AIR AMERICA - COOPERATION WITH OTHER AIRLINES by Dr. Joe F. Leeker First published on 23 August 2010, last updated on 24 August 2015 1) Within the family: The Pacific Corporation and its parts In a file called “Air America - cooperation with other airlines”, one might first think of Civil Air Transport Co Ltd or Air Asia Co Ltd. These were not really other airlines, however, but part of the family that had been created in 1955, when the old CAT Inc. had received a new corporate structure. On 28 February 55, CAT Inc transferred the Chinese airline services to Civil Air Transport Company Limited (CATCL), which had been formed on 20 January 55, and on 1 March 55, CAT Inc officially transferred the ownership of all but 3 of the Chinese registered aircraft to Asiatic Aeronautical Company Limited, selling them to Asiatic Aeronautical (AACL) for one US Dollar per aircraft.1 The 3 aircraft not transferred to AACL were to be owned by and registered to CATCL – one of the conditions under which the Government of the Republic of China had approved the two-company structure.2 So, from March 1955 onwards, we have 2 official owners of the fleet: Most aircraft were officially owned by Asiatic Aeronautical Co Ltd, which changed its name to Air Asia Co Ltd on 1 April 59, but three aircraft – mostly 3 C-46s – were always owned by Civil Air Transport Co Ltd. US registered aircraft of the family like C-54 N2168 were officially owned by the holding company – the Airdale Corporation, which changed its name to The Pacific Corporation on 7 October 57 – or by CAT Inc., which changed its name to Air America on 3 31 March 59, as the organizational chart of the Pacific Corporation given below shows. Prior to March 1955, the one and only company – CAT Inc – did everything: the operation of the Taiwanese flag airline doing business as Civil Air Transport, contract and covert flying, and maintenance work. After March 1955, Civil Air Transport Co Ltd continued to be the Taiwanese flag airline, CAT Inc. (renamed Air America Inc on 31 March 59) did all contract and covert flying, and Asiatic Aeronautical Co Ltd (renamed Air Asia Co Ltd on 1 April 59) operated the big maintenance base at Tainan. Nevertheless, the management of Air America Inc, Air Asia Co Ltd, and Civil Air Transport Co Ltd was for the most part the same. Although 3 aircraft had to be owned by CATCL, the ownership of an aircraft had little to do with its actual operator: CATCL operated aircraft owned by them and by Air Asia, and Air America operated aircraft owned by them, by Air Asia, by CATCL, by the US Government, and even by the Royal Laotian Government. But over the years, CATCL did not operate more than 3-4 aircraft at the same time, while Air America operated all the rest. For many years, only the aircraft used by CATCL wore airline titles, while Air America titles started to appear on some aircraft types only since the mid-sixties. Before, most Air America aircraft – with the exception of those in airline service in the Ryukyu Islands – were operated without any titles. To sum up: Civil Air Transport and Air Asia were not really “other airlines”, but part of the family. 1 See the Bills of Sale photographed in: UTD/Bisson/B5 microfilm reel no.2 2 Leary, Perilous missions, p.206. 3 In: UTD/CIA/B1F10. 1 Organizational chart of the Pacific Corporation (in: UTD/CIA/B1F10) A more complex scheme, which notes all stations and also includes Thai Pacific Services and Air America Limited, is given overleaf. It apparently appeared in the late 1960ies, when Sam Thong (STG) and Savannakhet (ZVK) in Laos were small Air America Stations. For Thai Pacific Services, which had been founded in 1968, but remained dormant until 1972, see my files Company Management…II and III. Air America Limited, Hong Kong was founded in 1966 to organize the financial side (accounting, data processing, etc. of the Company) and was dissolved in 1975. The list of Air America’s northern stations given is not complete: There were not only Kimpo near Seoul (KMP), Tachikawa (TAW) and Yokota (YOK) near Tokyo, Kadena, Okinawa (KAD), and Clark near Manila (CLK), but also several other Air America destinations in Japan like Wakkanai or Itazuke and other destinations in the Pacific Ocean like Iwo Jima, Guam or Saipan that are missing here. And among the stations mentioned for Civil Air Transport, Seoul (SEL), Bangkok (BKK), Manila (MNL), Hong Kong (HKG), Taipei (TPE), Naha, Okinawa (OKA), and Tokyo (TYO) were destinations of CAT flights, but Vientiane (VTE) and Saigon (SGN) were not; Saigon only had a very important CAT ticket office. The other destinations on Taiwan, which were also small CAT Stations, are missing. So, the indications in this scheme have to be taken cum grano salis. 