in many ways. nition. As mentioned, the CAB Bureau of The most common has been to reduce the Operating Rights' report on service to small level of service. In general, this has resulted communities recommended a test based on in fewer passengers as people substitute the driving time to the nearest hub and the their automobiles for infrequent or incon- level of service at that hub. No community venient flights. within 90 driving minutes of any hub was Since most local service and commuter considered isolated. If the hub were a major carriers have limited capital, the response in one, no community within a two-hour drive low density markets has been to minimize was considered isolated. expenses rather than maximizing revenues. A less precise definition has also been 27 used.50 A market is not isolated as long as the automobile is an effective transportation mode. A market is isolated when the bulk of the intercity traffic goes either by air or not at all. Another type of market was specifically identified with respect to typical commuter operations. This is the high density feeder market primarily providing airport access from communities surrounding major hubs. Operators in these markets face different problems than those in low or medium density areas. They provide high frequency, very short haul service with resultant high aircraft wear from frequent takeoffs and landings. Economically, the major problems are a high degree of peaking and directionality in their traffic flow as well as automobile competition. Faced with many empty backhauls, it is difficult to get the system load factor over 50%. A final type of market is created by geographic considerations, taking special advantage of the ability of aircraft to fly over water or mountainous terrain. Automobile travel, if available at all, is circuitous and time consuming. Examples are Aspen and Rocky Mountain Airways' service to moun- Ausrotas et al. Aircraft Requirements for Low/ tain ski resorts and the service of a great Medium Density Markets, M.I.T. Flight Trans- many carriers to the islands of the West portation Laboratory Report R73-4 (September, Indies. 1973). WORKSHOP REPORT In the course of twenty panels and one of the total national transportation system. hundred thirty speakers, several topics Policies and decisions affecting that system emerged over and over again. Therefore, at the national level may have a direct, al- rather than report on each panel indi- though often unanticipated, impact on the vidually, the important issues have been low/medium density markets. grouped and will be discussed in that framework. Four major groupings are used: THE ROLE OF THE DEPARTMENT OF 1. National Transportation Policy Issues TRANSPORTATION 2. National Air Transportation Policy Issues To date, there has been no clear state- 3. Low/Medium Density Air Transporta- ment of overall national transportation policy tion Policy Issues that provides direction to the planner, the in- 4. Technology Issues dustry or the public. As a result, each problem arising in the transportation field has been addressed in an uncoordinated manner National Transportation by either the agency with primary responsi- Policy Issues bility or by the Congress if the problem were serious enough. These responses have been Although the basic topic of the con- reactive rather than forward-looking and, as ference was the problem of air service to such, provide no basis for future planning. low and medium traffic generating points in The Department of Transportation, the United States, this arena is only one part founded in 1966 to assume the leadership role, has failed to provide the necessary be done. guidance. Although it has succeeded in cer- The above criticism of the DOT has been tain isolated cases, the early internal strife made often without visible response. The and conflicts among the operating agencies Workshop was frankly embarrassed to make themselves and between the agencies and it again, fearing that no one would read the Office of the Secretary have left an further, having dismissed the Workshop's image of an ineffective bureaucratic ma- efforts as trite. But although later recom- chine without a goal or leadership. There- mendations are more specific and can be fore, the first and perhaps strongest recom- implemented even without national plan- mendation of the Workshop was that ning, it is important to reiterate our urgent need for overall direction and coordination if The DOT should take an active, aggres- the major transportation problems facing the sive role in the formulation and coordina- country are ever to be truly solved. tion of integrated national transportation policy. RESOURCE ALLOCATION

In performing this task, the DOT must One goal of national transportation plan- realize that transportation is not an end in it- ning should be proper resource allocation. self, but a means of attaining other goals. This means that the planner should consider Therefore, the DOT must work with other on one hand both the economic and energy agencies of the government to identify na- efficiency of each mode and on the other tional goals and how transportation can help hand the desires of the consumer as re- meet them. The DOT must also work with flected in his modal choice. regional, state and local authorities to help them with their planning. The role of the De- Economic Efficiency To determine true partment is not to do the planning for these economic efficiency, all costs must be con- authorities, but to provide assistance and sidered. These include environmental costs coordination so the local needs and solu- and costs associated with not making al- tions fit into the national system. The 1972 ternate investments as well as the direct National Transportation Needs Study and its costs associated with the plan selected. The succeeding improved versions were a first mode with the lowest total cost is the most step in this direction, but much more must efficient.

28 One way to achieve low cost is to rely on for using air in place of bus or rail in short competition wherever possible. The direct haul markets where these alternatives are incentive to the owner or operator to maxi- available. If predictions of shrinking supplies mize his profits by lowering his cost is of petroleum fuels are true, fuel efficiency stronger than any amount of government may dictate that there be no new V/STOL regulation. systems or other air service in the high However, the owner-operator's decision density short haul markets where trains will is usually based on his direct perceived become the dominant mode of intercity cost. Environmental costs or total system public transport. In lower density short haul costs are often ignored by the private in- markets, air will be displaced by bus. Even if vestor. Therefore, government intervention synthetic fuels are introduced, fuel costs will in the basic market system may sometimes definitely go up, making air a less attractive be required to assure that all costs, particu- competitor in short haul markets. larly social costs, are considered. Intervention can take the form of direct Consumer Choice The third consideration regulation enforced through civil or criminal for allocating resources to transportation penalties; taxation or tax relief to dissuade and among the transportation modes is the or encourage a particular activity; or subsidy desire of the consumer, normally reflected to encourage performance or compliance. in the price and time he is willing to allocate Where the government provides financial in- for the service offered. The planner who de- centives, those incentives should be struc- cides that a bus should replace air transpor- tured to either minimize cost for the desired tation to a small town based on economic result or maximize results for the dollars al- and energy efficiency alone, although located. perhaps accurately reflecting the supply side of the equation, has failed to consider Energy Considerations If the market the demand aspect. Consumers may prefer mechanism always worked, there would be to pay a premium to ride a less economic no need to consider energy separately from and energy efficient vehicle. The planner costs. However, the market does not cannot preclude free consumer choice but operate perfectly. In addition, federal and can only hope to adjust perceived costs to local governments have distorted the market reflect true costs. The user should then be not only through their policies toward trans- free to pay a premium if he so desires. portation but also through their policies With these factors in mind, the Workshop toward energy producers. Regulation of recommended that natural gas prices, control of atomic energy, tax depletion allowances for petroleum and In taking the lead in transportation plan- regulation of the shipping costs of coal have ning and coordination, the DOT should affected the relative costs and values of consider modal economic efficiency energy sources. (including all private and public costs The political task of readjusting all and benefits), modal energy require- government policies to allow fuel markets to ments and consumer desires in formu- reflect true costs is impossible. Therefore, lating policy. the transportation planner must consider energy efficiency separately from and in ad- FEDERAL SUBSIDIES dition to economic efficiency. Presentations made to the Workshop indi- Federal subsidies to transportation are cated that the airplane is inefficient as com- made in many ways, direct and indirect. pared to rail or bus/truck transportation in These payments take the form of capital terms of units of energy consumed per pas- grants, low interest loans, free services and, senger or ton mile produced. This is offset as in the case of AMTRAK and the local by the speed and convenience of air in long service airlines, direct operating subsidies. haul markets where the value of time be- There seems to be, however, a trend away comes important for both travellers and from using general taxpayer funds and goods. However, based on energy con- toward directly assessing the user for the siderations alone, there is little justification costs of the system. It was the feeling of the

29 30

Workshop that this trend should be con- people themselves or moving the goods tinued and encouraged. people need or produce. It must serve the Many federal subsidy programs use gen- population as a whole, not merely some eral funds provided by the nation's tax- subsegment. payers-at-large to support essentially local During the past several decades, there or regional services. This applies to urban has been a decided shift in federal policy to- mass transit as well as local service airline ward improving the urban environment. This subsidies. While the nation as a whole may is reflected in government expenditures on benefit indirectly from the increased em- transportation. AMTRAK, designed primarily ployment, higher levels of commerce, etc., to serve the large cities and connecting cor- that accompany better transportation, the ridors, requires somewhere in the vicinity of primary beneficiaries are the users who pay a $150 million yearly operating subsidy. less for the service than it costs. The Rapid transit operating subsidies paid from balance of the cost is paid through federal the highway trust fund, if approved, will be taxes on users and non-users alike. But do millions more. In contrast, the $60 million the indirect national benetits received com- expended annually for local airline service is pensate the non-user for his contribution? the only direct federal operating subsidy to There are other service and manufacturing rural transportation. Yet 42% of the nation's industries that provide similar indirect na- population lives in rural America or in cities tional benefits without federal subsidy. Why of less than 50,000 people. should transportation receive these pay- The Workshop realized that equal treat- ments while similar industries such as public ment is not possible or perhaps even de- utilities or broadcasting and telecommuni- sired. However, it recommended that cations do not? The Workshop was not against subsidy per se, or even federal sub- DOT, as part of its planning process, sidies, but federal subsidy of primarily local should attempt to strike a better balance benefit was found without merit. As an ideal, between rural and urban transportation the Workshop recommended that services.

1. Federal subsidies to transportation For example, the Workshop heard should be paid only when presentations indicating that state com- A. There is a clear national policy that muter airline systems could be developed to the subsidy payments encourage serve the needs of the community without or support; or subsidy after an initial start-up period. A B. The subsidies are for limited ex- program in the Canadian province of periments to demonstrate the po- Ontario, under way for 18 months, shows tential of new concepts to the pri- great promise. A study for the state of North vate market, which would take over Dakota by Beech Aircraft indicated that a implementation if the demonstra- similar plan might work in the United States. tion were successful. Without endorsing any specific proposal, it 2. This policy toward transportation sub- was the consensus of the participants that a sidies should apply to all modes. well-planned and thought-out state program had a high probability of success. To ensure In formulating national transportation success, those developing the plan would plans, the DOT should recommend to Con- have to realize that not all cities and towns gress the adoption of a broad, consistent could be served economically by air. There- policy toward transportation subsidy in lieu fore, only those that had the potential for of present, uncoordinated programs admin- eventual self-support could be selected (or istered under numerous and often con- provision could be made at the state level to flicting laws. subsidize non-economic points). The plan would have to be based on realistic esti- RURAL-URBAN EQUITY mates of costs, traffic levels, fares, frequencies and the other parameters that Transportation, like government, is worth- could affect the system. The Workshop felt less unless it meets the needs of the people. strongly that once a state developed a It must be people-oriented, either moving reasonable program along these guidelines, 31

a self-supporting system would emerge. been widely publicized to date. It is unfortu- Total cost for a state with low population nate that such vital transportation experi- densities would probably not exceed $2 to ments are being designed and implemented $3 million over a three-year start-up period. without the participation of federal transpor- Higher density states would require even tation agencies. less. But there is an admitted element of risk. POPULATION DISPERSION No commuter carrier could be expected to risk losses of this magnitude over several Several Workshop participants argued years in anticipation of future profits. State that the federal government should support legislatures, generally without transportation air service to small communities to help backgrounds, could not be expected to pro- satisfy "the national goal of population dis- vide this support without considerable edu- persion." However, the Workshop was cation and political pressure. Therefore, the unable to find any more than offhand state- Workshop felt that support for the developments that such a goal actually exists. Al- ment of a sound plan and start-up funds though population dispersion was apparently from the federal government would be ap- announced as a goal in President Nixon's propriate to provide a quick response to a 1970 State of the Union Address, it has not pressing problem. The investment would not been reaffirmed since that time, nor has any be great. If commuter systems developed in legislation or program been proposed to pur- this manner proved successful in a few sue this goal. In fact, Congressional and states, the level of risk would be greatly re- Executive programs to improve urban life duced. State, local or even private operators would seem contrary to luring people away could be expected to start similar programs from the cities. in other states without federal support. With In addition, evidence was introduced at effective intrastate or intraregional com- the Workshop that people don't want to re- muter networks serving the needs of the locate to smaller towns unless they are small communities, local service carriers within a short drive of a major city. Move- could be permitted to delete subsidized ment is to the suburbs, not to the small or points and eventually eliminate the need for medium-sized cities. federal operating subsidies. Thus small fed- From an economic standpoint, better eral expenditures in a few states could lead transportation tends to concentrate rather to large national cost savings and improved than disperse populations. Good transporta- transportation to many small communities. tion allows industrial concentration, which Federal support of limited experiments to means more jobs and leads to population demonstrate these concepts would satisfy concentration. Industrial concentration also the Workshop's recommendations on bal- leads to lower costs of production and a anced but not necessarily equal treat- general benefit to the national economy. ment for low/medium density areas as Adequate personal transport can do little well as the proper use of federal subsidy to more than expand the range of the suburbs demonstrate feasibility. Therefore, the around industrial complexes. Workshop recommended that Therefore, the Workshop recommended that The federal government should support state or regional demonstrations for improving transportation services to small The DOT, with other government agen- communities. cies, should determine if in fact population dispersal is a valid national goal and how transportation aids or detracts from The Department of Commerce, through that goal. its Regional Action Planning Commissions, has made federal funds available to support a demonstration program in the southeast. This would be a good opportunity for DOT Another is being proposed for the northwest. to exhibit the type of interagency leadership These programs may satisfy the Workshop's and coordination which the Workshop con- recommendation although they have not siders DOT'S proper role. 32 National Air Transportation year 1971 data, 29% of the total cost of the federal airports and airways system ($331 Policy Issues million) should be allocated to general aviation. In contrast, DOT estimated that gen- The next area of importance identified by eral aviation returns only $63 million in the Workshop was national air transportation existing taxes, leaving a $268 million deficit. policy. Although not specifically relating to And that deficit is growing. the problems of low/medium density air DOT recommended that a gradual shift to service, overall national policy for the air a more reasonable pricing system be made system does have a major impact on the so that general aviation eventually pays for low/medium density sector. In particular, the costs it imposes on the system. The policy at the national level that affects the study office accepted general aviation's three aviation segments serving the small contention that parts of the federal system markets will be considered: general avi- are "overbuilt" as far as general aviation's ation, local service carriers and commuter needs are concerned and, as a result, the carriers. DOT study recommended that general aviation not be charged unless the services are THE PROPER ROLE OF GENERAL AVI- actually used. This requires moving away ATION from the current tax structure toward a set -of specific system user charges and fees After some debate about whether general that approximate the costs of the services aviation was a proper topic for the Workshop received. (There is a minor problem in de- at all, it became clear that general aviation, termining what services could be made op- although not public transport in the usual tional and which ones must be required for sense, does play a major role in providing overall system safety. This point was not basic transportation to the low and medium pursued by the Workshop.) density points. General aviation representa- General aviation proponents contended tives stressed its importance and suggested that the statistics used for the cost allocation that general aviation might be paying too study were fragmentary and insufficient. much of the air system cost in light of the Also, they suggested that the federal benefits provided. They pointed to its signifi- government should not attempt to recover cance in civil aviation, stating that general all the costs in view of the widespread public aviation accounts for 98% of all civil air- benefits of general aviation and the duty of craft, 95% of all civil pilots and 79% of the the federal government under the Federal hours flown and they cited the following Aviation Act to "promote" civil aviation. public benefits: The Cost Allocation Study Office took Transportation to outlying areas strong exception to the latter argument, Recreational use of aircraft pointing to numerous other economic activi- Derivative employment and trade oppor- ties having public benefits neither receiving tunities nor warranting taxpayer subsidy. Improved agriculture and forestry man- In light of all the confusion in this area, agement the Workshop recommended that Improved resource exploration Population dispersal and the spread of The FAA and DOT should obtain better economic activity statistics on general aviation. The first Backup capacity during national emer- step is to better coordinate existing data gencies such as disasters or airline from various fragmentary sources. New strikes. data acquisition programs should then The issue, however, was whether the fed- be initiated to provide missing informa- eral government (and general taxpayer) is tion. spending more for these services than the value received, particularly in light of the This would permit a more informed assess- limited amount of taxes that general aviation ment of general aviation's role and its use of returns to the federal treasury. airport and airway facilities. Agreement on Representatives of the DOT Cost Alloca- the statistical base would remove much of tion Study stated that, on the basis of fiscal the emotionalism of cost allocation. 33

