COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION BOB PACKWOOD, Oregon JOHN C. DANFORTH, Missouri, Chairman BARRY GOLDWATER, Arizona BOB KASTEN, Wisconsin PAUL S. TRIBLE, JR., Virginia ERNEST F. HOLLINGS, South Carolina JOHN D. ROCKEFELLER IV, West Virginia W. ALLEN MOORE, Chief Counsel and Staff Director Aste, George J., vice president, government and international affairs, United Airlines; Robert E. Cohn, general counsel, People Express; and Gene E. Overbeck, senior vice president, government affairs, American Airlines, Inc........ Leonard, John, on behalf of Regional Airline Assn.; accompanied by Alan 105 Reilly, Donald, executive director, Airport Operators Council International; 40 Sheehan, John J., senior vice president, government and technical affairs division, Aircrafft Operators and Pilots Assn.; Edward W. Stimpson, president, General Aviation Manufacturers Assn.; and Robert A. Cooke, vice president, Stevenson, Robert L., system manager, schedules, Delta Airlines, Inc.; Ed Prepared statements: Mr. Stevenson Mr. Witkowski Aaronson, Robert J., director of aviation, Port Authority of New York and New Burian, Lawrence L., president, National Air Transportation Assn., letter.. Driscoll, Edward J., president and chief executive, National Air Carrier Assn.. Los Angeles City Department of Airports, statement Metzenbaum, Hon. Howard M., U.S. Senator from Ohio, statement Murphy, Lewis C., on behalf of the U.S. Conference of Mayors, statement. Reilly, J. Donald, executive director/secretary general, Airport Operators Council Onstad, Clark H., vice president, Texas Air Corp., statement 127 BUYING AND SELLING AIRPORT OPERATING RIGHTS THURSDAY, FEBRUARY 6, 1986 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, SUBCOMMITTEE ON AVIATION, The subcommittee met, pursuant to notice, at 9:33 o'clock, a.m., in Room SR-253, Russell Senate Office Building, Hon. Nancy Kassebaum (Chairman of the subcommittee) presiding. Staff members assigned to this hearing: Stephen Johnson, staff counsel; and Steve Palmer, minority professional staff member. OPENING STATEMENT BY SENATOR KASSEBAUM Senator KASSEBAUM. The hearing will please come to order. The purpose of today's hearing is to examine the problem of insufficient operating capacity at the nation's four high-density airports, the remedy proposed by DOT, and the pros and cons regarding that remedy. The Department of Transportation has issued a rule permitting carriers to buy and sell slots at the airports. I have serious reservations about that particular remedy. I don't think buying and selling slots is good public policy or good transportation policy. There are 4,200 total slots at the four airports. It is my understanding that Prudential-Bache has done an estimate that the value of each slot is somewhere between $750,000 and $1 million. Using the higher figure, which we tend to do when it suits our case, this means that these public assets are worth $4.2 billion. Why, when the Department is proposing to sell Conrail and National and Dulles Airports is it proposing to give away a $4.2 billion asset? I am also concerned really not just the loss of public assets, and the resulting windfall that would appear to accrue to the air carriers, but I am concerned with what buy/sell will do to community air service, to the legitimate rights of general aviation, and to commuter carriers at the high density airports. (1) DOT's recently issued rule appears to be permanent. There is no provision for going back if this rule takes effect and proves to be unworkable. The 23 Senators to date who have given their support to S. 1966 are greatly interested in the testimony which we will hear today. We believe that there is a better plan, and it will not be easy to persuade us that we are wrong. Many of us are open to trying to find different avenues and a better plan, and we are willing to consider what those might be. There are a number of witnesses who will be testifying this morning. I think the arguments are fairly familiar to everyone involved, and I would hope that everyone will confine his statement to a limited amount of time so that we will have ample time for questioning. Senator Ford, do you have any opening statement? OPENING STATEMENT BY SENATOR FORD Senator FORD. Just a comment, Madam Chairman. I think there is something deeper here than just selling slots. There is a philosophy to sell everything-sell the railroads, sell the airports, sell the slots, sell the land between the lakes, sell Bonneville. We found members of the administration that are resigning because of the philosophy, particularly over Bonneville and the making of money. There is more here than just the selling of slots, I think. I know we must limit our questioning today and the testimony to just the selling of slots, but I think we need to look somewhat deeper as we see the erosion for short-term gain and long-term losses. Senator KASSEBAUM. It's been irreverently suggested that maybe Walt Disney Productions would buy the House and Senate. Senator FORD. Well, I have, for a long time, referred to this place as "Disneyland East." Senator Hollings has an opening statement he would like to have included in the record. [The statement and bill follows:] |