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gapers 
.of 
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BARRY 
.S. 
TRUMAN 
- 
PRESIDENT'S SECRETARY 
~ 
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t 
HAR 
, Papers of 
HARRY TRUMAN 
- 
\ PRESIDENT'S SECRETARY 
ORE 22-49 
IMPORTANCE TO THE US OF LATIN AMERICAN CIVIL AIR TRANSPORT 
TABLE OF CONTENTS 
Table A—Equipment of Latin American Scheduled Airlines 
. 
. 
. ....... 
Table B—Comparative Weekly Scheduled Mileage of Airlines ... 
> 
oe 
Table C—International Air Agreements Concluded by Latin American Countries Pe) 
Table D—Ownership of Airlines—South America ............. 
297 
Table E—Ownership of Airlines—Middle America ..........-... 
Appendixes 
U — Airlines of British Colonies and Puerto Rico 
a 
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@ 
LIST OF GRAPHICS 
Potential Airlift Contribution of Latin American Civil Air Transport 
Principal Increase in Scheduled sianend L.A. er from ’40 to ’49 
Airlines of Argentina 
.. 
: 
Organization for Civil Aviation (Brazil) 
Airlines 
of Brazil 
. 
; 
Organization for Civil Aviation (Chile) 
Airlines of Chile 
.. 
Organization for Civil Aviation (Colombia) 
Airlines 
of Colombia 
: 
Airlines of Honduras 
Airlines of Mexico 
The TACA System 
Organization for Civil Aviation (Peru) 
Airlines of Peru 
Organization for Civii Aviation (Uruguay) 
Airlines of Uruguay . 
Organization for Civil Aviation (Venezuela) 
Proposed Re-organization for Civil Aviation ven 
Airlines of Venezuela 
Airlines of the British Colonies 
and Puerto Rico 
MAPS 
The following maps, which supplement the information con 
enclosed in a separate envelope: 
Latin American Routes of Airlines Wholly or Partly US Owned 
Airline Routes in South America 
Airline Routes in Middle America 
International Airline Operations in the South American Area 
International Airline Operations in the Middle American Area 
tained in the appendixes, are 
In case 
airlift req 
ties of ava: 
aircraft. 
Latin Ame 
would pro’ 
engine pa 
military ai 
South Am: 
| 
reduce thi: 
the Latin . 
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major port 
ments witl 
aircraft fo 
tion, Latin 
number of 
lift on the 
American ( 
engine airc. 
275 planes 
imum of 17 
engine carg 
port critic: 
interior of 
shipment p 
disruption 
it could fly 
America. 
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IMPORTANCE TO THE US OF LATIN AMERICAN CIVIL AIR TRANSPORT 
SUMMARY 
In case of war with the USSR, US military 
airlift requirements will exceed the capabili- 
ties of available US civil and military transport 
aircraft. 
Under 
these 
circumstances, 
the 
Latin American countries could and probably 
would provide a considerable number of multi- 
engine passenger and cargo transports for 
military airlift operations within the Central- 
South American area which would somewhat 
reduce this deficiency... Thus, within 60 days 
the Latin American airlines could assume the 
major portion of the military airlift require- 
ments within that area, thereby releasing US 
aircraft for operations elsewhere. 
In addi- 
tion, Latin America might contribute a small 
number of four-engine aircraft for military 
lift on the trans-Atlantic runs. 
If the Latin 
American contribution were limited to twin- 
engine aircraft, it is estimated that as many as 
275 planes could be furnished, of which a max- 
imum of 175 would be cargo types. This twin- 
engine cargo fleet could be employed to trans- 
port critical 
strategic materials from 
the 
interior of Latin America:to seaboard trans- 
shipment points, and in the event of serious 
disruption of ocean shipping by enemy action, 
it could fly such materials directly to North 
America. 
In time of peace, Latin American civil avia- 
tion is of some secondary importance to the 
US because it: (a) aids in the economic de- — 
velopment of an area exceeded only by Europe 
as a market for US exports; and (b) provides 
a limited market for US transport aircraft of 
all types, thus slightly increasing the level of 
activity in the US aviation industry. 
Most 
Latin American countries, furthermore, have 
adopted in international agreements the lib- 
eral aviation principles sponsored by the US 
throughout the world, and thus have indi- 
rectly facilitated unimpeded international air 
traffic, which is a prerequisite to the maximum 
development of US commercial air carriers. 
Expected trends in Latin American civil 
aviation unfavorable to the US are: a reduction 
in Latin American purchases of US aviation 
equipment owing to the dollar shortage and 
the competition now being offered to US ex- 
porters by foreign aircraft manufacturers; and 
a tendency among certain Latin American 
countries to adopt restrictive measures against 
foreign air carriers. 
The latter development 
would give impetus to similar restrictive tend- 
encies already evident in other parts of the 
world, thus eventually threatening the struc- 
ture of US world air routes. 
Note: The intelligence organizations of the Departments of State, Army, Navy, and the Air 
Force have concurred in this report. 
The information in the estimate is as of 1 March 
- 
1950 and in the Appendixes as of 15 November 1949. 
Important changes since these 
Closure dates have been added as footnotes. 
; 
oo 
HARRY 
S. TREMAN 
- 
PRESTDENT'S S&GRETDARY FIDE 
Page 
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IMPORTANCE TO THE US OF LATIN AMERICAN CIVIL AIR TRANSPORT 
1. 
Strategic Considerations. 
In case of war, a major airlift would prob- 
ably be required to support US objectives, con- 
ceivably 
in widely 
separated 
areas. 
The 
strain on the airlift capacity of the US in an 
emergency will be such that help from other 
sources will be of considerable strategic signifi- 
cance. 
Despite 
its 
relative 
backwardness, 
Latin American civil aviation is capable of 
making such a contributien to military airlift 
operations within the Central-South American 
area. 
Between 20 and 50 percent of the Latin 
American 550-plane transport fleet could and 
probably would be made available in a reason- 
ably short time. 
There are sound reasons to anticipate that 
all Latin American countries, in varying de- 
grees of effective cooperation, would be aligned 
with the US in the event of war with the USSR. | 
The degree and promptness of their coopera- 
tion would depend in part upon the circum- 
stances out of which the emergency arose, but 
assistance would be immediately offered with 
sincere intentions if an attack occurred within 
the Western Hemisphere. 
Because most of the governments concerned 
regulate private airlines and because there is 
also a certain amount of US influence in a 
number 
of important 
companies,* 
there 
should be little difficulty in diverting the 
planes to wartime use. 
Given contracts protecting sovereignty and 
_ guaranteeing against loss, co-belligerent Latin 
American countries could be expected to ac- 
cept as large a diversion of civil aircraft to 
joint war purposes as would the US under sim- 
ilar circumstances, despite the fact that air 
' 
“Although US investments are proportionately 
not large, the actual influence of the US in the air 
_ 
transport industry of Latin America exceeds that 
Suggested by the direct ownership participation of 
US interests, largely as a consequence of the con- 
siderable indebtedness of numerous airlines to their 
US stockholders. 
transport is normally of more critical impor- 
tance to Latin American countries than are 
other media of transportation.* 
The most urgent US need in case of a major 
emergency would almost certainly be for four- 
engine aircraft capable of transoceanic opera- 
tions. 
Of the multi-engine US-built trans- 
ports now operated by Latin American civil air 
carriers, about 50, or approximately 10 per- 
cent of the total, are four-engine aircraft. 
This number is roughly one-eighth of those 
now operated by all US scheduled domestic 
and international airlines and, assuming a 
proportionate diversion to wartime use, would 
increase by one-eighth the airlift contribution 
in four-engine aircraft made by US scheduled 
airlines. 
Apart from the mere number of 
these Latin American aircraft, moreover, their 
strategic value to the US would be substan- 
tially enhanced by virtue of the fact that more 
than half are adapted for long-range overwa- 
ter operations. 
Their employment on trans- 
oceanic airlift missions would thus not require 
the time-consuming structural modifications 
which would be necessary for a large part of 
the US domestic fleet. 
The maximum estimate for availability of 
the Latin American civil transports to the US 
is 50 percent, the minimum, 20 percent. 
The 
first figure is supported by the consideration 
tlfat the bulk of the Latin American fleet is 
owned by those countries—Brazil, Chile, and 
Mexico, for example—likely to be most closely 
associated with the US in time of war; 
the second takes into account the increased 
wartime transport demands of the countries 
* Certain variables, such as the operating condi- 
| 
tion of the aircraft at any given time and the 
feasibility of their rapid conversion from passenger 
to cargo use or vice versa, which would have to be 
considered in precise logistic planning, are omitted 
here. 
They are beyond the scope of this analysis, 
which is intended solely to indicate the order of 
magnitude of the possible Latin American airlift 
contribution. 
UARRY § 
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= -apems. 
of 
TARRY 
S. 
TR 
PRESIDENT'S SECRETARY “FILE 
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PRESIDENT'S SECRETARY FILE 
» 
themselves,* as well as any combination of un- 
favorable circumstances that would be likely 
month; of 175 C-47’s, 2,365 tons. 
For the car- 
gin 
rying 
of 
passengers, on the oth 
fs 
cre 
to arise. On the basis of these estimates, 
mum of 100 ora meine. ate oma 
somewha 
vatin America could furnish a minimum of 
this type could be expected, capable of carry. } Americal 
110 and a maximum of 275 transport aircraft, 
ing between 10,800 and 27 000 troops per 
— 
predominantly of twin-engine types.** 
Ifitis 
month ona hypothetical run between Miami 
nance pt 
assumed that cargo lift would be more impor- 
. 
and Natal. 
In the event of circumstances re- 
parts abl 
tant than passenger operations, it is reason- 
quiring either type of operation, the continued 
can fleet 
able to suppose that of the 110-plane mini- 
existence of the extensive and ‘well-organized 
purely S 
mum, sixty cargo-type aircraft would be avail- 
chain of airfields and other facilities on the 
normal t 
| 
able and of the 275 maximum, 175. Calculat- 
Brazilian north coast and through the Carib. | *@M*- 
ing on a reasonable basis of operating effi- 
bean would be a consideration of the highest 
Althou 
_clency on a hypothetical run between the 
importancetothe US. 
US requ 
Atlantic seaboard and 
for example, the 
p 
| 
pacity, or 
lift capacity of 60 C-47’s would be 810 tons a 
articularly if bilateral arrangements had 
air fleet d 
been made before war began, a majority of the 
would be 
* In addition to the $50 civilian aircraft already 
Latin American aircraft could be made avail- 
tegic ma 
mentioned, there are about 180US-built transports, 
able to the US in a short time. 
Because of 
board tra 
which 
to both cargo 
the low standards of efficiency and mainte- 
treme em 
nance prevailing in many Latin American air- 
to the US 
be drawn on for airlift vibes aa or employed by 
/2@S, however, and the organizational prob- 
tegic mat 
Latin American countries an replacements, 
for di 
oe involved, it would take at least sixty days 
verted 
civil 
transports. 
ore the full 
capaci 
is no 
im 
pacity of these planes would 
goals. 
T 
moreover. 
sion at ar 
scientific 
| 
| 
from 
Multi-engine U.S. built passenger and 
. 
cargo transport aircraft operated by 
rosa 
Latin American countries. 
South An 
tant. 
Ot 
US has ex 
| 
Meow available for U.S. a 
be cut off 
= 
in case of war. (Estimated) 
munist sé 
2,365 tons* 
250 
Passenger 
material 
tirely feas 
Airplanes 
be directe 
US requil 
i 
which the 
suited. 
L 
rials are 
| 
many cas 
while airf 
constructs 
needed m 
Latin Am 
__*Per month 
four-engir 
commoda: 
“Papers 
of 
S FUR? T 
| 
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%
‘ances re- 
continued 
‘organized 
€s on the 
the Carib- 
highest 
ents had 
‘ity of the 
de avail- 
wow 
The present trend toward replacing US air- 
craft with foreign types, if continued, would 
somewhat hamper the effectiveness of a Latin 
American contribution in case of emergency 
because of the difference in flight and mainte- 
nance procedures and the need of obtaining 
parts abroad. 
If, however, the Latin Ameri- 
can fleet were used as a self-contained unit in 
purely South American operations from its 
normal bases, the effect would be less impor- 
tant. 
Although it is impossible to foresee the many 
US requirements for emergency airlift ca- 
pacity, one possible use of the Latin American 
air fleet directly affecting US security interests 
would be the transport of certain critical stra- 
tegic materials from remote sources to séa- 
board transshipment points or, in case of ex- 
treme emergency, frdm Latin America directly 
tothe US. 
Current stocks of most of the stra- 
tegic materials in the US stockpiling program 
are considerably short of objectives, and there 
is no immediate prospect of meeting these 
goals. 
The present 
unfulfilled 
objectives, 
moreover, are subject to drastic upward revi- 
sion at any time as the result, for example, of 
scientific or technological progress. 
Reduc- 
tion in the availability of strategic materials 
from normal sources is also possible. 
The fall 
of Southeast Asia to the Communists, for ex- 
. ample, would render increased US access to 
South American production critically impor- 
tant. 
Other sources of materials to which the 
US has external lines of communication might 
be cut off by hostile submarine action or Com- 
munist sabotage. 
Use of the Latin American airlift for emer- 
gency transport of strategic materials is en- 
tirely feasible. 
Such an airlift would probably 
be directed toward commodities for which the 
US requirement is relatively small and for 
which the limited airlift capacity would be best 
Suited. 
Latin American sources of such mate- 
rials are already being exploited and are in 
many cases capable of expanded production, 
while airfield installations have already been 
constructed 
in locations 
within 
reach 
of 
needed materials. 
Although the majority of 
Latin American airfields are not suitable for 
four-engine aircraft, most are capable of ac- 
commodating sustained operations by twin- 
| 
engine aircraft, which are those in largest 
Latin American supply and most likely to be 
used in a strategic materials airlift. 
Since 
. twin-engine planes constitute the least strin- 
gent US requirement, their use in a strategic 
material lift would not seriously prejudice the 
primary 
airlift commitment. 
Moreover, 
in 
case of a catastrophe such as the breakdown 
of ocean transport, twin-engine aircraft could 
be diverted from their most logical use in a 
strategic material afrlift (production site to 
seaboard) to an operation from Latin Ameri- 
can to North American destinations, whereas 
they could not satisfactorily transport mass 
cargoes from sites overseas. 
