According to the article, the CAB's Management issues
The CAB has abandoned its mandate of serving the public in favor of pursuing interests such as a 12% rate of return. The CAB's management has lost credibility and has weakened over time as a result of its involvement in politics, and the majority of its top staff has no experience of the aircraft transportation sector. The current chairman of the board, Robert Timm, is under fire because of his political affiliations, because the CAB is now perceived as a political tool with little interest in serving the public interest (CAB: Can This Agency Be Saved?, 2004).
Opposition to CAB's Economic Policy Decisions
The CAB's poor management has made some economic policy decisions which have faced significant opposition by everybody. For instance, the Board's capacity agreements and minimum charter guidelines have been opposed by the Justice Department because the CAB has made such decisions in areas where it does not have any powers. The CAB's decision to approve a 4% fare hike has faced opposition on the basis that no there is no reasonable justification for the increase (CAB: Can This Agency Be Saved?, 2004). The Congress and Administration were against the increase of prices and it seems that the CAB is against the regulation of fare prices after rejecting a proposal for airlines to increase or decrease fares by 15% depending on the situation.
CAB's Impact on Passenger Service and Airline Competitiveness
Most of CAB's decisions are reducing the quality of service passengers get as well as lessening the competitiveness of the airlines. The main board interest is making sure that a 12% rate of return is achieved even at the cost of public service. For instance, the capacity reduction agreements have the effect of charging travelers more while the level of service has reduced. Most regulators hold the opinion that the CAB's push for a 12% return (CAB: Can This Agency Be Saved?, 2004). This will cause chaos in the industry progressive deregulations steps are required to prevent the industry from falling.
Concerns about CAB's Impact on the Airline Industry
The CAB's economic decisions are hurting the airline industry as a whole. Most airlines are losing their competitiveness, and some are resorting to offering free drinks to attract more customers. Another concern is that since 1938, there has been no local service airline which has gained a certificate to operate (CAB: Can This Agency Be Saved?, 2004). The board's staff lack of knowledge has resulted in interested airline petitions to enter the market never being acted upon, and the existing airlines can desert the routes that lose money without any replacements made. Most observers argue that regulatory policy reforms are necessary to save the industry, but the main question on everybody's mind is whether the CAB will stop its pursuit of economic return and focus on serving the public.
Reference
CAB: Can This Agency Be Saved? (2004). Air Transport World, 41(7), 34-35. Retrieved from https://business.highbeam.com/26/article-1G1-119116116/cab-can-agency-saved-board-mandate-serve-public-being.
