Opinion ID: 296613
Heading Depth: 2
Heading Rank: 3

Heading: Southern's On-line Connecting Traffic Revenues-- 1.5 percent to 15 percent

Text: 31 In its estimates presented to the Board, Southern used a figure of 1.5 percent for its on-line connecting traffic forecast. 28 This may have been modest, but since it definitely was to Southern's advantage to show as high a figure as was reasonable for this on-line connecting traffic forecast, we assume that it was not excessively modest. But as quoted above, the Board's first opinion stated: 'we have used 1970 as the forecast year, increased revenues by 15 per cent for on-line connecting traffic.   ' /29/ The Board gave no explanation or justification for multiplying tenfold the on-line traffic possibilities as estimated by Southern itself, only saying that it had been used without objection in a number of recent cases, and conceding that its use was a novel technique. Of course this figure was never subject to cross-examination or exploration as to its foundation by any party. 32 This 15 percent increase was not unimportant. According to the Board's Appendix A to its order of September 1969, it accounted for $666,000 of the passenger revenue. 30 Added to other revenue increase of 10.52 percent, this multiplication miracle produced $736,000, more than Southern's entire $717,467 operating profit, and without it Southern's subsidy need would have increased proportionately. 31 33 When Delta pointed out what a miracle the Board had wrought, in its Opinion on Reconsideration the Board took refuge in 'recognition of these factors is admittedly a matter of expert judgment,' and unashamedly asserted that 'Delta has made no showing that our estimate here is unreasonable.' 32 Of course no party had had an opportunity to show that the estimate of 15 percent was unreasonable, as the record was closed. Southern had relied on an estimate of 1.5 percent, the motion of Southeast to strike these new figures or to remand the case for reopening of the record was never passed on by the Board, and there is nothing in the record up to now to justify it. When challenged, this can hardly be sustained as in accord with due process. 33 34 This case is illustrative of the errors into which an administrative agency may fall when it does not keep distinct and separate its tripartite functions and powers-- executive, legislative, and judicial. When the Board began this Investigation, it was exercising what was primarily an executive or administrative function in realigning the segments of the existing routes of Southern Airways. To this there was no opposition by other interested parties, and the job the Board was called upon to do was apparently performed in a workmanlike manner. 34 However, when the Board shifted to the consideration of awards on comparative applications for new routes, this, under its own statute, the Administrative Procedure Act, and relevant case law, called for adversary proceedings to take into account the perhaps conflicting public interests of the different communities involved and the certainly conflicting interests of the competing airlines seeking these new routes. In deciding this phase of the case the Board was clearly exercising a judicial function. 35 35 In summary, the use by the Board of untested and unsupported 1970 revenue forecasts for Southern, unmatched by comparative Southern cost figures, and unmatched by 1970 forecasts of any other carriers' revenue and cost figures, the astonishing escalation of the on-line traffic figure tenfold, none of which was subject to cross-examination or other challenge-- these are illustrative of the Board's failure to accord due process to Delta and the other competing applicants in exercising its judicial function. 36 The Board's Final Order 69-9-132 of 24 September 1969 and its Order on Reconsideration 69-11-94 of 21 November 1969 are hereby set aside and the case remanded to the Board for further proceedings in light of this opinion.