The strategic 
value of the Latin American airlift in such ex- 
traordinary circumstances is illustrated by the 
fact that these aircraft, which are capable of 
transporting 2,365 tons per month if operated 
from Brazil to the US (see p. 4), could deliver a 
volume of beryl, quartz crystals, tantalite, 
tungsten, zircon (baddeleyite), columbite and 
vanadium 75 percent greater than the average 
monthly US imports from all sources in 1948. 
In the event of a sustained operation, more- 
— 
over, cargo capacity could be increased some- 
_ what by the conversion of passenger aircraft 
to cargo use. 
2. Economic Considerations. 
The principal long-range economic signifi- 
cance of civil aviation in Latin America, from 
the US point of view, stems from its role in 
providing rapid intra-area communications. 
Aviation develops and maintains the economies 
of backward and isolated areas, and otherwise 
promotes the economic stability of the Latin 
American nations, particularly in view of their 
inadequate surface transport and the geo- 
graphic obstacles to their economic unifica- 
tion. 
As an important factor in promoting 
the economic welfare of an area which is ex- 
ceeded as a market for US exports by Europe 
> 
alone, the continued development of Latin 
American civil aviation is, therefore, clearly 
to the long-range advantage of the US. 
‘There are other factors of secondary eco- 
nomic importance to the US. 
The area con- 
stitutes a market for the sale of new and used 
US transport aircraft, spare aircraft parts, and 
other aviation equipment as evidenced by the 
fact that about 90 percent of the present 
i $ 
of 
“ESIBENT s SECRET 
¢ 
or the car- 
a mini- 
of Carry- 
per 
sen Miami 
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Mainte- 
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would 
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3] 
| 
|
Latin American transport fleet is of US manu- 
facture. 
US exports of all types of transport 
aircraft to Latin America totaled about $41.1 
million 
for the three-year period 1947-9.* 
This volume represented roughly 27 percent of 
the dollar value of all US exports in this cate- 
gory during these three years, thus constitut- 
ing a significant portion of the overseas mar- 
ket for US transport aircraft, and it was appre- 
ciably supplemented by the sale of spare parts 
and equipment. 
Because of the vital need to 
maintain the US aircraft industry at the high- 
est possible peacetime level in order to mini- 
mize the required wartime expansion, any for- 
eign markets for planes or for engines and 
parts are significant, particularly in view of 
the rapid downward trend in US civil trans- 
port production since 1947. 
The bulk of recent sales to Latin America 
has been of US war surplus stocks, and the 
actual purchase of new planes during the 
three-yeag period was not large (only about 
8 percent of US civil transport output), but 
the very fact that most of the planes were not 
new is of some significance, because it prom- 
ises an accelerated demand for replacements. 
The present US-made Latin American civil 
transport fleet (DC-3 and larger) is about 50 
percent of that now operated by all US sched- 
uled airlines, indicating a replacement demand 
_ at least half the size of that in the US. 
Con- 
. sidering the need for new and modern planes 
. to replace obsolescent ones, thus increasing 
the average unit volume of the aircraft sold, 
and the high replacement demand for new 
engines and parts, the Latin American mar- 
ket could, in coming years, have a considera- 
dle effect on maintenance of the US industry, 
despite the fact that the rate of expansion of 
the area’s air fleet is expected to be moderate. 
The above estimate, however, is made with- 
_ out reference to the competition that US man- 
facturers must meet. 
The prevalent Latin 
American dollar shortage plus the competitive 
advantage accruing to British and other Euro- 
pean manufacturers through currency devalu- 
ation create a strong temptation in Latin 
America 
to buy in other than US mar- 
<ets. 
These factors 
have 
already 
tended 
‘O favor increased Latin American purchases 
* See Table II, page 7. 
of military equipment and machinery from 
Europe. 
Furthermore, current production in 
Europe of small aircraft particularly suitable 
for Latin American 
feeder-line 
operations, 
some of which have already been sold in the 
area, and the probable introduction to the 
Latin American market of Canadian or British 
jet transports in advance of such US types will 
increase the competition. 
Since Latin Ameri- 
can purchases of new aircraft in the near fu- 
ture are not expected to be extensive, however, 
any trend away from US equipment will de- 
velop gradually and its effects on the US air- 
craft industry may not be appreciable for sev- 
eral years. 
With respect to its economic significance as 
an outlet for US investments, Latin American 
civil aviation does not offer an attractive mar- 
ket for venture capital. 
The declining US 
financial stake in Latin American-flag airlines, 
most of which are capitalized at comparatively 
low levels, is estimated now to be less than $20 
million, on the basis of the nominal value of 
stock holdings. 
This situation is in part the 
result of the enactment and enforcement by 
many Latin American countries of legislation 
requiring majority stock ownership and effec- 
tive control of national-flag airlines to be held 
by interests of the same nationality. 
The 
policy of establishing national control over 
civil air activities is consistent with the efforts 
of the Latin American countries toward eco- 
nomic autarchy in other directions, as mani- 
fested by their attempts to develop local in- 
dustry, their preference for government-to- 
government loans or grants, and their pro- 
nounced prejudice against admission of for- 
eign capital except under restrictions unlikely 
to appeal to foreigners. 
3.. Political Considerations. 
Civil air relations between the US and Latin 
America have also a subsidiary political impor- 
tance in that Latin America’s technical de- 
pendence upon the US in aviation matters 
during and. after the war has resulted in a 
marked US influence in civil air affairs. 
l- 
though there is evidence that this influence 
is declining as Latin American capabilities are’ 
developed, close cooperation between the two 
areas in aviation matters has contributed to 
their gene) 
a potentia! 
tors promc 
the 
increz 
oped throt 
have been 
agreement. 
nical assist 
training pr 
nel in the 
A prime 
policy has 
internatior 
air carrier 
their maxi 
lateral agr' 
major Lati 
“liberal” p. 
interests. 
ESTIMATEL 
Cargo Aircraf! 
Passenger 
Ai 
* This is ab 
into a further 
and passenge! 
should priorit 
hand transpor 
of personnel. 
factors, includ 
air fleet is ma 
passenger tran 
- 
Ope 
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N2'S ‘Storr 
“Dew 
AR} 
F 
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r 
— 
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r 
a
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from 
ction in 
Suitable 
tations, 
‘1 in the 
~ to the 
British 
Des wil] 
Ameri- 
near fu- 
-OWever, 
“ill de. 
iUs air- 
sey- 
as 
rican 
- 
US 
- ines, 
¥ 
> 
SECRET, 
their generally cordial relations and remains 
a potential means of sustaining them. 
Fac- 
tors promoting close relations, in addition to 
the increased 
economic 
intercourse 
devel- 
oped through exchange of airline services, 
have been the negotiation of reciprocal air 
agreements, and the establishment of US tech- 
nical assistance missions in Latin America and 
training programs for Latin American person- 
nel in the US. 
A prime objective of postwar US aviation 
policy has been the facilitation of freedom of 
international movement for US commercial 
air carriers under conditions conducive 
to 
their maximum development. 
In general, bi- 
lateral agreements negotiated by the US with 
major Latin American civil air powers embody 
“liberal” principles, favorable to US aviation 
interests. 
In turn, Latin American agree- 
ESTIMATED LATIN AMERICAN CONTRIBUTION 
TO EMERGENCY AIRLIFT 
MINIMUM NUMBER | MAXIMUM NUMBER 
AIRCRAFT 
AIRCRAFT 
AVAILABLE 
AVAILABLE 
(20% BAsIs) 
(50% Basis) 
110 
275 
Cargo 
|Personnel| 
Cargo | Personnel 
te 
-| 
Priority*| Priority*| Priority*| Priority* 
Cargo Aircraft. 
175 
25. 
Passenger 
Air- 
100 
100 
250 
* This is a broikdows of minimum and maximum figures 
into a further estimate of the distribution between cargo 
and passenger aircraft which would be made available 
should priority airlift requirements demand on the one 
hand transport 
of cargo, and on the other hand transport 
vf personnel. 
These 
estimates 
are based 
on 
several 
. factors, including the fact that the Latin American civil 
air fleet is made up of about 195 cargo aircraft and 360 
passenger transports. 
ments with European countries have generally 
- conformed to the US standard type. 
As a re- 
sult, designated US airlines have been assured 
freedom of movement throughout most of 
Latin America, and the US case in sponsoring 
world-wide liberal air principles has been con- 
siderably strengthened in other areas less sub- 
ject than Latin America to US influence. 
There is no assurance, however, that this 
trend will continue, 
As the Latin American 
lines, already financially weak, encounter in- 
creasing foreign competition, they are likely to 
adopt more restrictive policies toward foreign 
carriers. 
Moreover, the quondam opposition 
of certain Latin American countries to a mul- 
tilateral 
air agreement, 
which 
was being 
strongly advocated by the US, indicates that 
opposition from this area to US objectives in 
international air conferences is not excluded. 
Should this change take place, it would give 
impetus to a similar movement already evi- 
dent in other parts of the world and thus 
might eventually threaten the whole structure 
of US world air routes. 
TABLE II 
US TRANSPORT AIRCRAFT EXPORTED TO 
LATIN AMERICA 
| 
(Military and civil) 
AND 
YEAR 
AIRCRAFT 
.. 
| Dollar 
.._ 
| Dollar 
...| 
Dollar 
$4 
292 
144 
312 
17. 8 
160 
6.9 
169 
7.8 
Three 
Year 
| 
TRUMAN 
ENT 
| 
SPCR 
ARy 
> 
|
i 
ively 
| 
& 
. $20 
of 
he 
h y 
ion 
] 
fie 
er 
O- 
y*
DEFINITIONS 
The following terms pertaining to civil avia- 
tion employed throughout this estimate are 
herewith defined: 
(a) Fifth 
Freedom. 
This’ 
controversial 
principle concerns commercial air traffic privi- 
leges accorded through international agree- 
ment to an air carrier of one nation in the ter- 
ritory of a second. 
Specifically, Fifth Free- 
dom is the privilege of an air carrier of one 
- 
nation to take on in the territory of a second 
country passengers, mail, and cargo destined 
for a third state and, cenversely, the privilege 
to put down in a second nation passenger, 
mail, and cargo originating in a third country. 
(b) Bermuda Agreement. 
The Bermuda 
Agreement was negotiated between the US 
and UK in February 1946. 
It incorporated 
certain liberal principles governing interna- 
tional commercial air traffic, including a mu- 
tual concession of Fifth Freedom privileges 
and recognition of the right of fair and equal 
opportunity to engage in air commerce under 
competitive conditions. 
The US and UK have 
jointly promoted these principles throughout 
the world and the Bermuda Agreement has 
become the model for a large number of sub- 
sequent international air agreements. 
(c) Unduplicated Route Mileage. 
The fol- 
lowing hypothetical case illustrates the man- 
ner in which unduplicated route mileage is 
computed. 
Two given routes, such as New 
York-Habana-Panama and New York-Habana- 
Caracas, having a common segment (New 
York-Habana), are both operated by a single 
airline. 
In computing the unduplicated route 
mileage of this carrier the duplicated segment 
(New York-Habana) is included in the airline’s 
total only once. 
Moreover, this carrier’s un- 
duplicated route mileage is not affected by the 
fact that one or more other airlines operate 
parallel routes. 
The term “unduplicated,” 
therefore, refers only to those route miles 
which are not duplicated by an individual air- 
line. 
> 
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ANNEX 
INTRODUCTION 
1. 
Historical Background. 
a. Prewar Development. 
Before World War II, civil air transport in 
Latin America was developed, financed, and 
to a large extent controlled by European and 
North American interests. 
It was particu- 
larly susceptible to foreign development be- 
cause of the financial and technical inability 
of most Latin American countries to develop 
their own air services. 
Lack of adequate sur- 
face transport, moreover, led Latin American 
countries to encourage .development of air 
transport. As a result, foreign interests (prin- 
cipally German and US) established, operated, 
and controlled extensive air networks under 
liberal concessions. 
The capability of various 
national interests in Latin America to provide 
domestic air services gradually increased, how- 
ever, with the result that by the outbreak of 
World War II a trend was perceptible toward 
the progressive restriction of privileges enjoyed 
by foreign aviation interests. 
b. Wartime Development. 
Elimination of Axis Influence. 
With the 
outbreak of the European war and the sub- 
sequent military victories of the Axis, the 
_ extensive penetration of Latin American civil 
aviation by German-flag and German-con- 
trolled airlines (which together flew three 
million miles in 1940 over 27,000 route miles 
throughout South America) became a source 
of increasing concern 
to the US. 
Italian 
trans-Atlantic services, furthermore, flew from 
Rome to Natal, Rio de Janeiro and Buenos 
Aires. 
Consequently, the US and various 
Latin American governments cooperated to 
eliminate all Axis influence gradually from 
Latin American aviation. 
This was accomp- 
lished through the progressive replacement 
of Axis air services either with US airlines di- 
rectly or with native services operated by US- 
trained flight and ground personnel and 
backed by US financial aid and technical as- 
sistance. 
As a result of these measurés-and-the dis- 
continuation of air services’'in Latin America 
by other European interests, together with the 
close wartime collaboration between the US 
and Latin American governments, the US, at 
the close of the war, enjoyed a virtual monop-- 
oly of foreign influence over Latin American 
aviation. 
US Aid to Latin American Aviation. 
US- 
Latin 
American 
collaboration 
in aviation 
matters, instituted early in the war, has in- 
cluded technical guidance as well as the train- 
ing of pilots, mechanics, instructors, engineers, 
and high-level 
administrative 
officers. 
US 
civil air missions have also assisted in estab- 
lishing and developing standardized air traffic 
control and operational procedures, and have 
provided technical advice on navigational aids, 
radio communications, meteorological instal- 
_ 
lations, 
and 
maintenance 
requirements. 
Moreover, the US has advised certain Latin 
American nations regarding the promulgation 
of modern civil aviation regulations. 
This as- 
sistance, together with the US-sponsored war- 
time Airport Development Program, laid the 
foundation for the rapid expansion of Latin 
American airline operations. 
c. Postwar Expansion of Airlines and Air 
Facilities. 
| 
| 
The end of World War II initiated a period 
of rapid and continuing expansion of national- 
flag and foreign airline operations in Latin 
America. 
Increase in Latin American Airline Equip- 
ment. 
As a result of having purchased mod- 
ern aircraft from US postwar surplus stocks 
at low cost, Latin American scheduled air- 
lines in 1947 were operating over 400 more 
aircraft, including 36 more 4-engine types, 
than in 1940. 
(See Table A.) 
By early 1949 
another 69 aircraft, including 22 additional 
N 
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SPCRET , 
1940 - 10,000 
mi. 
