It is quite possible that any future certificates for these services, or other new forms of service not yet foreseen, would be encumbered by such unsound restrictions on the ground they were supplemental. And it is even possible that any new certificates for normal airline service, over routes competitive with existing carriers, would be limited as to schedules and equipment on the excuse of supplemental certification.

In our view, the Board should not be empowered to limit the schedules, equipment, facilities, or accommodations of any certificated air carrier in providing service over its routes. The act, as presently written, is entirely sound in prohibiting the exercise of such power by the Board. The act would seriously and unwarrantedly be weakened if the Board were to be given such power.

If a carrier is worthy of certification, having shown that its services are needed and that it is fit to perform them, it should be in a position to expand its service as the development of the business and the demands of the public shall require-to quote the act-without interference from the Board. If, on the other hand, it is not in the public interest to permit a given carrier to provide the schedules, equipment, facilities, and accommodations which its business and the public demand requires, then the carrier should not be certificated.

A related matter is the obligation of the carrier certificated under the present act to provide adequate service. This obligation is imposed by section 404 (a) of the act, and can be enforced by the Board. There has been some implication-although again it has not been clearly spelled out-that if the Board were empowered to issue certificates for supplemental service, it would not put on such supplemental certificate holders any obligation to provide service, much less adequate service.

In our view, it would be intolerable thus to create two classes of certificated carriers-one obliged to serve the public, and the other free to ignore the public at will. The obligation to provide adequate public service is a normal concomitant of any franchise to operate as a regulated public-service company. The presently certificated airlines have accepted-and, we believe, complied withthis obligation, although it has meant serving unproductive stations and unprofitable route segments. So long as the presently certificated carriers are under this requirement of law, we see no reason to establish another class of certificated carriers which would need only look to their own whims, or their own pocketbooks, in determining whether or not to provide service.

To turn to another phase of the subject: It has been argued that the Board needs the power to certificate for supplemental service because otherwise it may desire to authorize some type of service and be unable to do so. There is, so far as we can see, no basis for this line of argument. The Civil Aeronautics Act is a legislative instrument of great comprehensiveness and flexibility. It has been in existence for some 19 years. During that period it has been amended only in minor respects. The experience of these 19 years has shown that the act confers on the Board adequate powers to regulate air transportation effectively so as to protect the public interest and at the same time promote the development of an unequaled air-transport system.

There is no need to expand to this committee on the fact that the United States now has the best and the most progressive airline system in the world. The very great achievements of this Nation's airlines, under this act, negate any notion that fundamental requirements under the act should be tinkered with on the ground that the Board lacks power to authorize enough service.

But even more significant, for present purposes, is the fact that the Board has been able-under the act as now written-to cope adequately with the varying situations and the changing circumstances that have emerged in these 19 years. The history of the Board's grants of authority, under the act, belies any suggestion that its powers are inadequate and that it needs the additional power to certificate for supplemental service.

Under the present act the Board has not merely certificated the 12 domestic trunklines and some 14 United States-flag carriers to operate internationally. It has also created such classes of companies engaged in regulated air transportation-most of which could, depending on what the word means, be deemed supplemental-as the local service carriers, the helicopter operators, the all-cargo lines, the United States-Territorial and the intraterritorial operators, the Alaskan pilot-owners, an all-tour operator, the irregular or nonscheduled air carriers, the domestic air freight forwarders, the international air freight forwarders, the air taxi operators, and the cooperative shippers associations.

The Board has likewise found means under the act of authorizing carriage by air of first-class mail-not bearing airmail postageand such unique services as mail pickup, sightseeing flights, and charter and special service; meanwhile, the Board has exercised measures of control over foreign-flag carriers serving this country.

In no instance, so far as we know, has the Board been held legally powerless to deal with and to authorize operations by any class of air carriers, for any service that it has found in the public interest. This fact in itself demonstrates the comprehensive nature of the existing Civil Aeronautics Act.