2 Air America Inc. and Civil Air Transport Company Limited: structure and relations with other companies (UTD/Fink/B12F1) 3 2) Southern Air Transport Like Air America, Southern Air Transport was controlled by the CIA, but it was not part of the Pacific Corporation.4 On 5 April 1960, Air America bought DC-6As N90781 and N90782 from World Airways, and both aircraft were used by Air America on the MATS Inter-Island Contract since April 60.5 But then, it came out that airlines that wanted to operate under the MATS contract did not only have to use DC-6A aircraft, but also had to operate under Part 42 of the CAB and had to participate in the Civil Reserve Air Fleet Program (CRAF). As Air America had no other use for the new DC-6As than the MATS Inter-Island contract and as it would require too much time to get the supplementary certificates needed, the CIA decided to acquire control of a company that already had all those qualifications and was for sale. The new company was to operate under the MATS contract, using equipment under conditional sale from Air America, Air America personnel and maintenance and ground handling services also provided by Air America under inter-company agreements. This plan was approved by the CIA, and the airline chosen was Southern Air Transport. So on 5 August 60, the CIA acquired SAT thru Roger C. Hyatt acting as cut-out. After George Doole had established the necessary contractual relationship, Southern AT really received the big MATS Inter-Island contract. Under this contract, SAT was to make 417 round-trips between Tachikawa, Kadena, Taipei, Clark, and Guam, including 365 daily trips from Tachikawa to the other bases. Operations started on 1 October 60. To bring the operation under Grundy’s control, the Pacific Division of Southern AT was created at Tachikawa, headed by David Garber, Air America’s former Chief of Flight Operations at Tachikawa. But the services and management contract between SAT’s Pacific Division and Air Asia gave Hugh Grundy executive authority. So on 30 September 60, Air America terminated its operation of the MATS contract, the Air America markings on the DC-6As were changed to SAT overnight, and Air America crews became Southern Air Transport crews – the beginning of a very successful operation that lasted until 1972.6 After the MATS contract had passed to Southern Air Transport, both of Air America’s DC-6As were sold to Southern Air Transport on 30 September 60.7 This was not the end of the story, as now a type of cooperation began that was to last for more than a decade: Air America would buy and finance the aircraft that would be operated in the Far East by Southern Air Transport, but flown in part by Air America crews. Financial cooperation between Air America and Southern Air Transport became obvious in May 61, when Air America bought DC-6A N90784,8 which Southern Air Transport had leased from World Airways a couple of months before,9 but not for use by Air America, but by Southern Air 4 See the Memorandum dated 7 November 62, especially TAB I, online readable on the CIA website at http://www.foia.cia.gov/sites/default/files/document_conversions/15/c05261526.pdf. 5 Minutes of Meeting of the Executive Committee of Air America Inc of 12 April 60, in: UTD/CIA/B3F1. The first DC-6 arrived at Tainan on 30 March, the second on 12 April 60 (Leary, Manuscript, chap. V, p.319, in: UTD/Leary/B19F3). 6 Leary, Manuscript, chap. V, pp.316-28, in: UTD/Leary/B19F3. 7 Minutes of Meeting of the Executive Committee of Air America Inc of 12 March 63, p. 2, in: UTD/CIA/ B3F4. 8 Air America bought DC-6A N90784 on 31 May 61 (List of accumulated costs as of 31 December 67, in: UTD/CIA/B40/F8). 9 Southern Air Transport-pilot Tom Jenny flew N90784 from Taipei to Clark on 21 January 61 and on test flights out of Tachikawa on 24 January 61. At least between 26 February 61 and 10 March 61, he flew N90784 on the Tachikawa-Kadena-Clark run several times, sometimes including Taipei as a stop (log book of Tom 4 Transport to whom it was officially leased on 28 July 61.10 On 30 April 62, Air America even bought a 4th DC-6A, N90771,11 to be used by Southern Air Transport. Air America’s financial support to Southern Air Transport continued for the first 2 DC-6As, N90781 and N90782: Both of them had not yet been totally paid for in 1963, as they should have been.