Argentina 
41940 - 65,000 mi. 
11940 - 1,000 mi. 
41940 - 14,000 mi. 
4-engine transports were added, thus bring- 
ing the total fleet operated by the area’s 
scheduled airlines to approximately 700. 
Although 
US-manufactured 
aircraft 
amounted to 72 percent of the total owned by 
Latin American scheduled airlines in 1940, 
only 23 were as modern as the DC-3. 
In 1949, 
six hundred aircraft, or 88 percent of the total, 
were of US manufacture, and of these, 450 
were of types at least as large and as modern 
as the DC-3. 
(Aircraft of UK manufacture 
in use in 1949 amounted to only 8 percent of 
the Latin American transport total.) 
The 
increase in US equipment operated by Latin 
American airlines, moreover, would have been 
even greater had it not been for the severe 
dollar shortage which has recently prevailed 
in most Latin American countries. 
Although Latin American airlines operated 
18 percent of the world total of scheduled air- 
line equipment in 1949 (excluding the USSR), 
their share of 4-engine aircraft amounted to 
slightly less than 7 percent of the world total 
of this type. 
Increase in Latin American Airline Opera- 
tions. Asa result of rapid postwar expansion, 
Latin American scheduled airlines were oper- 
ating in 1947 about four times more mileage 
than in 1940. 
(See Table B.) 
By 1949, this 
- mileage had increased to over 15 million miles 
ai. Increase 
of 1,400% 
|,000 mi. Increase of 550% 
11949 L.A. mileage compared 
‘J a 
| 
to total U.S. and total world 
of 1800% 
of 300% 
scheduled mileage. 
ORE Tr-250 
per week or more than five times that sched- 
uled 
in 1940. 
The principal 
increases 
in 
scheduled weekly mileage from 1940 to 1949 
were made by the airlines of Argentina (an 
increase of about 140,000 miles—1,400 per- 
cent), Brazil (about 460,000 miles—over 700 
percent) and Venezuela (about 170,000 miles— 
over 1,500 percent). 
These countries have es- 
tablished substantial intercontinental oper- 
ations. 
Since 1940, the airlines of Mexico and 
Cuba have also shown marked increases in 
scheduled operations, amounting per week to 
over 220,000 miles (300 percent) and over 
70,000 miles (500 percent), respectively. 
The 
total scheduled mileage in early 1949 for all 
Latin American airlines amounted to slightly 
less than 20 percent of the mileage flown by 
all US scheduled domestic and international 
carriers and about 11 percent of the world 
total (exclusive of the USSR) of scheduled 
operations. 
| 
Despite pronounced postwar expansion of 
operations, Latin American airlines have been — 
limited by the general lack of public funds 
throughout the area, and by the severe dollar 
shortages which have affected most Latin 
American countries during the last two years. 
Government plans for badly needed develop- 
ment and improvement of airports, radio aids 
to navigation, and meteorological and com- 
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munications facilities have had to be realis- 
tically adjusted to national budgets. 
Many 
airlines, therefore, have been forced to develop 
air installations at their own expense. 
As in- 
dicated. above, moreover, 
the recent dollar 
shortage has also, by preventing the purchase 
of desired new equipment from the US, to 
some extent limited the expansion of airline 
operations. 
Increase in Operations of Foreign Airlines in 
Latin America. 
The growing capability of 
Latin American carriers to provide services 
throughout Latin America and to Europe and 
the US has created an increasingly competi- 
tive situation for foreign airlines operating to 
Latin America. 
In addition, the postwar in- 
auguration of Latin American operations by 
six European carriers has gradually dissipated 
the monopoly of foreign-flag services enjoyed 
immediately after the war by the US in that 
area. 
In spite of these developments, the 
postwar Latin American operations of US 
scheduled airlines have expanded consider- 
ably, partly as a result of the addition of new 
routes, but principally because of the greatly 
increased frequency and capacity of services 
offered. Moreover, despite the growth of Latin 
American-flag services, the scheduled mileage 
of US-flag airlines operating in Latin America 
in 1949 was still about 50 percent of the domes- 
tic and international mileage of all Latin 
American-flag scheduled airlines combined. 
2. 
Governmental Policy toward Civil Aviation. 
With respect to the civil aviation policies of 
Latin American countries, the principal post- 
war trends which affect US interests reflect 
the increased capabilities of Latin American 
air interests to provide adequate air transport 
services. 
aviation has resulted 
in a growing Latin 
American independence of foreign influence in 
aviation matters and a desire to protect na- 
tional airlines from intensive foreign com- 
petition in international operations. 
In do- 
mestic operations, moreover, all but two of the 
Latin 
American 
countries 
which 
granted 
cabotage privileges to foreign airlines have 
withdrawn such rights, thus reserving do- 
mestic air traffic to national interests. 
Government Promotion of Continued Ex- 
pansion. 
Many Latin American countries are 
The development of national-flag 
promoting the developmenf of adequate air 
services to all parts of their territories and in 
this respect. are encouraging their domestic 
air carriers by means of air-mail contracts and 
other forms of direct or indirect subsidy. 
Modern airports and other operational fa- 
cilities in many instances are being developed 
at government expense. 
Private flying is also 
promoted through government support of aero 
clubs. 
These programs 
are already being 
limited, however, by a growing shortage of 
public funds in some Latin American coun- 
tries and by the increasing cost of all phases of 
civil aviation. 
Asa result, these countries will 
probably be unable for some time to initiate 
over-all development programs, and construc- 
tion or improvement of facilities may be re- 
stricted to the most essential projects. 
Never- 
theless, the announced plans of various Latin 
American airlines indicate that there will con- 
tinue to be some expansion of both domestic 
and international air routes and frequencies. 
Latin American governments will continue to 
seek US advice and assistance in technical 
training of Latin American airline personnel 
until national capabilities have been further 
developed. 
- Protection 
of International 
Carriers. 
In 
addition to the foregoing positive support of 
both domestic and international airlines, a 
number of Latin American countries have 
adopted policies designed to protect their na- 
tional-flag carriers, operating internationally, 
from intensive foreign competition. Attempts 
have been made during negotiations for air 
transport agreements with other countries, 
to neutralize the competitive advantage of 
heavily-subsidized foreign airlines by restrict-. 
ing their traffic privileges in Latin America 
(see below, “Policy Toward International Ar- 
rangements’’). 
Policy Toward International Arrangements. 
Multilateral 
Air 
Transport 
Agreements. 
Having generally similar aviation interests, 
the Latin American countries represented at 
multilateral air transport conferences have 
voted practically asa bloc. 
Because they lack 
the financial and technical resources to meet 
intensive competition for a limited amount 
of international air traffic, these countries 
have opposed multilateral agreements on in- 
‘TARRY S 
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ternational air traffic rights which included 
Fifth Freedom privileges, and have insisted on 
retaining 
discretionary 
powers 
in _ such 
matters. 
For example, this attitude on the 
part of Latin American countries was partially 
responsible for the failure in 1947 of a special 
International 
Civil 
Aviation 
Organization 
(ICAO) Commission convened for the purpose 
of negotiating such an agreement. 
There ap- 
pears to be little likelihood, moreover, that 
this attitude will undergo a change in the 
foreseeable future. 
Bilateral 
Air Transport 
In 
contrast to their opposition to multilateral 
agreements of a liberal type, Latin American 
countries have concluded forty-three bilateral 
air agreements which, for the most part, con- 
form to the basic principles of the Bermuda 
pact. 
(See Table C.) 
The substantial post- 
war expansion of both Latin American-flag 
international operations and foreign-flag serv- 
ices to Latin America necessitated the con- 
clusion of thirty-five agreements involving 
non-Latin American countries, principally the 
US and UK. 
The other eight agreements gov- 
ern civil air relations within the Latin Ameri- 
can area. 
Two leading Latin American civil air powers, 
Mexico and Argentina, have consistently at- 
tempted to protect their international carriers 
by pursuing policies designed to restrict for- 
eign-flag operations in their territories, either 
through limitation of flight frequencies or a 
predetermined 
division 
of traffic. 
Mexico, 
whose international airlines are at present in 
the early stages of development, has success- 
fully maintained its restrictive policy with the 
result that it has concluded only two bilateral 
air agreements. 
Argentina, 
on 
the other 
hand, with numerous foreign routes and plans 
for further expansion, has been forced in sev- 
eral cases to accede to more liberal principles 
demanded by other countries in order to ob- 
tain desired foreign landing rights for its own 
international airline. 
In contrast to Argentina and Mexico, Brazil, 
whose principal international carrier is well 
able to compete with foreign airlines, has not 
pursued a restrictive air policy, but has signed 
eleven bilateral agreements of a liberal type. 
While Colombia and Venezuela, whose flag air- 
lines 
operate 
less 
extensive 
international 
routes, have not yet attempted any major 
restriction of foreign airlines, there are indica- 
tions that they may wish to do so if they be- 
come convinced that the ability of their air- 
lines to compete successfully on international 
air routes is threatened by strong foreign com- 
petition. 
The 
remaining 
Latin 
American 
countries are not yet conducting significant 
international 
air operations and therefore 
have had little reason thus far to adopt pro- 
tectionist measures for their national-flag en- 
terprises. 
The already demonstrated opposi- 
tion of these countries to a multilateral ex- 
change of Fifth Freedom privileges, however, 
indicates the strong possibility that their rela- 
tive financial and technical weakness in civil 
aviation will cause them to attempt some limi- 
tation of foreign competition when they are 
in a position to initiate their own international 
services. 
On the other hand, these countries 
may eventually find it necessary to follow the 
example of Argentina in order to obtain mini- 
mum desired rights in other countries for their 
own air carriers. 
The US and UK, the two principal pro- 
ponents of the Bermuda principles, have been 
particularly successful in promoting Bermuda- 
type air agreements in Latin America. 
The 
US has concluded eleven such agreements 
throughout the area, including all the larger 
countries except Mexico. 
The UK, for its 
part, has negotiated six Bermuda-type agree- 
ments in Latin America, in addition to a re- 
strictive agreement signed with Argentina 
prior to the Bermuda pact. 
— 
International Organizations. 
The Fifteen 
Latin American members of the International 
Civil Aviation Organization participate in its 
proceedings as actively as their financial and 
technical resources permit. 
Four of these 
members, however, were censured during 1949 
for failure to meet their financial obligations 
to the organization. 
Financial 
difficulties 
have been largely responsible for failure of 
the other five Latin American countries to join 
the organization. 
Nine international airlines of seven Latin 
American countries are active members of the 
international carriers’ organization, the Inter- 
national Air Transport Association. - 
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— 
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EQUIPMENT OF LATIN AMERICAN SCHEDULED AIRLINES 
| 
1940 
| 
1949 
| 
(2) US Manufacture: 
(3) UK Manufacture: 
(4) Axis Manufacture*: 
for 1947 
for 1949 
(5) Other Manufacture 
(8) 2 Engine aircraft...... 
454 
528 
(9) 1 Engine and unidentified a/c................ 
111 
296 
456 
* Item (4), showing aircraft of German or Italian manufacture, is included to demonstrate Axis influence in prewar 
Latin American civil aviation. 
For the postwar years, 1947 and 1949, the relatively small number of these aircraft remain- 
: 
ing in service is included under ‘‘other’’ in Item (5). 
** Item (10) includes aircraft of US manufacture which are at least as modern and as large as the DC-3, and are 
currently in use by US civil and military air carriers. 
Specifically: DC-3, DC-4, DC-6, C-—46, Convair 240, Martin 
202, Constellation. 
TaBLe B 
COMPARATIVE WEEKLY SCHEDULED MILEAGE OF AIRLINES 
1940 
| 
1947 
1949 
323, 602 
- 1, 381, 279 
1, 650, 827 
World Airlines, Total (excluding 
12, 424, 000 
15, 066, 000 
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INTERNATIONAL 
AIR 
AGREEMENTS 
CONCLUDED 
BY 
-LATIN 
AMERICAN 
COUNTRIES 
. 
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N 
icaragua 
B—Bermuda 
Type 
C—Split 
Tratlic/ 
Restrictive 
U—Unknown 
Type 
A—Prewar 
Dominican 
Republic 
Colombia 
Ecuador 
Paraguay 
Uruguay 
Venezucla 
El 
Salvador 
Guatemala 
Haiti 
- 
Honduras 
Argentina 
Panama 
Bolivia 
U.S. 
Brazil 
Chile 
Peru 
Cuba 
Argentir 
Aerop 
ALFA 
FAM. 
LADI 
ZONI 
Bolivia: 
LAB. 
Brazil: 
Aero 
Aerovi 
LAP.. 
LATB 
PAB.. 
REAL 
VARI‘ 
Cruze 
SAVA( 
VASP. 
British G 
BGA.. 
Chile: 
LAN. 
Lipa-Si 
Colombia: 
AVIA 
LANS2 
SAETA 
AERO? 
AFRYI 
Ecuador: 
ATEC: 
TRASA 
Parcguay: 
LATN. 
Peru: 
ANDE 
signed 
November 
1949, 
is 
ostensibly 
& 
Bermuda-type 
bilateral, 
but 
appears 
to 
contain 
some 
restrictive 
provisions. 
Faucett 
Urujuay: 
CAUSA 
PLUNA 
Venezuela: 
AVENS 
TACAc 
* The 
Brazil-Spain 
agreement, 
** 
Norway, 
Denmark, 
Sweden. 
N—Company-Government 
V—ICAO 
Meinber 
LAV.... 
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TRUMAN 
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SECRETARY 
FILE 
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3 BORET 
Taste D 
OWNERSHIP OF AIRLINES 
South America 
| PERCENTAGE OF OWNERSHIP 
| 
| 
U.S. 
|Nationals| Govt. 
| 
Argentina: 
Bolivia: 
= 
ose 
20* 
*Panagra 
Brazil: 
9* 
+s 
*9% U.S. interest held by TWA. 
: 
, 
** VASP bought 82% interest in 2/49, resold 
| 
in 2/50. 
100 
* Govt. of Rio Grande do Sul holds 21% 
(100 
* 
*Govt. of city and state of Sao Paulo holds 
75% 
British Guiana: 
| 
Chile: 
Colombia: 
ss 
47. 7* 
49. 1 
2.8 
.4 other, * PAA 
AFRYPESCA 
Unknown 
a 
* No information on percentages. 
Peruvians 
© 
believed to hold controlling interest. 
Some 
— 
*PAA 
*TACA system controlled by Waterman 
Steamship Corp. of the US, **LAV 
ARy Pr 
Ecuador: 
Paraguay: 
Uruguay: 
Venezuela: 
37. 05* 
55. 45 
| 
. 
