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Clinton Creates Panel on U.S. Airline Industry : Aviation: National commission will study the troubled industry and suggest steps to revive it.

April 08, 1993|HOWARD LIBIT | TIMES STAFF WRITER

WASHINGTON — Attempting to revive the nation's struggling airline carriers and aircraft manufacturers, President Clinton signed legislation Wednesday creating a national commission to study the aviation industry and suggest solutions.

The 15-member National Commission to Ensure a Competitive Airline Industry will have 90 days to report back to the Administration and Congress on ways to aid an industry that has lost about $10 billion in the last three years.

Under the bill, the White House, Senate and House each will appoint five voting members to the commission. The panel will also have 11 non-voting members.

Describing the commission's work as a "fast-track operation," Clinton said he expects members to be announced soon after Congress' two-week Easter recess.

The aviation industry has been shaken in recent years by such forces as the recession, high fuel prices and decreased tourism. Airlines have also suffered from the effects of overexpansion of routes, high debt from purchase of aircraft and fare wars that often drive ticket prices below costs.

Clinton speculated that solutions might involve "a more aggressive trade policy" and "keeping the global marketplace freer from unfair competition."

His comments, at least in part, appeared to be an attempt to appease the nation's three biggest airlines--American, Delta and United--which were upset last month when the Administration approved British Airways' plan to invest $300 million in USAir to join with the U.S. carrier in a combined marketing effort.

Representatives for the airlines and aircraft manufacturers said Wednesday that they were ready to work with the commission. "The creation of the commission was the easy part, and even that took almost two months to accomplish," said a written statement by Jim Landry, president of the Air Transport Assn., which represents the nation's airlines.

But support for the commission is far from universal. Robert L. Crandall, chairman of American Airlines, said he feared that the group might lead to the return of government regulation.

Speaking before the World Affairs Council in downtown Los Angeles, Crandall said he found the idea of a government-appointed commission coming up with solutions to the industry's problems "terrifying."

"The best result for the domestic industry is to do nothing," Crandall said. "Let us fight it out."

On many issues, the three largest carriers favor solutions opposed by smaller airlines, such as Continental and Trans World Airlines, many of which are operating under bankruptcy protection.

"I think the commission will be balanced sufficiently and that the varying views will be represented," said airline analyst John Ash, managing director of Global Aviation Associates. "That means the commission will not reach any radical solutions, but it also means it will not short shrift any views."

A solution that Ash suggested would be a change in tax law to encourage airlines to retire older airplanes and purchase new, environmentally cleaner ones.

Another idea being proposed is temporary re-regulation to stabilize the industry.

Times staff writer Jesus Sanchez in Los Angeles contributed to this story.

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