Freedom of the Skies Act

Amends the Federal Aviation Act of 1958 to direct the Civil Aeronautics Board, in the exercise and performance of its powers and duties, to consider the necessity of maximum competitive market forces to provide the needed air transportation system. Establishes time limitations in which the Board is required to determine applications for certificates of public convenience and necessity. Directs the Board to issue such certificate as requested if it does not act within such period.

Directs the Board to issue a certificate of public convenience and necessity to qualified applicants for service between any two cities not receiving non-stop scheduled air transportation. States that air carriers which engage in interstate air commerce solely with aircraft having a capacity of less than 56 passengers or 16,000 pounds of property shall not be required to obtain such a certificate.

Requires the Board to reissue all certificates for interstate air transportation by January 1, 1981, in the form of an unduplicated list of city pairs that each air carrier is authorized to serve. Authorizes carriers to transfer, sell, or lease any or all of its authority to engage in interstate air transportation. Requires the Board to approve such transaction unless it fails to meet specified standards.

Permits air carriers to abandon routes under specified conditions.

Allows carriers engaged in interstate or foreign air transportation to engage in non-stop transportation without regard to any certificate limitations between any points in the United States named in its certificate. Directs the Board to undertake proceedings to eliminate certificate restrictions which preclude such non-stop service.

Directs the Board to establish new classes of scheduled passenger air carriers based on criteria relating to the number of available seat miles.

Allows air carriers which hold a certificate of public convenience and necessity and air carriers holding a certificate issued by a State regulatory authority which report their available seat miles to engage in interstate scheduled air transportation in additional markets to those otherwise authorized subject to specified regulations.

Allows air carriers engaged in non-stop scheduled air transportation between two points to apply for a certificate authorizing unrestricted non-stop service in such market. Requires the Board to grant such application within 30 days unless the applicant has not conformed with the provisions of this Act.

Repeals the Postmaster General's authority to require an air carrier to establish additional schedules for the transportation of mail between two points served by such carrier.

Requires persons seeking approval of a consolidation, merger, or acquisition of an air carrier to file a copy of such proposal with the Attorney General and Secretary of Transportation in addition to the Board. Prohibits the Board from granting such request if it would result in a restraint of trade unless the anticompetitive effects of such proposal are outweighed by its probable effect in meeting the transportation needs of the communities involved and such needs cannot be satisfied by a lesser anticompetitive alternative. Authorizes the Attorney General to bring an antitrust action concerning such transaction. Prohibits the consummation of such transaction until the antitrust action has been completed.

Requires the Board to notify the Attorney General and Secretary of Transportation of any pooling agreements between air carriers. Requires the Board to conduct a hearing regarding such proposal or an already existing agreement which may have anticompetitive implications or fails to serve a transportation need upon the request of the Secretary or Attorney General. Prohibits the Board from approving specified types of contracts or agreements in interstate or overseas air transportation.

States that the Board may not find an air carrier rate which is above direct costs as unjust or unreasonable on the basis that it is too low. Prohibits the Board from requiring an air carrier to charge a rate in excess of the direct costs of such service. Directs the Board to consider criteria in determining the maximum rates for air transportation. Allows the temporary suspension of proposed air carrier rates by the Board when the lawfulness of such rate change has be challenged. Requires the Board to complete the proceedings regarding such challenged rate change within 180 days of the time when such change would have gone into effect.

Authorizes the Postal Service, upon a determination that the service provided by certified air carriers between any two points is inadequate for its needs, to contract with other air carriers for the transportation of mail between such points.

Directs the Secretary of Transportation to conduct a study of the local air carrier subsidy program and to make recommendations to Congress for any necessary changes in such system.