TACAde VENEZUELA........ 
45° 
42. 8 
12, 
‘
Tastz E 
OWNERSHIP OF AIRLINES 
. 
Middle America 
| 
PERCENTAGE OF OWNERSHIP 
| 
‘a 
U.S. 
| Nationals] 
Govt. 
| 
Bahamas 
* British 
wholly-owned subsidiary of BOAC. 
Costa Rica: 
40* 
* PAA 
Gb 
(?) 
100* 
*Sold by TACA System to 2 residents of 
Costa Rica 5/48. 
Costa Rican owners may 
be backed by US capital. 
Cuba: 
48* 
*PAA 
39. 54 
60. 46 
* US Citizen 
Dominican Republic: 
El Salvador: 
TACA El Salvador........ 
* Almost wholly owned by TACA Airways, 
S.A., 
in turn 
controlled 
by Waterman 
: 
Steamship Corp. of the US 
Guatemala: 
Haiti: 
Honduras: 
ak beens n 
40* 
*PAA 
TACA de Honduras............ 
(7) 
100 
*Sold by TACA System to 2 residents of 
Honduras 2/48. 
Honduran owners may be 
backed 73% by US capital. 
Jamaica: 
in October 1949. 
: 
Mexico: 
37* 
* US Citizen 
100 
* Controlling interest believed to be held by 
‘ 
~ 
US Citizens 
* United Air Lines and US citizens. 
Pre- 
ferred Stock: 100% UAL; Common Stock: 
83.2% UAL, 16.8% US Citizens. 
tion. 
G 
pha. 
betv 
Min 
Min 
tora 
from 
new 
regu 
all A 
juris 
Mini 
sibili 
Minti 
Railr 
Inlar 
Sh 
Over: 
pir 
Road 
Com! 
tio 
Wr 
ized i 
direc} 
| Pp; 
TR 
SLD 
Nicaragua: 
Panama: 
aviati 
COPA. 
33* 
* PAA 
majo} 
Caribbean-Atlantic............. 
100* 
* US Citizens 
Th 
P
ats of 
S may 
APPENDIX A 
ARGENTINA 
1. 
Government Organization 
for Civil Avia- 
tidn. 
Governmental jurisdiction over the various 
phases of civil aviation in Argentina is divided 
between the Ministry of Transport and the 
Ministry of Air. 
Following the creation of the 
Ministry of Transport in June 1948, the Direc- 
torate of Commercial] Aviation was separated 
from the Ministry of Aifand transferred to the 
new 
organization. 
With the exception 
of 
regulation of commercial aviation, however, 
all Argentine aviation activities fall under the 
jurisdiction of the Ministry of Air. 
The two 
Ministries have the following general respon- 
sibilities: 
Ministry of Trans- 
Ministry of Air 
port 
Railroads 
National Meteorological 
Service 
Inland River 
Institute of Aeronautical 
Shipping 
Medicine 
| 
Overseas Ship- 
Airport Construction and 
ping 
Maintenance * 
Roads 
Air Traffic Control 
Commercial Avia- Accident Investigation 
tion 
(other than commer- 
cial) 
| 
Aircraft Industry (Cor- 
doba) 
Air Force 
When the Argentine airlines were national- 
ized in May 1949, they were placed under the 
direction of the Ministry of Transport. 
Re- 
sentment of the Ministry of Air over the 
changes which reduced its power and rivalry 
between the two Ministries in the field of 
_ 
transportation have adversely ‘affected the 
Argentine Government’s 
administration 
of 
aviation matters. 
Military officers hold the 
majority of key posts in both Ministries and 
* The new international airport at Ezezia has been 
placed under the Ministry of Transport. 
thus exercise almost complete control over 
civil aviation policy. 
Among the several temporary or permanent 
commissions which have been established to 
deal with civil aviation are: (1) an advisory 
council whose responsibility is to coordinate 
the activities of all government organizations 
on matters affecting international ciyil avia- 
tion, with particular reference to Argentina’s 
membership in the International Civil Avia- 
tion Organization (ICAO), and to advise the 
Minister of Air thereon; and (2) a temporary 
Air Transport Advisory Council which is to 
study the position of commercial aviation in 
Argentina in relation to the over-all transport 
requirements of the country. 
2. 
Domestic Civil Aviation Policy. 
Argentina’s desire to bring its aviation up 
to the level of the most advanced air nations 
of the world has produced a nationalistic air 
policy designed to promote Argentine civil 
aviation and to develop a self-sufficient in- 
dustry capable of serving the needs of both 
‘military and civil aviation in Argentina. 
a. Civil Aviation Legislation. 
The Basic Air Policy of the Argentine Gov- 
ernment was outlined in Decree No. 9358/45 
of 27 April 1945, which stated the following 
principles: 
~ (1) Domestic airline operations should bé 
undertaken preferably by the govern- 
ment directly and otherwise by mixed 
| 
companies which include substantial 
government participation. 
International aviation should be gov- 
erned by bilateral reciprocity. 
Infrastructure (airports and all other 
ground facilities) should belong exclu- 
sively to the government. 
Eventually, all shareholders and em- 
ployees of Argentine airlines should be 
native Argentines. 
| 
(2) 
(3) 
Pe 
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By-laws of this decree outlined details of 
organization of the mixed companies which 
operated Argentina’s air services until nation- 
alization of all airlines in May 1949, well ahead 
of the generally anticipated schedule. 
Early in 1949, a commission composed of 
representatives of the various government de- 
partments concerned was charged with draw- 
ing up a draft Civil Aviation Code, as well as 
regulations to govern civil air affairs. 
Until 
this project can be concluded and officially 
approved, however, aviation matters will con- 
tinue to be administered by directive and 
decree. 
Government action taken to date in- 
cludes reclassification of Argentine airports 
to conform with ICAO recommendations, es- 
tablishment of a new scale of landing charges, 
and issuance by decree of aircraft — 
tion regulations. 
b. Regulation of Argentine Airlines. 
In accordance with the first item of the 
Basic Air Policy, four mixed airline companies 
were decreed early in 1946. 
FAMA (30 per- 
cent government-owned) operated only inter- 
national services, while Aeroposta, ALFA, and 
ZONDA (each 20 percent government-owned) 
provided: primarily domestic 
service. 
Gov- 
ernment control over management and oper- 
ations was so rigid, however, that the private 
interests were unable to exercise effectively 
their prerogatives, with the result that these 
companies never actually operated as mixed 
companies. 
On the pretext that this form of 
organization was uneconomic and had caused 
severe financial losses 
(covered by govern- 
ment subsidy), nationalization of the mixed 
companies was decreed in May 1949. 
All pri- 
vate shares were paid off and operational re- 
organization designed to bring about the de- 
sired economies was announced in October 
1949. 
(See Section 4, Airlines.) 
There has 
been no foreign capital participation in Ar- 
gentine airlines since the end of the war. 
Non-scheduled operators are definitely dis- 
| 
couraged and permits are issued only when the 
services to be performed are of such a nature 
that they cannot be conducted by the sched- 
uled carriers. 
Direct government control over airline oper- 
ations has effectively prevented competition 
within the country. 
Prior to nationalization 
and reorganization of the Argentine airline 
network, competition was avoided by limit- 
ing the number of air transport companies and 
fixing the areas within which each was to 
operate. 
Each of the three domestic airlines 
was assigned to a specific region. 
Although 
this policy avoided competition, it also pre- 
vented realization of a unified national air 
network. 
Reorganization measures, however, 
have combined the three former domestic air- 
lines into a single carrier providing improved 
service. 
Cc. Regulation of Foreign Airlines. 
Argentina terminated all cabotage rights 
for foreign airlines on 2 January 1947. 
The 
rights now enjoyed in Argentina by foreign. 
airlines are determined on the basis of formal 
bilateral air agreements. 
The “regional (in- 
ternational) cabotage”’ policy of Argentina is 
discussed below in Section 3 under the head- 
ing “International Civil Aviation Policy.” 
d. Promotion of Other Civil Aviation Ac- 
tivity. 
In compliance with the Basic Air Policy, all 
airports and air navigational facilities in Ar- 
gentina have become the property of the gov- 
ernment and are controlled by the Ministry 
of Air. 
This also applies to meteorological 
stations and aerial cartographic offices. 
Un- 
der the Argentine Government’s five-year plan 
of 1947, the State has undertaken an extensive 
airport building and development program. 
Aero club training and flying is facilitated 
by substantial government subsidy and tech- 
nical aid. 
The State, however, retains strict 
and complete control over these operations, 
which are designed to fit into the pattern of 
military 
training. 
All 
other 
aeronautical 
training is under direct military supervision. 
While Argentine aviation policy theoreti- 
cally encourages private investors to partici- 
pate in the aircraft manufacturing industry, 
virtually all of this function is actually per- 
formed by the State. 
Argentina’s announced 
objective is to build a self-sufficient aircraft 
manufacturing industry by 1951. 
It will be 
many years, however, before Argentina can 
approach this goal. 
In the meantime, all 
transport aircraft must be purchased abroad. 
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A lack of modern machine tools, technical 
and scientific knowledge, and skilled labor has 
impeded Argentine aircraft manufacturing 
efforts to date. 
The principal emphasis of the 
research and construction program has been 
placed on military aircraft development, which 
absorbs the major portion of the limited avail- 
able resources. 
A number of aviation scien- 
tists from several European countries, for ex- 
ample, are working almost exclusively on mili- 
tary aircraft projects. 
Moreover, the Argen- 
tine Government has made poor use of the 
many skilled Italian workers who have re- 
cently immigrated. 
While many Argentine industrial plants con- 
tribute indirectly to aircraft manufacture, 
only three or four are engaged in the final 
production of aircraft. Of these, only two are 
private organizations and their limited output 
. is devoted to small aircraft. 
These concerns 
are: Petrolini Hermanes, S.A., which has built 
a number of 150-hp. tandem trainers, and 
IMPA (Industria Metalurgica Plastica Argen- 
tina), which is at present doing assembly work 
and manufacture of small parts. 
A twin- 
engine five-passenger transport is reportedly 
under construction by the latter. 
Argentina’s 
productive capacity, therefore, is centered al- 
| 
most entirely in the projects of the Aerotech- 
nical Institute at Cordoba.- This government- 
operated enterprise was originally established 
principally for research and development, but 
the lack of government encouragement and 
assistance to private concerns has resulted in 
Cordoba’s assumption of virtually the entire 
construction burden. 
Its projects are now al- 
most exclusively military, although its future 
| 
program 
includes construction 
of a twin- 
engine ten-passenger transport and a proto- 
type four-engine transport. 
Argentina, how- 
ever, does not yet possess adequate equipment 
to make the necessary high-stress material and 
Structural tests for the production of trans- 
port aircraft comparable to those now being 
produced by the US and UK. 
Although Cor- 
doba has been represented by the Argentine 
Government as the nucleus of a great national 
| 
aircraft industry, it is possible that its prin- 
_ 
Cipal mission for some time to come will ac- 
tually be to develop the technical knowledge 
required in Argentina for the effective pur- 
chase of foreign aircraft. 
| 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
In order to minimize foreign competition 
with its international carrier, FAMA, Argen- 
tina has not only consistently resisted grant- 
ing Fifth Freedom traffic rights, but has also 
attempted to protect FAMA by seeking air 
agreements on the basis of a predetermined 
division 
of traffic. 
Some Argentine agree- 
ments have gained advantages for its carrier 
in this respect, but, in general, Argentina has 
been forced to accede to more liberal agree- 
ments granting full traffic rights in order to 
secure satisfactory reciprocal rights. - 
Under its “regional (or international) cabo- 
tage” theory (decreed 12 September 1947, al- 
though pronounced and promoted earlier), 
Argentina attempted to create and become the 
leader of a regional bloc including Chile, Uru- 
guay, Paraguay, Peru, and Bolivia, in which 
all mail and passenger traffic between points 
within the region would be reserved to airlines 
of the countries comprising the bloc. 
How- 
ever, Argentine efforts to create such a restric- 
tive bloc within the neighboring area were 
effectively frustrated by the defection of Chile, 
which concluded a full Five Freedoms agree- 
ment with the US in May 1947, and failed to 
support Argentine attempts to secure inter- 
national recognition of the regional bloc. 
Ar- 
gentina itself was forced to modify its position 
in negotiations with the US and also concluded 
a Fifth Freedom agreement in May 1947. 
This agreement, however, has never been fully 
effective as a result of Argentine intransigence 
with respect to conclusion of the requisite 
route annex to the agreement. 
In view of 
FAMA’s present requirement for US landing 
rights, Argentine obstructionism may soon be 
withdrawn. 
. 
Argentina has concluded restrictive type bi- 
lateral agreements with the UK (May 1946), 
Portugal and Spain. Although the agree- 
ments with France and Italy may also be sus- 
ceptible of restrictive interpretation, other Ar- 
— 
gentine agreements, including those with the 
Netherlands and the Scandinavian countries, 
are of a liberal nature generally similar to that 
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(See attached chart 
on Latin American bilateral air agreements.) 
b. International Organizations. 
Argentina was the only Latin American 
country not invited to the 1944 Chicago Con- 
ference at which the Convention establishing 
ICAO was adopted. 
Since it adhered to the 
Convention on 4 June 1946, however, Argen- 
tina has participated actively in ICAO. 
Ar- 
gentina’s international airline, FAMA, is an 
active member of the International Air Trans- 
port Association (IATA). 
c. US Technical Assistance. 
Because of its Axis-oriented policy during 
World War II, Argentina did not benefit from 
the US-sponsored 
Inter-American 
aviation 
training and technical assistance programs. 
Moreover, it has not taken advantage of the 
opportunity to request US air or technical 
missions during the postwar period. 
4. 
Airlines. 
a. Argentine Scheduled Airlines. 
Before 1945, the airlines of Argentina were 
wholly privately owned. 
The Argentine Air 
Policy Law of 1945, however, made govern- 
ment participation in the airlines compulsory. 
Under this and subsequent decrees, three do- 
mestic carriers and one international airline 
were 
established. 
Until 
nationalization 
of 
these airlines in May 1949, the government 
held 20 percent of the capital of the domestic 
mixed 
companies, 
Aeroposta, 
ALFA, 
and 
ZONDA, and 30 percent of the capital of 
FAMA, 
the 
international 
‘chosen 
instru- 
ment.” 
The Dodero shipping and trading in- 
terests held a large part of the private stock of 
these companies. 
