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The Role of the Civil Aeronautics Board in Licensing Foreign Air Carriers Whitney Gillilland

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The Role of the Civil Aeronautics Board in Licensing Foreign Air Carriers Whitney Gillilland Journal of Air Law and Commerce Volume 32 | Issue 2 Article 5 1966 The Role of the Civil Aeronautics Board in Licensing Foreign Air Carriers Whitney Gillilland Follow this and additional works at: https://scholar.smu.edu/jalc Recommended Citation Whitney Gillilland, The Role of the Civil Aeronautics Board in Licensing Foreign Air Carriers, 32 J. Air L. & Com. 236 (1966) https://scholar.smu.edu/jalc/vol32/iss2/5 This International Review is brought to you for free and open access by the Law Journals at SMU Scholar. It has been accepted for inclusion in Journal of Air Law and Commerce by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. INTERNATIONAL REVIEW THE ROLE OF THE CIVIL AERONAUTICS BOARD IN LICENSING FOREIGN AIR CARRIERSI By WHITNEY GILLILLANDtt The international air route structure which serves the free world has been developed largely under a series of bilateral agreements between nations. The United States has more than fifty. They deal with many subjects including access, law of the contract, airport charges, capacity, rates, disputes, and termination. All of these relate to an exchange of routes. My comments will be directed primarily to the route grants, and the steps required to implement them. Fundamental in the United States conception of international air routes, and of bilateral agreements, is the view that once operating authority has been granted, a carrier shall have reasonable opportunity to develop a route, and will not be subject to unilateral limitations of frequencies or capacity. Consequently, the exchange set forth in a bilateral and the subsequent procedures concerning operating permission are regarded as matters of much importance. It is by these two steps that a balance of rights is to be achieved and tested-not by later steps unspecified in the bilateral. Although negotiation of agreements is carried on under the leadership of the Department of State, the Civil Aeronautics Board, whose functions are primarily economic, has an equally important duty. This is so because the Declaration of Policy of the Federal Aviation Act requires the Board to consider, as in the public interest, and in accordance with the public convenience and necessity, the development of an air transportation sys- tem properly adapted to the needs of the foreign commerce of the United States.! Another section requires the Secretary of State to consult with the Board concerning negotiations. Still another section provides that no foreign air carrier shall engage in air transportation to and from the United States, unless there is in force a permit issued by the Board.' A fourth section imposes similar requirements on United States carriers.' t Address presented at the Third Interamerican Law Conference, University of Miami Law Center, Coral Gables, Florida, 22-24 March 1966. tt Member, Civil Aeronautics Board. 'Federal Aviation Act of 1958, § 102, 72 Stat. 740, 49 U.S.C. § 1302 (1964). For the complete text of the act (as amended through July 1963) and related statutes, see CAB, AERO- NAUTICAL STATUTES AND RELATED MATERIALS (1963). 'Federal Aviation Act of 1958, § 802, 72 Stat. 713, 49 U.S.C. 5 1462 (1964). 'Federal Aviation Act of 1958, 5 402, 72 Stat. 757, 49 U.S.C. 5 1372 (1964). 'Federal Aviation Act of 1958, § 401, 72 Stat. 754, as amended, 76 Stat. 143 (1962), 49 U.S.C. 1371 (1964). 1966] INTERNATIONAL REVIEW Accordingly, it is the custom for the Board to subject the international route structure to constant study. When negotiations are in the offing, it is the practice to consult carefully with the United States carriers whose operations may be affected, and to prepare and submit a report, together with recommendations, to the Department of State. It is also the custom to take part in the negotiations. An agreement, when consummated, is not self-operating and a carrier which aspires to serve a route has further steps to take. First it must seek and obtain from its own government a desig- nation to serve the route. This is required by the bilateral.' Then it must seek and obtain from the other government permission to operate the route4 The complexity of procedures varies between nations and the require- ments of each should be borne in mind in the course of negotiations. Ours are complex and sometimes cause misunderstandings to applicants. Unless understood they may also cause us embarrassment, particularly in cases where reciprocal applications have been quickly granted. However, the United States procedures place no burden upon foreign carriers to which United States carriers are not subjected, for the latter generally face much greater tests upon their applications to the Board for certificates of public