Economic Regulation of Intrastate Air Carriers in California

Abstract

statutory provisions relating to Public Utilities Commission jurisdiction. Because of unique geographic and economic factors, commercial intrastate air travel has developed faster and with greater economic significance in California than in any other state. Attendant legal questions have arisen out of the uncertainty regarding the extent of exclusive federal control as well as from the application to those activities which are not subject to exclusive federal jurisdiction of certain state constitutional provisions, adopted while the airplane was still a combination box-kite and windmill not imagined as a means of mass transportation. Future developments in California may well lead the way towards settling the problems of federal, state and local regulation of air travel throughout the nation. The unlimited potential of air travel and its rapid development in recent years shows the need for resolution of the jurisdictional issues created by present laws and decisions, and for the development of a far-sighted and sympathetic governmental attitude to realize this potential. A comparable opportunity to further the development of intrastate and local-service air transportation may never again arise if the present solution of these problems is not forthright and effective. Congress and the states have not yet produced a sound regulatory pattern. Air carriers, serving many masters, face a nearly impenetrable mass of confusion, duplication and uncertainty in economic regulation. This complexity of regulation has an important adverse affect on the development of an air transportation system which will serve national, sectional and local needs adequately. This fact requires the resolution of existing jurisdictional conflicts and the establishment of a flexible regulatory framework aimed at maximum social utilization of the inherent advantages of the airplane. The framework should be tight enough to protect the public interest in safety, service and competition, and loose enough to permit the still unrealized potential of air transportation to develop as rapidly as eco-