View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Southern Methodist University Journal of Air Law and Commerce Volume 17 | Issue 2 Article 1 1950 The Air Route Pattern Problem Russell B. Adams Follow this and additional works at: https://scholar.smu.edu/jalc Recommended Citation Russell B. Adams, The Air Route Pattern Problem, 17 J. Air L. & Com. 127 (1950) https://scholar.smu.edu/jalc/vol17/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 Volume 17 SPRING, 1950 Number 2 THE AIR ROUTE PATTERN PROBLEM* By RUSSELL B. ADAMS Member, Civil Aeronautics Board; Chairman, Economic Division, Air Coordinating Committee since 1946; Chairman of Alternate Members of ACC since 1949; Formerly, Post Office Department 1930-39; Director of Economic Bureau of CAB, 1945-48; technical advisor to U.S. delegation to First Interim Assembly of PICAO, Montreal, 1946; Alternate Delegate to First Assembly of ICAO, Montreal, 1947; Chairman U.S. delegation to Second Assembly of ICAO, Geneva, 1948, signing the Convention on International Recog- nition of Rights in Aircraft; Chairman U.S. delegation to Confer- ence on Civil Aviation between the U.S. and Canada at Ottawa, June, 1949. AT the time of the passage of.the Civil Aeronautics Act of 1938 the United States had a domestic air-transportation system of 39,267 miles and an international and overseas air-transportation system of 31,- 067 miles. These systems, almost all of which were established by the Post Office Department and which constituted the so-called "grand- father routes" under the Civil Aeronautics Act, formed the foundation for the subsequent route development of United States air transporta- tion. Domestically, the "grandfather routes," while constituting essen- tially a good basic design in the light of the economic and technological achievements and promises of the time, possessed certain inherent de- fects which ensuing developments have brought into sharp relief. Both good and bad features, however, were the inheritance of the Civil Aero- nautics Board. Internationally, only in the Caribbean area and South America was a basic design underway. Here, the Board had an oppor- tunity to do much in the way of planning. Today, the domestic system embraces nearly 146,000 miles, and the international and overseas sys- tem comprises almost 210,000 miles. The unsatisfactory post-war financial condition of the airline indus- try gave the first impetus to a questioning of the soundness of the route expansion and the manner in which it was accomplished. In 1945, the certificated trunk air carriers in the United States made an operating * Adapted from an address delivered at the Fourth Annual Air Transporta- tion Institute, The American University, Washington, D. C., on January 27, 1950. This article represents the personal views of its author and is not presented as a reflection of the views of the other members of the Civil Aeronautics Board. 127 JOURNAL OF AIR LAW AND COMMERCE profit of nearly $34,000,000. In 1946, they experienced an operating loss of almost $5,000,000. The losses mounted in 1947, showing a year- end total of approximately $15,000,000. In early 1947, the Civil Aero- nautics Board acknowledged the possibility of route pattern deficiencies in undertaking special investigations of five air carriers.' These and other circumstances led to activity by both the President and the Con- gress in the aviation field. The result in early 1948 was the President's Air Policy Commission 2 and the Congressional Aviation Policy Board 3 reports. The President's Air Policy Commission was seriously apprehensive with respect to the possible existence of excessive competition in the air-transportation system and was concerned with the important ques- tion of whether the combination of existing companies should be encouraged or prevented by the Board. The Congressional Aviation Policy Board report also dealt with the problem, stating among other things, "Excessive competition exists in some sections and there is insufficient competition in others." While the whole plight of the industry was not attributed to route pattern deficiencies, revisions in the route pattern were clearly envisioned as necessary in both reports. The early investigations of the Board attested to the fact that no illusions existed within the Board itself concerning the possibility of deficiencies in the route pattern. It would have been more than sur- prising if the expansion of any industry of the magnitude of that experienced by the air-transportation industry could have been accom- plished without fault. Whether perfecting and expanding the inher- ited domestic system or planning the international system, the problems were not