convenience and necessity, and upon which their designations to foreign governments are founded. The United States procedures must be evaluated in the light of the deeply entrenched habit of mind prevalent in this country which calls for uniformity, for public hearings, and for full and adequate opportunity to be heard in cases where private rights may be affected by administrative action. This has been the state of affairs since colonial times and has been manifested throughout our governmental structure. It accounts for the Administrative Procedure Act, which re- quires uniform and impartial procedures of all administrative agencies,7 and for the provisions of the Federal Aviation Act with which we are concerned. Thus, public adversary hearings are readily to be expected on questions which are reserved under a bilateral for the grantor government's determination! Furthermore, there is no means to publicly come to grips with the terms in advance of execution. Accordingly, hearings serve a purpose as an accounting for stewardship. The procedural steps are in brief as follows.! The application for a foreign air carrier permit is filed with the Board through diplomatic channels and public notice of its filing is given. The matter is then set for a public hearing before one of the Board's hearing examiners. The proceeding is conducted in much the same fashion as a case is tried in one of the ordinary civil courts. The great bulk of the cases are not contested and, at the conclusion of the hearing, a recommended decision is issued 'Air Transport Agreement With Great Britain, II Feb. 1946, 60 Stat. 1499, T.I.A.S. No. 1507 [Bermuda Agreement]; British Overseas Airways Corp., Foreign Permit Amendment, 29 C.A.B. 583, 585 n.2 (1959). e Ibid. 760 Stat. 237 (1946), 5 U.S.C. §§ 1001-11 (1964). 'Bermuda Agreement, supra note 5, arts. 2 & 6. 'Federal Aviation Act of 1958, § 402, 72 Stat. 757, 49 U.S.C. § 1372 (1964). JOURNAL OF AIR LAW AND COMMERCE [Vol. 32 by the examiner. In these instances no exceptions are filed and the case is submitted immediately to the Board for its consideration. There are, however, cases in which United States domestic carriers intervene, and vigorously contest some or all of the authority sought by the foreign air carrier. In such cases, the evidence is frequently voluminous and the length of time to assimilate it is considerable. When that has been done, the hear- ing examiner issues a recommended decision which may be subject to excep- tions and briefs to the Board. Thereafter the Board considers the recom- mended decision, may hold oral argument, and either adopts it or prepares one of its own. The decision does not issue at this point however. Unlike the United States carrier domestic route certificate cases, but like the United States carrier foreign route certificate cases, the Board's decision is not final until it has been reviewed by the President." The President may require a re- vision in any respect, and may seek the advice of the Departments of State or Commerce, or of any other departments or agencies. Thus, al- though his views are articulated by the Board, he is in effect the final determinor of the matter. The decision is not subject to review in the courts." The issues considered by the Board in such a case are these: (1) Is the applicant carrier fit, willing, and able to properly perform such air transportation and to conform to the provisions of the Federal Aviation Act and the rules, regulations, and requirements of the Board thereunder, and (2) Will the proposed transportation be in the public interest?" The Board is not limited in its decisions to acceptance or rejection of an application but may prescribe the duration of any permit and may attach to it such reasonable terms, conditions, or limitations as, in its judgment, the public interest may require." In actual practice the issues seldom prove formidable. The vast majority of cases are of a pro forma, perfunctory nature, merely providing the mechanical means for making the record upon which the Board can base its statutory findings. The time involved is determined mostly by the pro- cedural requirements, and is infrequently prolonged by the complexity of the issues. It is not surprising, however, that in some cases a United States carrier, perceiving its economic status to be threatened by new route competition without compensating advantages, and accustomed to slugging it out vigorously against competitors in domestic route cases, albeit with greater chances of success, should resist foreign carrier applications with much energy. " Federal Aviation Act of 1958, § 801, 72 Stat. 782, 49 U.S.C. § 1461 (1964). "1Federal Aviation Act of 1958, § 1006, 72 Stat. 795, as amended, 74 Stat. 255 (1960), 75 Stat. 497 (1961), 49 U.S.C. 1486 (1964). Chicago & So. Air Lines v. Waterman S.S. Corp., 333 U.S. 103 (1948); Pan American-Grace Airways, Inc. v. CAB, 342 F.2d 905 (D.C.
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