Nationalization of the mixed companies, in- 
volving sale of all private shares to the gov- 
ernment was decreed in May 1949, ostensibly 
because the mixed-company form of organiza- 
tion was uneconomic and resulted in severe 
financial losses which the state had to assume. 
In order further to reduce administrative 
costs and. improve services, the Argentine 
Government in November 1949 initiated an 
extensive reorganization of the nationalized 
airlines. 
All four carriers were merged into 
SECRET 
a single state entity known as Aerolineas Ar- 
gentinas. 
FAMA continues to be the instru- 
ment for transoceanic and major international 
operations, while domestic and regional in- 
ternational services are conducted under the 
name of Aeroposta. 
ALFA and ZONDA have 
ceased to exist. 
Until the necessary changes 
in power plants, panel instrumentation, and 
radio equipment can be effected to make the 
equipment of the three former airlines inter- 
changeable, 
operations 
will continue 
very 
much as in the past although functioning un- 
der a single administration and management. 
The military air transport line, LADE, has 
been maintained for pioneering new routes, for 
relieving the load on internal routes at peak 
traffic periods, and for operation of “national 
interest” services of little commercial interest 
to the regular airlines. 
Dollar exchange difficulties have seriously 
hampered Argentine efforts to acquire and 
maintain new US equipment. 
Utilization of 
FAMA’s DC-6 aircraft has been severely re- 
stricted by lack of spare parts. 
An Argentine 
order for five Convair 240 aircraft, moreover, 
has been subject to extended negotiations and 
has not yet been fulfilled because of lack of 
dollar exchange. 
(1) Aeroposta (Empresa Aerocomercial del 
Estado Aeroposta). 
Routes: Aeroposta serves the southern por- 
tion of Argentina, below an arbitrary line ex- 
tending from Buenos Aires in a generally 
southwest direction to the Chilean bound- 
ary. 
This area includes the agricultural and 
sheep-raising areas, as well as the Argentine 
lake region. 
Equipment: 
6 DC-3 
2 C-47 
59 JU-52/3 m 
Ownership: Government. 
Formerly a mixed 
company, re-organized in 1947 from an earlier 
privately-owned Aeroposta. 
(2) ALFA (Empresa lindane del Es- 
_tado ALFA). 
Routes: ALFA serves the northeastern part 
of Argentina, with Buenos Aires as the south- 
ern terminus. 
International routes are oper- 
ated to Asuncion and Montevideo. 
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TRUMAN 
PRESIDENT'S SECRETARY FILE. 
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‘ 
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SECRET 
AIRLINES OF ARGENTINA 
Number 
Route Miles* |Miles per Week (Various Types) 
AEROPOSTA 
4,089 
36,862 
‘| 100% Govt. 
ALFA 
2,976 
18,658 
100% Govt. 
ZONDA 
2,185 
37,868 
100% Govt. 
LADE 
1,886 
12,812 
100% Govt. 
FAMA 
9,166 
44,876 
100% Govt. 
TOTAL 
~ 
20,302 
151,040 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ORE Tr-350 
Equipment: 
5 DC-3 
2 Beechcraft C-45 
6 Cessna C-78 
2 Stinson Voyager 
1 Grumman Goose 
6 Noorduyn Norseman 
4 Short Sandringham 
Ownership: Government. 
Formerly a mixed 
company, reorganized in 1946 from the pri- 
vate “‘Corporacion.” 
(3) ZONDA 
(Empresa Aerocomercial 
del 
Estado ZONDA). 
Routes: ZONDA serves the densely popu- 
lated agricultural region of central Argentina 
with three routes, and the sparsely populated 
northwestern region with one route. 
ZONDA 
has taken over the cabotage services formerly 
provided by the US airline PANAGRA, on two 
routes: Buenos Aires-Cordoba-Mendoza; and 
Buenos Aires-Cordoba-Tucuman-Salta.. 
An international route is also operated, as 
an extension of the Buenos Aires-Mendoza 
route, to Santiago, Chile. 
With this route, 
ZONDA supplements FAMA’s Buenos Aires, 
_ 
Santiago nonstop service by providing inter- 
national service to the intermediate cities. 
Equipment: 
16 DC-3 
1 Avro Anson 
Ownership: Government. 
Formerly a mixed 
company set up in February 1946. 
(4) LADE (Lineas Aereas del Estado) 
Routes: LADE was established to operate 
feeder routes throughout Argentina, supple- 
menting 
the 
trunk 
routes of 
Aeroposta, 
ALFA, and ZONDA. 
Operations are at pres- 
ent confined to the central part of the country, | 
which includes the entire pampas agricultural 
region, except for one route extending into the 
foothills of the Andes at Bariloche and San 
Juan. 
Equipment: (Not included in the summary 
table of Latin American airline equipment, 
since LADE is operated by the Argentine Air 
Force and uses some Air Force transport 
planes.) 
1 DC-3 
1 Lockheed Electra 
15 JU-52/3 m 
2 Dewoitine 338 
2 Dewoitine 333 
Ownership: Government. 
Preceded by an- 
other airline of the same name, also operated 
by the Air Force. 
The routes of the old LADE 
have been taken over by other airlines, and 
the present LADE has established new routes. 
(5) FAMA (Empresa Aerocomercial del Es- 
tado FAMA). 
| 
Routes: As Argentina’s designated “chosen 
instrument,” FAMA has the right. to operate 
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| PRESIDENT'S. SECRETARY FILE! 
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all international routes. 
It operates all the 
long distance international services, but sev- 
eral routes to neighboring countries have been 
allocated to the “domestic’’ airlines. 
FAMA’s 
intercontinental 
routes 
connect 
Buenos Aires with the capitals of Spain, Italy, 
France, and the UK. 
These connections are 
made over two routes, both having a segment 
in common as far as Madrid (Buenos Aires-Rio 
de Janeiro-Natal-Dakar-Villa 
Cisneros-Mad- 
rid). 
At Madrid the routes branch, one con- 
tinuing to Paris and London, the other to 
Rome. 
It is planned to extend the latter 
route to the Near East. 
FAMA has an appli- 
cation pending before the US Civil Aeronautics 
Board for a route from Buenos Aires to New 
York via Sao Paulo or Rio de Janeiro, Belem, 
Port 
of Spain, and Habana. 
Continental 
routes operated by FAMA are: Buenos Aires- 
Santiago, 
Chile, 
and 
Buenos 
Aires-Porto 
Alegre-Sao Paulo-Rio de Janeiro. 
Equipment: 
6 DC-6 
6 DC-4 
5 Vickers Viking 
2 Avro York 
1 Lancastrian 
Ownership: Government. 
Formerly a mixed 
company set up in February 1946. 
FAMA is 
a member of the International Air Transport 
Association. 
b. Foreign Scheduled Airlines. 
_Argentina is served by two US companies, 
Pan American World Airways (via the east 
coast of South America) and PANAGRA (via 
the west coast). 
Moreover, a third US airline, 
Braniff International Airways, hopes to extend 
its Latin American service to Buenos Aires, 
via Asuncion, in the near future.* 
The fol- 
lowing other foreign operators also serve Ar- 
gentina: 
European: 
BOAC (British Overseas Airways Corpo- 
ration) (via both coasts) 
Air France 
KLM (Royal Dutch Airlines) 
SAS (Scandinavian Airways System) 
ALITALIA (Italy) 
IBERIA (Spain) 
Latin America: 
Cruzeiro do Sul (Brazil) 
Panair do Brasil 
CAUSA’ (Uruguay) 
LAN (Chile) 
* Braniff service over this route began during June 
1950. 
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EARRY 
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APPENDIX B 
BOLIVIA 
1. Government Organization for Civil Avia- 
tion. 
| 
Civil aviation in Bolivia is the responsibility 
of a Director General of Civil and Commercial 
Aeronautics acting under the jurisdiction of 
the Minister of Public Works and Communi- 
cation. 
A Special Aeronautics Commission, 
headed by the Foreign Minister and including 
other present and past members of the gov- 
ernment, was appointed 
in May 1948, to study 
the aviation scene in Bolivia. 
Its report was 
submitted in April 1949, but has not yet been 
approved by the Cabinet. 
With respect to 
administration of Bolivian civil aviation, the 
report recommends creation of a government- 
controlled airport administration authority, 
which would gradually assume control of all 
Bolivian airports, and establishment of a na- 
tional council of aviation similar to the US 
Civil Aeronautics Board. 
2. 
Domestic Civil Aviation Policy. 
The report of the Special Aeronautics Com- 
mission represents the thinking of officials 
whose opinions carry considerable weight with 
respect to air matters and hence is a fairly 
accurate guide to Bolivian air policy. 
In ad- 
dition to its recommendations concerning ad- 
ministration, 
the Commission 
also recom- 
mended that the surplus transport aircraft of 
the military Air Transport Squadron (ETA), 
which has flown some routes commercially, 
should be transferred either to the principal 
established 
airline, 
Lloyd 
Aero 
Boliviano 
(LAB), or to a new government-controlled 
commercial company. 
The Commission indi- 
_ Cated, however, that it preferred creation of a 
new Bolivian airline, which would not com- 
pete with LAB over the same routes. 
The 
services now operated within the country by 
the US carrier, PANAGRA, would not be ad- 
versely affected. 
The report comments cau- 
tiously that ‘cabotage, in principle, should be 
reserved for domestic companies, but that cir- 
cumstances may make it desirable to depart 
from this principle; therefore no rigidly na- 
tionalistic policy should be adopted. 
Subsi- 
dization is endorsed as an essential means of 
shaping the development of the industry and 
of giving it the financial support necessary to 
assure a reasonable profit. 
Competition, the 
report points out, is desirable but must be 
carefully controlled in the interest of both the 
public and the aviation industry. 
a. Civil Aviation Legislation. 
The administration and regulation of avia- 
tion in Bolivia was organized under the basic 
law of 25 October 1947, which transferred con- 
trol over Bolivian civil aviation from military 
to civil authorities, and established the Direc- 
torate General of Civil and Commercial Avia- 
tion. 
A Decree of 20 May 1948 and a Supreme 
Resolution of 7 August 1948 supplemented this 
law. 
New aviation regulations prepared by 
the Directorate have not yet been approved. 
Government relations with the domestic and 
international airlines are established on a con- 
tract basis. 
b. Regulation of Bolivian Airlines. 
Bolivian policy favors government partici- 
pation in airline companies, as reflected by the 
above-mentioned report and by the govern- 
ment’s present ownership of a 55 percent in- 
terest in LAB. 
Subsidization of airlines (LAB 
_and PANAGRA), 
air facilities and aero clubs 
has been practiced in the past and appears to 
be an accepted 
policy. 
Nationalization 
of 
Bolivian airlines is recognized as being beyond 
Bolivia’s financial means, however, and prob- 
ably would not be attempted except in an 
emergency. Controlled competition is favored 
at present, although LAB enjoyed a monopoly 
of domestic air services (PANAGRA cabotage 
services excepted) until flight authorization 
was granted the Bolivian Development Cor- 
poration in September 1947. 
as 
‘ 
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4APRY 
TRUMAN 
PRE 
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SBSIDENT'S SECRETARY 
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TARRY S. 
PRESIDENT'S SECRETARY FILE 
~ 
| 
TRUMAN 
SECREP 
c. Regulation of Foreign Airlines. 
Bolivia and Ecuador are the only Latin 
American countries which still permit foreign 
airlines to operate cabotage services. 
The US 
| 
airline, PANAGRA, serves some eight towns 
within Bolivia in addition to its international 
route through Bolivia, which stops only at La 
Paz. 
This privilege is interpreted by Bolivia 
as a temporary concession, until such time as 
the domestic airlines are in a position to ex- 
tend their services sufficiently to replace the 
foreign cabotage services. 
d. Promotion 
of Other 
Civil 
Aviation 
Activity. 
By the same law (25 October 1947) which 
created the Directorate General of Civil and 
Commercial Aviation, the executive branch 
of the Bolivian Government was authorized 
to proceed with the expropriation of air strips 
built within the country by private enterprise. 
The expropriated fields belong to the State, 
which has authorized LAB and PANAGRA to 
build facilities and administer the airports un- 
der contract, including some subsidy. 
Accord- 
ing to LAB’s present contract with the gov- 
ernment, its twenty airfields will pass to the 
operational control of the State on 31 Decem- 
ber 1951, with no compensation for the invest- 
ments made. 
PANAGRA will be compensated 
for the investments it has made, whether its 
facilities are taken over before or upon expira- 
tion of its present contract (which runs to 1 
April 1967). 
There is no airframe or engine industry in 
Bolivia. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Because 
of Bolivia’s landlocked 
position, 
civil aviation is of key importance to the coun- 
try. 
Bolivian policy with respect to interna- 
tional aviation has favored almost complete 
freedom of the air. 
The two bilateral air 
agreements concluded by Bolivia have been 
with Chile and the US and are both Fifth 
Freedom agreements. 
b. International Organizations. 
~ Bolivia is a member of the International 
Civil Aviation Organization (ICAO), but has 
lacked the funds to send a delegation to most 
ICAO meetings. 
Furthermore, it was among 
\ 
four Latin American members whose voting 
power was suspended by the 1949 ICAO Assem- 
§ 
bly for failure to meet their financial obliga- 
tions. 
c. US Technical Assistance. 
A CAA technical assistance mission has been 
assigned to Bolivia since early in 1948. 
4. 
Aijrlines. 
Domestic services in Bolivia are provided by 
LAB, PANAGRA, ETA, and the Air Transport 
Company of the Bolivian Development Corpo- 
ration. 
LAB was organized in 1925 and operated 
under German influence until 1941, when the 
Bolivian Government acquired 48 percent of 
the stock. 
The company was operated under 
contract until 1946 by PANAGRA, which put 
LAB operations on an efficient, safe basis. 
Upon termination of this contract, the com- 
pany was partially reorganized and the gov- 
ernment assumed a controlling interest of the 
stock. 
ETA has been ambitious to use its eight 
DC-3’s in expanded commercial operations 
within 
Bolivia. 
The Bolivian Development 
Corporation service, which uses two C-46 cargo 
planes, is a minor operation almost entirely 
limited to the La Paz-Reyes route. 
If ac- 
cepted, the Special Aeronautics Commission’s 
recommendation that the equipment of both 
ETA and the Development Corporation be 
transferred to LAB or to a new commercial 
company controlled by the government will 
reduce the possibility of competition in com- 
mercial air transport between the Defense 
Ministry (which controls ETA) and the Min- 
istry of Public Works (which controls LAB 
and the aviation activities of the Development 
Corporation). 