Under these circumstances, the Air Transport Association sees no! basis for argument that the Board should be empowered to issue certificates for supplemental service. As we have pointed out, the requested power is so vaguely defined as to constitute a blank check of undetermined potentialities. No one knows what the term “supplemental" may be construed to mean. The power to categorize service under a given certificate as supplemental, and thereby limit the schedules, equipment, facilities, and accommodations of the cer tificate holder, would be an unwarranted and unsound departure from the principles now embodied in the act. It is fundamental that each certificated carrier's management be free to expand its service as it judges the business and the public require. It would contravene the public interest to require some certificated carriers to provide adequate service, while other certificated carriers were free to operate where and when the pleased, without duty to the public. And the act, as presently written, is broad enough to cover whatever regulatory measures may be needed with respect to any foreseeable types of air transportation. For such reasons, the Board's proposal that it be given power to issue supplemental certificates should be rejected. That concludes my statement, Mr. Chairman.

Senator MONRONEY. Thank you very much, Mr. Tipton.
Senator Schoeppel?

Senator SCHOEPPEL. I do not believe I have any questions. I may have some questions that I may want to submit later on as to the interpretations of some of the other testimony that was offered here. Senator MONRONEY. I might say, for the benefit of the record, we do not have any bill introduced and before the committee at this time and we have only suggested language from the Civil Aeronautics Board. There has been testimony that the vagueness of what "supplemental carrier" means could be hammered out in legislative language to, probably, more clearly define exactly what the Board had in mind; whether it was to help in the direction of making possible without fear of violating economic regulations the right of the sup plemental or the irregular air carriers to fly certain routes where traffic loads seem to permit.

On that point I would like to ask, Mr. Tipton, do you have any suggestions as to how this matter could be handled? Now, the Board, as you know, has ruled in its Large Irregular case that 10 round trips a month would be quite proper and thus it has put a ceiling on the amount of flights between 2 different points that these irregular carriers could engage in.

Do you think that is too many, or do you think that, unless there is some way of carrying out this directive without the necessity of defending it in each particular route being flown, the irregular carriers would have a hard time living up to what they thought they were granted in the Board's decision?

Mr. TIPTON. The Board at the present time, of course, is regulating the irregular carriers on the basis of an exemption issued under 415 of the Civil Aeronautics Act. The question pending before the Board in its current investigation, one of the questions, is whether or not the supplemental carriers should be certificated, and, as Mr. Solomon has just stated here, many of them are urging very strongly that, in lieu of exemptions, certificates be granted to them. I take it that one of the reasons the Board puts forward this very broad expansion of its power is to meet an anticipated need there.

In the first place, the Board has not concluded that the irregular carriers should be regulated through certificates, nor have they concluded that they should be authorized to operate a regularly scheduled service limited in terms of schedules, so this particular problem

Senator MONRONEY (interposing). I thought they were allowed in this Large Irregular case 10 round-trip flights a month.

Mr. TIPTON. The decision was issued by the Board at an earlier time and was taken to the circuit court of appeals and that was reversed and remanded to the Board for further proceedings and, consequently, the case is again being

Senator MONRONEY (interposing). But the Board had decided, but now it is held up in court. That is the point I was trying to make; that each case and each route could be held up in court, could it not, on the fact that the Board did not hold sufficient hearings to justify the need for an exemption equaling 10 round trips a month?

Mr. TIPTON. Yes; any decision of the Board can be litigated-that is the provision of the act-and this particular amendment would not

affect that, particularly. You would still have arguments about which various carriers could debate in court.

Senator MONRONEY. It would be a different procedure, though, would it not? The exemption applies to the volume of traffic and everything else. But the supplemental certificate by the Civil Aeronautics Board would apply, generally, to the powers given to it by the Congress.

Mr. TIPTON. Well, I think I am getting your question now, and I am sorry I did not get it before.

Senator MONRONEY. I am sorry I did not phrase it better.

Mr. TIPTON. I should have understood it. The supplemental provision here, with all its disadvantages that I have just described, and I surely would hope the committee would never report it, would unquestionably eliminate any question as to whether the Board could issue such a certificate so limited and, thus, that issue would not be litigated, would not have to be litigated in court.

Senator MONRONEY. That is right.

