Petitions for review of an order of the Civil Aeronautics Board finding New York Air Lines, Inc. to be fit, willing and able to commence new passenger-carrying air service between New York City and Washington, D.C. Affirmed.
Before Moore, Mansfield and Mulligan, Circuit Judges.
New York Air Lines, Inc. (NYA) is a newly formed air carrier and subsidiary of Texas Air Corp. (TAC) which also controls Texas International Airlines, Inc. (TXI), an established and certificated air carrier which operates predominantly in the southeast. On September 8, 1980, NYA, TXI and TAC applied to the Civil Aeronautics Board for a certificate of public convenience and necessity for NYA to conduct new passenger-carrying air service between New York City and Washington, D.C., 49 U.S.C. § 1371, and for approval of their interlocking relationships and common control, 49 U.S.C. §§ 1378, 1379. In order that service on the New York City-Washington, D.C. route might be commenced on December 14, 1980, the applicants moved for expedited procedures. On September 30, 1980, in Orders No. 80-9-176 and 80-9-177, the Board tentatively concluded that NYA's requested route authority was "consistent with the public necessity and convenience," directed the interested parties to show cause why final approval should not be granted and instituted a fitness investigation of NYA to be set for a hearing before an Administrative Law Judge. The issues to be considered at the fitness hearing included whether NYA was fit, willing and able to perform the services sought and whether the common control and interlocking relationships would adversely affect the public interest. (Order No. 80-9-176).
The Air Line Pilots Association, International (ALPA), Association of Flight Attendants, International Brotherhood of Teamsters, Airline Division (Teamsters), International Association of Machinists and Aerospace Workers (IAM), Pacific Southwest Airlines, Piedmont Aviation, Inc., and U. S. Air, Inc., sought leave to intervene in the fitness investigation and leave was granted on October 23, 1980. (Order 80-10-131). The labor intervenors attempted to show that NYA was not fit, willing and able as required by Section 401(d)(1) of the Federal Aviation Act, 49 U.S.C. § 1371(d)(1), and, therefore, CAB should not issue a certificate of public convenience and necessity. Specifically, the unions, especially ALPA, offered evidence which would show that TXI management had attempted to increase the payload of its DC-9 aircraft by instituting an optimum take-off speed resulting in numerous blown tires; further attempts by TXI to increase payload by mounting a rocket on the aircraft resulting in weight and balance errors; the existence of eight different cockpit layouts in TXI DC-9s which were to be leased to NYA resulting in safety hazards due to frequent moves by pilots among the various layouts; NYA's proposed rules on minimum rest time and maximum flight and duty time were less protective against pilot fatigue than TXI's and the FAA minimum requirements in this area are obsolete; and if TAC had not created a new air carrier with newly recruited captains, TXI's experienced captains would have flown the new route resulting in increased safety. Finally, ALPA sought to introduce evidence regarding the inferiority of proposed wages and working conditions at NYA.
ALPA contended that Section 3 of the Airline Deregulation Act of 1978, P.L. 95-504, 92 Stat. 1705, codified at 49 U.S.C. § 1302, requires the CAB to "fully evaluate" the report of the Federal Aviation Administration on the safety implications of new air carriers, 49 U.S.C. § 1302(a)(1), and to recognize the clear intent of Congress in the "furtherance of the highest degree of safety in air transportation and air commerce." Id. at § 1302(a) (2). Thus, the argument continues, the CAB is now required to scrutinize more carefully the safety consequences in each new entrant's proposal. Similarly, in 49 U.S.C. § 1302(a)(3), the Board is directed to consider as being in accordance with the public interest the "need to encourage fair wages and equitable working conditions." Thus, argue the unions, the Board was required to consider the labor implications of NYA's proposal as part of the fitness investigation.
The Administrative Law Judge precluded ALPA from offering the above described proof. He did, however, permit the Bureau of Domestic Aviation to introduce into evidence a letter from R. L. Collie, Chief, Air Transportation Division Office of Flight Operations at the FAA to Peter M. Block at the CAB. The letter is a "response" to a CAB request for a safety and compliance evaluation of NYA and TXI. In this one page letter, Mr. Collie wrote that NYA was not yet certificated by the FAA and therefore, no information about that carrier was available. In fact, the FAA did not certificate NYA until December 19, 1980, eight days after the CAB issued the order presently under review. Service on the New York-Washington, D.C. route commenced on that same date. Regarding TXI, Mr. Collie wrote that "(in) our opinion, (TXI) is conducting its operations satisfactorily in accordance with (FAA Regulations)." He further wrote that "(w)e know of no reason why the Board should act unfavorably on the New York Air Lines application." ALPA sought to subpoena Mr. Collie to appear at the hearing. The FAA, however, sent another official, Mr. J. Johnson, who was not familiar with the Collie letter. Mr. Johnson confirmed that the FAA had not yet even made internal staff recommendations on NYA's FAA certificate qualifications.
On November 26, 1980, pursuant to a CAB order, the record was closed and immediately certified to the Board without recommendation by the ALJ. Briefs were to be filed by December 3, 1980 and oral argument was held before the Board on December 4. Thereafter, on December 11, the Board issued the order appealed from in this case.
In the December 11 order, Order No. 80-12-57, the CAB made final its tentative conclusion that certification of NYA would be consistent with the public convenience and necessity. Only one objection to certification had been filed in the show cause proceedings by Air New York which the Board rejected.*fn1 With regard to the fitness investigation, in which the labor parties intervened, supra, the Board found that NYA was fit, willing and able to provide the proposed service. Id. at 4. The Board determined that NYA had met the three criteria uniformly applied to determine fitness:
(a)n applicant can qualify for a certificate if it can demonstrate that it: (1) will have the necessary managerial skills and technical ability, before beginning service, to operate safely; (2) if not internally financed, has a plan for financing that, if carried out, will generate resources sufficient to commence the operations proposed without undue risk to consumers; and (3) will comply with the Act and regulations imposed by Federal and state regulatory agencies. We find that NYA meets all three criteria and should be found fit.
Moreover, the Board held that the amendments to Section 102 of the Federal Aviation Act embodied in the Airline Deregulation Act of 1978, supra, did not impose any further duties upon the Board with respect to safety or labor considerations. Concerning the labor implications, the Board noted that pursuant to Section 401(k)(4) of the Act, 49 U.S.C. § 1371(k)(4), the CAB has always been required to ensure that carriers comply with Title II of the Railway Labor Act. Thus, the Board reasoned, "the language on wages and working conditions in section 102(a)(3) does not mandate the Board to expand its presence in the industry's labor field." Id. at 17. With respect to the ALPA's argument that CAB must now evaluate a new carrier's propensity for safety, the Board held that:
(t)he Federal Aviation Administration sets standards for both pilots and carriers. Unless those standards are met, they simply cannot obtain FAA certification. Although the concern of aviation safety is one for both agencies, for us to try to judge such questions as pilot competence would represent a departure from our primary area of expertise and an intrusion into the FAA's primary sphere. We are unwilling to make such inroads, and ...