[Congressional Record Volume 143, Number 115 (Thursday, September 4, 1997)]
[Extensions of Remarks]
[Page E1653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 BILL TO AMEND TITLE 49, UNITED STATES CODE, RELATING TO CRITERIA FOR 
               GRANTING SLOTS TO NEW ENTRANT AIR CARRIERS

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                          HON. JOHN J. LaFALCE

                              of new york

                    in the house of representatives

                      Thursday, September 4, 1997

  Mr. LaFALCE. Mr. Speaker, today, I am introducing a bill that will 
increase competition among airlines, resulting in lower air fares for 
travelers throughout the country. Specifically, my bill would amend 
title 49, section 41714(c)(1) of the United States Code to enable new 
entrant air carriers to obtain access to airport slots at high density 
airports.
  Under current law, the Secretary of Transportation may grant 
exemptions for new entrants to obtain slots at designated airports only 
if: First, it is in the public interest; and second, the Secretary 
finds that exceptional circumstances exist. An October 1996 report by 
the General Accounting Office found that few new entries have occurred 
because the exceptional circumstances requirement has been interpreted 
narrowly by the Department of Transportation, although there is no 
language in the legislative history to support a narrow construction. 
My bill would eliminate the exceptional circumstances criterion, thus 
encouraging the distribution of slots to new entrants.
  Section 41714 governs the distribution of airport slots at the four 
slot-controlled airports in this country: LaGuardia, Kennedy, Chicago, 
and Washington National. To reduce congestion during peak traffic 
periods, in 1969 the Federal Aviation Administration [FAA] set limits 
on the number of takeoffs and landings that can occur at these airports 
by allocating takeoff and landing slots equitably among airlines. In an 
effort to minimize the Government's role in the allocation of slots, in 
1985 the Department of Transportation [DOT] amended its regulations to 
allow airlines to buy and sell airport slots to one another. Under this 
buy/sell rule, the DOT grandfathered slots to the holders of record as 
of December 16, 1985. However, the DOT reserved its right to withdraw 
slots from those airlines and redistribute them at any time.
  As a result of this grandfathering, a few established carriers 
control the vast majority of slots at these major airports. Not 
surprisingly, a seller's market for these slots has emerged. 
Established airlines rarely sell their slots and when they do the costs 
range from $500,000 during nonpeak hours to as much as $2 million 
during peak hours. The GAO report notes that in order to mount 
competitive service in a market, an airline needs about six slots, with 
at least three slots falling during peak periods. The unavailability 
and high costs of these slots has effectively precluded many low-cost 
carriers from entering the market.
  Recognizing the need for new entry at these slot-controlled airports, 
in 1994 Congress passed Public Law 103-305, which directed the DOT to 
grant exemptions from these controls when the Secretary of 
Transportation ``finds it to be in the public interest and the 
circumstances to be exceptional.'' However, because of the Department's 
narrow construction of the exceptional circumstances requirement, 
little new entry has occurred. By eliminating this test, my bill will 
make it clear that Congress intends that these exemptions be liberally 
granted when it would serve the public interest.
  The Department of Transportation's recent Domestic Airline Fares 
Consumer Report found that high airfares are a serious problem for the 
traveling public in many communities. Opening the market at these major 
airports to new entrants will increase competition and drive down 
airline ticket prices to destinations throughout the country. It is my 
hope that this bill will be the first step toward lowering airfares for 
those communities that have not benefitted from deregulation.

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