A Happy Hawk in the Hen House

CAB's Kahn pares those fares and reshapes the airlines

May is the month that holiday travel starts to soar, and this year vacationers will be offered a bagful of bargains in air fares -thanks in large part to an unlikely bureaucrat named Alfred Kahn. A lean, balding, hatchet-faced man who teeters back and forth in his high-backed leather chair, Kahn, 60, looks like a restless hawk. The image is apt. In less than a year as chairman of the Civil Aeronautics Board, he has outdone any of his predecessors in shooing the airlines out of the cozy hen house of Government supervision that has protected and confined them for 40 years. By opening the door to all-out competition, Kahn has drastically, and probably permanently, changed the U.S. airline industry.

Soon after taking office, Kahn shucked off the CAB's cautious approach to granting fare cuts and told airline chiefs that he would welcome applications for discounts. The more aggressive lines, especially American and United, quickly reduced fares to fill unoccupied seats, and competitors were somewhat reluctantly forced to follow their lead. Last month the CAB voted to allow airlines to cut fares as much as 50% without even checking with the agency. This move could hurt some lines that may need to show dominant positions on important routes in order to get financing for fleet buildups in the future. Says Kahn: "Some carriers may drop by the wayside. But those managements that do learn to adjust are going to do very well."

Jimmy Carter picked Kahn to head the CAB because he seemed a logical choice to loosen its iron grip over fares, routes and almost all other aspects of the airlines' economic life. As a Cornell University economics professor who was also chairman of the New York State Public Service Commission from 1974 to 1977, Kahn has spent much of his career criticizing federal and state government for shielding inefficient industries to the detriment of consumers, who must pay more. Fully aware of the criticisms his deregulation drive would bring, he says: "No businessman protected from competition ever believed that competition is anything but destructive."

In addition, instead of following his predecessors and limiting the number of airlines flying any route, Kahn has sought to increase competition on all routes. Two weeks ago, the Senate approved a bill that would ease the way for new airlines to enter the industry, cut fares even lower and permit lines to spread onto other routes with little or no Government interference. The bill, which the Administration thinks has a good chance of passage in the House this summer, would drastically weaken the powers of the CAB. But that does not worry Kahn, who contends that "I will consider myself a success in this job if there is no job when I leave it."

Carter supports Kahn and holds up the CAB as an example of the price-cutting benefits of competition, but the two men are not always in accord. After the President overturned the CAB's award of the Dallas-London route to Pan American and gave that plum to Braniff, the fiercely independent Kahn openly criticized the decision and seriously considered quitting.

Now Kahn, who often pads about his office in his socks, has an easy rapport with his top staff, which CAB critics agree is one of the sharpest in Washington. An outgoing man, Kahn has brought a new sense of style and unpredictability to the once stodgy agency. He has a passion for Gilbert and Sullivan, which he often indulged at Cornell by singing and prancing in student productions. His other obsession is clear English. Says he: "If you can't explain what you're doing in simple English, you are probably doing something wrong." He admits that his fight against bureaucratic bafflegab is not always successful. But he adds: "Rome wasn't destroyed in a day." qed

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