Establishment of a new com- 
mercial air. transport company, which the 
Commission 
considered 
preferable, 
would 
create indirect and controlled competition for 
LAB, with both carriers under the jurisdiction 
of the same government regulatory bodies. 
a. Bolivian Scheduled Airlines. 
(1) LAB (Lloyd Aereo Boliviano) 
Unduplicated 
Miles Scheduled 
Route Miles 
Per Week 
~4,010 
15,932 
i 
its 
from 
the 
the 
near 
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Routes: LAB operates only within Bolivia, 
its routes extending the length of Bolivia 
from north to south, and from La Paz in 
the west to Santa Cruzin the east. 
The west- 
ern part of LAB’s network serves principally 
the populous “altiplano” region; the eastern 
part of its network serves the lowlands from 
near the Brazilian border in the north to the 
Argentine border in the south. 
Equipment: 
7 DC-3 
1 C-46 
(During the recent revolt in Bolivia, 1 DC-3 
was destroyed and two others were flown to 
Argentina by the rebels. 
As of October 1949 
LAB had only 4 DC-3 aircraft and 1 C-46 avail- 
able for service). 
Ownership: 
Government—55 percent 
Nationals—25 percent 
US (PANAGRA)—20 percent 
b. PANAGRA. 
In addition to its international 
routes, 
PANAGRA serves the eastern part of Bolivia 
over two cabotage routes extending to the 
Brazilian border and thence to Campo Grande, 
Brazil. 
5. 
Foreign Scheduled. Airlines. 
The international routes of PANAGRA con- 
nect Bolivia with Peru, Chile, Argen 
and 
Brazil. 
Early in 1949, a second US airline, Braniff 
Airways, instituted its west coast service (Bal- 
boa-Guayaquil-Lima-La Paz) and in March 
established a non-stop Lima-Rio de Janeiro 
service overflying Bolivia. 
Panair do Brasil, 
which plans to operate a reciprocal Rio de 
Janeiro-Lima service overfiying Bolivia, has 
not yet begun operations over this route. 
SARRY S. TRUMAN 
“ARSIDENT 'S SECRETARY 
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JECRED 
APPENDIX C 
BRAZIL 
1. 
Government Organization for Civil Avia- 
tion. 
In order to fulfill the provisions of the Bra- 
zilian Air Code, an Air Ministry was created on 
20 January 1941 to direct all aviation activity 
in Brazil, both civil and military. 
Control 
over civil air affairs was vested in various di- 
visions of the Air Ministry having the follow- 
ing general functions: 
(a) Directory 
of Civil Aeronautics—respon- 
sible for all legal, technical, and administra- 
tive problems except the operational control 
of air traffic; 
inspects aviation 
clubs, air 
schools and 
air transport companies, 
and 
issues certificates and licenses on the basis of 
directives from the Directory of Supply. 
(b) Directory of Supply—responsible for in- 
specting aircraft. 
This is a military office. 
(c) Directory of Air Routes—responsible for 
organization and operation of airports, air- 
Way traffic control, and- communication and 
meteorological services. 
This is primarily a 
_ military organization. 
(d) Air 
Staff—a 
policy 
and 
planning 
agency, which functions only through the 
Minister of Air. 
| 
(e) Five Air Zone Commanders—military 
officers primarily concerned with military 
matters, but exercising authority over civil air 
affairs in their territories in a manner com- 
parable to that of US Civil Aeronautics Ad- 
ministration regional administrators. 
In June 1949, an Air Route Licensing Board 
was created by the Directory of Civil Aeronau- 
tics for certification of domestic airline routes. 
This body, similar to the US Civil Aeronautics 
flight frequencies 
and 
traffic 
stops, 
and 
handles “all other questions” of Brazilian air 
transport. 
_ 
‘International air policy is determined by a 
special committee 
(the CERNAI), which is 
Board, deals with route requests, regulates 
— 
dominated by the Air Ministry, although there 
is token representation of the Foreign Office. 
The chart on following page shows the re- 
lationship between 
the various 
functional 
units of the Brazilian Air Ministry. 
Through its Air Ministry, Brazil has at 
present probably the most extensive aviation 
organization of any country in Latin America. 
The Air Ministry’s primarily military charac- 
ter, with military men holding the majority 
of key posts, is attributable in part to its 
creation on the eve of war and to the strategic 
nature of the duties which were pressed upon 
it during the following four years. 
In a decree of 16 September 1946, President 
Dutra set forth the objectives and respon- 
sibilities of the Ministry: 
(a) to cooperate with the other agencies 
of the government in order to guarantee legal 
order and to assure the national defense; 
(b) to organize, equip and instruct the 
Brazilian Air Force; 
(c) to regulate, 
develop and coordinate 
civil and commercial aviation; 
(d) to coordinate and stimulate the aero- 
nautical industries of the country. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
Brazilian air policy finds its authority in the 
previously mentioned laws which created the 
Air Ministry and outlined its role. 
These are: 
(1) Decree Law No. 483 of 8 June 1938, the 
Brazilian Air Code, promulgated under powers 
delegated to the President of the Republic 
by Article 180 of the Constitution; (2) Decree 
Law No. 2961 of 20 January 1941, which 
_ereated the Air Ministry to direct all aviation 
activity, both civil ard military; and (3) De- 
cree Law No. 9888 of 16 Septembef 1946, which 
further defined the purposes and organization 
of the Air Ministry. 
Other decrees and orders 
HARRY 
TR 
| 
| PRESIDENT Is SEC
~ 
| 
SECRET 
(AIR MINISTER) 
r 
Dir. of Civil 
- 
of 
Dir, of Air 
_ Aeronautics 
Supply 
Routes 
Air 
Staff 
Zone-Command 
Officers 
Director Hae Route 
Board | 
Lema. 
Traffic 
Operations 
Private Flying 
Division 
Division 
Division 
have been issued from time to time supple- 
menting the foregoing legislation. 
b. Regulation of Brazilian Airlines. 
Brazilian national policy encourages the 
private ownership of airlines and the Brazilian 
Government has no financial interest in any 
airline. 
The State of Rio Grande do Sul, how- 
ever, has a 21 percent interest in VARIG, and 
the State of Sao Paulo, a 75 percent share 
in VASP. 
It is Brazilian policy, moreover, to 
assure the control of domestic air transporta- 
tion enterprises by nationals of Brazil. 
Subsidies are granted to airlines by the 
Brazilian Government solely for the develop- 
ment and operation of unprofitable routes of 
national interest. 
Past recipients of this aid 
have been Cruzeiro, Panair do Brasil, VARIG, 
and NAB. 
Since mid-1948, the Directory of 
Civil Aeronautics has taken firmer action to 
control competition and prevent a continu- 
ation of the severe three-year rate war which 
resulted from the mushrooming of many small 
air transport companies after the war. 
(See 
Development Div. 
ORE Tr-450 
below, Section 4, Brazilian Scheduled Air- 
lines.) 
c. Regulation of Foreign Airlines. 
Brazil reserves cabotage traffic for its do- j 
mestic airlines. Privileges for foreign carriers, 
including the carriage of international traffic, 
are negotiated through formal bilateral air 
agreements, although direct government-com- 
pany contracts are occasionally resorted to for 
the use of air facilities and similar privileges. 
For the most part, Brazil has pursued a re- 
strictive policy with respect to foreign non- 
scheduled operators, principally because of its 
desire to assure maximum utilization of avail- 
able scheduled airline capacity. 
Brazil has 
been willing in principle to grant permission 
for infrequent US non-scheduled commercial 
{ 
flights between the US and Brazil. 
On the 
other hand, it has generally denied flight 
clearance for US non-scheduled carriers oper- 
ating between Brazil and a third country, and 
| 
has resisted granting even technical stop per- 4 
mission on Brazilian 
territory 
for flights 
neithe 
Recen 
the U 
persor 
contre 
Foreig 
d. F 
tivity. 
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neither originating nor terminating in Brazil. 
Recently, however, Transocean Air Lines of 
the US secured permission to fly displaced 
persons from Europe to Recife and Natal under 
contract with IRO. 
(See below, Section 4 c, 
Foreign Non-Scheduled Operations.) 
d. Promotion of Other Civil Aviation Ac- 
tivity. 
With respect to civil aviation, the Brazilian 
Government’s over-all economy program has 
cut most heavily into appropriations for air- 
port development. 
The bulk of construction 
funds now being made available is devoted 
principally to maintenance and improvement 
of military airfields. 
Therefore, the initiation 
of a large-scale civil airport development pro- 
cram such as Argentin@has undertaken seems 
rather unlikely in the near future. 
Even the 
excellent wartime facilities in Brazil which 
the Air Ministry has taken over from the US 
have been poorly maintained. 
. Brazil is limit- 
ing itself to “only the indispensable” in im- 
existing facilities. 
Aero club training has been subsidized fairly 
generously to encourage private flying and 
thus to build up a reserve of pilots, as well as 
an air-minded public. 
The recent economy 
program, however, has caused a reduction in 
the subsidies to these clubs, and, at the same 
time, a relaxation of their ties to the govern- 
ment. 
A government-promoted aeronautical engi- 
neering school, the first of its kind in Brazil, 
has been established, advised, and staffed by 
US nationals. 
Air Force 
training 
schools, 
meanwhile, continue their extensive programs. 
All manufacture of aircraft in Brazil ceased 
oy the end of 1948. 
Until that time, the gov- 
ernment had promoted a few small enter- 
prises: (1) a small government factory at the 
Galeao Airport in Rio de Janeiro, which as- 
sembled trainers from parts shipped from the 
US; (2) the government-owned and operated 
Fabrica de Motores near Rio de Janeiro, which 
* assembled a few aircraft engines with parts 
‘rom the US; and (3) a privately owned, gov- 
e‘nment-subsidized 
plant at Lagoa Santos 
near Belo Horizonte, which had a contract to 
assemble a few AT-6 trainers but has been in- 
Operative since 1947 because of extended liti- 
gation. 
Two 
privately 
owned 
enterprises, 
moreover, turned out quite a few sport planes. 
These concerns were the Cia. Aeronautica 
Paulista, which producéd about 30 two-place 
© 
“Paulistinha” aircraft during 1948, and the 
Cia. Nacional 
de Navegacao Aerea, which 
turned out about 100 Piper Cub types. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Brazil has supported liberal air traffic prin- 
ciples in most of its formal negotiations for 
air agreements. 
In principle, it favors the 
multilateral approach for the negotiation of 
commercial traffic rights, reserving to bilateral 
negotiations the airline routes to be operated. 
Brazilian officials, moreover, have pointed out 
that their country’s support for the Mexican 
proposal in favor of a restrictive multilateral 
air agreement at the 1947 Geneva meeting of 
the International Civil Aviation Organization 
(ICAO) 
did not represent actual Brazilian 
policy. 
Brazil bases its bilateral negotiations upon 
the Bermuda type agreement concluded with 
the US on 6 September 1946, which was the 
first agreement of this type concluded by the 
US with a Latin American country. 
Since 
that time, Brazil has signed similar agree- 
ments with the UK, Portugal, France, the 
Netherlands, 
Norway, 
Sweden, 
Denmark, 
Switzerland, Argentina, Chile, and Lebanon 
and has nearly completed negotiations with 
Spain.* 
Parts 
of 
the 
Argentine 
agree- 
ment have been criticized, 
particularly 
in 
Brazil, as being susceptible of restrictive in- 
terpretation, with the result that the agree- 
ment has not yet been ratified. 
Otherwise, 
Brazil has adhered closely to Bermuda prin- 
ciples. 
b. International Organizations. 
Brazil has been an active member of ICAO 
since its inception in 1944 and has supported 
the organization as fully as Brazilian finances 
have permitted. 
Panair do Brasil, Cruzeiro, 
and VARIG are the country’s airline members 
*The 
Brazil-Spain 
Air 
Transport 
Agreement, 
signed 28 November 1949, contains restrictive pro- 
visions and principles not found in other Brazilian 
air agreements. 
It is considered as representing a 
change in Brazilian aviation policy in an effort fur- 
ther to protect Brazilian international air services. 
| 
| 
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ERY s. TRUMAN 
PRDST 
SECRETARY FT 
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of the International Air Transport-Association 
lines, eight non-scheduled, and about tent 
atd 
(IATA). 
charter or taxi services still operating in 1949.4§ 
pet 
c. US Technical Assistance. 
| 
with-@ 
but 
other Latin American country from the US 
P 
Pau 
operations or had ceased operating for more 
A 
Inter-American Aviation Training Program, 
; 
than one year. 
Enforcement of minimum r 
trar 
the Airport Development Program, and other 
quirements for maintenance and facilities has 
tran 
: 
wartime measures of hemisphere cooperation. 
i 
threatened to force the remaining marginal 
Air 
Many pilots, technicians, and administrative 
. 
; 
rsonnel were trained in the US and a string 
operators out of business. 
In addition, on 
Aere 
; 
_ 
of the oldest scheduled operators in Brazil, 
airli 
of large, modern air bases was built around 
eet 
a 
. 
- 
NAB, long a recipient of government subsidy 
trair 
Brazil . bulge” under US sponsorship. 
for up to 80 percent of its services, also be-@® 
been 
US 
teghnical cooperation with Brazil in air 
came insolvent during the latter part of 1948.@% 
the | 
i 
affairs is accomplished at present principally 
The six major scheduled airlines have also#™ 
with 
i 
through private channels. 
The Aeronautical 
experienced severe economic difficulties in the@# 
Pana 
Institute at San Jose do Campo near Sao _ si postwar period, with the result that Panai 
Para 
i 
Paulo, for instance, has ne age 
do Brasil initiated a strong economy program,#™ 
sent 
; 
US aviation technicians and professors under 
Cruzeiro was close to bankruptcy, and Aero-@ 
cause 
; 
private contract in order to build up a native 
vias Brasil suffered serious financial losses. 
govet 
: 
corps of aeronautical engineers. 
VASP, VARIG, and REAL, however, with theirg 
founc 
more efficient and conservative managements,@™ 
Edua 
4. 
Airlines. 
were able to minimize their financial losses.¥ 
: 
a. Brazilian Scheduled Airlines. 
Despite the foregoing difficulties, these six air- : 
Brazil's vast area and its lack of adequate 
lines managed to retain their tight hold 
} 
surface transport has made the country afer- 
the Brazilian air traffic market, as indicated§ 
tile field for the development of an extensive 
in the following table showing the percentage ) 
, 
and intensive air transport network. 
