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January 28, 1999, Thursday FINAL AM EDITION

SECTION: BUSINESS; Pg. 1

LENGTH: 724 words

HEADLINE: Carty urges airlines to seek common goals;
The American Airlines executive says legislative objectives should unite the industry.

BYLINE: Maria Recio, Star-Telegram Writer - Washington Bureau

BODY:
WASHINGTON - American Airlines chief Donald Carty urged the
industry yesterday to work together in pressing its legislative
interests before the 106th Congress rather than bickering among
themselves.

"We need to stop extending our marketplace battles onto the
battlefields of litigation and legislation," Carty said at a luncheon
of the International Aviation Club.

"When our competitive battles leak into national, state or local
politics, not only do we divert our attention from where it belongs -
our customers - but we also destroy our ability to work together
towards our common goals. "

It was Carty's first major appearance in Washington since becoming
chairman and chief executive officer of Fort Worth-based American
Airlines and its parent, AMR Corp., in May. He presented a congenial and conciliatory approach toward working
with government and other airlines.  That was in sharp contrast to the
in-your-face approach that his predecessor, Robert Crandall, took in
his dealings with official Washington.

But Carty did not shy away yesterday from criticizing
Transportation Department officials, who were in the audience, for
intervening in December in a dispute between Dallas and Fort Worth
over expansion of service at Dallas Love Field.  He called the
government action "naive. "

Carty's speech was aimed not only at the army of Washington
lobbyists and lawyers in attendance but at lawmakers who will soon
consider landmark legislation.  Rep.  Bud Shuster, R-Pa., chairman of
the House Transportation and Infrastructure Committee, has called
1999 "the year of aviation" because of the important aviation issues
facing Congress.

Next week, the Senate Commerce, Science and Transportation
Committee will take up legislation to reauthorize the Federal
Aviation Administration for two years.  Congress faces a March 31
deadline to essentially approve the agency's role in operating the
air traffic control system and the airport grant program.

Last year, the Senate and House in the outgoing 105th Congress
failed to agree on a comprehensive FAA bill and opted to authorize
the agency for six months.  The House panel has already approved
another short-term six-month bill, setting up a squabble with the
Senate.  The committee's aviation subcommittee also plans to begin
hearings on a comprehensive package next week.

Shuster wants the aviation trust fund, which collects ticket taxes
and other levies to pay for airport construction, to be separate from
the unified federal budget so that airport spending would not be
restricted.  The Senate panel's chairman, Sen. John McCain, R-Ariz.,
does not want the fund to be "off budget. "

Carty did not address the specifics of the dispute other than to
say that McCain's plan to overhaul the FAA should be joined with
Shuster's advocacy of spending aviation revenue on aviation needs.

Citing a report done by the National Civil Aviation Review
Commission, Carty said, "Without significant FAA reform soon, our
aviation system will succumb to gridlock shortly after the turn of
the century. "
Asked about one of the most contentious issues facing American -
the legal dispute over Love Field - Carty said that Fort Worth and
Dallas are "anxious" to reach an agreement.

"They're getting close," he said.  "I hope they agree.     I'm
afraid there are so many issues here it may end up in court for years
to come. "

Carty used his speech to indirectly chide Transportation
Department officials for intervening in the case.  Without naming the
agency, which issued rules easing restrictions on flights from Love
Field last year, he said that "the notion by policy-makers that
planes can land anywhere, that's naive. "

Nancy McFadden, the Transportation Department's general counsel
and a central figure in the rule making, was on the dais with Carty.

The agency maintained that federal law allowing airlines to fly
wherever they wish pre-empted any local restrictions.

As for the long-stalled federal approval of American's marketing
alliance with British Airways, Carty said, "We are going to be
long-term partners together.  How intimate will be defined by the
regulatory bodies. "

Maria Recio, (202) 383-6103
mrecio@krwashington.com

PHOTO(S): Head shot of Donald Carty

LOAD-DATE: January 29, 1999