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“AIRLINE DEREGULATION IS NOT HELPING EVERYONE” mentioning the U.S. Dept. of Transportation was published in the Senate section on pages S8979-S8980 on July 26, 1996.
The publication is reproduced in full below:
AIRLINE DEREGULATION IS NOT HELPING EVERYONE
Mr. DORGAN. Mr. President, about 2 years ago, Frontier Airlines began jet airplane service in North Dakota. It was actually a carrier that had previously quit service, and some years later a new group of people using the same name, Frontier, reorganized and started a new airline.
Two years ago, when Frontier started service to parts of North Dakota, we were fairly excited about that, because in a small, sparsely-populated State like North Dakota, we need more competition in airline services. North Dakota is served by one major carrier. The fact is that when you have one-carrier service--although I admire that carrier--you generally pay higher prices, and you have the kind of service they decide they want to give to you. So we were fairly excited that we would get that jet airline service to North Dakota.
This morning, Frontier Airlines announced that it will withdraw its service to North Dakota. I spoke with the president of the company this morning. I also spoke with the Secretary of Transportation this morning about this issue, and I want to comment for a moment about this matter because it deals with the larger issue of airline deregulation.
We have people in this Chamber, in the other Chamber, and out in the country who do handstands and all kinds of gymnastic feats when they describe the wonders of airline deregulation for America. They say the deregulation of the airlines has been remarkable. You get lower prices, and you get more service. Well, that certainly is true if you happen to live in Chicago, New York, Los Angeles, or perhaps a dozen other cities. If you are traveling from Chicago to Los Angeles, guess what? Look at an airline guide and you have all kinds of carriers to choose from, and they are vigorously competing with price and so on and so forth. Those are the benefits and virtues of airline deregulation. But the fact is, if you do not live in one of the large cities, airline deregulation has not been a success for you. It means less service and higher prices.
Now, what happened when we had airline deregulation was--and we have seen merger after merger in the combination of smaller airlines bought up or merged into the larger airlines and a subsequent concentration of economic power--the airlines sliced up parts of the country into hubs, and they control the hubs and decide how they want to serve the public with price and service. Then a new carrier starts up. How does a new carrier compete when you have an airline industry that is now highly concentrated with a few giant economic powers? The fact is, it does not compete, and it cannot compete very well.
Two years ago, when this airline started, I went to the Secretary of Transportation and had a meeting with him in his office. I said, the fact is, a new jet carrier cannot start up and be successful under the current circumstances unless the discriminatory practices that exist with the big carriers against these new carriers are ended. The Department of Transportation has a responsibility to end it. That was 2 years ago. Now, a jet carrier trying to serve a State like North Dakota and going into a hub like Denver, in order to be successful, is going to have the other major carriers provide code-sharing arrangements. But, guess what? A very large airline carrier, one of the largest in the country, would say to a carrier like this, I am sorry, we do not intend to cooperate with you under any circumstances--on ticketing, on baggage--and we use our own computer reservation system, and you will not even show up on the first couple of screens that travel agents pull up.
So what happens? The fact is that the new carriers that start up do not make it because there are fundamentally discriminatory practices, and we have a Department of Transportation that drags its feet and does nothing about it. In the last couple of months, the Department of Transportation has started to do some things, but not nearly enough. For 1\1/2\ years they did nothing. That result is evident not only in North Dakota, but also around the country where we see regional startups trying to promote more competition in the airline industry. The regional startups are squashed like bugs by the big carriers because of what, I think, are fundamentally anticompetitive practices.
Now, you can make a case, I suppose, that a big carrier does not have to cooperate with anybody under any conditions. I think it is a silly case to make, but I know people will make that case. What that will lead to is the circumstance that now exists, only more concentrated, and with fewer carriers. We have only five or six major carriers in this country. They have gotten bigger, with more economic power. They have the capability of deciding anyplace, at any time, that a startup carrier is not going to make it because they are not going to allow it.
I have a fistful of information here from travel agents and others, who describe what they consider to be anticompetitive practices by other carriers against this startup carrier in North Dakota. I do not have stock in this company. I do not know much about this company. I do not care about one company versus another. All I care about is that we have a circumstance where we have competitive airline service and an opportunity to get more and better service in a State like North Dakota.
The current system, under deregulation, is an abysmal failure. Those who twirl around like cheerleaders, believing this represents something good for this country, ought to understand that it represents something good for only part of the country; for those people lucky enough to live in the major cities who are going to get more service at lower prices. For the people in the parts of the country where there is less opportunity and where we have a need for the startup of new regional jet carrier services, the cheerleaders for deregulation ought to understand that these startups are squashed like bugs by the major carriers of this country, and the major carriers do this under the watchful eye of the people who are supposed to be concerned about competition.
I hope the Secretary of Transportation and the Department of Transportation are able, at some point, to take the kind of action that we expect them to take to deal with these issues.
We have a DOT bill coming to the floor next week. I intend to be here, if necessary, with a whole range of amendments talking about the airline issues and what DOT has or has not been doing on these issues. I might not get more than one vote for them. It would not matter much to me.
I am not going to sit by and see this happen. This notice today of the withdrawal of service of another carrier in North Dakota means North Dakotans will have less service and pay higher prices once again. The fact is, this is not brain surgery, and this is not a problem for which we do not know a cure or a solution. We understand the problem and we know the solution. The solution is not to preach about deregulation and then decide you could care less about whether there is anticompetitive behavior. If this Government, this Congress, this Department of Transportation, or this Secretary of Transportation, do not do something about the anticompetitive practices and anticompetitive behavior, we will never see this problem resolved.
If I sound a little upset this morning, I am. I hope that perhaps some discussions in the coming days might convince some of these carriers, that are out there trying to make it in an anticompetitive environment, that somebody is going to do something to make it competitive and fair once again.
Mr. President, as I said, from what I hear about the Senate schedule next week we will have the Department of Transportation appropriations bill on the floor. I intend to be over here actively and aggressively working on some of these issues then. It may be the only appropriate and opportunistic way for me to make the point that I think needs to be made.
So I appreciate the indulgence.
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