In addition, the Workshop recommended ficient in providing small community service, that serious question is raised as to whether it best serves the nation's transportation ob- The evidence seems strong, even with jectives to retain the local service carriers faulty statistics, that some upward ad- as they exist today—a relatively weak class justment of general aviation payments is of carrier dependent on subsidy and in order. But this should be gradual in entrusted with the task of providing small order to avoid unnecessary disruption of community air service, a task which they are activities that rely on the present system. no longer equipped to perform efficiently. Rather than fight the trend and attempt The ultimate magnitude of the increase to force the local service carriers to better would be determined after an adequate serve the small community, a more rational statistical base is established. approach is to give this class of carrier a greater opportunity for self-sufficiency and to rely on the commuters to provide more LOCAL SERVICE CARRIERS economical small community service. As a first step, the locals should be al- Over the past decade, there has been a lowed to delete uneconomic points which general trend for the local service carriers to are non-isolated. There are several dozen of acquire more jet equipment and long haul these points being served today which are routes while gradually deleting smaller cities not only an unnecessary drain on the car- from their certificates. Whether or not this is rier's systems and the public treasury, but desirable from the viewpoint of the small also may not warrant any air service from community, it must be recognized as an ac- any carrier. Second, as traffic growth per- complished fact. mits, new routes should be awarded to the Three decades ago, it was perhaps locals to strengthen their systems and aid in appropriate to experiment with the feasibility their transition to trunk status. Therefore, of a specialized industry segment devoted the Workshop recommended that solely to providing local or feeder service to and from rural communities on a subsidized The CAB should announce a policy of al- basis. But with the passage of time and the lowing gradual expansion and evolution development of commuter airlines more ef- of locals to trunk status as present ex- 34 cess capacity is absorbed with the con- bership's advantage as well as the carriers'. comitant elimination of local service sub- Allegheny's experience is clearly an sidies and deletion of subsidized points. example in point. The Allegheny Commuters feed more traffic into the system which Although the transition would take five to means more pilots and aircraft are needed. ten years, it should be announced as a And since the new local service aircraft are policy as soon as possible to allow planning jets, the crews actually upgrade their status for the change. and pay. At isolated points commuter replace- Another possible solution suggested at ments should be established to guarantee the Workshop, although fraught with inter- service without a subsidy requirement or at carrier and inter-personnel problems, was least with a lower subsidy than that required that local crews furloughed by a commuter by the local service carrier. If subsidy is substitution would be hired by the commuter necessary, innovative techniques like the as part of the substitution agreement. Crew contract bid system, carrier flow-through, members would retain their positions on the negative excise taxes and direct subsidy local carrier's seniority list and would be re- payments to commuters by the CAB or by called when system growth warranted it. local governments using revenue-sharing While serving with the commuter, crew funds should be tried on an experimental members might receive a higher salary than basis in keeping with the Workshop's overall the commuter would normally pay, the dif- recommendation on subsidy. There is not ference being paid by the locals. necessarily one unique answer to this prob- Clearly the potential of upgrading the lem. Therefore, the government must be status and pay of ALPA or other union willing to adapt to each case with whatever members that would result from transition- innovative techniques will meet the local and ing locals into trunks would ameliorate the national interests. At the same time, learn- union position. Where this potential is not ing from the Local Service Experiment, the readily apparent to the union or its mem- government must not allow the commuters bers, other approaches will have to be ex- to operate aircraft too large for their markets plored. or to become totally dependent on federal operating subsidies. Community Resistance Some communities resist their deletion from a local's cer- Air Line Pilots Association Resistance tificate, usually because of community pride and a distrust of the commuter operator who Nationally, ALPA seems to be against local might serve as a replacement. After the service carriers deleting points or entering transition takes place, however, most com- into commuter substitution agreements. munities are pleased with the more frequent This is exemplified by the "Scope" clause in and timely service the commuter offers. most local service carrier contracts that Community education is needed to ease the prevents the carrier from eliminating service transition. to a point, either absolutely or through com- Small towns must realize that they will muter substitution, without union approval. never be able to support frequent service ALPA is also challenging the CAB's power to with large aircraft, even with large subsidy exempt commuters operating 30-passenger support, and that it is in their best interest to aircraft from detailed economic regulations. accept and support frequent and reliable Its legal position in opposing local carrier service in smaller aircraft rather than the and CAB action is based on highly technical infrequent ill-timed large aircraft service arguments relating to Congressional intent now offered by many local carriers. An in passing the 1938 Act. However, its phil- enthusiastic public relations campaign by osophical position is that it is ALPA's duty to both the local and the commuter, ac- oppose any action that could adversely companied by the documented experiences affect its members. of other communities where commuter To overcome this opposition, it will be replacement has been a success, would necessary to show that the general expan- probably be enough to gain local support. sion of locals into trunks and local replacement by commuters is in the union mem- Financing Problems The Workshop dis- 35

cussed other problems facing the local serv- industry seems to be increasing dramatically ice industry, primarily related to financing now that the effects of earlier route strength- their potential growth. Among those pre- ening are being felt and since the Workshop sented were limited return on investment had recommended a policy of encouraged and erosion of the equity base. growth and increased route strengthening, it It was alleged that, since the CAB limits was not felt necessary to take a position on the rate of return on subsidized service to these issues. between 8 and 10%, carriers could not afford to purchase new aircraft for these COMMUTER CARRIERS markets at today's high interest rates. The return would not cover current investment Information presented at the Workshop costs. As a consequence, even those car- indicated that commuters are being un- riers who would like to upgrade the quality of necessarily handicapped by their continued their service are forced to continue using confusion with general aviation by both the their old turboprop equipment. Although this public and government alike. Many govern- problem would be eliminated if subsidized ment branches include the commuter air local service is phased out, it was argued carriers in general aviation statistics, ad- that the CAB should realize the unreason- versely affecting their identification as part ableness of its rate of return standards and of the air carrier system. allowable business deductions in these Some airport operators, particularly at markets during the interim period while the larger hubs, shunt commuters to less favor- carriers are moving toward trunk status. able terminal or gate positions. In some in- Basic CAB rate making policy allows the stances, commuters are forced to use gen- carrier a rate of return on his investment eral aviation facilities which can be quite base that, in theory, is sufficient to attract remote from the air carrier terminals. This investors to the firm and also make debt places a particular burden on the commuter financing attractive to lending institutions. who specializes in connecting traffic and This policy allowed the local carriers to feeding passengers to the certificated car- accumulate a small but growing equity base riers. over the first twenty-five years of their exis- Aviation suppliers, such as fuel distribu- tence. Then between 1967 and 1972, this tors, often treat commuters separately from equity base was totally eroded by poor earn- air carriers in allocating fuel, a serious form ings and increased costs. Most local car- of discrimination. Airport operators may riers accumulated a debt of several times force commuters to purchase fuel from the their original equity position, making it diffi- fixed base operator at the field rather than cult to attract new equity capital. This forced allowing them to negotiate their own fuel them to lease rather than purchase new air- contracts. This problem is so severe in some craft. Traditional rate of return/rate base areas that commuters must offload passen- regulation limits carrier profits to a fixed gers to carry fuel purchased at outlying air- return on investment. Leased aircraft, not ports to avoid paying premiums at the hub (if included in this investment base, hypo- indeed fuel is available at all). thetically limit profits and slow recovery. Finally, commuters are denied access to Two solutions were proposed to the Work- several valuable industry collective arrange- shop. The first was the inclusion of the ments. These include the listing of single- capitalized value of leased equipment in the plane and connecting schedules in the Of- rate base, rather than allowing the deduc- ficial Airline Guide and inclusion in tariff tion of interest costs as a business expense. publications (a particular problem to freight This would increase the size of the rate base carriers), interline traffic and comprehen- and subsequently allow a higher dollar sive joint fare arrangements. return. The second recommendation was Collectively, these discriminations have a the abandonment of the rate of return/rate significant impact on the current operations base method of rate making and the substi- of commuters and their potential growth. To tution of the operating ratio technique that overcome these discriminations, the Work- bases profits on revenues and expenses shop recommended that rather than on the investment of the firm. However, since the financial health of the The DOT, FAA and CAB should officially 36 recognize and endorse commuters as a second important aspect: it involves the vital segment of air transportation not es- banker and the community in the com- sentially different qualitatively from cer- muter's activities and increases their in- tificated air carriers. The federal agencies terest in his success. This should promote should impress these attitudes upon the commuter's traffic and growth. state, local and airport authorities as well as influence the certificated carriers to Federal Certification Several commuters adopt more cooperative arrangements claimed that problems of recognition and with commuters. access to finance could be cured if the com- There should be a total and complete dis- muters were granted some form of limited association of commuters from general certification from the CAB. It would protect aviation and air taxis, including separate their routes from "predatory competition" regulations where appropriate. and improve their image. But at the same time, they did not want the detailed fare, merger and other types of economic regula- Commuter Finance Like the local service tion that traditionally accompany the grant of carriers, the commuters were quick to raise a monopoly route by a regulatory board. In their financial problems. To date, the com- short, they wanted the benefits without the muters have been financed from three main burdens. sources: The classic argument was that a com- The owner/operator — Quite often the commuter carrier would not devote its limited muter owner/operator has been a fixed base cash and resources to develop a marginal and/or air taxi operator in the region. His market if someone else could step in and expansion into a scheduled commuter car- split the profits. However, this argument rier has been underwritten by these other could be made by any businessman. In our activities. competitive system, a successful business High-risk investors — People looking for will alert others to the potential for profits, quick profits or tax write-offs were often at- inviting competition. This is usually praised tracted by the "glamour" of owning part of as a major asset of the American competi- an airline. tive system. It can be argued that, unlike Community support — Businessmen of the other businesses, air service is essential. town provided initial financing because of a Yet we do not 'give certificates to grocery desire for better service. stores, clothing stores or other businesses However, these sources are all limited perhaps more essential to the public good, and to finance the next generation of aircraft even if they are the only store of their kind in and expansion the commuters will have to a small town. rely on the more traditional sources of equity The commuters' predatory competition and debt funding. argument took two forms. The first was that The banking community tends to look at entry in the commuter industry is so easy the commuter like any other business. If the that inexperienced operators, unable to esti- carrier can show good management, a solid mate the market, will buy an aircraft, enter a financial base and an adequate product line market able to support only one carrier, split (a strong route structure in the case of the that market and eventually force both out of commuter), there should be little trouble at- business. tracting debt or equity capital. Contrary to In countering this argument, it should first the belief of some commuters, a sound be pointed out that this is not predatory business — not guaranteed loans, certifi- competition at all, but normal competition in cation or other governmental support — is most markets, faced day in and day out by the major criterion. the vast majority of American businessmen. It was suggested that commuters might Second, there are few examples of this finance their activities through local banks actually occurring. In general, operators are rather than relying on the larger banks which not so foolish as to compete with an es- have provided the bulk of the local service tablished carrier in a thin market unless that and trunk financing. Since the commuter is carrier is not providing adequate service. known in the community, he may be able to Even where competition is encountered, one get better terms locally than from some carrier will usually have greater staying remote source. Local financing has a power and eventually emerge with control of 37

the market. It is unlikely that another new After considering these arguments and competitor would immediately start the the admittedly erratic but steady growth of battle over again. Third, even if both the commuter industry, the Workshop con- competitors fail, the market can support one cluded that certification is not in the best in- carrier and no doubt another will appear to terest of the industry at this time and would fill the void. Even if the federal government do little to achieve the desired goals of has a duty to ensure that service is provided, recognition or better financing. it should have no duty to ensure that the Indications are that the industry is on the service is provided by a particular carrier. verge of proper recognition and, with little Finally, if the community is concerned with additional federal effort (as recommended interruptions in service or lack of continuity, by the Workshop), the commuters could be it can support the carrier it prefers, through accepted as full partners in the air trans- either direct or indirect subsidies. portation system without the burdens of cer- The second argument for protection was tification. The financial community gives based on predatory competition in the little weight to either certificates or govern- economic sense which occurs when one ment guaranteed loans in deciding whether carrier, because of superior assets, prices to finance or not. And arguments for protec- its services below costs until it depletes a tion from competition were considered competitor's assets, drives him into invalid by the Workshop. (One banker bankruptcy and then raises its own prices to queried before the conference said that the monopoly level, recovering losses and at what the commuters needed was not the same time gouging the public. protection from competition, but protection This argument runs counter to the first. If from themselves and their own bad business entry into the commuter industry is as easy practices.) Therefore, the Workshop recom- as stated in argument one, then the predator mended that has little guarantee of retaining his monopoly and engaging in monopoly pricing long The commuter industry should retain its enough to cover the losses incurred while unregulated free competition status. driving the earlier competition out of business. Since the carrier cannot count on The Workshop was appraised of potential recovering losses, much less enjoying court decisions that could invalidate the monopoly profits, the chances of true preda- CAB's ability to exempt commuters from tory competition in the commuter industry regulation. With this in mind, the Workshop are very small. Further, even if truly preda- also recommended that tory conduct does take place, remedies may be available under existing anti-trust law. If regulation is forced upon the industry Since commuters are exempted from by the courts, Congress should enact regulation by the CAB, they do not possess specific legislation to exempt commuters CAB-supervised anti-trust immunity like from regulation or amend the Federal certificated carriers. Aviation Act of 1958 to allow the CAB to Commuters who were against certifica- insert conditions in commuter certifi- tion raised several objections. First, the cates that essentially retain the present costs of regulation, even if not full certifica- Part 298 in another form. tion, are prohibitive. One operator estimated that legal fees alone for participation in one If deregulation by statute is not desired, CAB proceeding added $2.50 to his hourly the authority of the CAB to place conditions operating costs for the entire year. in commuter certificates is essential. Under The second argument was that limited the current act, the CAB cannot directly certification would eventually mean full reg- control the aircraft type or size used by a ulation at some time. This would mean certificated carrier. This must be changed if limited profits since the CAB establishes the the commuters are to be prevented from appropriate rate of return. It would also following the transition of the local service mean lack of flexibility. A carrier would no carriers into aircraft too large for small com- longer be able to enter and leave markets at munity service. will, experiment with fares or do many of the A presentation made to the Workshop in- other things that have brought success to dicated that the legislative changes needed the commuters. to grant conditional commuter certificates are minimal. Since the Board already has For example, Northwest Airlines has the the power to grant certificates with condi- only direct route from Billings, Montana, to tions to supplemental air carriers, the sec- Washington, D.C. Western with Billings- tions of the act governing supplementals Denver authority and TWA with Denver- need only be expanded to include commuter Washington authority have entered into a air transportation. joint fare agreement that offers connecting passengers fares competitive with North- State Regulation All the comments and west. The resulting joint fare is considerably recommendations concerning federal regu- below the sum of the individual fares for the lation of commuters apply equally well to Billings-Denver and Denver-Washington state agencies. In the view of the Workshop, segments. the long range environment for commuters More recently, there has been a focus on should retain as many as possible of the the advantages of joint fares to the traveller freedoms they now have and subject them to as well as to the carriers. One presentation as few as possible of the regulatory burdens. to the Workshop made the point that joint Under the present system, commuters have fares to date have been a tool for diverting been able to serve air transportation needs traffic from one carrier to others. However, as the marketplace directs with little artifi- they could also be a tool for traffic genera- cial interference by the government. The tion. The presentation pointed out that a commuter is able to react and adapt to nationwide system of joint fares, while per- changing circumstances, maintain lower haps slightly diluting yield as compared to costs, provide higher frequencies and, as a direct service over any segment, would result, compete not only with other air car- stimulate overall traffic growth to an extent riers, but also with alternate modes of sur- that would more than offset any losses. face transport. It is vital in this respect that Since 'joint fares both increase carrier the state regulatory agencies do not, competition'and stimulate growth, the Work- through new and burdensome regulation, shop endorsed the action of the CAB in the destroy for these carriers the advantages Domestic Passenger Fare Investigation, now existing under federal regulatory phil- holding that certificated scheduled airlines osophy. must establish joint fares in all markets over In the Workshop's opinion, the proper role all routings. This action provides travellers of the state agencies is to plan and promote with generally available joint fares in all cer- the transportation system. Regulation tificated markets irrespective of their pre- should be applied only where there are truly vious historically limited use in competitive local, intrastate problems that cannot be situations only. In addition, the emphasis on solved by any other means. Where intrastate joint fares will probably result in fewer tariff- authority is used as an excuse to modify quoting errors, an area of consumer con- situations or policies of interstate commerce cern. with which the state does not agree, there is Many of the benefits of joint fares a clear abuse of power and conflict with between certificated carriers would result federal authority. Congressional action may from certificated carrier-commuter joint be necessary to correct such abuse. fares. However, the Workshop was not ready to recommend the mandatory insti- JOINT FARES tution of such a program by the CAB at this As mentioned previously, commuter car- time. The National Air Transportation Con- riers complained bitterly of their inability to ferences (NATC) has petitioned the Board enter into general joint fare agreements with for a hearing on this matter so all the factors certificated carriers and to have the joint can be explored. The Workshop encouraged fares they do establish published in the the Board to proceed with this hearing as proper tariffs. At the present time, each soon as possible. commuter joint fare in each market must be At the present time, the CAB could lend separately negotiated with each participat- its support to a broadening of the current ing certificated carrier. voluntary arrangements between the certifi- Historically, joint fares were a competitive cated and commuter carriers. In due device whereby two carriers could provide a course, after added experience with the new connecting service at a competitive price in certificated carrier joint fare policy and a market served directly by a third carrier. negotiated joint fares between commuters

38 and certificated carriers, further action may supports and encourages the expansion of be indicated. this concept to other modes and offices within the Department of Transportation. COUNSELLING COMMITTEE ON AVIATION Low/Medium Density Air Several times throughout the conterence, Transportation Policy Issues the DOT was criticized for formulating plans or programs in a vacuum and inviting com- Having discussed the more general topics ments and criticisms only after it was too of national transportation policy and overall late to redirect the effort to incorporate sug- air transportation policy, the Workshop con- gestions. One way to avoid this would be for sidered its central topic, the problems and the Secretary of DOT to have at his disposal issues of air service at low and medium den- a Counselling Committee on Aviation to pro- sity points. Underlying the discussion were vide a sounding board and assist him in questions which should be kept in mind. evaluating the content and timing of system What is the benefit of air service to these planning proposals and to recommend the points7 To the extent that the service costs initiation of new proposals where required. more than the revenues received, who pays The committee would be comprised of ex- the excess (subsidy)? And how should the perts from industry, academia and other payments be made if needed? institutions with a broad background of diverse experience and would be an on- COMMUNITY NEED FOR AIR SERVICE going activity — not organized to write a report and then disband. NASA and other "Community" was used in a broad sense, agencies have used such groups to great including state and regional areas when ap- advantage (although not without some criti- plicable as well as local cities or towns. In cism) and DOT could learn from their ex- isolated areas, air transportation may serve periences. a large geographic region even though the Shortly after the formal sessions of the airport is in one particular town. Workshop, several industry leaders formed Communities justify their need for air such a group to advise the Administrator of service on four basic grounds: community the FAA on issues of importance to short pride, economic development, population haul air transportation. The Workshop dispersion and isolation.