Anum- 
Of Brazil’s total passenger and freight air# 
aad 
ber of circumstances, including the air-mind- 
mileage being flown by each airline in 1948. 
§ 
edness of recent Brazilian governments, their 
Total 
transport, the availability of cheap surplus 
pap 
38.2 
33.06 
en 
aircraft in the US, and the technical and 
Cruzeiro 
22.1 
25.20 
| 
financial assistance furnished by the US since 
Aerovias 
. 
129 
18.00 
Aerc 
1941, have promoted the great postwar expan- 
bg 
- 
12.40 
sion in Brazilian scheduled and non-scheduled 
prar. 
Aero 
air services. 
As a consequence, however, an 
excessive number of small companies came 
Total, 
97.1 
94.36 
ILAT. 
! 
into being, creating a condition of serious 
six airlines 
LAP 
competitive imbalance and leading to a violent 
rate war which also threatened the excellent 
Pana: 
safety record of Brazilian airlines. 
The finan- 
The outstanding recent development 
in 4 
cial condition of several companies finally be- 
 P*82illan aviation was the purchase of Aero- 
REAI 
came so acute that the government took meas- 
V/@S Brasil by VASP in 1949, and its resale in 
§ 
VARI 
ures to control the competition by stricter ap- 
Cruze 
plication of existing regulations and institu- 
SAVA 
= 
prise owned and controlled almost wholly by 
: 
ee 
tion of new ones. 
These steps,including more 
4, city and State of Sao Paulo, temporarily 
VASP 
) 
stringent regulations on capitalization, have 
in control of the third ranking Brazilian air- 
! 
T 
| 
forced almost a dozen marginal operators to__jine, in terms of passenger-kilometers flown 
* Th 
: 
suspend operations temporarily or perma- 
during 1948. 
The present owners of Aero- 
are 1 
: 
nently, leaving nine scheduled Brazilian air- 
vias Brasil secured control in February 1950: 
— 
} 
Z 
“dpers 
of 
| BARRY 
S. 
TR TRUMAN 
| PRESIDENT'S. SECRETARY FILE 
| 
‘SECREY
out ten 
in 1949, 
with- 
an com-@ 
~imenced 
“or more 
-lnum re- 
tles has 
larginal 
on, one 
Brazil, 
subsidy 
be- 
of 1948. 
. 
also: 
‘>in the 4 
Panair 
gram, @ 
Aero- 
| losses. § 
their 
. ents, 
air- 
‘qd on 
-ated 
tage 
+8. 
Total 
rs 
at double the price paid by VASP a year earlier. 
Details of the transactions are rather obscure 
but reportedly involve the political maneuver- 
ings of Adhemar de Barros, Governor of Sao 
Paulo, who is seeking the presidency of Brazil. 
An important factor in the Brazilian air 
transport picture is the air mail and military 
transport service operated by the Brazilian 
Air Force (FAB). 
This service, the Correio 
Aereo Nacional (CAN) is strictly a military 
airline, operated ostensibly with the aim of 
training FAB pilots. 
Civilian passengers have 
been frequently carried by CAN, however, with 
the result that it has occasionally competed 
with the scheduled airlines, especially with 
Panair do Brasil on its service to Asuncion, 
Paraguay. 
CAN’s operations do not repre- 
sent any great threat to the civil airlines be- 
cause the latter and the democratic Brazilian 
government keep CAN in line. 
CAN was 
founded as Correio Aereo Militar by General 
Eduardo Gomez in 1931, for the operation of 
air mail routes within Brazil and to Paraguay 
which were inoperative at the time, owing, 
CAN’s proponents claimed, to the lack of initia- 
tive of Brazilian private capital. 
During 1948, CAN flew an average of 60,000 
miles per week over a route network of 38,000 
miles. 
Aircraft 
for these operations were 
drawn from two air transport groups of the 
FAB Transport Command whose equipment 
includes 43 C-47’s and 2 C-46’s. 
(1) Aero Geral (Aero Geral, Lida.) 
Routes: Aero Geral operates along the coast 
of Brazil between Santos and Natal via Rio 
de Janeiro, Vitoria, Belmonte, Salvador, Ara- 
caju, Penedo, Maceio, Recife, and Cabedelo. 
Equipment: 
1 C-46 
3 PBY-5 
: 
Ownership: 100 percent private Brazilian. 
Aero Geral was established in the summer of 
19473. 
AIRLINES 
OF BRAZIL 
( October ,1949 ) 
Airline 
Unduplicated 
Scheduled 
ot ae 
Ownership 
Route Miles” 
[Miles per Week (Various Types) 
| 
phere Geral 
1,572 
3,144 
100% Private 
Aerovias Brasil 
12,226 
98,597 
{ 
LATB 
1,410 
5,188 
100% Private 
LAP 
1,605 
13,918 
100% Private 
Panair de Brasil 
| 
52% Private 
21,408 
176,764 
{ re 
REAL 
2,519 
60,856 
18 ~ 
100% Private 
VARIG 
2,680 
40,403 
100% Private 
Cruzeiro 
10,187 
125,401 
(26 
100% Private 
_jSAVAG 
633 
4,809 
100% Private 
VASP 
2,892 
60,450 
100% Private 
TOTAL 
73 ,064 
089 530 
158 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ORE Tr-550 
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TRUMAN 
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PRE S IDENT 
| 
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(2) Aerovias Brasil 
(Empresa de Trans- 
portes Aerovias Brasil, S.A.). 
Routes: 
Domestic: Aerovias Brasil serves the eastern 
part of Brazil with a more extensive network 
in that area than any other Brazilian airline. 
Its system is composed of three main route 
groups: 
(a) routes along the Atlantic Coast 
from Porto Alegre as far north as Belem; (b) 
interior routes straight north from Sao Paulo 
to Belem; and (c) a route extending north 
from Rid de Janeiro through Belo Horizonte 
to Lapa, where it branches off into two routes, 
one to Parnaiba and the other to Fortaleza. 
International: Aerovias Brasil’s only inter- 
national route at present is to the US, via 
Caracas and Ciudad Trujillo to Miami, Florida. 
Equipment: 19 DC-3 
Ownership: 
91 percent private Brazilian 
9 percent US (TWA) 
Aerovias was organized in 1942 as a sub- 
sidiary of the extensive TACA Airways System 
(see Panama, Section 4, Airlines). 
TACA’s 
holdings were bought by Brazilians when the 
company was reorganized in 1947. 
In Febru- 
ary 1949, VASP acquired an 82 percent in- 
terest in Aerovias Brasil, but then resold this 
| 
share early in 1950 to private Brazilian in- 
terests. 
(3) LATB (Linha Aerea Transcontinental 
Brasileira, S.A.). 
Routes:. LATB operates between Rio de 
Janeiro and Sao Paulo, and from Rio de 
Janeiro to Recife along the Brazilian coast. 
Equipment: 
5 DC-3 
| 
1 Beechcraft C-45 
4 Avro Anson 
Ownership: Believed to be 100 percent pri- 
vate Brazilian. 
LATB was organized in 1944. 
(4) LAP (Linhas Aereas Paulistas, S.A.) 
Routes: LAP operates between Rio de Ja- 
neiro and Sao Paulo, and along the coast: Rio 
de Janeiro-Vitoria-Caravelos-Ilheus-Salvador- 
Aracaju-Maceio-Recife-Campina Grande. 
Equipment: 
4 DC-3 
1 Lockheed Hudson 
Ownership: Believed to be 100 percent pri 
vate Brazilian. 
LAP was organized in 1943. 
(5) PAB (Panair do Brasil, S.A.). 
Routes: 
Domestic: The four main groups of domes 
tic routes operated by PAB are: (a) the coastal 
route from Porto Alegre to Belem through 
, 
most of the larger coastal cities; 
(b) the 
Amazon route extending from Belem the f 
length of the river to Iquitos (Peru), with 
¢ 
subsidiary route branching off at Manaus 
te 
Porto Velho; (c) a route from Rio de Janeiro 
north through Belo Horizonte to Belem; and 
(d) the routes westward from Rio de Janeirc 
to Campo Grande, Corumba and Cuiaba, and 
from Rio de Janeiro through Sao Paulo, Curia 
tiba and Iguassu Falls to Asuncion (Para-4 
guay). 
PAB’s 
remaining 
domestic 
routes 
serve the regions near Sao Paulo, Rio de Ja-¢ 
neiro and Belo Horizonte. 
International: Within South America, PAE 
operates international routes to Iquitos, Peru,# 
and to Asuncion, Paraguay, both mentioned 
above, as well as a third route to Montevideo,4 
Uruguay, and Buenos Aires, Argentina. 
Out- 
side South America, PAB operates a route orig-4 
inating in Buenos Aires with stops at Monte- 
video, Rio de Janeiro, Natal, Dakar, and Lis- 
bon. 
From Lisbon, one branch of this route 
extends to London, via Paris, another to Istan- 
bul via Madrid and Rome, and a third through? 
Madrid to Zurich and Stuttgart. 
A PAB ap- 
plication is pending before the US Civil Aero- 
nautics Board for route to Miami. 
. 
Equipment: 
Lockheed Constellation 
19 DC-3 
4 PBY-5 
Ownership: 
92 percent private Brazilian 
48 percent US (PAA) 
: 
PAB has been a Pan American Airways 
(PAA) subsidiary since 1930 (one year after it 
was founded). 
PAA held all shares until 1943, 
when it reduced its interest to 58 percent. 
Ing 
1947, the present stock ownership ratio was 
established. 
| 
(6) REAL: (Transportes Aereos Real, S.A.). 
Routes: REAL operates throughout 
the 
State of Sao Paulo and extends 
into the 
neighboring States of Minas Gerais, Parana, 
Rio Grande do Sul and the Federal District. 
It also 
neiro, 
as farc 
Equi} 
Owne 
REAL 
(7) 
Rio Gra 
Route 
all part 
connect 
via Flor 
connect. 
an inter 
Eq mip 
Ow ne7 
State of 
about 21 
ed in Mé 
mally or, 
(8) 
Sul, Ltdc 
Routes 
tends alo 
Porto Al: 
up the 
. 
Janeiro, 
Sao Paul 
Connertix 
this routs 
Campo C 
route cor 
Velho, ar 
Cruzeiro 
from Rio 
another, 
 Zuelan ail 
Change o 
’ 
‘ 
of 
S 
I 
>
Somes- 
@ 
Oastal 
rough 
t 
pen 
the 
full 
vith a 
tog 
 aneiro 
nt pri- 
1943. 
and 
neiro 
@ 
i 
SECRET 
It also connects Sao Paulo with Rio de Ja- 
neiro, and with many of the southern cities 
as far down as Porto Alegre. 
Equipment: 
14 DC-3 
2 Lockheed Lodestar 
2 Bristol Wayfarer 
Ownership: 100 percent private Brazilian. 
REAL was organized in 1946. 
(7) VARIG (S.A. Empresa de Viacao Aerea 
Rio Grandense). 
Routes: VARIG operates extensive routes to 
all parts of the State of Rio Grande do Sul, 
connects Porto Alegre with Rio de Janeiro, 
via Florianopolis, Curitiba and Sao Paulo, and 
connects Porto Alegre with Montevideo over 
an international route. 
Equipment: 
12 DC-3 
7 Lockheed Electra 
2 C-46 
2 Junkers F-13 
1 Noorduyn Norseman 
Ownership: 
State of Rio Grande do Sul is believed to hold 
about 21 percent of the capital stock. 
Found- 
ed in May 1927, VARIG is Brazil’s oldest for- 
mally organized airline. 
(8) Cruzeiro (Servicos Aereos Cruzeiro do 
Sul, Ltda.). 
Routes: Cruzeiro’s domestic network ex- 
‘ends along the Brazilian coast from Belem to 
Porto Alegre. 
From Belem, a route extends 
up the Amazon to Manaus. 
From Rio de 
Janeiro, a route extends westward through 
Sao Paulo to Corumba on the Bolivian border. 
Connections for points in Bolivia are made on 
this route with the US carrier, PANAGRA, at 
Campo Grande. 
From Corumba, Cruzeiro’s 
route continues northward to Cuiaba, Porto 
Velho, and then to Xapuri, Acre Territory. 
Cruzeiro also operates an international route 
‘rom Rio de Janeiro 
Buenos Aires, and 
<nother, in conjunction with LAV, the Vene- 
zuelan airline, from Rio de Janeiro to Caracas. 
Change of aircraft on the latter route is made 
é 
° 
100 
percent 
Brazilian. 
The 
- 
at Boa Vista, Brazil, near the Venezuelan 
border.* 
Equipment: 
22 DC-3 
2 DC-4 
2 Focke-Wulf 200 
Ownership: 100 percent private Brazilian. 
Organized by German interests in 1927, Cru- 
zeiro took its present name when al] German 
influence was eliminated in 1942. 
(9) SAVAG 
(Sociedade .Anonima 
Viacao 
Aerea Gaucha). 
Routes: SAVAG connects Porto Alegre, capi- 
tal of the State of Rio Grande do Sul, with 
three cities in the southern part of the State: 
Bage, Pelotas, and Rio Grande. 
(These cities 
are also served by VARIG.) 
Equipment: 
2 Lockheed Lodestar 
(One or two DC-3 aircraft have 
been lost recently in crashes.) 
Ownership: 100 percent private Brazilian. 
SAVAG was organized in 1946. 
(10) VASP (Viacao Aerea Sao Paulo, S.A.). 
Routes: VASP operates domestic routes only, 
connecting the City of Sao Paulo with: 
(1) 
Rio de Janeiro; 
(2) Goiania, capital of the 
State of Goiaz; and (3) the southern and cen- 
tral portions of the State of Sao Paulo. 
Equipment: 
17 DC-3 
5 JU-52 
Ownership: 
100 percent 
Brazilian. 
The 
State of Sao Paulo, the City of Sao Paulo, and 
the Bank of the State of Sao Paulo together 
own approximately a 75 percent controlling 
interest in VASP. 
b. Foreign Scheduled Airlines. 
Three US airlines serve Brazil on regular 
international schedules: Pan American World 
_ Airways, from the US to Belem, Rio de Ja- 
neiro, Sao Paulo, and Porto Alegre (thence 
to Montevideo and Buenos Aires); Braniff In- 
* Cruzeiro was granted a Foreign Air Carrier per- 
mit by the US CAB on 10 February 1950 authoriz- 
| 
ing it to operate service to Washington and New 
York via intermediate points in Trinidad, Puerto 
Rico and the Dominican 
Republic. 
This service 
had not commenced by June 1950. 
*P 
of 
Ry. 
