American Bilateral Air Trasnport Agreements on the Threshold of the Jet Transport Age Albert W

Journal of Air Law and Commerce Volume 26 | Issue 2 Article 1 1959 American Bilateral Air Trasnport Agreements on the Threshold of the Jet Transport Age Albert W. Stoffel Follow this and additional works at: https://scholar.smu.edu/jalc Recommended Citation Albert W. Stoffel, American Bilateral Air Trasnport Agreements on the Threshold of the Jet Transport Age, 26 J. Air L. & Com. 119 (1959) https://scholar.smu.edu/jalc/vol26/iss2/1 This Article 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. THE JOURNAL OF AIR LAW AND COMMERCE Vol. 26 SPRING, 1959 No. 2 AMERICAN BILATERAL AIR TRANSPORT AGREEMENTS ON THE THRESHOLD OF THE JET TRANSPORT AGE BY ALBERT W. STOFFEL1 American Foreign Service Officer (Presently assigned to the Department of State as Supervisory Foreign Affairs Officer-Aviation) INTRODUCTION AND SUMMARY F OR over twelve years America's civil air transport relations with foreign countries have been conducted according to the principles of the Ber- muda Agreement. This agreement, a compromise between British restric- tionist policies and American liberal policies, provides standard terms for the exchange of international air transport rights. Today many governments feel that they were too generous to the United States when they made those agreements. They now seek to protect their own national airlines by stretch- ing the liberal Bermuda principles to suit their purposes or by asking for amendment or renegotiation. At the same time our own air industry feels that their foreign competition has done too well in gaining a large share of America's international air market under the Bermuda-type agreement. Among the problems to be solved are: equitable exchange of routes including beyond rights, definition of the Five Freedoms and agreement on statistics to be used to identify traffic as to Freedom, capacity and frequency control, multiple designation of airlines, changes of aircraft, and competitive fares. All of these problems have been with us for some time and all of them are being accentuated by the introduction of the jet transports. Solutions are hard to find and are not likely to be clear-cut. At any rate a constant study of civil air policy is necessary with particular attention to the Bermuda principles as a suitable basis for exchange of rights in the jet age. BACKGROUND Pre-World War II Arrangements Before World War II America's foreign air relations were simplified by the fact that there was only one important American international airline which operated as a chosen instrument. Pan American Airways, later called Pan American World Airways, made its own agreements with foreign governments wherever possible. Pan American began its international operations in 1927 (Key West-Havana) and together with its associate company, I As the author holds an official position, it should be noted that the views expressed in this article are his personal views. Their expression does not in any way imply the concurrence of the United States Government. JOURNAL OF AIR LAW AND COMMERCE Pan American-Grace Airways (Panagra), shared international air transport in the Western Hemisphere only with some of the European airlines. Arrangements were made with local governments who were anxious to have the transport service provided by Pan American. As they had no national carriers of their own capable of conducting international operations, they did not fear competition. In exchange for such rights Pan American, in many countries, participated in the establishment and development of local airlines. Pan American's relations with a number of countries were made easier by the fact that the United States Senate on February 20, 1931 approved the Havana Convention on Commercial Aviation which had been signed on February 20, 1928. Other ratifying countries were Guatemala, Mexico, Nicaragua, Panama, the Dominican Republic, Costa Rica, Haiti, Honduras, Chile, and Ecuador. The Convention contained articles covering the taking- on and discharging of passengers and cargo (Article XXI) and the reserva- tion of cabotage (Article XXII).2 In addition, the United States had con- cluded a civil air agreement with Colombia effective January 23, 1929. In the Pacific area Pan American was able to operate to Manila without benefit of foreign authorization by hopping between American-controlled islands. Introduction of Trans-Atlantic service, however, necessitated obtaining from the European governments the necessary operating rights. Great Britain had long had an active international air transport operation, pri- marily 'between London and Paris, and was therefore aware of the value of such rights. Pan American Airways and the British company, Imperial Airways, had negotiated with Portugal for landing rights at Lisbon and Horta in the Azores. The United States ,and the United Kingdom then negotiated through diplomatic channels to arrange for reciprocal landing rights in England, Bermuda, Newfoundland, and the United States. Other negotiations were conducted for landing rights in Canada, Eire, and France. In 1939 Pan American began trans-Atlantic service to Southhampton. Internationalization France in 1932 proposed to the League of Nations Conference for the Reduction and Limitation of Armaments, held at Geneva, complete internationalization of civil air transport under a regime to be organized by the League. This proposal, which included an international air police force, aroused considerable interest but never got beyond the discussion stage. Other proposals for the internationalization of air transportation were raised at the Chicago Conference in 1944. Representatives of New Zealand and Australia proposed that a single international corporation should be formed in which every nation would participate. The British made another proposal to the effect that an international board should be established to control and promote world air transportation in much the same way as the Civil Aeronautics Board performed these tasks in the United States. Inter- national carriers would be granted licenses 'based on an economic showing of international convenience and necessity. Some of the powers proposed for this board went beyond those available to the Civil Aeronautics Board such as regulation of the number of flights to be made by each company and of the percentage of traffic which each country's airline would carry, as well as allocation of certain routes to specific countries to the exclusion of all others. Since the end of the Chicago Conference there has been little interest in internationalization of civil aviation and, in fact, the industry has become more and more national as it has developed since the end of World War II. One successful "international" operation, organized on a regional basis, has been that of the Scandinavian Air System, a consortium of the three national 2 Brown, Pan American Cooperation in Aeronautics, IX, J. Air Law, 494 (1938). BILATERAL AIR TRANSPORT AGREEMENTS Scandinavian airlines for the conduct of their long-range international operations. Chicago-type Agreements During World War II, in a memorandum issued by the Civil Aeronautics Board dated December 2, 1943, the Department of State and the Civil Aero- nautics Board formally announced that the United States would follow a bilateral approach in obtaining landing rights for our airlines abroad. This meant that the Department of State would conduct negotiations with foreign governments for such rights in a manner determined to be desirable by close coordination between the Civil Aeronautics Board and the Department. This statement was necessary so that it would be clear to the airlines and to foreign governments that in the future the so-called unilateral arrangements made between Pan American Airways and foreign governments would not be used as a basis for new international air relationships. Actually the Board had been in favor of government-to-government arrangements almost since its inception.3 The discussion of a legal framework for international aviation which would be required following the war engendered interest in some form of a multilateral agreement governing international air transportation. As a minimum it was realized that a post-war international organization was needed to set up air navigation standards and practices, as well as to deal with the economic problems involved. The United States invited most of the nations of the world to attend an international conference on civil aviation at Chicago late in 1944. Fifty-four nations attended. Argentina was not invited as it did not fall into any of the categories of countries to which invitations were sent; members of the United Nations and nations associated with the United Nations in World War II, European and Asiatic neutral nations, and the Danish and Thai Ministers in Washington in their personal capacities. The USSR did not respond to its invitation. Other major countries which did not participate were either enemy or enemy-occupied countries. The United States went to Chicago with a liberal approach in mind aimed at free competition on rates and services. The United Kingdom held out for strict government control of rates and apportionment of routes and regulation of frequency and capacity. The Chicago Conference produced: 1. The Convention on International Civil Aviation ("The Chicago

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