39 5C I W

Community Pride Many communities want been eliminated from consideration by a firm air service because they think it helps create seeking relocation because of inadequate the image of a progressive modern town. air service. Thus air service is often a Like good schools, paved streets, properly necessary, though not solely sufficient, trained police and fire departments and condition for the economic development of a other local amenities, air service helps region. people identify with their communities in a But again, who benefits from this positive way. But it should be noted that the development9 A century ago, the federal benefits of community pride accrue pri- government financed the expansion of the marily to the residents of the particular com- railroads because the ensuing development munity. of vast agricultural and mineral resources benefited the country as a whole as well as Economic Development Although some each new region settled. Today, with the studies have claimed that the mere provision possible exception of opening Alaska, im- of an airport in an area is enough to spark proved transportation facilitates the move- economic growth, evidence presented at the ment of products, people and goods, but Workshop indicated that neither airports nor does not stimulate national growth by un- even regularly scheduled air service are in locking new national resources. To the and of themselves sufficient for economic extent adequate transportation allows a firm development. Unless there are other factors to locate where its costs are the least, a such as access to materials, an adequate national goal of economic efficiency is pro- labor supply and the proper tax structure, air moted. However, the national gain is small service will not induce new industry to an compared to the direct benefits to the com- area. munity brought by industrial relocation. Enough evidence was presented, how- By the communities' own admissions, ever, to convince the Workshop that air they generally want modest expansion by service can be an important factor in at- low-polluting industries with growth limited tracting new industry to a town and that to perhaps 3 or 4% per year. Thus the many communities, although they offer all industry they seek is often light manufactur- the other inducements to new industry, have ing In general, such firms are already in business and are looking for a new location nation as a whole as compared to the in- because either the labor force in their area habitants of the isolated community. is inadequate or expensive or local taxes are In summary, the Workshop was con- rapidly increasing. Thus the decision to vinced that air service is needed by small leave town A is already made. When town B communities for a variety of valid reasons is selected over town C, the economy of and, to the extent that revenues do not cover town B grows, but at the expense of towns A costs, in some cases it should be subsidized and C. Thus, from a national perspective, because of the intangible benefits it offers to most of the benefits of community economic the local community. The Workshop was not development are transferred from one re- convinced, however, that the federal gion to another, providing little overall na- government should pay these subsidies, tional benefit that would not have accrued if since little overall direct national benefit ac- some other relocation decision had been crues from service to small communities. made. OTHER JUSTIFICATIONS FOR FEDERAL Population Dispersion As an adjunct to SUBSIDY economic development, the communities point to population dispersion as another In addition to the arguments of com- benefit of air transportation. As was men- munity need and population dispersal, at tioned in an earlier section, it is not clear least five other .arguments and counter- whether population dispersion is a national arguments were identified for federal sub- goal or whether better transportation aids sidy of air service to the small community. this goal. In addition, when a firm moves from the big city, it normally brings only a Infant Industry As recommended by the few key personnel with it (perhaps in- Workshop, federal subsidy may be justified creasing unemployment in the city left be- to encourage a new transportation experi- hind). The bulk of the positions are filled ment for a limited time. One reason for such from the already-formed local community an experiment would be to encourage- and since one reason for the move is usually an accelerate the growth of a new industry. adequate labor supply in the area. In fact, This would justify the inception of the local there is some evidence that the location of a service experiment in the 1940s. However, new business in a town actually concen- after 30 years, the industry can no longer be trates population since people are lured considered infant nor can subsidies for air from the farm and other nearby small towns service to small communities be considered because of better jobs. So perhaps the most an experiment. Any town on a local service that can be said is that economic develop- carrier's certificate that would have ment may keep some people from leaving responded to air service and grown into a the community for larger cities and thus self-supporting'point on the carrier's system helps prevent further concentration in large has long since achieved such status and it is urban areas. unlikely that any community that has not ever will. Isolation Perhaps the most difficult argument to assess is the community's need for Transportation as a Public Function The air service because of its isolation. And the federal government has historically support- small isolated community is often the least ed certain aspects of transportation for able to pay for the service it receives. In various periods of time. There is also a tra- fact, air service may be the most econom- dition as old as the Roman roads of govern- ical transportation to these communities. It ments providing facilities to improve trans- was estimated in the Canadian Ontario portation beyond the normal scope of private experiment that air service to four com- investment. Yet there is no legal obligation munities for one year costs less than one to provide federal support for local transpor- mile of highway construction. tation problems. And the growth of user Few would question that air service im- charges indicates a federal movement away proves life in these communities, if by from outright grants of transportation funds. nothing more than providing faster access to medical service when needed. But again it is Urban-Rural Equity Air service to small hard to quantify what benefits accrue to the communities may be subsidized on the

41 42

grounds that urban mass transit is subsi- and the responsibility for subsidizing air dized but, in keeping with the Workshop's transportation, where necessary, should overall subsidy recommendation, perhaps be delegated to the lowest governmental neither should be. Also, the connection be- level capable of assessing the costs and tween subsidized urban mass transit and benefits of this service. nationally proclaimed goals is clearer. Mass transit improves the general environment by This would put the burden of subsidy on getting people out of automobiles. It aids the the community, if community pride is the poor, enabling them to have access to better benefit they perceive. If economic growth is jobs and thereby reducing welfare and un- the benefit, then the town, county, state or employment payments. The poor are also even region that benefits from that growth heavily dependent on mass transit for should subsidize. If isolation is the concern, access to medical and educational facilities. then again the town, county, state or region In'contrast, air subsidies have little connec- concerned should pay for the service. tion with announced national goals (although The immediate question raised was how they do benefit local communities). The air will they pay? The present revenue sharing traveller is more often not poor but relatively plan is an excellent source of funds since high on the income scale. And last, those they are uncommitted. The community can who benefit directly from mass transit far decide how to spend the money and, if air outnumber air travellers on subsidized service has high enough priority, it will be routes. supported. If it does not have a high priority to the community, that is all the more justi- National System Benefit The subsidized fication for eliminating federal subsidy pay- system feeds passengers onto the unsubsi- ments. dized system, spreading fixed costs over The second comment was that local sub- more passengers and thus lowering overall sidies would result in random patterns of air transportation costs for all passengers. service and not in an integrated air trans- However, most economists doubt that the portation system. First, the Workshop unsubsidized air system is characterized by doubted if this would truly occur because such "increasing returns to scale" beyond communities would buy service to cities with those presently realized. Secondly, the good air service as well as other communi- primary benefit of the feeder traffic accrues ties of direct economic interest. Other con- to the airline company and its stockholders. nections would not be essential. Second, Benefits to travellers in general are remote the Workshop stressed the need for DOT and difficult to trace. Finally, if the govern- leadership for integrated national, state and ment wanted to lower overall travel cost local transportation. This would eliminate (again, it is not apparent that this is a na- many of the anticipated problems. tional goal), then the most efficient way to do so would be to subsidize all carriers Change in Federal Policy If the federal directly and not depend on secondary government decides, contrary to the Work- effects. shop's recommendations, to either announce a federal policy of providing air serv- Public Benefits of Availability The general ice to small communities or to run subsi- availability of air service is an asset to the dized experiments, then the Workshop rec- community and its people, even if never ommended that used. This is most certainly true but, again, it is an asset to the community, not to the Under any new federal subsidy proposal, nation in general. the government should concentrate on In summary, the Workshop found many minimizing costs for a specified service good reasons to justify subsidy to air service level or maximizing service for a speci- at small communities, but not directly by the fied subsidy level. federal government. It therefore recommended, in keeping with its general recom- To do this, the Workshop suggested that mendations on subsidy, that the government specify the service desired and not the operator, test new subsidy pay- Direct federal subsidy of air service to ment techniques, insist on local cost sharing small communities should be eliminated to assure community interest, make subsidy 43

predictable over a period that allows ade- strengthening policy of the 1960s, over 50% quate operator planning, and establish and of the local carriers' revenue passenger enforce community eligibility standards. The miles are now generated on long haul routes latter point would require measurable cri- adequately served by current jet aircraft like teria for subsidy such as isolation, minimum the DC-9 and 737. The difficult area for air- required passenger enplanement levels in craft requirements lies in between these two response to the service (strictly enforced), a extremes — markets now served by the car- maximum cost per boarded passenger and/ riers' aging turboprop equipment. Local car- or passenger mile, local cost sharing (plus riers expressed an interest in a 50 to 70 pas- some expression of democratic popular sup- senger jet for these markets, but thought the port through the use of revenue sharing cost of current aircraft in that size range (all funds, a referendum or similar technique). foreign) was too high. Several studies by Only such action can place federal subsidy manufacturers supported this position. on any reasonable basis if Congress decides M.I.T. and Frontier Airlines studies indi- to continue the program. cated that a 40-passenger jet could fit into a local service system and increase carrier Technology Issues revenues and profits. This aircraft would replace DC-9s or 737s on thinner jet routes Pervading and cutting across policy is- and Convairs on high density turboprop sues at all levels is technology. At any time, routes. However, these markets are already a technological breakthrough could obsolete profitable and presently receive adequate not only our thinking, but also an entire service. The end result would be higher car- mode of transportation. In the low/medium rier profits and better service to points al- density air transportation area, however, ready self-supporting, but no reduction in technology exists that could improve both cost or improvement in service to subsidized the quality and the cost of service. The prob- markets—the real area of concern at the lem is applying that technology to the market conference. in a cost-effective way. Commuter Requirements Most commuters AIRCRAFT operate small aircraft, particularly in low/ medium density markets. In the quarter The major issue raised at the Workshop ended June 30, 1971, there were 782 air- was whether the federal government should craft in the commuter fleet, but only 189 sponsor development of a new family of were turboprop-powered and none were small quiet aircraft to serve low/medium pure jet. The bulk of the remaining 593 air- density markets. A first concern was craft were small single-engine and light whether a new aircraft, using currently twins. Although commuter operators in available technology, could provide im- small markets expressed a desire for a less proved service to low/medium density mar- expensive, more rugged 10-passenger air- kets at lower costs. The secondary issues craft, there would be little commonality were what this aircraft might be like: Would between it and a 40-passenger jet. the same aircraft meet the needs of com- There may be a need for a larger 20 to 30 muters and locals? Should it be turboprop- passenger aircraft by commuters operating powered or jet? Is STOL capability required? in high density markets, particularly as air Can used aircraft satisfy the need? What en- traffic control slots at hub airports become vironmental characteristics are acceptable? more limited. Again, however, these are not Addressing the secondary issues first, the the types of markets that the Workshop was Workshop came to the conclusion that low/ established to address. medium density market characteristics are quite diverse and, as a result, have a variety Turboprop vs. Jet Local service carriers of aircraft needs. are committed to jet fleets. Commuter carriers, however, put jet power very low on Local Service Requirements There are their list. They are much more concerned some points on the local service systems about economical operation, low purchase that generate so little traffic that they cannot price and performance characteristics. If a be profitably served by any aircraft. At the jet can match the turboprop in all these other extreme, as a result of the route areas, then the commuter will buy it. But if it 44

cannot, business sense dictates turboprop markets. There would be little commonality power. and. as a result, there would be small pro- Discussions of passenger preference at duction runs and correspondingly high air- the Workshop led to a similar conclusion. craft prices. Passengers in the low/medium density Returning to the primary issue of whether markets would prefer to ride jets, but other the government should finance the design factors such as schedule convenience, re- and/or development of such an aircraft, the liability, dependability and costs are more Workshop concluded that this could not be important. Again, all things being equal, the justified at this time. A new 30 to 50 passen- passenger would select a jet. If factors are ger aircraft is too large to improve service or not equal, however, he will choose the lower costs at low density subsidized points. turboprop's lower cost. Used in medium density markets, it could improve the profitability of local service car- Other Concerns Environmental require- riers but improved private profits are not a ments, the need for STOL capability and the legitimate reason for federal subsidy. It was like depended heavily on the specific argued at the Workshop that the increased markets served. In most cases, low density profits from a new aircraft used on medium points were not noise or pollution conscious. density routes could cross-subsidize low Because of lower population densities, large density service, reducing operating subsidy open land areas around airports, predomi- and thus justifying government financing of nantly small aircraft and fewer overall air- aircraft development. However, even if craft movements, there was little community cross-subsidy is desirable (a disputed complaint. The opinion was expressed that point), it can be achieved at less cost to the hearing the aircraft actually made people government through route awards or fare in- feel good since it reminded them they were creases in non-subsidized markets. getting service. Although STOL capability can have a International Considerations Although not large economic impact on short haul operat- directly connected to the topic of service to ing costs by reducing taxi and maneuver small communities, the Workshop briefly time, STOL need was based more on geo- discussed whether the development of a graphic considerations than anything else. family of small jet aircraft could have inter- Airport and runway cost reductions were national implications such as helping to sometimes considered for introducing STOL retain United States leadership in interna- in very low density isolated markets where tional aviation, contributing to the balance of air access was needed to provide emer- payments and serving a humanitarian goal gency relief and medical service. It was of applying U.S. technology to improving air suggested at the Workshop that state and transportation systems in developing coun- regional planners in these areas should in- tries. The Workshop agreed that such public vestigate the total system cost of providing policy goals might be satisfied by a new air- such services and consider VTOL service craft and might even justify federal subsidy with its lower facility cost, although admit- of aircraft design and development, tedly higher operational costs, as an particularly because foreign aircraft being alternative. However, the institutional struc- developed for these markets are receiving ture of the. United States air system makes backing from their governments. It was also this total system approach difficult. In gen- suggested that such aircraft might be used eral, the federal government owns and by the military if a compromise design could operates the airways and navigation facil- be developed between the military's desire ities, state or local governments own and for high performance and the airlines' need operate the airport and associated facilities, for economic operation. But these issues and private industry owns and operates the were beyond the scope of the conference aircraft in the system. Each attempts to min- and not enough information was presented imize his own costs (often at the expense of on which the Workshop could base a con- the others) and there is no overall authority clusion. Therefore, the limited recom- to keep the total system in balance. mendation of the Workshop was that Having examined these secondary issues, the Workshop concluded that several diverse Although foreign trade and international types of aircraft are needed to serve diverse leadership concerns might justify gov- 45

ernment subsidy of the design and de- tailored to the public's needs. velopment of a family of new small jet Because of available land and few large aircraft, such a program cannot be justi- aircraft operations, the small airport does fied on domestic considerations alone. not usually face a severe environmental problem at this time. The operator should Research and Development Although the use this opportunity to purchase enough Workshop concluded that the federal gov- land before development begins to protect ernment should not fund the design and de- himself for the future. velopment of a commercial aircraft for Perhaps the most difficult problems facing domestic markets, it did feel that the gov- these airports are the federally-imposed ernment should continue its basic research security and certification requirements and technology programs that might ulti- which are essentially beyond the control of mately lead to commercial applications. the local operator. If these can be antici- However, no new high technology programs pated and designed into expansion plans, in the traditional sense are needed to sup- the operator can maximize ADAP revenues port the development of aircraft for low/ to offset some of these costs. Some com- medium density markets. The spin-off from munities have entered into joint use agree- current programs, which should be con- ments with military bases as a way of defer- tinued, is sufficient. Instead, programs are ring costs since the military often provides needed to apply existing technology and to essential security and emergency services. stimulate the private sector. Studies on "de- This solution depends on the geographic sign to cost" techniques (where the basic availability of military facilities and is often product and cost are specified and the engi- less than satisfactory since the community neer must meet both constraints), new is in a weak bargaining position and must manufacturing methods and new low-cost frequently take whatever is offered. materials are also needed. Therefore, the Failing any of these methods of offsetting Workshop recommended that federally-imposed costs, the operator must use either operational funds or seek ad- Studies are needed on "design to cost" ditional funds from the electorate. If such engineering, new manufacturing tech- funds are unavailable, then the airport faces niques and new materials to stress low closure. Federal cost sharing may be justi- cost and reliability rather than high cost fied to prevent this if public benefits can be technology. demonstrated.

AIRPORTS Problems of the Commuter Carrier at Low/Medium Density Airports Other than Airport problems were viewed from two those general problems discussed in the perspectives; that of the airport operator section on National Air Transportation Policy and that of the air carrier. In general, the Issues, the commuters face little difficulty at local carriers have had few problems be- the small airport. There is generally enough cause of their size and status. Therefore, ramp and apron space near the terminal and the Workshop concentrated on the interface gates to satisfy their needs. Terminals are between commuters and airport operators. often designed for people, not aircraft, allowing easy interchange of passengers and Problems of Low/Medium Density Air- baggage. port Operators The small airport operator The biggest needs of the carrier at the does not face the types or magnitude of small airport are dependable landing and problems of the larger airports. In general, navigation aids that would improve both his major task is maintaining good public re- safety and service reliability. lations with the electorate who often control airport financing in smaller cities and towns. Problems of Medium/High Density Air- Since traffic is relatively light, the operator port Operators A majority of passengers must pay close attention to his costs and be boarding at low/medium density points sure that users of the facilities pay their al- travel to a medium or high density point and located share of the costs incurred. This in- thus must be integrated with the traffic at the cludes concessions and services, which can larger hub. Since the passengers brought to be a valuable source of income when a hub by a commuter airline are only a small 46 percentage of the total passengers using the most traffic is interline. They need counter airport, their needs are often forgotten dur- space in terminals that is not relegated to ing the airport planning process. the luggage pickup or rental car areas. They The problems of the airport operator are need equal access to services. Since earlier both environmental quality and runway and recommendations covered many of these gate capacity. He has difficulty meeting the problems, the Workshop did not make needs of the certificated carriers much less specific recommendations in this area. In those of the commuters. general, progress is being made by the airport and commuter operators which Problems of the Commuter Carrier at should improve airport problems from both Medium/High Density Airports The com- perspectives. muters operating small aircraft contended they are treated like a fully certificated air OPERATIONS carrier in the air but like a second class carrier on the ground. At most airports, they The third area of technological concern enter the traffic patterns and are handled was system operations. Two major sub- indiscriminately from a 747 by air traffic topics were identified — air traffic control control. But after landing, they claim they and safety These are both very large and are shunted away from the carrier facilities controversial subjects but the discussion and forced to use the general aviation ter- was limited to the specific impact on minal at the far end of the field. low/medium density markets. In fact, the commuters' needs are just the opposite. They want expedited air traffic The Cost of the Air Traffic Control Sys- control procedures taking advantage of the tem This topic was triggered by the Cost Al- characteristics of small aircraft, using short location Study. As long as the ATC system or non-duty runways and avoiding the gen- was free, people wanted more of everything. eral traffic patterns. Where this has been Now that users may have to pay for serv- tried, it has worked successfully, but to date ices, they are questioning the cost and utility it has been at the discretion of local tower of various functions. personnel. A change in tower management The particular fear of operators in the low can eliminate these special procedures. density markets (primarily general aviation) On the ground, commuters need access is that the present ATC system, designed to cargo and passenger terminals since primarily to serve the high density terminals,