Mr. TIPTON. But, to get right down to the question of the policy here involved, as I stated in my statement, the provision which says that the Board shall not restrict schedules and shall not restrict equipment is so important that there should be no deviation from it, even in the case of this current proceeding with respect to the irregular carriers.

What I am saying is that the Board should not attempt to regulate the carriers I represent or the irregular carriers on the basis of a limitation of schedules. The Board has ample power to regulate and certificate with respect to specialized types of service, not involving either limitations of schedules or limitations of equipment, and any effort to regulate on that basis has done nothing but cause controversy and confusion and, in many cases, serious violations of the act by attempting to say that you shall operate so many schedules and you shall not operate any more.

I think that the Congress should not authorize the Board to regulate in those terms. They have the power to provide for charter service, for limitations to cargo service, for limitations to particular classes of traffic; they have very broad powers to establish specialized kinds of service under certificates, and what we are urging here is that, for all the reasons I have made in my statement, plus another one, the Congress should not authorize the Board to regulate through certificates in terms of a limitation of schedules because it has not worked up to now and it will not work.

Senator MONRONEY. You would not want to authorize a type of service, either, would you, by differentiating between coach service, perhaps, and first-class service?

Mr. TIPTON. I do not know of any way, no matter what you would write in a statute, you would distinguish between coach service and first-class service. There, again, you are regulating the accommodations that the carriers shall provide for the public, and the distinctions between first-class and coach service are largely, at the moment, in terms of the high density of seating which permits a reduction in fare. It would be too bad, it seems to me, if the Board were given such an extensive power as to tell you how many seats you are supposed to have in your airplanes in addition to the power that they already have to fix your rates.

It has gone too far in terms of regulating the management of the carriers. It just cannot be successful.

Senator MONRONEY. It would be pretty hard to define, because in some lines they give a de luxe coach service that is comparable to firstclass service; is that correct? I mean, in the matter of regulation, it would be impossible to distinguish or clearly define the difference between those two classes of service; is that not true?

Mr. TIPTON. That is, in my opinion, true. Those variations in service are a basic reason for competition, of which we have a tremendous amount in the air transport business. The carriers compete with each other by providing a particular kind of service, with each trying to attract the public to its operation. That is, presumably, the reason the Congress had something to say in the statute about competition. The Board was not given either the power or the responsibility to regulate every single phase of the air-transport business. In matters of public service of this kind, many of these points were left to the competitive pressures these carriers put upon each other.

Senator MONRONEY. Does it not, finally, come down to what an irregular or nonscheduled air carrier is, in that that is the area in which the right of entry is sought and has been sought for a number of years in the air-traffic picture?

Mr. TIPTON. Well, one thing I want to be sure about and emphasize is that this particular bill is far broader, as I think I made it clear; it is far broader than the irregular-carrier discussion. It goes to all conceivable types

Senator MONRONEY (interposing). It will open up special certification to helicopters, all cargo, international supplemental service, every other thing?

Mr. TIPTON. Whatever the Board thought at a particular time was supplemental, they would drop the hammer and that would be supplemental because they said it was supplemental, and you could not litigate it because the term "supplemental" is as broad as all outdoors. You take it to the Circuit Court of Appeals and they would rely on the Board's judgment as to what supplemental was and, for that reason, the power is much broader than the irregular carrier discussion. But

Senator MONRONEY (interposing). It is no more broad than that right that the Board has today to give a full, complete certificate if it wishes. In other words, it finally comes back to the wisdom of the Board and the findings of the examiner?

Mr. TIPTON. That is right. What this comes down to is to what extent shall the Board have the power to fix schedules, accommoda tions, equipment accommodations, and facilities of whatever airline is regulated. The Congress now has said they shall not have any. and that was a deliberate decision, a decision made not only with respect to the air transport system but also the motor carrier system. almost, as I recall, in identical terms, because those areas were reserved for management to deal with, to be controlled and regulated not by Government but by the forces of competition. That was a good decision in the Motor Carrier Act and it was a good decision here, and we are urging you just as strongly as we can not to change that decision.

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