Transcontinental Bus System, Inc. v. CAB
| Decision Date | 24 July 1967 |
| Docket Number | 23410,23020-23027,23054,and 23411.,No. 22791,23513,23099,23512,22791 |
| Citation | 383 F.2d 466 |
| Parties | TRANSCONTINENTAL BUS SYSTEM, INC., et al., Trailways of New England, Inc., Capitol Bus Company, Inc., et al., Virginia Stage Lines, Inc., et al., Continental Tennessee Lines, et al., Deluxe Trailways, Inc., et al., American Buslines, Inc., et al., Continental Pacific Lines, et al., D. C. S. P. Motor Way, Inc., et al., Adirondack Transit Lines, Inc., et al.; National Trailways Bus System, Petitioners, v. CIVIL AERONAUTICS BOARD, Respondent. TRANSCONTINENTAL BUS SYSTEM, INC., Petitioner, v. CIVIL AERONAUTICS BOARD, Respondent (two cases). |
| Court | U.S. Court of Appeals — Fifth Circuit |
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Theodore Hardeen, Jr., Charlottesville, Va., Howard S. Boros, Washington, D. C., Warren A. Goff, Dallas, Tex., for petitioners.
O. D. Ozment, Assoc. Gen. Counsel, Joseph B. Goldman, Gen. Counsel, Warren L. Scharfman, Assoc. Gen. Counsel, Robert L. Toomey, Acting Assoc. Gen. Counsel, John H. Wanner, Gen. Counsel, Civil Aeronautics Bd., Washington, D. C., Howard E. Shapiro, Atty., Dept. of Justice, Washington, D. C., for respondent.
Before GEWIN, THORNBERRY and DYER, Circuit Judges.
These are consolidated petitions for review of several orders of the Civil Aeronautics Board (Board) dismissing without a hearing the petitioners' consolidated complaints which sought the suspension and investigation of tariffs filed by numerous air carriers providing for reduced rates for military standby, youth standby, and young adult passengers. The petitioners, forty-six independent motor carriers licensed by the Interstate Commerce Commission and a national trade association of motor bus operators, claimed that the tariffs were unreasonable, uneconomic, and unjustly discriminatory in violation of sections 403(b) and 404(b) of the Federal Aviation Act of 1958, 49 U.S.C. §§ 1373(b) and 1374(b) (1964). The Board found that the complaints failed to set forth sufficient facts to warrant suspension or investigation of the tariffs and, in accordance with § 1002 of the Act, 49 U.S.C. § 1482 (1964), dismissed the complaints without a hearing.
The petitioners sought review of the orders approving the military standby tariffs in the eleven Courts of Appeals. The petitions were transferred to this Court and consolidated with the petition filed in this Court, Case No. 22,791. Subsequently, the petitioners sought review of the orders approving the youth and young adult fares in this Court, and those petitions, Nos. 23,410 and 23,411, were also consolidated with Case No. 22,791 in this proceeding. We affirm the action of the Board with respect to the military standby tariff, but set aside the orders relating to the youth and young adult tariffs and remand for further proceedings.
The military standby tariff provides that military personnel traveling in uniform on leave, pass, or furlough or within seven days of discharge may fly on a standby basis for approximately one-half of the regular jet coach fare.1 The standby status permits the traveler to be accommodated only if seats are available after all regular fare passengers have been boarded and subjects him to being deplaned enroute or "bumped" to accommodate a regular fare passenger.2
The youth standby tariff similarly allows a rate reduction of fifty percent of the regular jet coach rate and provides carriage only after all regular fare and military standby passengers have been accommodated. Persons traveling under this tariff may also be "bumped" enroute. The reduced rates are available only to youths over the age of 123 and under the age of 22 who purchase an identification card issued annually by the airlines for the sum of $3.00. The reduced fares are unavailable during certain peak holiday periods, namely Easter, Thanksgiving, Christmas and New Years.4
The young adult fare tariff, proposed only by Allegheny Airlines, Inc.5 is also applicable only to persons between the ages of 12 and 22 who hold identification cards issued annually by the airline for the sum of $10.00. Cards procured after June 30, however, may be purchased for $5.00. This tariff provides for the making of reservations and the rates are two-thirds of the regular first class fare.