/ 47 will spread to low density airports where its ing. The ATC centers concentrate primarily high cost features are unneeded on their hubs Although it is possible to work A second subtopic was the FAA's over- out local procedures, the incentive has had reaction to some safety topics. The example to come from the carriers. There has been used was the disproportionate sums spent too little coordination between the ATC on collision avoidance systems compared to centers and the low density terminals. prevention of accidents during approach and The commuters were also concerned landing when the majority of fatal incidents about operating IFR in uncontrolled air- occur. space. Civil aircraft may legally operate VFR The Workshop's recommendations were in the same airspace if clear of the clouds that and the visibility is one mile. The commuters would like control zone protection which The FAA should not extend the full high would require at least three miles visibility density ATC system to low density for VFR. points and it should drop services that To improve these situations, the Work- users do not wish to support financially. shop recommended that

The FAA should balance safety with cost ATC centers should initiate letters of effectiveness in low density areas. agreement and local procedures at low density terminals. Air Traffic Control Procedural Problems At the high density ends of low/medium Controllers might hesitate to use local density market service, the capabilities of procedures because they don't know if the the smaller commuter aircraft to make steep user is familiar with them. Therefore, the or angled approaches are often not used. Workshop recommended that Although approach standards are presently different for large and small aircraft (ob- The FAA should publish local procedures struction clearance area sizes are larger for in the Airman's Information Manual. large aircraft which require greater turning radii, are less maneuverable, etc.), ap- Air Traffic Control Equipment Needs proach procedures could be developed to Although equipment is satisfactory at high take advantage of the characteristics of density terminals, an automatic direction smaller STOL or light aircraft without com- finder (ADF) is often the only approach aid promising safety. If these capabilities were at many commuter air terminals. (Many used, it would aid in traffic flow at higher pilots consider an ADF approach to be density points. Studies have shown that emergency procedure only.) there would be no problem separating small Area navigation is considered essential aircraft with operational capabilities and for low density air transport to provide direct field length requirements that differ from routing and approach capability to small air- large CTOL aircraft at major hubs, although ports not served by an approach facility. ATC operational changes might be needed VOR/DME coverage is almost nonexistent in (e.g.. separate controllers). Therefore, the high mountain regions and very sparse in Workshop recommended that many low traffic areas. Very low frequency (VLF) navigation offers promise in such re- The FAA should develop separate ap- gions, but at the present time needs some proach procedures for large and small backup. VLF hybrids could eliminate this aircraft. need. This type of system also gives non- precision approach capability at outlying air- These procedures can be expanded to in- ports at no additional cost. Research at the clude rotary-wing vehicles as their use in- DOT's Transportation Systems Center has creases. also shown strong potential for DME/DME Commuter carriers claimed that they ex- area navigation. perience as much delay at isolated airports The Workshop recommended that as in major hubs because of inadequate radar coverage, lack of local control au- The FAA should move to certificate VLF thority and interference from local IFR train- RNAV for IFR and DOT/TSC should con- •16

tinue research on DME/DME RNAV and generate vortices 90% as great as present VLF hybrids. wide-bodied aircraft. Therefore, traffic separation based on STOL or VTOL capabilities may still leave small aircraft vulnerable. The Coordination of Civil Aviation Safety Workshop therefore recommended that Civil aviation faces a number of safety problems ranging from pilot qualifications and hour limitations to combustible materials in The FAA should investigate the use of aircraft. Research and responsibility for im- wake vortex size as a criterion for aircraft proving these areas is fragmented among separation rather than weight or STOL different government agencies. The Work- capability or speed. shop was impressed by a presentation on the organization and effectiveness of the More research is needed on the causes of military's Joint Technical Coordinating approach accidents. A statistical study by Group on Aircraft Survivability and the the National Transportation Safety Board recommendation by one of its members that (NTSB) of causes to date would provide di- an interagency coordinating group be estab- rection for this program. Basic research on lished for civil aviation safety. The group deceptive visual altitude cues, particularly would not pre-empt any other agency's area on descent from clouds, could be of great of expertise, but would coordinate activities benefit as could educational programs on to eliminate duplicate programs and en- potential danger areas. The Workshop courage interagency cooperation and com- therefore recommended that munication. The equivalent military program has been very successful. The FAA and NASA, guided by NTSB The group would require authority, res- statistical studies, should conduct ad- ponsibility, a firm budget, a permanent staff ditional research into the causes of and an assured existence of a minimum of approach and landing accidents. five years so that long range planning and programs could be established. Therefore, the Workshop recommended that Safety Problems of Commuters No one knows what the industry safety record really Congress should authorize $3-5 million is. For statistical reporting purposes, the per year for a five-year period to initiate a commuters are lumped with non-scheduled joint civil coordinating group for aviation air taxis and helicopter operators. The raw safety. data exists, but has never been compiled for commuters as a category. In addition, no one has considered how to properly present Approach and Landing Safety Problems of commuter safety data. Because of short approach and landing safety were con- route segments and small passenger sidered particularly important in low/medi- capacity, commuters can never hope to ap- um density areas for several reasons. First, proach the safety record of long haul air car- the accident rate is very high during IFR riers on the basis of passenger miles. There- circling approaches, a common approach at fore, the Workshop recommended that most low density airports. Second, NASA radar tracking studies of VFR aircraft pat- The NTSB should initiate a program to terns at uncontrolled airports have disclosed improve published safety statistics on an entirely different environment from con- commuter airlines. trolled airports. There were numerous viola- tions of standard pattern entry procedures A second problem facing the commuter and several factors were noted that con- industry is the difficulty of small companies tributed to collision potential on the turn to instituting full-scale safety programs on their final approach. Third, small aircraft are par- own. They cannot afford separate safety ticularly vulnerable to wake vortex turbu- staffs or the preparation of comprehensive lence at larger airports. This situation may manuals as used by airlines and the military. get worse since data presented at the Work- And they need data support and organiza- shop indicated that powered lift aircraft tional help. Therefore, the Workshop recom- such as blown flap STOL are expected to mended that 49

NTSB should perform statistical research with the NATO should assist the com- on accident causes in commuter airlines muters with safety education, organiza- and the recommended joint civil coordi- tion for safety and safety programs based nating group for aviation safety working on the NTSB results. COMMENTS AND MINORITY VIEWS

After the initial draft report was dis- typically are to be used to develop, modify, tributed, numerous comments were re- test and evaluate systems, procedures, ceived from Workshop participants. In most facilities and devices. We do not believe that cases, the suggested changes were minor the recommended demonstration project and were directly incorporated into the re- neets these criteria and that R&D funds port. In several cases, however, the ;hould be used. This has the aspect of a changes were significant and several rec- subsidy and as such should be performed by ommendations were modified as a result. In the CAB if done at all. We believe the private other cases, the comments, although not marketplace should provide this entrepre- representing the majority view, deserved neur ship. special attention. This section will discuss F A. Meister both modifying and minority comments with Acting Associate Administrator quotations from participants' letters where for Plans appropriate. FAA November 12, 1973 Modified Workshop Recom- An industry representative stated a similar mendations position. This is a distortion (and unwarranted ex- In the draft report it was recommended pansion) of FAA responsibilities. The FAA is that the enforcement branch of the aviation [industry]... and should not be involved in de- The FAA's Quiet Short-Haul AirTranspor- fining markets or services to fit those mar- tation Systems Office [QSATSO] support kets.... the proposed North Dakota commuter FAA's inputs to such a demonstration, demonstration for service to small com- and hopeful feedback, are in the areas of munities (or similar state or regional flight equipment certification, operating pro- plan) as well as pursue its present plans cedures and the air traffic control system. of sponsoring demonstrations at con- They are by-products. The main event is in gested airports. the arenas of market demand and customer acceptance. Without discredit to the North Dakota pro- C.R. Dutton posal, the wording has been changed to Manager, Commercial emphasize the Workshop's desire for federal Marketing, Research and support of local or regional planning and Engineering demonstration efforts (of which North Lockheed-Georgia Company Dakota's is an excellent example). The October 31, 1973 intent was not to endorse one specific plan but to promote federal-state cooperation. Since QSATSO is no longer in a position to The Quiet Short-Haul Air Transportation take an active role in such a project, it is no Systems Office (QSATSO) appeared to be a longer clear which federal agency should likely federal office to participate in such a take the lead. Therefore, the recommenda- program since it was in the process of de- tion has been made more general. veloping a National Short-Haul Plan that Another recommendation was deleted en- would include demonstrations of new con- tirely. Several times throughout the concepts to relieve congestion at high density ference, the DOT was criticized for formu- airports. However, a recent FAA reorgan- lating plans or programs in a vacuum and ization drastically limited the future and inviting comments and criticisms only after it scope of the QSATSO program, essentially was too late to redirect the effort to incorpo- eliminating its participation in demonstration rate suggestions. Therefore the Workshop projects of any kind. The position of the FAA recommended that is stated as follows: The report recommends that Research A counselling committee on aviation and Development (R&D) funds of the FAA's should be established to support the Quiet Short Haul Systems Office be used for Secretary of DOT in evaluating and a commuter demonstration. FAA R&D funds recommending system plans.

50 The concept was to create an ongoing ports such activities and suggests they be activity with the participation of industry, continued, but no longer includes a specific academics and other interested parties to recommendation. provide a sounding board for the Office of The third recommendation drastically the Secretary of Transportation, help evalu- modified was that ate proposals in advance of major com- mitments and suggest new projects where Studies are needed on "design-to-cost" appropriate. engineering, new manufacturing tech- The recommendation, however, created a niques and new materials to stress low dilemma. If it were strongly supported by the cost and reliability rather than high cost Workshop, then should not the concept be technology. expanded to other modes than air? If it were not strongly supported, then shouldn't it be a In particular, NASA and DOT should de- suggestion rather than a recommendation? velop a family of new quiet engines. This Participants were specifically requested to should encourage manufacturers to de- forward comments on which form the velop new quiet aircraft for low/medium recommendation should take. Some parties density markets and retain United States' strongly supported the recommendation and world technology lead. thought it should be expanded. The entire second paragraph was re- [l]t is my opinion that such a committee moved. It was originally a compromise be- should be formed.... The aviation com- tween those who felt the government should munity is the most over regulated segment support actual aircraft development and of the Nation's population. All aspects of those who felt the government should do government involvement in this regulation nothing. The latter group could see some come as a result of ' 'think tank'' input from justification for federal participation in an government employees. Some input from engine program because public benefits the consumer or user certainly is in order. such as noise and pollution reduction would Jack K. Daniels result (in contrast to the predominantly pri- Chairman vate benefits from a new aircraft). North Dakota Aeronautics Criticism came from all quarters. Commission October 13, 1973 While the report does not endorse government sponsorship of a local service aircraft Some opposed it totally. development, a favorable posture is expressed for government sponsorship of a FAA in toto is the Secretary's advisor on commercial engine development on the aviation. Another committee would be su- premise that such engine development perfluous and of no use to the Secretary. could contribute to the retention of the U.S. The Assistant Secretaries on the environ- world technology lead. We cannot accept ment and safety, R&D, and policy are also this rationale. Engine development alone - advisors to the Secretary on aviation, among without a corollary airframe program — other matters. A duplication of this effort could decrease the U.S. technology lead in would really contribute to the "bureaucratic that it would provide a new engine only for machine" mentioned earlier in the report. foreign airframes — such as the YAK 40 — Robert L. Paullin thus making them more marketable in the Chief, R&D Policy U.S. In this respect it is felt that the eco- Implementation Division nomic value and subsidy impact of a truly U.S. Department of specialized new local service aircraft re- Transportation mains to be explored and that the basis for October 4, 1973 such analysis could well be NASA's currently planned design studies of innovative The majority felt it should be a suggestion. local service aircraft. In fact, a similar group has recently been C.E. Harris informally created by industry leaders to ad- Director, Domestic Marketing vise the Administrator of the FAA. With this Lockheed-Georgia Company in mind, the final draft encourages and sup- October 31, 1973

51 The case is not made as to why NASA, executed engine designs are relatively rare, from the Federal viewpoint, should be in- and quite costly to develop (relative to air- volved in the development of a family of new frame development), once an engine design quiet engines for low/medium density is brought into existence, it will and must be markets. If there is such a demand, and the utilized in a great number of aircraft applica- case is not made that there is, why can't tions in order to make these aircraft com- private industry develop the engines? It is mercially practical. Since the Workshop was certainly questionable whether or not such a addressed to a market in which there is gen- product would be beneficial to the country at eral agreement that a variety of highly large. As a matter of fact, the point is made specialized, but relatively inexpensive air- earlier in the report that noise is not much, if craft types are required to satisfy the various any, of a constraint at low/medium density operating contexts, the family, or common airports at the present time. This being so, core, concept of engine development there would be little if any benefit from a new becomes the essence of the matter. I think quiet engine at these same airports. that, if anything, it needs to be emphasized Robert L. Paullin even more strongly. Certainly there are no Cited previously. existing propulsion engines which will make aircraft more responsive to the commuter A small commercial engine having all the operator's needs possible in the foreseeable general characteristics offered by the O Fan future. or OCSEE engine is in existence in France, Bruce James White the Astafan produced by lurbomeca. The Senior Development Engineer characteristics of this type of engine can be AiResearch Manufacturing Co. demonstrated on the modified Aerocom- October 17, 1973 mander that Turbomeca uses as a test bed. I have flown this aircraft and found the engine It is through the fostering of improved pro- very quiet and responsive. We feel that pulsion that the federal government can best between the work Hamilton Standard has provide the stimulus needed to initiate the done on the variable pitch fan component development of quiet and economically and Turbomeca's development of the Asta- viable aircraft for the low/medium density fan sufficient development is already ac- market. NASA is currently funding the Quiet, complished to make expenditure of scarce Clean Short Haul, Experimental Engine U.S. government R&D dollars on this engine (OCSEE) program tor the propulsion needs development unnecessary at this time. of the 150 passenger, M = .75- .80 class of If noise constraints eventually require the aircraft. Some of the fundamental tech- use of this type of engine and the higher nology advances from that program may operating costs occasioned by its use are well apply to the engines for the smaller and economically acceptable, then the normal slower commuter aircraft. However, the market forces would probably cause such an grossly different mission profile of the latter engine to be developed. It seems to us in- dictates the need for a separate program to consistent to recommend against subsidy to develop an optimum powerplant for that develop an aircraft that is needed to reduce class of application. or eliminate annual local airline subsidy pay- One size of engine appears to fit the pro- ments, but recommend subsidy to develop a pulsion requirements for the two aircraft family of engines for which no clear eco- sizes most commonly discussed nomic requirement currently exists. 2-engine, 30 passenger feederliner and the Anthony A. duPont 4-engine, 60-70 passenger commuter. In President view of this commonality, it would be ap- duPont Aerospace Company propriate for the federal government to Octobers, 1973 sponsor a program to develop a very high bypass powerplant in the 7,000 - 10,000 pound thrust class to meet the unique re- Two strong objections to the deletion were quirements of such aircraft. made. Suitable gas turbine core engines are [H]istorically it has been shown that new available in this size range thus obviating the aircraft are possible only if a suitable engine need for costly core engine development. is available. Since truly pertinent, well- One of these could be selected to serve as

52 the basis for a prototype development pro- The NTSB should conduct additional re- gram utilizing the new very high bypass search into causes of approach and land- engine technology to offer a potential for ing accidents. shorter field lengths, lower operating costs and a most attractive noise level in the It was pointed out by Mr. Kenneth Hodge, vicinity of FAR36 -20db. The introduction of Director of Aeronautical Operating Systems, such an engine to the propulsion inventory NASA; Mr. John Enders, Chief Aircraft/Air- could be the single factor that would spur port Operating Problems, NASA; and Mr. the expansion of low/medium density air Robert Paullin, Chief, R&D Policy Imple- transportation systems. In particular, the mentation, DOT, that NTSB would provide lower noise levels and steeper flight paths the statistical data needed to identify prob- afforded by the new engines would eliminate lem areas, but that actual safety research the current obstacles to the development of programs would be performed by NASA and an effective network of airports needed for the FAA. The recommendation was re- this expansion. worded appropriately. George Rosen Chief of Propulsion R&D Comments on Workshop Hamilton Standard Division Recommendations United Aircraft Corp. November 12, 1973 The following comments on the Workshop recommendations, while not representing However, since the vast majority of com- majority positions, are significant and ments on the draft report were against the deserve special attention. They are pre- recommendation, the portion concerning sented with the recommendations in the engine development and the associated dis- same order as in the report. Recommenda- cussion have been removed. tions that were discussed in the previous The final recommendation receiving section or that received little comment are major modification was that not reproduced in this section.

