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Proposal May Land O.C. Airport More Carriers : Transportation: Discount airlines could use John Wayne by affiliating with established carriers. Supervisors vote Tuesday.

October 02, 1994|CHRIS WOODYARD | TIMES STAFF WRITER

SANTA ANA — In a crucial vote that could help determine the future of air travel in Orange County, the Board of Supervisors will decide Tuesday on a proposal that would allow discount carriers such as Reno Air to begin service at John Wayne Airport right away by making connections with airlines already established there.

The plan has strong support from carriers who feel they have been shut out by existing airport policy. It has also won praise from some airport officials and from Supervisor Thomas F. Riley, in whose district the airport is located.

"I think the changes will enhance competition and provide more operating flexibility," Riley said Friday. "As the airline industry changes, the county will have to accept the challenge."

The proposal could also give John Wayne more of an international flavor. Airlines like Northwest Airlines, for example, which operates jointly with KLM Royal Dutch Airlines on overseas flights, would be able to put up signs promoting the connection, even though KLM itself does not operate at John Wayne.

For the Record
Los Angeles Times Tuesday October 4, 1994 Orange County Edition Business Part D Page 2 Column 1 Financial Desk 1 inches; 36 words Type of Material: Correction
Shuttle flights--The Times reported incorrectly Sunday that Shuttle by United has begun flights at John Wayne Airport. The short-distance discount service, which began Saturday, flies to four other Southern California airports, but not John Wayne.

But the so-called affiliate plan is bitterly opposed by a group of carriers already serving Orange County. Led by United Airlines, that group maintains that the proposal could lead to less, rather than more, competition. At the very least, said United lobbyist Alan B. Wayne, it would shut off the airport to additional flights by low-fare Southwest Airlines, which began serving John Wayne in May, or United's new low-cost subsidiary.

"Orange County is virtually closing the door to any Shuttle by United operation in the future and to any significant expansion by Southwest," Wayne said. "Orange County residents are going to be penalized and continue to pay higher fares than at other airports."

Strict noise restrictions in a 1985 agreement between the county and Newport Beach limit the number of flights at John Wayne. Carriers that already have landing slots, or approvals for a certain number of arrivals and departures a day, rarely surrender them.

Although the number of daily flights is thus capped, Orange County has become an increasingly popular destination among the traveling public. That, in turn, has allowed airlines serving John Wayne to charge premium prices for tickets.

Southwest managed to get landing slots at the airport by purchasing Morris Air Service, which was already operating there with service to Salt Lake City.

All of that has resulted in a long waiting list for carriers wishing to start Orange County service.

Reno Air would still be in a holding pattern if not for an agreement with American Airlines. American had been flying between John Wayne and San Jose, a popular business destination that also served as an important junction for flights headed east and farther north. It was a profitable run until newcomer Southwest began offering a $69 one-way fare--about half what American was charging.

Rather than cut fares and lose money, American proposed turning over the flights over to Reno Air, which has much lower overhead costs and could compete profitably against Southwest.

Reno Air had hoped to start Orange County service during the summer but was blocked when the federal Department of Transportation insisted on reviewing the matter. Regulators have since cleared the agreement.

If the Board of Supervisors approves the affiliate plan, Reno Air officials say, they might be able to begin flying from Orange County as soon as this month with five daily fights to San Jose and one daily flight to Reno.

"United has waged a vigorous campaign to keep Reno Air out of Orange County," said Robert M. Rowen, Reno Air's vice president and general counsel. United's objections, he said, stem from the fact that it doesn't want competition for its Shuttle by United, which on Saturday began flights between John Wayne and Los Angeles International.

United, for its part, vows to keep fighting.

"We feel the county is . . . in effect, interfering with normal, free-market forces and encouraging the formation of cartels," lobbyist Wayne said. "We think that is the wrong way to go, and it will prevent Orange County residents from benefiting" from interstate air fare discounting wars among major carriers.

The carrier concedes, though, that it expects the Board of Supervisors to vote for a change of policy, especially with Riley having given it his blessing.

Airport officials say they see only benefits in encouraging more competition.

The affiliate proposal "makes regulation more flexible," said airport spokeswoman Courtney C. Wiercioch. "The carriers may choose to be part of an operating group or not part of an operating group."

She stopped short of predicting how Tuesday's vote will go. "At this point," Wiercioch said, "we don't know."

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