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July 1, 1999

Miller Organizes Support for Loosening Airport "Slot" Restrictions

Twenty-eight state attorneys general join in appeal to U.S. Senate. "This is crucial for new and low-cost airlines, lower air fares, and economic vitality in Iowa," Miller says.

DES MOINES-- Attorney General Tom Miller organized an appeal today by the attorneys general of twenty eight states and Puerto Rico asking the U.S. Senate to loosen "slot" controls that limit the number of takeoffs and landings at certain airports. The letter strongly supported an amendment on slots offered by Iowa Senators Tom Harkin and Chuck Grassley.

Current slot controls have an anti-competitive impact that pose "significant barriers to entry for new-entrant airlines and barriers to expansion for low-cost airlines," the letter says.

"This is another crucial battle in our efforts to restore competition and fairness in airline pricing," Miller said. "It is crucial for low-cost airlines, new airlines, lower air fares, and economic vitality in Iowa."

Miller took the lead in martialing the nationwide attorneys general support for loosening slot restrictions -- contacting airlines, answering questions, circulating the letter, recruiting signers, and working with the offices of Sen. Tom Harkin, Sen. Chuck Grassley, and Sen. John McCain, chairman of the Senate Transportation Committee.

The Senate is slated to take up the "Air Transportation Improvement Act" sometime after the July 4 recess; Miller organized attorneys general support for the bill and the amendment by Senators Harkin and Grassley.

"The Harkin/Grassley amendment is crucial," Miller said.

With the Harkin/Grassley amendment, the attorneys general wrote, the bill "would phase out the slot system in a way that promises to benefit small and medium-size airports around the nation." Slot controls would be adjusted at O'Hare airport in Chicago and LaGuardia and Kennedy airports in NY under the measure. The changes would benefit new-entrant and low-cost carriers, and airlines that fly some smaller aircraft. The slot system would be phased out entirely in five years.

"It is our view that doing nothing in today's environment is not an acceptable alternative given the importance of air transportation to all of our communities," the letter said.

"For business and leisure travelers, this guarantees new competition which translates into affordable air fares, improved access, and better service. For our communities it offers greater opportunity for economic development."

Miller noted that Iowa air fares are among the highest in the nation, and that the situation presents a serious challenge to economic growth and development.

The attorney generals' letter notes that 98 per cent of current slots are held by the major airlines, and that even foreign carriers have more slots than domestic new-entrant or low-cost airlines.

"Presently there is no practical way for new carriers to compete in these crucial markets," the letter says. "It is difficult to imagine that an airline serving the Midwest, the South, or the East could compete effectively in the market without access to slot-controlled airports. These controls are regulatory relics and they pose a serious impediment to an open, fair, and competitive marketplace."

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