53 NATIONAL TRANSPORTATION POLICY has been reported.) True cost, collected by ISSUES user charges, for low density short haul air could have a big impact on these opera- The DOT should take an active, agressive tions. Energy requirements should likewise role in the formulation and coordination consider energy expended for operation, of integrated national transportation snow removal, construction and main- policy. tenance. Concur, but plans must also be estab- Jack T. Stultz lished to implement such a policy. The need Manager. Airline Marketing is for action not just platitudes. Sikorsky Aircraft Division C R. Dutton United Aircraft Corp. Cited previously. October 19. 1973 Coordination is a mechanical task. We in The transportation planner in each mode the Department must do more than that: that will have difficulty considering total energy is. we must assure that policy is made and efficiency because he is not in a position to then implemented, that plans and programs make modal tradeoffs. Trust funds also work are formulated and carried out so that against this consideration. This problem "policy" comes into being. should be identified in the report. Robert L. Paullin F. A. Meister Cited previously. Cited previously. The statement is made [in support of this / still have major problems in declaring recommendation] that: "there has been no energy efficiency per se as being any sort of clear statement of national policy that pro- national goal.... [This opens] up the poten- vides direction to the planner, the industry or tial for a great deal of waste of resources if the public. " While there is no specific state- you go this route. ment of broad national policy per se, na- George Eads tional policy is reflected in existing laws, Associate Professor of orders, regulations, etc. and their applica- Economics tion. This is a framework within which plan- The George Washington ners work now and should be explicitly University recognized in the report. September 28, 1973 F. A. Meister Cited previously. Too much mischief can come from undue preoccupation with "energy crisis. " James C. Miller ill In taking the lead in transportation Associate Professor of planning and coordination, the DOT Economics should consider modal economic effi- Texas A&M University ciency (including all private and public October 1, 1973 costs and benefits), modal energy requirements and consumer desires in 1. Federal subsidies to transportation formulating policy. should be paid only when A. There is a clear national policy that Considerations of environment and land the subsidy payments encourage use should also be added. Land use may be or support; or aviation's largest single advantage to the B. The subsidies are for limited ex- nation as a whole. periments to demonstrate the po- C R. Dutton tential of new concepts to the pri- Cited Previously. vate market, which would take over implementation if the demonstra- [C]ap/ra/ cosf and maintenance cost of tion were successful. airports have not been properly reflected in 2. This policy toward transportation sub- the total air transportation cost. These costs sidies should apply to all modes. are rising and there is some movement toward the user paying his full share. The reasoning used to justify the con- (5,000 for a 747 turn-around at Heathrow clusion on policy and subsidy fails to recog- 55 nize that the air transport industry does not B. (No change) operate as an open, free enterprise system, 2. This policy toward air transportation sub- and the Federal Government is not likely to sidies should apply to all air carriers. become less involved in its operation. A. The selection of air carriers to re- C. E. Harris ceive such subsidies should be predi- Cited previously. cated on a combination of desire and ability to serve, economic efficiency [7] he one area where we are apart is in and energy considerations. your comments on federal support for a dis- B. The amount of subsidy should be tinctly local benefit. It reads as if you see the such to assure full compensation in- nation as being divided between local people cluding a reasonable return on invest- and national people. We know, of course, ment for the service performed. there are no national people, but only local Gordon Linkon people who together make up the nation. Vice President-Marketing With the exception of such activities as the Frontier Airlines administration of the federal government October 18, 1973 and the business of foreign policy and national defense, practically everything else [The discussion leading to this recommen- the federal government does has to be done dation] seems to overlook the fact that Con- in one or more localities. It is fair to say that gress has found that subsidy of some local local service airlines pretty much blanket the benefits is in the national interest. If this is country so that air transportation to all local the wisdom of our collective representa- areas by them is truly national in scope. tives, how can it be "found without merit"? William W. Hogan ...I think that any realistic appraisal of what Treasurer Congress has done provides ample evidence Frontier Airlines that low cost transportation for every September 26, 1973 American is an implicit, if not explicit, na- Good idea to demand a clear national tional goal or policy. I find the evidence of policy. Is not this policy outlined in many things done much more persuasive than the Senate resolutions of past years regarding evidence of things said. Hence it seems local carrier subsidy? open to question that things would be much William M. Magruder improved if Congress said explicitly the pur- Executive Vice President pose for which it did things implicitly. Piedmont Airlines Robert E. Monroe Octobers, 1973 Vice President - Policy and Technical Planning / agree that the general consensus was Aircraft Owners and Pilots that the DOT should play an aggressive role Association in the formulation and coordination of an November 12, 1973 integrated National Transportation Policy. What the report fails to mention, however, The difficulty of the draft report in dis- are the directives already laid down by the cussing subsidy is its belief that all subsidies Congress, particularly in the Federal Avi- should be paid by the users — it considers a ation Act of 1958. In fact, one could con- national transportation system to be a serv- clude that the Workshop intentionally or ice for the users and not a national asset for inadvertently ignored the Federal Aviation the benefit of all the people. The aviation in- Act of 1958.... I do not believe...that the dustry produces substantial public benefits recommendation as written is the consensus to all of the nation. Subsidy to enhance of the Workshop. these benefits can be justified were appro- I recommend the following substitution: priate national benefits are derived. 1. Federal subsidies to Air Transportation LASAC [Local Airline Service Action be paid only when Committee] maintains that a National Air Transportation Policy has real basis in the A. Such subsidies are required to pro- historical record of Congressional action. If vide a level of air transportation serv- present policy declarations are insufficient, ice determined to be in support of the a more detailed statement of national policy National Transportation Policy. may be required. To this end, LASAC continues its support for the following goals: / believe for instance, that the goal of re- (1) The expansion and development of distribution of population is a worthy one and local air service to ensure the broadest pos- that lacking any change in policy since the sible coverage at the lowest practicable President's 1970 State Of The Union Mes- rates to serve the needs of the small- and sage it remains an official policy. I agree medium-sized cities and the nation with air with the report in its conclusion that im- services. provements in the air transportation system (2) The establishment of procedures and will not assist in moving population from programs for cooperative efforts by the fed- urban to rural environments, but I feel such eral, state and local governments in the improvements might reduce the present flow formulation of standards and policies to of population from rural to urban environ- govern the inauguration, maintenance and ments. When one considers the huge invest- development of local air service in the vari- ments being made in cities to cope with their ous areas of the country. increasing populations, the investment in (3) A review by the Congress of the admin- subsidy seems small and, if effective in istration by the Civil Aeronautics Board of slowing the population growth in cities, the policy of the Federal Aviation Act with worthwhile. respect to local air services and the John R. Auer adoption of a resolution or statute express- Deputy Director for Operations ing the sense of Congress in regard to local Department of Aeronautics air service. State of Nebraska (4) The maintenance of at least the current October 9, 1973 level of local air service with regard to cities served and schedules operated pending the The discussion about whether people review by Congress. want to live in urban or rural areas involves too much speculation about what people do James L. Vance or do not want to do. If National Transporta- President, Local Airline tion Policy is to be established and meaning- Service Action Committee ful for the next 25 years, then we should be Publisher, Worthington Minn. looking ahead to what should be, not neces- Daily Globe sarily what we have now. October 29, 1973 Howard C. Tinney Manager, DHC-7 Program DOT, as part of its planning process, Boeing Commercial Airplane Co. should attempt to strike a better balance October 23, 1973 between rural and urban transportation services. The statement that people do not want to locate in smaller towns surprises LASAC The report recommends a better balance [Local Airline Service Action Committee]. between rural and urban transportation. This Job opportunities not considered, substan- is an admirable goal, but how are expendi- tial evidence on preference of city dwellers tures to be a/located to achieve it? For for living locations, countryside vs. metro example, does the interstate highway sys- center, has been accumulated. The results tem serve the needs of the residents of large of these studies point to opposite conclu- cities or has it opened up rural areas thus sions. Where people live, finally, is often a providing better access to cities as well as determinant of economic opportunity, which other rural areas? An elaboration of this in turn is at least a partial byproduct of thought might be good to include in the transportation adequacy. Good air service report. can be a vital factor in promoting a healthy F. A. Meister dispersal of industrial facilities to all parts of Cited previously. the nation. To this end, the Congress is the appropriate national agency to establish a The DOT, with other government agen- determination whether population dispersal cies, should determine if in fact popula- should be a valid national goal and how tion dispersal is a valid national goal and transportation aids should promote or de- how transportation aids or detracts from tract from that goal. Public policy determi- that goal. nations of this import should involve a broad

56 •

base of public input at the highest level of activities that rely on the present system. decision making. James L. Vance / disagree that the evidence referred to is Cited previously. as strong as the Workshop implies and invite your attention to the [recent] paper by / question the validity of the material Battelle [challenging the Cost Allocation respecting population dispersion. The im- Study]. plicit purpose of the host of laws, programs Robert E. Monroe and appropriations to improve the quality of Cited previously. rural life is to make it unnecessary for people to migrate to the cities to obtain a An unwarranted assumption based on a better quality of life and to make it possible faulty foregone conclusion. If the Workshop for those in the cities who are so inclined to did not contribute in any way to clearing up return to relatively rural locations. Note for this issue then no recommendation should example the Appalachia program and its be implied. counterpart commissions, the Rural De- C. R. Dutton velopment Act of 1972, and a number of Cited previously. other rural assistance programs you will find referenced in the Congressional Quarterly. I The reference to the "air carrier" industry have seen several remarks on this subject in paying their share of the system costs [while the Congressional Record and one which "General Aviation" is not] must be stopped. arose from a speech atone of our meetings. The "air carriers" are not paying much more than "General Aviation. " All they are Robert E. Monroe paying is the registration and weight tax. The Cited previously. people or group of system "Users" that are really paying their share are the airline pas- NATIONAL AIR TRANSPORTATION sengers and they should be getting the POLICY ISSUES credit. Jack K. Daniels The evidence seems strong, even with Cited previously. faulty statistics, that some upward adjustment of general aviation payments is One group of people felt that the cost al- in order. But this should be gradual in location study should have looked at costs order to avoid unnecessary disruption of from another viewpoint, i.e., 1) determine

57 cost of system required to meet military be done without subsidy, it would of course needs, 2) determine costs for additional fa- be the result which the draft report is seek- cilities and services (above those required ing. LASAC [Local Airline Service Action for the military) required to support air car- Committee] feels the draft report tends to riers, and 3) determine if those facilities and regard commuter capabilities in this regard services satisfy the requirements of general with undue optimism. LASAC is of the opin- aviation; if not, add facilities and services ion the end result would be subsidy for the until the requirements are satisfied. The commuter carriers who would then become costs should then be allocated according to local service carriers, and MIT would be the facility and service requirements. recommending their merger with the trunks Howard C. Tinney in the year 2002, or thereabouts. Cited previously. James L. Vance Cited previously. The CAB should announce a policy of allowing gradual expansion and evolution of locals to trunk status as present ex- [T]his trend introduces a deficiency in the cess capacity is absorbed with the con- gross air transport system. The second comitant elimination of local service sub- levels are not, and were never intended to sidies and deletion of subsidized points. be, "localservice" carriers, as they have so erroneously been called over the years. Rather, their route structures are intended / see nothing to be gained in the way of ef- to be regionally oriented, and as nonredun- ficiency or anything else by the merger of dant regionally as possible. The essential locals into trunks. I know of absolutely no capability that this implies which is not in- evidence that this is desirable or necessary herent to the local service, or commuter, George Eads context is ability to provide service from Cited previously. some relatively low density point to quite This is a drastic measure which would put distant points of much higher population us in the posture of 30 years ago when local density within their own system.... service carriers were created to serve One must not overlook the purpose of the small/medium communities. The corollary charter under which the U.S. second levels of merging local service carriers into the were originally certificated, and appreciate trunks is the emergence of commuter car- the fact that the commuters cannot ever be riers to serve the smaller cities. If this could in a position to fill this role, and still be res- 58 ponsive to the true commuter market. The DOT, FAA and CAB should officially Bruce James White recognize and endorse commuters as a Cited previously. vital segment of air transportation not essentially different qualitatively from cer- The recommendation is based on the as- tificated air carriers. The federal agencies sumption that commuter carriers can pro- should impress these attitudes upon vide needed service to small communities state, local and airport authorities as well as local service carriers delete them. This as influence the certificated carriers to drew the following comment: adopt more cooperative arrangements \T]here are no commuters that fit your with commuters. description., .that service the Piedmont There should be a total and complete dis- area. This is not to say that they could not association of commuters from general appear at some date, but the population aviation and air taxis, including separate density is not the same as in the Allegheny regulations where appropriate. area and they do not exist now. [T]he report should have gone on to rec- William M. Magruder ommend that in achieving this disassoci- Cited previously. ation, the Board should acknowledge this di- vorce with a separate and distinct set of The report states that Air Line Pilots As- Regulations entitled "Classification and sociation (ALPA) resistance must be over- Exemptions of Commuter Air Carriers"... come for the transition of locals to trunk Karl P. Baldwin status to take place and that nationally ALPA Chairman of the Board is against local carriers deleting points or Air Wisconsin entering into commuter substitution agree- September 24, 1973 ments. The report points to the "Scope" clause that requires union approval of such The commuter industry should retain its deletions or substitutions and ALPA's recent unregulated free competition status. court challenge of the CAB's power to ex- If regulation is forced upon the industry empt commuters from detailed regulation as by the courts, Congress should enact evidence of this policy. specific legislation to exempt commuters [The] Draft Report misstates ALPA's po- from regulation or amend the Federal sition. ALPA has no national or general Aviation Act of 1958 to allow the CAB to policy opposing the "deletion" of certifi- insert conditions in commuter certificated points. Nor is ALPA's opposition to the cates that essentially retain the present commuter substitution program based upon Part 298 in another form. "highly technical arguments," although, I suppose, this may be a matter for subjective judgment. In my opinion, ALPA's legal po- / believe this section misses a very sig- sition is quite simple and non-technical: i. e., nificant point raised at the Workshop. It ap- Congress did not give CAB power to appoint pears the drafter of this section erroneously unregulated carriers to perform the work of assumed that the issue of certification had the certificated transportation system. to be resolved on an "all or nothing" basis. Gary Green This is not the consensus of the Workshop. Director, Legal Department The participants who favored certification ALPA and those opposed to certification were in September 25, 1973 agreement that if certification were made available but did not become mandatory, the // appeared to be the sense of those pres- industry, the small communities and the ent that the Scope Clause and ALPA's legal regulatory agencies would have the best of action against the CAB were not the anti- all possible worlds. commuter actions they have been made out We would have a flexible system which to be. would support free competition in high den- Lou Davis sity markets, provide protection in thin mar- Director, Public Relations kets and provide the opportunity for a direct ALPA subsidy experiment where subsidy may be October 23, 1973 required. 59 In fact, a commuter carrier should be per- between "too large aircraft" and federal mitted to serve one market in a free com- operational subsidies.... petitive environment (no certificate require- C. R. Dutton ment or limitation), another based on an ar- Cited previously. rangement with a local carrier and still a third under a certificate from the CAB with [A]ll levels of scheduled air transport all of the burdens and benefits attendant to services must eventually be regulated by a such certificate (including the potential for federal agency, and that agency must be the subsidy). CAB. State agencies should have nothing to Gordon Linkon do with the matter. In general, they have Cited previously. neither the understanding or visibility of the overall situation, nor can they be sufficiently divorced from political pressures to function The report stresses that the CAB must adequately in a position of any authority. have the power to restrict the types of air- I cite the fragmented inconsistent nature craft commuters can use to prevent their of the local service air transport industry in following the transition of the local service the United Kingdom during the past twenty carriers into aircraft too large for small com- years as a prime example of what happens munity service. to a segment of a total public service requirement which is outside the interests and The big airplane is not the culprit it is protection of a federal or national regulatory made out to be. The locals went to the more power which in fact has other interests comfortable (pressurized, jet) equipment to within the total system. What is necessary is protect their markets. The competition was for the CAB to come to a better understand- the family automobile and it was (and is) ing of the essential differences in the four formidable. There were no small airplanes basic levels of the service structure, and that were a/so comfortable airplanes. Com- how they must relate to each other. muter success now is in part a reflection of Bruce James White increased surface (auto) traffic congestion Cited previously. and the frustrations attendant thereto. If the commuters experience any growth at all / differ with the conclusion that limited they too are going to want to go to larger certification is not required in the commuter equipment — for both competitive and eco- market. Your logic in developing this con- nomic reasons. clusion is impeccable, but we have re- There is no proof that subsidy payments peatedly seen entries into aviation markets have in fact increased — on a real or con- that were not based on logic. It seems that stant dollar basis — as a result of re-equip there will always be people willing to invest programs. The correlation is more akin to in aviation in the face of very dismal pros- general economic conditions. It was an un- pects just because they love the flying busi- fortunate "happenstance" that the jets were ness. Our experience with commuter serv- ordered at about the time of the 1957-1958 ice in Nebraska is limited but we have sev- recession and that significant progress pay- eral instances of two or three marginal ments had to be made during the 1960-1961 operators competing with each other in recession. Subsidy hit a peak in 1963, the markets which are only adequate for one. year the first jets were introduced by the John R. Auer locals, but was significantly reduced each Cited previously. year thereafter, as the economy — and jet fleets — expanded. Industry payments in LOW/MEDIUM DENSITY AIR TRANS- 1970 were the lowest since 1963 on a cur- PORTATION POLICY ISSUES rent dollar basis, and the lowest since 1955 on a constant dollar basis. Once again the Direct federal subsidy of air service to increases in subsidy in 1971 and 1973 are in small communities should be eliminated exact juxtaposition with a down-turn in the and the responsibility for subsidizing air economy. transportation, where necessary, should There were of course other forces at work be delegated to the lowest governmental during these periods as well, but the above level capable of assessing the costs and evidence is sufficient to dispel the direct tie benefits of the service.

60 The draft report appears to consider sub- [In addition, the Workshop failed] to ad- sidy to be an objectionable concept and dress itself to the very large problem of how would eliminate it. Philosophically and prac- do we get from here to there.... If federal tically, LASAC [Local Airline Service Action subsidy is terminated, the certificated car- Committee] must take exception to this rier involved must surely be given the option broad exclusion. Subsidies in a wide variety to terminate its service or to continue with- of forms traditionally have played an impor- out any subsidy or receive a localized sub- tant role in development and maintenance of sidy. If the choice is, in fact, a "free the nation's transportation systems. Con- choice," the small isolated community is sidering the needs and costs for providing bound to lose. Ifitisnota "free choice" and scheduled air service to the low/medium a requirement to serve can be imposed on a population centers throughout most of the local carrier at the state level, what happens nation, it is inconceivable to LASAC that any to the plan to permit local carriers to tran- kind of adequate system can be maintained sition to smaller trunks?... without a degree of subsidy, either public In essence, I believe the recommendation subsidy or that provided internally by the to eliminate all federal subsidy is both con- carriers from proceeds of more profitable, trary to the consensus of the Workshop and long-haul routes. LASAC does not argue that good judgment. That is not to say, however, certain routes by both certificated and non- fhaf a recommendation is not in order to re- certificated carriers cannot operate profit- duce the amount of federal subsidy through ably without subsidy. LASAC does argue deletions, flow through, direct subsidy to there is a continuing national need to pro- commuters, etc., coupled with a recom- vide dependable, scheduled air service to mendation to encourage localized subsidy smaller and medium-sized cities in all parts for commuter service to communities that of the country: to provide this service, sub- do not otherwise meet federal standards. sidy where appropriate, will continued to be Gordon Linkon required.... Cited previously. The statement that funds received through revenue sharing can be expended by the smaller community to support air In its discussion of this recommendation, service is not supported anywhere in the the report raises several possible reasons report. Even if there were no other priorities for federal subsidy, but rejects them as for these funds, the amounts of revenue being primarily local matters. sharing dollars received by these municipal- Regarding community pride, I think that ities are generally wholly unequal to the cost community pride leads to pride in the state of air service subsidy. and nation that provides the climate for a James L. Vance community to do prideful things. I doubt that Cited previously. you really mean to suggest that there is no national interest or benefit from being com- There is apparent inconsistency with res- posed of communities that take pride in their pect to the conclusions related to National community progress. After all, these com- Transportation Policy Issues, i.e., how can munities are the sources of all that tax the Workshop on the one hand recommend money that the nation redistributes. federal subsidy payments in support of a Regarding.. .Economic.. .Development... clear National Policy and recommend to [t]he studies I have seen have indicated the eliminate federal subsidy, on the other hand. airport as one of the indispensable ingredi- There is also an inconsistency with res- ents among others for economic growth.... pect to the recommendation for no regula- [ The report] again deals with the concept tions or interference from state or local of benefits for the nation as a whole. I can't agencies on the one hand and the recom- help repeating that the nation is made up of mendation that subsidies be paid from state individuals and I know of no way that the na- or local agencies. Clearly, no one can pru- tion can be benefitted as a whole without dently recommend localized subsidy without benefitting individuals. Sooner or later, localized regulations to assure that the pur- every federal program impacts on some one poses requiring subsidy are being made on or more individuals. I conclude that an im- an honest, economical and efficient possible and fallacious criterion has been basis... applied. 61 Regarding Transportation as a Public Function, is it really "local" transportation that we are talking about? Section 8 of Article I of the Constitution would seem to establish some obligations "for post roads" and their modern day equivalents; and a large number of Congressional enactments for the purpose seems to belie the assertion that there is no [federal] legal obligation in local matters of this kind.... Robert E. Monroe Cited previously.