easy. To "look into the seeds of time, and say which grain will grow and which will not" is infinitely more difficult than retrospec- tive analysis of a situation to determine error. War and post-war eco- nomic and technological developments brought into play important new factors and considerations. In undertaking to correct possible de- fects, however, the Board was confronted by three basic problems: (1) an ascertainment of the areas which needed attention; (2) a decision on any specific changes required by the public interest; and (3) a deter- mination of the means by which any decision of the Board with respect to desirable changes in the route pattern could best be effectuated. Of the three problems, the third was and is by far the most difficult. It is also the most neglected by critics of the existing situation. 'Colonial Airlines, Order Serial No. E-373, dated March 18, 1947 (Dkt. No. 2852); Northeast Airlines, Order Serial No. E-375, dated March 18, 1947 (Dkt. No. 2853); Chicago and Southern Air Lines, Order Serial No. E-401, dated March 24, 1947, closed by Order Serial No. E-1783, dated July 12, 1948 (Dkt. No. 2862) ; Capital Airlines, Order Serial No. E-437, dated April 7, 1947 (Dkt. No. 2883); Western Air Lines, Order Serial No. E-485, dated April 28, 1947 (Dkt. No. 2911). 2911). 2 Survival in the Air Age, Report by the President's Air Policy Commission, issued January 1, 1948. 8 National Aviation Policy, Report of the Congressional Aviation Policy Board of the United States pursuant to Public Law 287 (An Act to Provide for the Establishment of a Temporary Congressional Aviation Policy Board), 80th Cong., 2d Sess., issued March 1, 1948. AIR ROUTE PATTERN PROBLEM The first persistent effort of the Board in the route pattern field was 4 the Board's investigation of the route structure of National Airlines. In the National case, the Board found that it was in the public interest for it to undertake to determine "whether the encouragement and development of an air transportation system properly adapted to the present and future needs of the United States and the fostering of sound economic conditions in such air transportation system" would not be furthered by the transfer of National's property and various segments of its route system to other carriers. While specific mention was made in the original order of September 28, 1948, of the possible transfer of the Miami-New York route to Pan American World Airways, the Miami- New Orleans route to Delta Air lines, and the Miami-Havana route to Eastern Air Lines or Delta, the Board later made it clear that its consid- eration of possible transferee carriers or solutions was not intended to be confined only to those named in the order.' After three weeks of hearings, National announced on March 30, 1949, that it had entered into tentative agreements with Pan American and Pan American-Grace Airways for the interchange of equipment at Miami. It was stated that such interchange would make possible through flights between New York and other cities on the National sys- tem and points in South America. The agreement also contemplated the operation of Pan American aircraft in domestic service between New York and Miami. In addition, National referred to arrangements which had been made for the acquisition of some of its stock by W. R. Grace &cCo. and Pan American. National then requested either dismis- sal of the investigation or temporary adjournment of the hearing, pend- ing action by the Board on the stock transfer arrangements and the interchange agreements. 6 The Board did adjourn the hearing tempo- rarily and has since consolidated into the over-all case not only these proposals but also the proposed agreement between National and East- ern under which these carriers could operate through flights from points west of New Orleans on Eastern's system to points east of New Orleans on National's system. 7 Public hearing in the investigation was scheduled to be resumed on March 6. Especially to be noted in the procedural progress of this case is the fact that specific actionable proposals have been submitted to the Board to be examined concurrently with the Board's detailed study of the en- tire National problem. As the result of its investigation the Board will make a determination of what, if any, revisions should be undertaken in the public interest with respect to the route pattern of National. To 4 National Route Transfer Case (Dkt. No. 3500 et al.), instituted by Order Serial No. E-2025 (September 28, 1948), amended by Order Serial No. E-2228 (November 24, 1948). 5 Order Serial No. E-2275 (December 8, 1948). 6 Applications for approval of these proposals were filed on May 11, 1949 (Dkt.