To more fully understand the nature of these proceedings a short history of reduced fares for military personnel and youths is required. The Board first sanctioned reduced fares for military personnel traveling at their own expense in 1956. Those tariffs provided for reduced fares on flights between the continental United States and the then territories of Alaska and Hawaii. These rates were authorized under Board regulations issued pursuant to the provision of § 403(b) which excises overseas and foreign tariffs from the strictures of that section and relegates control of such traffic to the Board. When the territories became states, however, travel between them and the continental United States was no longer overseas transportation and the rates were abandoned. The present military standby tariffs here under consideration were first submitted in essentially their present form and were authorized by the Board on a temporary basis in 1963. See American Airlines Military Fares, 38 C.A.B. 1038 (1963). Those tariffs provided for a fifty percent reduction in jet coach rates and applied to military personnel traveling in uniform on furlough, leave, or pass. Carriage under the tariff was on a standby basis, and passengers were to be accommodated only in empty coach seats. The expiration dates for those tariffs were set in early 1965. Subsequent extensions expanded the service to its present state. The complaints of the petitioners in the instant proceeding were directed at tariffs filed by twenty air carriers proposing an indefinite extension of the military standby tariff.
Reduced rates for youths under twelve have traditionally been a part of the rate scheme in the transportation industry. In 1961 the Board first approved reduced fares6 for youths between the ages of 12 and 22 as a promotional experiment. Those tariffs provided for a fifty percent reduction in fare and permitted the making of reservations within three hours of flight time. Shortly after the tariffs went into effect they were abandoned by the trunkline air carriers because of operating difficulties caused by the tariffs. Several local service carriers, however, continued the reduced rates, and they are still in effect today.7 In December 1965, American Airlines, Inc. filed the youth standby tariff here in question. On the same day, Allegheny Airlines filed its young adult tariff. Neither tariff contained an expiration date. Complaints were filed against the youth tariff of American by five competing airlines,8 the American Society of Travel Agents, and the petitioners. Only the petitioners filed a complaint against Allegheny's young adult tariff. The complaints in both cases sought suspension and investigation of the tariffs. The Board in dismissing the complaints limited its approval to an experimental one year period.9 It also required the carriers to file quarterly reports containing statistical data and evaluations of the effectiveness of the tariffs.
The petitioners alleged before the Board and assert here on review that the tariffs are unreasonable and unjustly discriminatory in violation of the Federal Aviation Act of 1958 (FAA). They contend that the tariffs are unreasonable and uneconomic because they are not reasonably related to the fully allocated cost of transportation. They also contend that Allegheny's young adult tariff is unreasonable because there is no cost savings to the air carrier which would justify the reduced fare. They further allege that the young adult tariff is incapable of generating enough additional traffic to overcome the diversion from normal regular fare traffic and that the tariff is therefore not justified under the profit-impact test advanced by the Board.
The petitioners also assert that the fares are unjustly discriminatory because they are based solely on the identity of the traffic, which is "like" all other passenger traffic, and that the factors upon which the Board granted relief in approving the tariff were beyond the scope of its competence because such factors did not relate to carriage. It is alleged that the standby features of the military and youth tariffs do not differentiate the service from regular service in view of the low average load factors on most domestic flights; it is also pointed out that the reservation feature of the young adult tariff eliminates even that minor difference. In addition, the petitioners contend that the identification card requirement of the youth and young adult tariffs do not distinguish the service or serve as a valid distinction as compared with other promotional fares. Thus, the petitioners conclude, the tariffs offer like service to like traffic under the same or similar circumstances at a reduced rate and are therefore unjustly discriminatory in violation of § 404(b) of the FAA.
In dismissing the complaints, the Board ruled that the standby provisions of the military and youth tariffs sufficiently distinguished the service from that offered regular fare passengers, that the fare was not based solely on the identity of the traffic but was justified, in the case of the military standby tariff, by the national defense considerations advanced by the Secretary of the Army, and, in the case of the youth fares, by the traditional discounts offered youths by the transportation industry and the promotional effects of the tariff. The Board further found that the tariffs fostered the financial position of the industry by increasing revenue, improving the utilization of equipment and ground facilities, and filling seats which otherwise would be vacant. With respect to the young adult fares, the Board...
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