TECHNOLOGY ISSUES Although foreign trade and international leadership concerns might justify government subsidy of the design and development of a family of new small jet aircraft, such a program cannot be justified on domestic considerations alone.

[You] are totally off base with any recommendation suggesting that government subsidy for development of small jet aircraft might be justified on grounds of "foreign trade and international leadership. " George Eads Cited previously. [A] national point has been missed here. Also, a national opportunity. We have limited resources, but we do have multiple mis- sions — Navy COD, USAF CXX, State De- partment Embassy Aircraft, et al. The replacement for the locals' YS-11, F-27 and Convairs is only five years away. Why avoid the subject of putting the requirements together? These airplanes have always been severely compromised. I believe this to be a great area for technology planning. The COD requirements are not rigid. For example, the speed was selected only to assure no propellers — a maintenance concern. I would suggest that somehow a col- lection of their requirements be examined to determine what can be done. Remember, airplanes like the DC-8 have ranges that vary from 2500 to 6000 n. mi., different wing areas, spans, leading and trailing edges, several engines, several fuselage lengths, cargo and convertible configurations. Few, if any, of these model variations were planned in advance. The current DOD, OMB and Congress mood is to save money in defense areas when it makes sense and I believe this is a sensible area. One configura- tion of the basic model does not have to do all jobs, but a good basic design with several technology. Therefore it is not correct to say model changes would probably do a great that no new technology is needed. many things much cheaper than three or Susan D. Norman four optimized airplanes. Aerospace Engineer My coordination with the Navy COD NASA Ames Research Center people did not show any great desire for a October 28, 1973 high performance aircraft. Their original speed requirement was for 250 knots, but One half the operating cost is labor. One they raised it to 330 knots to try and elimi- thing that is hurting the commuters and local nate propellers due to maintenance prob- service carriers is the increase in cost per lems in their present fleet. I believe the mili- seat for non-jet aircraft. The consensus was tary-civil compromise can be easily ob- that R&D needs to be directed toward an air- tained. plane which is simpler to operate and re- The domestic justification that overrides quires fewer manhours for maintenance. all others these days is to spend money effi- Reliability and simplicity being the key areas ciently. The COD, CXX, State Department for development. Breakeven costs for the - helping in subsidy is a high order of na- airplane should be at load factors of less tional priority — if it is presented this way. It than 40%. is just hard to do these things across depart- Howard C. Tinney ments, services and with civil operators. I Cited previously. also do not necessarily agree that such an aircraft would not reduce subsidy. The more The FAA should balance safety with cost profit on medium-density routes, the less effectiveness in low density areas. subsidy on low-density routes. William M. Magruder This is a poor way in which to achieve Cited previously. safety. Cost effectiveness by definition means the quantification of dollars versus A single high performance short field air- some parameter of effectiveness. His- craft can satisfy a number of civilian and torically, the FAA has not accepted the rate military needs such as COD, utility transport of say five fatal accidents per year as bal- and attache aircraft. The proper aircraft can ancing off the cost, for example, of a par- have a large enough production base to ticular flight control system or an air traffic have reasonable purchase costs. The control system. government can and should support the de- Robert L. Paullin velopment of such an aircraft by procuring it Cited previously. for COD and other military requirements and paying the development costs of the military [The Local Airline Service Action Com- versions. The development cost of the air- mittee (LASAC)] is somewhat appalled at craft in addition to being justified by the the statement that the "FAA should balance military requirements will be returned to the safety with cost effectiveness in low density taxpayers many times over by the reduction areas. " The aviation background of numer- of the procurement cost to the military be- ous LASAC representatives indoctrinated cause the production base is increased by them with the principle that "safety is no civil airline requirements, by improved local compromise. " LASAC must deplore any at- airline service, and by the eventual reduc- tempt to improve the economics of an air tion or even elimination of subsidy to the carrier operation at the expense of safety. local service airlines. James L. Vance Anthony A. duPont Cited previously. Cited previously. ATC centers should initiate letters of Studies are needed on "design-to-cost" agreement and local procedures at low engineering, new manufacturing tech- density terminals and the FAA should niques and new materials to stress low publish local procedures in the Airman's cost and reliability rather than high cost Information Manual. technology. These recommendations arise from the These types of studies involve a form of problems faced by commuter carriers at

63 small, uncontrolled airports. be effective, even though authorized a con- [On the one hand] you refer to controlled siderable amount of money for a five year air space and changes to VFR minimum vis- period. ibility requirements, while on the other hand Robert L. Paullin you refer to low density markets. Care must Cited previously. be exercised in the imposition of restrictions on the general aviation operator that provide For air carriers, all operations, for the for a commuter to fly IFR in controlled air period 1950 through 1970, 21 years, the space once or twice a day serving five to six total fatality rate averaged at 5.99 fatalities passengers. per 100,000 flying, hours.... Air carriers are Once the control zone is established it considered to be one of the safer forms of exists 24 hours per day and further reduces transportation. The same figure for general the freedoms of the non-air carrier aircraft aviation is 6.57, about 1/2 a fatality more. operator permanently. This suggests to me that safety is not the Jack K. Daniels major problem it is presented to be. Injuries Cited previously. in aviation are a fraction of fatalities while in surface transportation the reverse is the "Control zone" type protection around case. Since no federal records are kept or airports served by Commuters is a must. published on property damage due to The passenger deserves the same consid- aviation, the implication is that it is a minor eration in Podunk that he does in megalopo- matter. This leads me to question the validity lis — this is a double standard of safety. or benefit of the recommendation for a $3-5 C. R. Dutton million dollar program for a coordinating Cited previously. group for aviation safety. Robert E. Monroe The FAA should move to certificate VLF Cited previously. RNAV for IFR and DOT/TSC should continue research on DME/DME RNAV and VLF hybrids. Comments on the Text

There is a great deal of uncertainty asso- Some minor points discussed in the report ciated with VLF requirements, costs and also drew comments, even though no payoffs. Until this uncertainty is resolved, by recommendations were made. In the draft, controlled analysis, we do not believe FAA the statement was made that "...U.S. de- should certificate VLF. signed helicopters were not efficient under F. A. Meister high altitude conditions and research in this Cited previously. area was warranted." This statement was based on a misunderstanding and has been Congress should authorize $3-5 million removed as a result of the following com- per year for a five-year period to initiate a ment: joint civil coordinating group for aviation safety. Reasonable data is available to trade off rotor characteristics, i.e., tip speed, solid- The existing Federal, state, and private ity, and installed power to achieve good al- industry groups concerned with aviation titude performance. The selection of an 8 or safety should continue to carry out their res- 10 thousand ft. design point will result in an ponsibilities with increased coordination, if increase in the ton mile cost when the air- desired. There is one major difference be- craft is operated near sea level. tween civil aviation and military aviation and With the present size of the commercial that is the proprietary nature of civil aviation. market, it seems best for both the manu- I did not hear the presentation by the military facturer and operator if a design point of representatives, but I understand from the about 2000 ft. for a hot day is chosen. The report that they are coordinating technical operator must then choose a larger heli- information. I have worked in aviation on copter and operate at reduced payload when both sides of the fence, i.e., military and his operations are at high altitude. civil, and based on this background feel that The research might best be conducted on the coordinating group suggested would not market demand and cost sensitivity, to

64 quantify requirements for special purpose is going to be appraising what is going to helicopters. happen to that new investment in the future. JackT. Stultz True, some of the foundation for that ap- Cited previously. praisal will come from what has happened in the past, but the past period included in that The other area that received comment re- appraisal will probably not exceed five lated to carrier finance. years. He will be using that past experience [D]uring the session I sensed some lack only as a guide as to the future. Naturally, of reality as to the money market, principally he will also be looking at the other elements the equity portion of it. While this is more that relate to the potential future profitability appropriately the field of an investment of the enterprise under study including the banker, not a commercial banker, I felt that regulatory climate when applicable. there was a substantial lack of understand- [W]ith the possible exception of periods of ing on the part of some as to what attracts abnormal credit restraint, such as we are the potential investor to acquire an interest now in, well structured, well managed com- in a company or in an industry. That feeling panies with firm prospects for a profitable on my part originated from the quotations future should have no problem in securing made by some of the earnings rate on a typ- financing, i.e., they should be able to get ical airline investment made at a remote equity first and bank or other debt financing period in the past. thereafter. Obviously, anyone putting his money to Ronald G. Ross work today could not care less what an in- Group Vice-President vestment, made twenty years ago, might be Bank of America worth today. Instead, the potential investor August 24, 1973

65 [Mr. Ross1 comments were based on an to a greater degree the lower cost of debt. actual session of the Workshop and not on Third, in the DPFI the Board based the local the draft report. Ed.] service "target" ROI not on the actual debt/ equity ratio of 88/12, but on an "optimum" First, the locals in fact have obtained... ratio of 60/40. Thus, the 12.35 percent ROI capital over the past few years (look at their concluded to be reasonable is in excess of rates of growth in equity-plus-debt), al- the actual cost of capital (found by the Hear- though, as you note, the unrealistically low ing Examiner to be 11.0 percent). In any ceiling on subsidy-eligible ROI does skew event, including the capitalized value of the allocation of new investment. Second, leased aircraft in the rate base or resorting estimates of the cost of capital reflect the to an operating ratio approach to ROI would debt/equity ratio. If a firm has a high debt/ appear very unsatisfactory. equity ratio (and debt costs less than James C. Miller III equity), then its ROI after taxes but before Cited previously. interest payment on debt is going to reflect

66 EPILOG In retrospect, perhaps the most difficult to the DOT's apparent reluctance to take a question to answer is "what did the Work- more active position. shop accomplish?" Its major accomplish- The Department is only one of many ment may have been the least tangible: agencies that directly or indirectly affect bringing together people with different, often transportation policy. Since it has no control conflicting opinions and positions in a over the other parties, the DOT must rely on manner that allowed a fuller, freer inter- persuasion, personal contact and informal change than is normally possible. Most par- methods to develop a consistent govern- ticipants said they left the Workshop with a ment position. This is an enormous and better understanding of the issues and a time-consuming task. Although there are better perspective on the overall problem of members of the Department who are work- providing air service to small communities. ing toward greater DOT leadership in this Judging from previous Workshops, the ef- way, it will be a long time before their efforts fects of this information exchange may not are felt. There are also people within DOT be felt for two or three years. And when they who prefer the status quo. Realizing the De- are felt, people probably will not connect partment's limitations, this group addresses them to their origin at Aspen in 1973. problems from that perspective, thereby There have, however, been some direct automatically limiting the scope of any solu- effects. For example, NASA revised its tions. Neither approach produces quick study of a new aircraft for small city service broad solutions to national problems. Thus because of the Workshop's recommenda- the DOT is effectively prevented from pro- tions. The request for proposal recently is- viding leadership by the very institutional sued referred to the Workshop several problems it was created to solve. At pres- times. Also, the National Air Transportation ent, no one agency can resolve the conflicts Conferences (the commuter trade associ- without Congressional action and it is doubt- ation) published a booklet called "Clearing ful that Congress will grant the needed pow- the Air" explaining the industry's position on ers to an agency in the executive branch. several key issues raised at Aspen and the Very early in the Workshop itself, it be- NATC membership revised its position on came apparent that there were at least two limited certification, no longer favoring it, different overall philosophical positions held after a floor debate that was punctuated with by participants. The first, held primarily by references to the Aspen results. The federal officials and academics, placed Workshop was specifically mentioned as great reliance on free market forces to ac- providing the impetus to clarify and restate complish policy goals and on the belief that NATC's viewpoints. In addition, Robert H. government intervention should take place Binder, the DOT Assistant Secretary for only when strong public policy reasons re- Policy, Plans and International Affairs quired it. And then such intervention should (Designate), referred favorably to the draft be minimal and create the least possible report in a speech at the annual meeting of market distortion. The second position, held the Association of Local Transport Airlines. most often by state and local representa- And several federal and state officials who tives, was based foremost on public policy attended the Workshop have made state- considerations: a need for air service was ments of policy that reflect the Workshop's perceived; the fact that the free market was sentiments, although no specific reference not serving that need indicated that the free was made. Thus, in numerous ways, the im- market was unable-to satisfy the need and pact of the Workshop is already being felt in that government action was required. both industry and government. This divergence in underlying assump- In contrast to these Workshop-inspired tions makes communication between state actions, at least one hoped-for result has not and federal officials difficult. According to occurred. There has not yet been any indi- state officials, they receive no satisfaction cation that the federal Department of Trans- from Washington and are shuffled from one portation will become more involved in the office to another when they attempt to ex- problems of the nation's smaller com- plain their problems to federal agencies. munities, much less show the leadership According to federal officials, state and that the Workshop requested. The reasons local people present plans based more on for this are complicated and difficult to de- emotion than logic and want huge federal termine, but the following at least contribute subsidies to support ill-conceived programs.

67 68

From many discussions with people in both eral support, with the possible exception of positions, it seems that federal officials limited planning funds, will not be forth- living in the high density eastern corridor coming in the near future. The avenue to often do not understand the problems of the long-term federal support is not through the resident of a small isolated community, par- DOT, or perhaps even through the CAB, but ticularly in- the midwest and far west. But it through Congress. If the states can con- is also clear that people from those areas do vince their elected representatives in Wash- not understand the problems of the Wash- ington that their plans are sound, then Con- ington political structure. They approach gress may pass legislation directing both each federal office as if it and it alone had federal participation and commitment of the power to satisfy their state's needs, funds. Until such a directive is issued, how- while in reality they must gain support from a ever, there will be no federal leadership. number of offices, agencies and Congress In summary, the Workshop did have some itself before an effective federal-state pro- measurable impact on the people attempting gram can be developed. (Perhaps the Work- to find solutions to the problem of small shop itself has made the same mistake by community transportation services, al- singling out DOT for leadership.) though it did not achieve all that might have From observing these conflicting view- been desired. It was an effective communi- points in the reactions of federal officials to cations tool and served to clarify and the Workshop's draft report, it appears that present the key issues to be resolved. Only the states must rely on their own resources time will tell whether actual solutions are if they want quick solutions to the transpor- forthcoming. tation problems of small communities. Fed- APPENDIX A

Keynote Speeches velopment, problems of low density commuters. The National Interest in Air Transporta- K. Cardella President, Cochise Air- tion to Smaller Communities, Robert H. lines Binder, Assistant Secretary for Policy, Plans J. Foster Director, City of Houston and International Affairs (Designate), DOT Aviation Dept. Problems and Issues Facing the Local E. Gerhardt Director, Special Proj- Service Industry, Raymond J. Rasen- ects, Local Service Mar- berger, Washington Counsel, North Central keting, Frontier Airlines Airlines and Chairman, ALTA 3rd Level G. Hunter Chief, Planning Staff, Committee Rocky Mtn. Region, FAA D. Mays Director, Washington Problems and Issues Facing the Com- State Aero. Commission muter Industry, Thomas Miles, President, H.Swaine Chairman, Dept. of Eco- National Air Transportation Conferences nomics, N. Michigan Univ. The Community's Interest in Air Service, James Vance, President, Local Airline Serv- The Costs of the Air System ice Action Committee and Publisher, Worth- Moderator: H. Swaine, Consultant to M.I.T. ington, Minnesota, Daily Globe Issues included the costs of the air system, allocation of those costs, energy consump- The Role of Technology in Transporta- tion, direct subsidy and its effects. tion, Lawrence P. Greene, Assistant for G. Eads Assoc. Prof., Dept. of Aeronautical Research and Development, Economics, Geo. Wash. DOT Univ. FAA Plans and Programs for Low/Medi- P. Fahlstrom Program Director, Avia- um Density, Frederick A. Meister, Acting tion Cost Allocation Study, Associate Administrator for Plans, FAA DOT R. Monroe Vice President, Policy and APPENDIX B Tech. Planning, AOPA J. Vittek WorkshopDirector, M.I.T. Panels The Role of Air in the National Transpor- Industry and Area Development tation System Moderator: R. Ausrotas, M.I.T. Moderator: A. Andrews, Consultant to Subtopics same as under "Community's M.I.T. Need for Air Service". Subtopics included the public benefits of air L. Greene Asst. for Aero R&D, DOT service, the use of air for population disper- I. Hoover Dep. Director, Rocky Mtn. sion, the proper role of general aviation, Region, FAA DOT Cost Allocation Study, short haul T. LaPorte Assoc. Director, Inst. of planning. Gov't. Studies, Univ. of L. Davis Director, Public Rela- Calif.-Berkeley tions, ALPA F. Weisbrod City Manager, Pueblo, P. Fahlstrom Program Director, Avia- Colorado tion Cost Allocation Study, DOT T. Miles President, NATC Local Service Reduction and Commuter R. Monroe Vice President, Policy and Replacement Tech. Planning, AOPA Moderator: H. Swaine, Consultant to M.I.T. D. Sheftel Director, QSATSO, FAA Subissues included the effects of route strengthening, independent commuter re- The Community's Need for Air Service placement, the "Allegheny Commuter" Moderator: R. Ausrotas, M.I.T. concept, needs of the community, position Subtopics included the quality of air service of ALPA. to the community, Houston STOL program, K. Baldwin Chairman of the Board, problems of isolation, population growth, Air Wisconsin community growth, industry and area de- S.Browne Visiting Professor, M.I.T.

69 K. Courtenay Vice President, Economic termodal effects and policies. Regulations, Southern J. Gansle Office of Policy and Plans Airways Development, DOT G. Green Director, Legal Dept., R. Klabzuba Staff, Congressman Moss ALPA T. Miles President, NATC R. Henson President, Henson Avia- tion G. Linkon Vice President, Mktg., Alternate Service Frontier Airlines Moderator: J. Wiley, M.I.T. B. White Director, Aviation Dept., Subtopics included the use of auto, bus, rail, State of N. Mexico limousine; relative costs; passenger acceptance. Subsidy Issues W. Gibbons Regional Dev. Planner, Moderator: W. Swan, M.I.T. Four Corners Regional Discussion included the effects of subsidy Commission on equipment choice, plans for eliminating E. Hinz Assoc. Group Dir., Air local service subsidy, route strengthening, Transportation, Aero- certificate deletions, profit sharing between space Corporation government and carriers, concepts of com- R. Montague Manager, Market Re- muter subsidy (desirability, flow through, search, AMTRAK bids, operating subsidy), federally funded R. Walsh Actg. Director, Office of equipment development, "free" aircraft in Policy and Plans Develop- lieu of operating subsidy. ment, DOT A. Andrews Consultant A. Blackburn President, Urban Systems Environmental Issues W. Kutzke Attorney, General Coun- Moderator: W. Swan, M.I.T. sel's Office, DOT Problems included noise and chemical pol- J. Miller Assoc. Prof., Economics, lution, new engine technology. Texas A&M University C. Foster Director, Office of Noise T. Morton Senior Vice President, Fi- Abatement, DOT nance, Piedmont Airlines J. Kramer Director, Refan Prog. Of- J. Pickett Vice President, Air Mid- fice, NASA west B. Metzger Acoustics & Noise Con- H.Vavra Director, N.D. Aeronau- trol, Hamilton Standard tics Commission Div., United Aircraft W. Wayne Vice President, Local A. Meyer Dep. Asst. Admin, for Service Mktg., Frontier Noise Control Programs, Airlines EPA L. Williams Aerospace Engineer, Finance Ames Research Center, Moderator: R. Ausrotas, M.I.T. NASA Issues included investment criteria, availability of funding, risk analysis, value of Cargo and Mail Service to Small Com- route protection or certification to communities muters, needed return on investment. Moderator: N. Taneja, M.I.T. W. Hogan Treasurer, Frontier Air- Discussion of the problems of providing lines cargo and mail services to small towns, de- R.Ross Group Vice President, mand, costs and rates, regulatory problems, Bank of America loss and damage problems. J. Whitney President, Air New Eng- G.Adamson President, Air Midwest land R. Grammer Exec. Vice President, S-M-B Stage Line Joint and Through Fares P. Hwoschinsky Research Asst., M.I.T. Moderator: N. Taneja, M.I.T. L. Pierce Vice President, Ross Avi- Problems of establishing and maintaining ation/President, Great joint and through fare programs, filing re- Western Airlines quirements, publications in tariffs, OAG, in- J. St. Mark Vice President, NATC

70 R. Shreve Manager, Adm., ATA Operating Costs R. Soltys Director of Marketing, Moderator: W. Swan, M.I.T. Sun Valley Key Airlines Issues included DOCs and lOCs for regional and commuter carriers, use of small aircraft Limited Certification for Commuter Car- by regionals, security fees and traffic delay riers costs, costs of Part 121 operation. Moderator: A. Andrews, Consultant to J. Adsen Chief, Air Transportation M.I.T. Security, FAA Issues discussed were forms of certifica- B. Harris Project Manager, Futures, tion, market entry and exit controls, route Frontier Airlines protection, reporting requirements, costs of G. Hickman President, Aspen Airways regulation. R. Klabzuba Staff, Congressman Moss K. Baldwin Chairman of the Board, J.Leonard Secty. &Treas., Ransome Air Wisconsin Airlines D. Farmer Attorney, Dept. of Justice W. McCarter Project Manager, Gen. J. Fugere President, Pilgrim Airlines Aviation, Planning Div., A. Horst President, Suburban Air- Ontario Ministry of Trans- lines portation and Communi- C. Murphy Director, Texas Aeronau- cation tics Commission Airport Requirements Moderator: J. Vittek, M.I.T. Airline Management and Operations Issues included design alternatives, certifi- Moderator: J. Vittek, M.I.T. cation, security requirements and costs, Discussion of frequency effects, scheduling, ground access requirements, runway and directionality and load factors, management construction costs, intermodal connections, and marketing concepts, employee rela- airline needs. tions. P. Haines Chief Pilot, Aspen Airways J.Coker Vice President, Marketing, J. Kal AirportsPlanning Division, Southwest Airlines FAA K. Morse President, Command Air- F. Ladwig Manager, Peterson Field, ways Colorado Springs H.Voss Director, Planning, Gold- M. Macy Vice President, NATC en West Airlines G. Paulson Asst. Dir. of Aviation & Airport Mgr., Stapleton International Airport, Denver Local Service Aircraft Requirements W. Rell Commander, Airport Se- Moderator: H. Faulkner, M.I.T. curity, Stapleton Interna- Technology and performance requirements, tional Airport, Denver unit costs, operation costs, maintenance, J.Wiley Visiting Professor, M.I.T. subsystem costs, jet appeal, community acceptance. Air Traffic Control W. Berry Businessman, Pueblo, Moderator: W. Hollister, M.I.T. Colorado General discussion of requirements for land- L. Greene Asst. for Aero R&D, DOT ing aids, navigation aids, tower require- B.Harris Project Manager, Futures, ments, safety concerns, equipment cost, Frontier Airlines performance trade-offs. S. Hula Director, Marketing Plan- G. Autry President, Rocky Moun- ning, Southern Airways tain Airways R. Kuhlthau Professor, Dept. of Aero- R. Hubbard Prog. Mgr., Navigation, space Engineering TSC, DOT University of Virginia M. Kay Assoc. Dept. Head, H.Tinney DHC-7 Program Manager, MITRE Corp. Boeing W.Simpson Chief, Air Trans. Syst. R. Young Sr. Associate, Simat, Proj. Div., DOT Helliesen & Eichner

71 Commuter and Air Taxi Aircraft Require- W. Hollister Assoc. Professor, M.I.T. ments M. Macy Vice President, NATC Moderator: H. Faulkner, M.I.T. A. Neumann Chief, Western Area Field Same issues as for "Local Service Aircraft Offices, Bureau of Avia- Requirements" tion Safety, NTSB D.Crabtree Director, Operations, J. Shaw Chief-, NAVCOM Engi- Golden West Airlines neering Div., FAA K. Espy Vice President, Helicop- R. Winblade Director, G. A. Technol- ters Unlimited ogy Office, NASA J. Fugere President, Pilgrim Airlines M. Macy Vice President, NATC J. Whitney President, Air New Eng- APPENDIX C land Participants Aircraft Markets and Technology Status Moderator: R. Ausrotas, M.I.T. Adams, O.S. Joint military-civilian developments, import Manager, Advanced Design of foreign aircraft and equipment, multi- Lockheed-Georgia Co. (Marietta) nation development projects, potential 2121 Ponce de Leon Ave., N.E. domestic sales, present and projected air- Atlanta, Ga. 30307 craft developments (domestic and foreign), (404) 424-2694 engine technology, systems research. R. Black Director, Adv. Design, Adamson, Gary M. Douglas Aircraft Co., President McDonnell Douglas Corp. Air Midwest J. Cochrane Aerospace Engineer, Terminal Building Ames Research Center, Municipal Airport NASA Wichita, Kansas 67201 R. Mclntyre Director, Corp. Planning (316) 942-3311 & Mkt. Research, De- Havilland, Canada Adil, Anees A. S. Norman Aerospace Engineer, Head, Intercity Passenger Transp. Ames Research Center, Transportation Systems Center NASA Kendall Square D. Redpath Vice President & Gen. Cambridge, Mass. 02142 Mgr., Aviation Service (617) 494-2510 Div., Rockwell Interna- tional Adsen, Jay R. G. Rosen Chief of Propulsion R&D, Chief, Air Transp. Security Div. HamiltonStd. Div., United FAA, Western Region Aircraft 15000 Aviation Blvd. M'. Vucelic Director, Hawthorne, California 90260 New Business, Rockwell (213) 536-6325 International Andrews, A.M. Aviation Consultant Safety 6508 Pinecrest Court Moderator: J. Vittek, M.I.T. Annandale, Va. 22003 A review of accident causes, technological (703) 354-7615 research, new safety aids, new materials and techniques, improved training and pilot Armour, John D. performance monitoring. Chief, Operations Supervisor A. Edwards Lt.Col., USAF Stapleton Intl. Airport J. Enders Chief, Aircraft/Airport Room 400, Terminal Bldg. Operating Problems, Denver, Colo. 80207 NASA (303) 398-2142

72 Aspinall, Wayne N. Beeler, De E. Pilot Dep. Dir. Flight Research Ctr. Frontier Airlines NASA 6 Meadowlark Lane P.O. Box 273 Littleton, Colo. 80123 Edwards, Calif. 93523 (303) 798-6447 (805) 258-3311, Ext. 211 Auer, John R. Dep. Director for Operations Berry, Walter R. Nebraska Dept. of Aeronautics Former Director of Aviation Box 82088 City of Pueblo Lincoln, Nebraska 68501 Airport Box 32 (402) 471-2371 Pueblo, Colo. 81004 Ausrotas, Raymond (303) 948-3355 Associate Director Flight Transportation Lab. Betti, Alder P. Mass. Inst. of Technology Prog. Mgr. A/C Ops. QSATSO Room 33-411 FAA Room 838D Cambridge, Mass. 02139 800 Independence Ave., S.W. (617) 253-7574 Washington, D.C. 20591 Austin, Fred L. Binder, Robert H. President Asst. Secty. for Policy, Plans and Intl. Austin and Associates Affairs (Designate) 567 San Nicolas Drive DOT Newport Beach, Calif. 92660 Room 10228E (714) 644-8339 400 7th St., S.W. Washington, D.C. 20590 Autry, Gordon F. (202) 426-4551 President Rocky Mountain Airways Black, Richard E. Room 201, Hangar No. 6 Dir., Advanced Design Stapleton Intl. Airport Douglas Aircraft Co. Denver, Colo. 80207 McDonnell Douglas Corp. (303) 398-5354 3301 Rossmoor Way Los Alamitos, Calif. 90720 Bagley, H.W. Product Manager Blackshear, David L. Landing Systems Director of Aviation, Louisiana Singer-Kearfott P.O. Box 44155, Capitol Station 1150 McBride Ave. Baton Rouge, La. 70804 Little Falls, N.J. 07424 (504) 389-5549 (201) 256,4000, Ext. 5071

Baldwin, Karl P. Blackburn, Anthony J. Chairman of the Board President Air Wisconsin, Inc. Urban Systems Research & Engrg. Box 1003 1218 Massachusetts Ave. Appleton, Wisconsin 54911 Cambridge, Mass. 02138 (414) 734-5741 (617) 661-1550 Baugh, Edward R. Boyd, John Manager, Short Haul Systems Dev. Dep. Dir., Aeronautics & Flight Systems Boeing Commercial Airplane Co. Ames Research Center Box 3707, MS 77-77 NASA Seattle, Washington 98124 Moffett Field, Calif. 94035 (206) 237-0382 (415) 965-5070

73 Braine, R. Norman Commons, Geoffrey D. Mgr., Western Region Senior Economist Hamilton Standard Div. Northrop Airport Dev. Corp. United Aircraft Northrop Page Technology Park 8929 Sepulveda Blvd. Vienna, Virginia 22180 Los Angeles, Calif. 90045 (703) 938-2070 (213) 670-6124 Conner, D. William Browne, Secor D. Head, V/STOL Aircraft Proj. Office Visiting Professor NASA Langley Research Center Mass. Inst. of Technology Mail Stop 262 Room 33-411 Hampton, Virginia 23665 77 Massachusetts Avenue Cambridge, Mass. 02139 Courtenay, J. Kenneth (617) 253-2274 Vice President, Economic Regulations Southern Airways, Inc. Burket, Paul Atlanta Intl. Airport Aeronautics Administrator Atlanta, Ga. 30320 Aeronautics Div., Oregon DOT (404) 766-5321 3440 25th St., S,E. Salem, Oregon 97310 Crabtree, Dennis J. (503) 378-4880 Director, Operations Golden West Airlines Cardella, Kenneth 5801 W. Imperial Hwy. President Los Angeles, Calif. 90045 Cochise Airlines (213) 646-2924 Arizona Corp. Tucson Intl. Airport Daniels, Jack Tucson, Arizona 85706 Chairman, North Dakota Aero. Comm. (602) 889-6311 P.O. Box 637 Williston, N.D. 58801 Chandler, R.E. (701) 572-3773 Chief, Pass. & Pers. Entitlements General Services Administration Davis, Lou Washington, D.C. 20406 Director, Public Relations (703) 557-9030 Air Line Pilots Association, Intl. 1625 Massachusetts Ave. Chavkin, Jerold M. Washington, D.C. 20036 Dep. Dir., QSATSO (202) 797-4000 FAA, Room 838 800 Independence Ave., S.W. Davison, Jay S. Washington, D.C. 20591 President (202) 426-3301 MidContinent Airlines P.O. Box 723 Cochrane, John Duncan, Okla. 73533 Aerospace Engineer (405) 252-0380 Aeronautical and Flight Systems MS 237-9 Dennison, Terence O. Ames Research Center Air Transportation Consultant NASA Short Bros, and Harland Ltd. Moffett Field, Calif. 94035 345 Boylston St. (415) 965-5664 Newton Centre, Mass. 02159 (617) 965-1910 Coker, Jess R. Vice President, Mktg. Dugan, James F., Jr. Southwest Airlines Head, Propulsion Section 3300 Love Field Drive NASA Lewis Research Center Dallas, Texas 75235 21000 Brookpark Road (214) 350-5511 Cleveland, Ohio 44135

74 duPont, Anthony A. Farmer, Donald A. President, duPont Aerospace Attorney 300 Wells Fargo Bldg. Anti-Trust Division 21535 Hawthorne Blvd. U.S. Dept. of Justice Torrance, Calif. 90503 Washington, D.C. 20530 (213) 370-3566 (202) 739-3278

Eads, George Faulkner, Henry Associate Professor Staff Engineer Dept. of Economics Flight Transportation Lab. George Washington University Mass. Inst. of Technology Washington, D.C. 20006 Room 33-411 (202) 676-6150 77 Massachusetts Ave. Cambridge, Mass. 02139 Edwards, Alan M. (Lt. Col., U.S.A.F.) (617) 253-7573 Joint Technical Coordinating Group on A/C Survivability HQ Naval Air Systems Command Foster, Charles R. Air 09JA Director Washington, D.C. 20361 Office of Noise Abatement (202) 692-1730 Department of Transportation Room 10409E Edmonds, Duane 400 7th St., S.W. DHC-7 Program Washington, D.C. 20590 Boeing Commercial Airplane Co. (202) 426-4553 Box 3707, MS 77-77 Seattle, Washington 98124 Foster, Joseph A. (206) 237-2238 Director City of Houston Aviation Dept. Enders, John H. 2800 Terminal Road Chief, Aircraft/Airport Op. Probs. Houston, Texas 77060 NASA HQ, Office of Aeronautics and Space (713) 443-4369 Technology Code ROO, Room 626 Washington, D.C. 20546 Fugere, Joseph M. (202) 755-2366 President Espy, Kenneth Pilgrim Airlines Vice President Box 1743 Helicopters Unlimited New London, Conn. 06320 Stapleton Intl. Airport (203) 446-1212 Denver, Colorado 80207 (303) 321-3344 Gansle, James Fahlstrom, Paul G. Office of Policy and Plans Dev. Program Director DOT, Room 10223, TPI-32 Aviation Cost Allocation Study 400 7th St., S.W. DOT, TPI-26 Washington, D.C. 20590 Washington, D.C. 20590 (202) 426-4382 (202) 426-2292

Fahr, Karl A. Geoffrion, Donald R. Vice President, Mktg. Asst. Director, QSATSO Scenic Airlines FAA, Room 838, AQS-3 P.O. Box 11227 800 Independence Ave., S.W. Las Vegas, Nevada 89111 Washington, D.C. 20591 (702) 736-4041 (202) 426-3396

75 Haines, Paul Hall, Walter W. Chief Pilot President Aspen Airways, Inc. Western Air Stages Stapleton International Airport Box 1201 Denver, Colo. 80207 Grand Junction, Colo. 81501 (303) 398-3745 (303) 243-6512

Gerhardt, Edward H. Harris, Ben R. Director, Special Projects Project Manager, Futures Planning Local Service Marketing Frontier Airlines Frontier Airlines 8250 Smith Road 8250 Smith Road Denver, Colo. 80207 Denver, Colo. 80207 (303) 398-5175 (303) 398-5171 Harris, Charles E. Gibbons, William F. Director, Domestic Marketing Regional Development Planner Lockheed-Georgia Co. Four Corners Regional Comm. Marietta, Ga. 30060 Suite 238, Petroleum Plaza Bldg. (404) 424-2734 3535 East 30th St. Farmington, N.M. 87401 Heap, Dennis (505) 327-9626 Director of Air Cargo Rocky Mountain Airways Gilfix, Lou Room 201 Economist Stapleton International Airport DOT Denver, Colorado 80207 Room 9217, Nassif Bldg. (303) 398-5350 TPI-14 Washington, D.C. Henson, Richard (202) 426-4203 President Henson Aviation, Inc. Godbout, Gerald J. Box 689 Director, Cargo Services Hagerstown, Md. 21740 Air Transport Assoc. of Am. (301) 733-5200 1709 New York Ave., N.W. Washington, D.C. 20006 Hickman, Gerald B. (202) 872-4129 President Aspen Airways, Inc. Grammer, Robert F. 8685 Montview Blvd. Exec. Vice President Denver, Colo. 80220 Sedalia-Marshall-Boonville Stage Line (303) 398-3757 5805 Fleur Drive Des Moines, Iowa 50321 Green, Gary Higgins, Thomas P. Director, Legal Dept. Proj. Mgr. for Transportation Systems Air Line Pilots Assn., Intl. Lockheed-Burbank 1625 Massachusetts Avenue Burbank, Calif. 91503 Washington, D.C. 20036 (213) 847-2907 (202) 797-4000

Greene, Lawrence P. Hinz, Earl R. Assistant for Aeronautical R&D Assoc. Group Dir. DOT Air Transportation Room 9404, TST-7 The Aerospace Corporation 400 7th Street, S.W. P.O. Box 92957 Washington,-D.C. 20590 Los Angeles, Calif. 90009 (202) 426-4516 (213) 648-5748

76 Ho, H. Peter Hula, Stanley J. Asst. Prof., Civil Eng. Dept. Director, Marketing Planning University of Hawaii Southern Airways, Inc. 2540 Dole Street 3200 Stone Road, J-4 Honolulu, Hawaii 96822 Atlanta, Ga. 30331 (808) 948-8295 (404) 349-0939 Hunter, George P. Hoeper, Kenneth Chief, Planning Staff Senior Research Analyst Rocky Mountain Region Minn. Dept. of Aeronautics Federal Aviation Admin. (ARM-4) Admin. Bldg. P.O. Box 7213 Downtown Airport Park Hill Station St. Paul, Minn. 55107 Denver, Colo. 80207 (612) 222-4741 (303) 837-3147 Hwoschinsky, Beth A. Hogan, William W. Workshop Secretary Treasurer 1604 Westgate Apts. Frontier Airlines, Inc. Cambridge, Mass. 02139 8250 Smith Road (617) 494-8334 Denver, Colorado 80207 (303) 398-4729 Hwoschinsky, Peter V. Workshop Asst. Manager Hollister, Walter M. Research Assistant Assoc. Prof., Aero & Astro Dept. Flight Transportation Lab. Mass. Inst. of Technology Mass. Inst. of Technology Room 33-107 Room 33-412 77 Massachusetts Avenue 77 Massachusetts Avenue Cambridge, Mass. 02139 Cambridge, Mass. 02139 (617) 253-2264 (617) 253-2038 Jacobson, Ira D. Hoover, Isaac Assistant Professor Deputy Director University of Virginia Rocky Mountain Region 723 Village Road FAA-DOT Charlottesville, Va. 22903 Park Hill Station (804) 924-7091 P.O. Box 7213 Denver, Colorado 80207 Kal, John C. Airports Planning Division FAA, Room 506D Horst, Arthur 800 Independence Ave., S.W. President Washington, D.C. 20591 Suburban Airlines (202) 426-3844 Box 1201 Reading, Penn. 19603 Kay, Marvin E. (215) 375-8551 Assoc. Dept. Head Advanced Development & Design MITRE Corporation Hubbard, Robert 1820 Dolly Madison Blvd. Program Mgr., TSC Navigation Program and McLean, Va. 22101 Airborne Proximity Warning Indicator Pro- (903) 893-3500, Ext. 2703 gram DOT-TSC Klabzuba, Richard W. Code PTA Staff Asst. to Congressman Moss 55 Broadway 2185 Rayburn House Office Bldg. Cambridge, Mass. 02142 Washington, D.C. 20515 (617) 494-2418 (202) 225-6745

77 Kleine, Henry McCabe, Lawrence E. Systems Analyst Commissioner Jet Propulsion Laboratory Minn. Dept. of Aeronautics MS 156-223 St. Paul Downtown Airport 4800 Oak Grove Drive Administration Bldg. Pasadena, Calif. 91103 St. Paul, Minn. 55107 (213) 354-5039 (612) 222-4741 Kramer, James J. McCarter, W. B. Director JT3D/JT8D Refan Prog. Office Project Manager NASA Headquarters General Aviation Planning Div. Room 626, Code RJ Ontario Ministry of Trans. & Communication 600 Independence Avenue, S.W. 1201 Wilson Ave. Washington, D.C. 20546 Downsview, Ontario, Canada (202) 755-3005 McCleery, James Kuhlthau, A. Robert FAA Prof., Dept. of Eng. Science & Systems P.O. Box 7213 University of Virginia Park Hill Station Thornton Hall Denver, Colo. 80207 Charlottesville, Va. 22901 (303) 837-3624 (804) 295-7141 Mclntyre, Robert B. Kutzke, William Director, Mkt. Planning Attorney DeHavilland, Canada General Counsel's Office Downsview, Ontario, Canada DOT, Room 10102, TGC (461) 633-7310, Ext. 622 400 7th Street, S.W. Washington, D.C. 20590 Macy, A. Martin (202) 426-4731 Vice President, Operations National Air Trans. Conferences Ladwig, Frank W. T156 15th Street, N.W. Director of Aviation Washington, D.C. 20005 Municipal Airporl (202) 293-2550 City Airport Office 1583 Aviation Way Magruder, William Colorado Springs, Colo. 80916 Executive Vice President (303) 596-0188 Piedmont Aviation LaPorte, Todd Smith-Reynolds Airport Assoc. Director P.O. Box 2720 Inst. of Gov't. Studies Winston-Salem, N.C. 27102 University of California-Berkeley Berkeley, Calif. 94720 Martin, M.M. FAA Leonard, John P.O. Box 7213 Secty. & Treasurer Park Hill Station Ransome Airlines Denver, Colo. 80207 P.O. Box 500 (303) 837-3646 Cornwells Heights, Penn. 19020 (215) 639-4300 Mascy, Alfred C. Linkon, Gordon Program Manager Vice President, Marketing NASA/OAST Systems Study Division Frontier Airlines, Inc. MS 202-7 8250 Smith Road Ames Research Center Denver, Colo. 80207 Moffett Field, Calif. 94035 (303) 398-4765 (414) 965-5887

78 Mays, Dixie J. Monroe, Robert E. Director Vice President Wash. State Aero. Commission Policy and Technology Planning 8600 Perimeter Road Aircraft Owners & Pilots Assn. Boeing Field Box 5800 Seattle, Washington 98108 Washington, D.C. 20014 (206) 764-4131 (301)' 654-0500

Meister, Fred Montague, Peter M. Acting Assoc. Admin, for Plans Manager, Market Research FAA AMTRAK 800 Independence Ave., S.W. National R.R. Pass. Corp. Washington, D.C. 20591 955 L'Enfant Plaza North, S.W. (202) 426-3131 Washington, D.C. 20024 (202) 484-2521 Metzger, Frederick B. Head of Acoustics and Noise Control Hamilton Standard Division Morrison, Maynard R. United Aircraft Chief, Air Trans. Sec. Div. MS 1A-3-1 FAA, Rocky Mtn. Region Bradley Field Road Park Hill Station Windsor Locks, Conn. 06096 P.O. Box 7213 (202) 623-1621, Ext. 8351 Denver, Colo. 80207 (303) 837-3411 Meyer, Alvin Dep. Asst. Admin, for Noise Control Programs Morse, Kingsley G. Office of Noise Abatement and Control President Environmental Protection Agency Command Airways, Inc. 401 M Street, S.W. Dutchess County Airport Washington, D.C. 20460 Wappingers Falls, N.Y. 12590 (202) 557-7777 (914) 462-0600

Miles, Thomas S. Morton, T.W. President Sr. Vice President, Finance National Air Trans. Conferences Piedmont Aviation, Inc. 1156 15th Street, N.W. Smith-Reynolds Airport Washington, D.C. 20005 P.O. Box 2720 (202) 293-2550 Winston-Salem, N.C. 27102 (919) 767-5340 Miller, James C., Ill Associate Professor Murphy, Charles Department of Economics Director Texas A&M University Texas Aeronautics Commission College Station, Tex. 77843 Box 12607 (713) 845-7351 Austin, Texas 78711 (512) 475-4768 Miner, S. Donald Market Manager Nader, Fareed Boeing Company Asst. Prof., Civil Eng. Dept. MS K16-11 University of Hawaii 3801 S. Oliver Street 2540 Dole Street Wichita, Kansas 67210 Honolulu, Hawaii 96822 (316) 687-3425 (808) 948-7055

79 Neumann, Arthur E. Picket!, James Chief, Western Area Field Offices Vice President Bureau of Aviation Safety Marketing & Corporate Planning National Transportation Safety Board Air Midwest Suite 14 Municipal Airport, Hangar 17 10255 E. 25th Avenue Wichita, Kansas 67209 Aurora, Colo. 80010 (316) 942-3311 (303) 837-4492 Pierce, Lewis A. Vice President, Ross Aviation Nicholson, Leslie A. President, Great Western Airlines Shaw, Pittman, Potts & Trowbridge P.O. Box 9124 910 17th Street, N.W. Albuquerque, N.M. 87119 Washington, D.C. 20006 (505) 242-2811

Prindle, Ed Norman, Susan D. Director of Marketing Aerospace Engineer Rocky Mtn. Airways Systems Study Division Hangar #6 Ames Research Center Stapleton Intl. Airport NASA Denver, Colo. 80207 MS 202-7 (303) 398-5372 Moffett Field, Calif. 94035 (415) 965-5887 Proctor, O.K. DHC-7 Program Boeing Commercial Airplane Co. Nutter, Robert Box 3707, MS 77-77 Director, Air Trans. Systems Eng. Seattle, Washington 98124 MITRE Corporation (206) 237-8695 1820 Dolly Madison Blvd. McLean, Va. 22101 Rasenberger, Raymond J. (703) 893-3500, Ext. 2652 Washington Counsel, N. Central Airlines Chairman, ALTA 3rd Level Comm. Zuckert, Scoutt and Rasenberger Paullin, Robert L. 888 17th Street, N.W. Chief, R&D Policy Implementation Div. Washington, D.C. 20006 TST-13 (202) 298-8660 DOT 400 7th Street, S.W. Rea, Charles Dale Washington, D.C. 20590 FAA (202) 426-9502 25104 W. 25th St. Denver, Colo. 80207 (303) 837-3646 Paulson, Gordon Asst. Dir. of Aviation and Airport Manager Redpath, Don Stapleton Intl. Airport Vice President & General Manager Room 400, Terminal Bldg. Aviation Services Division Denver, Colo. 80207 Rockwell International (303) 398-3844 5001 N. Rockwell Avenue Bethany, Okla. 73008 (405) 789-5000 Phillips, Charles Rell, William Economist Commander, Airport Security DOT-TSC Stapleton International Airport 55 Broadway Room 400, Terminal Building Cambridge, Mass. 02142 Denver, Colo. 80207 (617) 494-2510 (303) 398-3855

80 Rosen, George Sheftel, David J. Chief of Propulsion R&D Director, Quiet Short Haul Air Transporta- Hamilton Standard Div. tion Systems Office United Aircraft FAA, Room 838 MS1A-3-2 800 Independence Ave., S.W. Windsor Locks, Conn. 06096 Washington, D.C. 20591 (203) 623-1621, Ext. 641 (202) 426-3300

Rosenkrans, Wayne A. Shreve, Richard S. President Manager, Administration Jeppesen Times Mirror Cargo Services 8025 East 40th Avenue Air Transport Assn. of America Denver, Colorado 80207 (303) 388-5301 1709 New York Ave., N.W. Washington, D.C. 20006 (202) 872-4133 Ross, Ronald G. National Trust & Savings Assn. Group Vice President Simpson, Robert W. Bank of America Director 555 South Flower Street Flight Transportation Lab. Los Angeles, Calif. 90071 Mass. Inst. of Technology (213) 683-3455 Room 33-412 77 Massachusetts Avenue Sandford, John Cambridge, Mass. 02139 Director, Product Planning (617) 253-3756 General Aviation Division Rockwell International 5001 N. Rockwell Avenue Simpson, William E. Bethany, Okla. 73008 Chief, Air Transportation Systems (405) 789-5000 Project Division Office of the Secretary, TST-43 Saunders, George W. DOT, Room 10413 Asst. Comm. for Motor Equip. Transp. and 400 7th Street, S.W. Public Utilities Washington, D.C. 20590 General Services Administration (202) 426-4514 Washington, D.C. 20406 (703) 557-8655 Sloan, Lloyd Short Haul Analyst Scott, Roger M. Boeing Commercial Airplane Co. DHC-7 Program Box 3707, MS 77-77 Boeing Commercial Airplane Co. Seattle, Washington 98124 Box 3707, MS 77-77 (206) 237-2238 Seattle, Wash. 98124 (206) 237-2238 Soltys, Robert A. Sharp, Lyle C. Director of Marketing Director of Aviation Sun Valley Key Airlines Pueblo Memorial Airport 3909 S. Airport Road Airport Box 32 Ogden, Utah 84403 Pueblo, Colo. 81004 (801) 399-3331 (303) 948-3361 Speas, R. Dixon Shaw, John President Chief, Nav. Aids and Comm. Div. R. Dixon Speas Associates FAA, Room 435B 47 Hillside Avenue Washington, D.C. 20591 Manhasset, N.Y. 11030 (202) 426-3063 (516) 627-7460

81 Stephenson, Rhoads Taneja, Nawal Systems Analysis Section Manager Asst. Prof., Dept. of Aero & Astro Jet Propulsion Laboratory Flight Transportation Lab. Bldg. 156-203 Mass. Inst. of Technology 4800 Oak Grove Drive Room 33-411 Pasadena, Calif. 91103 77 Massachusetts Avenue (213) 354-4876 Cambridge, Mass. 02139 (617) 253-7504 Stickle, Joseph Assistant Head Tanner, Trieve A. Air Worthiness Branch Research Psychologist NASA Langley Research Center NASA Ames Research Center MS 247 1911 Barbara Drive Hampton, Va. 23365 Palo Alto, Calif. 94303 (703) 827-1110 (415) 965-5185 St. Mark, Janet Taylor, Ben Vice President, Administration Consultant National Air Transportation Conferences Rockwell International 1156 15th Street, N.W. 5001 N. Rockwell Ave. Washington, D.C. 20005 Bethany, Okla. 73008 (202) 293-2550 (405) 789-5000 Stout, E.G. Tinney, Howard C. Manager, Transportation Systs. DHC-7 Program Manager Transportation Programs Boeing Commercial Airplane Co. Lockheed-Burbank Box 3707, MS 77-77 Burbank, Calif. 9.1503 Seattle, Washington 98124 (213) 847-2907 (206) 237-2238 Stultz, Jack T. Topaz, Lon Manager, Airlines Requirements Assistant Commissioner Sikorsky Aircraft Div. Rail-Air-Marine United Aircraft Corp. Public Utility Commission North Main Street 206 Public Service Bldg. Stratford, Conn. 06497 Salem, Oregon 97310 (203) 378-6361 (503) 378-6659

Swaine, Howard Vance, James Chairman, Dept. of Economics President, Local Airline Service Action Northern Michigan University Committee Marquette, Michigan 49855 Publisher, Daily Globe (906) 227-2220 Wortnington, Minn. Swan, William (507) 376-4121 Staff Engineer Flight Transportation Lab. Vavra, Harold G. Mass. Inst. of Technology Director Room 33-411 North Dakota Aeronautics Comm. 77 Massachusetts Avenue Bismarck Municipal Airport Cambridge, Mass. 02139 Box U (617) 253-7575 Bismarck, N.D. 58501 (701) 224-2748 Sweet, Harold STOL Design Manager Vittek, Dorian L. Dept. 72-09 Workshop Manager Lockheed-Georgia 52B Beaconwood Road Marietta, Ga. 30060 Newton Highlands, Mass. 02161 (404) 424-2694 (617) 969-1920 82 Vittek, Joseph F., Jr. White, Bob Workshop Director Director Associate Director New Mexico Aviation Dept. Flight Transportation Lab. P.O. Box 579 Mass. Inst. of Technology Santa Fe, N.M. 87501 Room 33-411 (505) 827-2861 77 Massachusetts Avenue Cambridge, Mass. 02139 White, Bruce James (617) 253-7572 Senior Development Engr. Propulsion Engines, Advanced Tech. Voss, Henry R. AiResearch Manufacturing Co. Senior Director 402 S. 36th Street Planning and Schedules Phoenix, Arizona 85034 Golden West Airlines (602) 267-2931 P.O. Box 1877 Newport Beach, Calif. 92663 Whitney, Joseph C. (714) 546-6570 President Air New England Vucelic, M. Mike Logan International Airport Director, New Business East Boston, Mass. 02128 Space Division (617) 569-5650 Rockwell International Corp. 12214 Lakewood Blvd. Wiley, John R. Downey, Calif. 90241 Visiting Professor (213) 922-3995 Flight Transportation Lab. Mass. Inst. of Technology Walsh, Richard F. Room 33-406 Acting Director 77 Massachusetts Avenue Office of Policy and Plans Dev. Cambridge, Mass. 02139 DOT, Room 10301C (617) 253-7475 400 7th Street, S.W. Washington, D.C. 20590 Williams, Louis (202) 426-1911 Aerospace Engineer NASA Ames Research Center Wayne, William D Moffett Field, Calif. 94035 Vice President (415) 965-5887 Local Service Marketing Frontier Airlines Winblade, Roger L. 8250 Smith Road Manager, General Aviation Tech. Office Denver, Colo. 80207 NASA Headquarters (303) 398-5168 Code RAG, Room 13600 Washington, D.C. 20546 Weisbrod, Fred (202) 755-2399 City Manager City Hall Young, Raymond A. P.O. Box 1427 Senior Associate Pueblo, Colo. 81003 Simat, Helliesen and Eichner, Inc. 1019 19th Street, N.W. Washington, D.C. 20036 Wells, William G., Jr. (202) 659-4044 Technical Consultant U.S. House of Representatives Zalesky, R.E. Committee on Science and Astronautics Senior Sales Representative Room 2321 Advanced System Sales Rayburn House Office Building Lockheed-Burbank Washington, D.C. 20515 Burbank, Calif. 91503 (202) 225-6371 (213) 847-2965