HARRY S 
RESTPENT ts SEC 
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-SECR 
ternational Airways, from the US with a non- 
In 
addition, 
the 
Argentine-flag 
carrier‘ 
stop Lima-Rio de Janeiro service, inaugurated 
FAMA, stops at Rio de Janeiro and Natal en: 
early in 1949; and PANAGRA, from Bolivia to 
route to Europe, and the Uruguayan airline, ; 
Campo Grande in the west of Brazil. 
PLUNA, operates between Montevideo andt 
European airlines and the Brazilian cities 
th 
Porto Alegre. 
ey serve en route to Buenos Aires are: 
pe 
on 
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laced 
| 
gg Rio de 
persons under contract with the International # 
BOAC (British Over- 
—Natal, Rio de Janeiro 
Refugee Organization (IRO) from Europe as ) tion. 
seas Airways Cor- 
and Sao Patio 
far as Recife and Natal, where passengers are 
Civ 
poration) 
transferred to Cruzeiro'do Sul. 
(The latter 
a Di 
i 
KLM (Royal Dutch 
—Recife and Rio de 
has been acting for some time as Transocean’s 
# 
actin 
Airlines) 
Janeiro 
agent in Brazil.) Transocean expects to make 
SAS (Scandinavian 
—Recife and Rio de 
about fifty such trips before this agreement is # 
‘C5 
Airway System) 
Janeiro 
terminated upon expiration of IRO in March 
¢ 
creat 
Iberia (Spain) 
—Natai 
1950. 
ree 0 
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In acdc 
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yan airline, 
and/ 
APPENDIX D 
CHILE 
1. 
Government Organization for Civil Avia- 
tion. 
_ 
Civil aviation in Chile is the responsibility of 
a Directorate General of Aeronautics (DGA) 
acting under the jurisdiction of the Minister of 
National Defense. 
A Civil Aeronautics Board 
(CAB), patterned after that of the US, was 
created during 1948. “It is composed of a Di- 
rector of Aeronautics, who is also chairman of 
the CAB, a representative of the Foreign Of- 
fice. a representative of the National Council 
of Communications (in the Ministry of Public 
_ 
Works and Communications), and two repre- 
sentatives appointed by the President of Chile. 
In addition, there is a Secretary General of the 
CAB, who is also chief of the Division of Law | 
and Air Transport in the DGA. 
The National 
Council of Communications advises the gov- 
ernment on domestic aviation policy through 
an Air Transport Committee and on interna- 
Ministry of Defense ] 
tional aviation policy through an Air Naviga- 
tion Committee. 
Chilean Air Force control of 
the DGA and of the national airline, LAN 
(Linea Aerea Nacional), is somewhat tempered 
by civilian domination of the CAB and the 
committee of the Communications Council. 
Nevertheless, conflicts of opinion between civil 
and military authorities have seriously hin- 
dered the progress of civil aviation in Chile 
during the past few years. 
The military, for 
example, has succeeded in holding up legisla- 
tion which would provide the CAB with auton- 
omy and with funds to execute its functions, 
including Chilean representation in interna- 
tional civil aviation organizations. 
Chile’s air 
communications system and its airports are 
operated and controlled by the air force within 
the DGA. 
The relationship between the gov- 
ernment agencies concerned with civil avia- 
— 
tion is indicated in the following chart: 
Ministry of Public Works 
and Communications 
| | 
Civil Aeronautics Board 
Under Secy. of Aviation 
Air Force 
of Aeronautics 
Chilean 
General 
Communication 
Air Transport 
Air Navigation 
Committee 
Committee 
National Council of 
Safety 
| ry E 
Aviation 
Law and Air 
Transport 
Aviation 
| 
ORE Tr- 650 
of 
|} 
s. TR 
j 
ENT'S SECRETAR 
SECRET 
| 
| 
| 
‘ 
‘ 
| 
: 
| 
| 
| 
| 
;
* 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
The organic law of the Chilean Air Force 
created a Directorate General of Aeronautics 
to control commercial and private flying and 
to enforce rules and regulations of aerial navi- 
gation. 
The Chilean Civil Aeronautics Board was 
created by Decree No. 42 of 31 January 1948, 
as a direct dependency of the Ministry of Na- 
tional Defense. 
However, additional legisla- 
tion increasing its autonomy and providing 
funds for its work has been held up indefi- 
nitely. 
A Civil Aeronautics Code for Chile was 
approved by the Chamber of Deputies in Sep- 
tember 1947, but has not yet been acted upon 
by the Senate. 
By a decree published in Jan- 
uary 1948, regulations were established gov- 
erning the granting of concessions and per- 
mits by the CAB to commercial airlines. 
b. Regulation of Chilean Airlines. 
It is Chilean policy to maintain a govern- 
ment-owned and financed airline as the sole 
scheduled Chilean operator for routes within 
Chile and to other countries. 
Though an in- 
cependent entity, the national airline, LAN, is 
owned and subsidized by the government and 
effectively controlled by the air force, which 
provides most of the airline’s pilots and key 
officials, and which dominates the government 
regulatory body, the DGA. 
The establishment 
of additional Chilean 
airlines must be approved by both the CAB 
and LAN. 
Direct competition with LAN is 
not permitted, although two small companies 
have recently been authorized to establish 
scheduled services supplementing LAN opera- 
tions.. Charter and taxi services are also of- 
fered by one of these companies, and an all- 
cargo service is being proposed by a third com- 
pany. 
The law of 16 February 1949 extended 
to any other commercial airline the same cus- 
toms and tax exemption privileges previously 
enjoyed only by LAN. 
c. Regulation of Foreign Airlines. 
Until 1946, the US carrier PANAGRA en-. 
joyed cabotage rights in Chile, sharing sched- ~~peceuliar geographical position with respect to 
uled service within the country with LAN. 
Cabotage traffic for foreign airlines, however, 
is now prohibited. 
Foreign airlines are al- 
QECRET 
lowed to operate scheduled services to Chile on 
the basis of concessions granted by the Chil-§ 
ean CAB. 
Other foreign flights over Chilean 
territory must also be authorized by this body. § 
d. Promotion of Other Civil Aviation Ac-¥ 
tivity. 
LAN is awarded an annual subsidy for air-4 
port development. 
However, the amount of% 
funds allotted to LAN or through other agen-@ 
cies for the development and improvement of 
air facilities and navigation aids has been§ 
very limited. 
The continued inability of theg 
government to finance adequate facilities and 
navigational aids for LAN, as well as the reluc- 
@ 
tance of the air force to cooperate in this re- 
spect, has prevented, for example, the estab-% 
lishment of regular all-year service to the¢ 
south of Santiago. 
The limited funds which § 
have been available, therefore, have neces- 
sarily been used for the improvement and 
maintenance of Chile’s international airports. 
The government is anxious to support and 
encourage aero clubs, but has been able to sub- § 
sidize this activity only to a limited extent. 
Ing 
spite of insufficient funds and lack of adequate 
¥ 
flying equipment and spare parts, however, 
aero club flying in Chile has increased rapidly. 
¥ 
There is no aircraft engine or airframe in- 4 
dustry in Chile. 
3. 
International Civil Aviation Policy, 
a. Air Traffic Policy and Air Agreements. 
Until 1947, it appeared that Chilean air pol- 
§ 
icy endorsed 
restriction 
of Fifth Freedom 
@ 
rights for foreign air carriers. 
In May 1947, 
however, Chile changed its attitude and con- 
cluded a liberal (Bermuda type) air agreement 
with the US. 
Chile followed the form of this 
agreement 
in other 
bilateral 
negotiations 
shortly after the US agreement was concluded. 
The civil aviation policy of Chile, therefore, is 
@ 
directly opposed to the Argentine-sponsored 
principles of a “regional cabotage” bloc and a 
predetermined division of traffic (see Argen- 
tina, Section 3, International Civil Aviation 
Policy). On the other hand, Chilean policy 
has had to sake into account the country’s 
Latin American trunk airline routes, especially 
the relatively isolated location of its capital 
and pfincipal 
city, Santiago. 
Recognizing 4 
that 
forei 
inter 
tory 
via tl 
ernm™ 
air fl 
to Cr 
area. 
riers 
stop 
servic 
Ch: 
ment. 
Brazi 
b. 
Chi 
fini 
ternal 
(ICAC 
memkt 
sentec 
ber 1¢ 
Some 
the m 
withd) 
tre ac 
The ci 
nowev 
civil a. 
Oppose 
represt 
group. 
progre 
Hamilt 
Civil A 
sion ot 
torate 
a leace 
renrese 
suppor 
cated t 
LAN 
Transp 
A US 
Mission 
numerc 
Govern 
Civil av 
| 
S. TRUMAN 
RSIDENT ' s SECRETARY 
| 
? 
> 
| 
| 
| 
| 
‘
of 
relue- 
hel 
= 
Chil- 
§ 
is body. 
Ace 
nent of 
| 
| 
in- 
i 
“hile on 
) 
Chilean 
for air- 
agen- 
been 
of the 
@ 
esand 
@ 
us re- 
estab- 
oO the 
which 
§ 
neces- 
and 
orts. 
and 
 Sub- 
uate 
over, 
‘dly. 
SECREF 
that an unrestricted aviation policy toward 
foreign carriers would probably result in many 
international flights overflying Chilean terri- 
tory (en route to Buenos Aires, for example, 
via the west coast of South America), the Gov- 
ernment of Chile has followed an international 
air transport policy designed to assure service 
to Chile on the principal airline routes of the 
area. 
It has therefore insisted that air car- 
riers crossing Chile make at least one traffic 
stop within the country, direct or connecting 
service to Santiago being mandatory. 
Chile now has bilateral air transport agree- 
ments with the US, the UK, Argentina, Bolivia, 
Brazil, and Peru. 
b. International Organizations. 
Chile has experienced considerable difficulty 
in financing delegations to meetings of the In- 
ternational 
Civil 
Aviation 
Organization 
(ICAO), of which the country has been a 
member since early 1947. 
It was not repre- 
sented, for example, at the important Novem- 
ber 1947 ICAO Assembly meeting in Geneva. 
Some high government circles, particularly 
‘he military, are seriously considering Chile’s 
withdrawal from ICAO, allegedly because of 
(ne acute shortage of dollar exchange in Chile. 
The civilian elements concerned with aviation, 
nowever, which are more actively promoting 
Civil air activities in the country, are strongly 
opposed to withdrawal of Chile’s international 
representation. 
Outstanding 
among 
this 
sroup, as well as in his contribution to the 
Dbrogress of civil aviation in Chile, is Edward 
Hamilton, Secretary-General of the Chilean 
_ Civil Aeronautics Board and Chief of the Divi- 
sion of Law and Air Transport in the Direc- 
‘orate General of Aeronautics. 
He has been 
@ leader both in Chilean aviation and in its 
representation abroad, and has consistently 
supported the liberal aviation principles advo- 
cated throughout the world by the US. 
LAN is a member of the International Air 
Transport Association (IATA). 
_¢. US Technical Assistance. 
A US Civil Aviation Technital Assistance 
Mission, set up in Chile in 1948, submitted 
numerous recommendations to the Chilean 
Government for improvement of the country’s 
Civil aviation facilities. 
Chile is now request- 
— 
a 
A 
> 
ing the services of an airways expert when a 
new US mission can be assigned. 
4. 
Aijrlines. 
a. Chilean Scheduled Airlines. 
From 1932, when it was organized, until 
early 1949, the Chilean national airline LAN 
(Linea Aerea Nacional), enjoyed a monopoly of 
Chilean-flag scheduled air transportation. 
In 
May and June of 1949, however, concessions 
were granted to two small Chilean airlines to 
conduct 
scheduled 
services 
supplementing 
LAN operations. 
A number of factors have hampered LAN’s 
efforts to expand and improve its services. 
In 
1948, for instance, the company was unable to 
fulfill its new flight schedules when its four 
new Martin 202 aircraft were grounded for 
manufacturer’s 
design 
changes. 
Overhaul 
and repair difficulties with these same aircraft 
again interfered with flight schedules in the 
summer of 1949. 
Moreover, lack of adequate 
airfield, air navigation, and meteorological fa- 
cilities in the southern part of the country has 
handicapped LAN’s efforts to provide regular 
service in that region. 
The company has also 
been plagued with personnel problems to the 
extent that a full-scale investigation of the 
company’s operations was recently ordered, 
with a view to eventual reorganization. 
Government subsidization of LAN opera- 
tions has been increased considerably since 
1940. 
Continued heavy subsidies, however, 
are required to cover the company’s operating 
deficits. 
Some economies have been effected 
through the joint maintenance by LAN and 
PANAGRA of a meteorological service at San- 
tiago which supplies all aircraft with weather 
data. 
(1) LAN (Linea Aerea Nacional). 
Routes: 
Domestic: The main domestic route oper- 
ated by LAN stretches the full length of Chile 
from Arica in the north, on the Peruvian 
border, to Punta Arenas in the extreme south 
of Chile, on the Straits of Magellan. 
International: LAN operates one interna- 
tional route, a non-stop service from Santiago 
to Buenos Aires, using its Martin 202’s. 
LAN 
has long planned to inaugurate service to 
Lima, Peru, and to La Paz, Bolivia, on the basis 
‘ 
‘5 
a 
| HARRY 
PRE 
TRUMAN 
SIDEN?T 
RETARy 
~ 
: 
| 
’ 
} 
| 
$ 
4. 
> 
‘
na 
SEOREL 
AIRLINES 
OF CHILE 
. 
( October, 1949) 
Number 
Airline 
Unduplicated 
Scheduled 
of Aircraft 
Ownership 
LAN 
2,997 
26,331 
100% Govt. 
LIPA SUR 
| 
567 
8,964 
100% Private 
TOTAL 
3,564 
35,295 
a 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
of bilateral air agreements which Chile has 
with those countries. 
‘These plans have been 
held up, however, principally because of LAN’s 
equipment problems. 
™ 
Equipment: 
4 Martin 202 
6 DC-3 
4 Lockheed Lodestar 
6 Lockheed Electra 
LAN is now taking delivery on its order for 
six De Havilland “Dove”’ aircraft to be used in 
“feeder-line” service. 
These aircraft are being 
acquired from the UK chiefly because of at- 
tractive credit terms and Chile’s prevailing 
dollar shortage. 
Ownership: 
100 percent. Chilean Govern- 
ment. 
(2) LIPA-SUR (Linea Aerea Pacifico Sur). 
Routes: LIPA-SUR was authorized by the 
Chilean CAB early in 1948 to operate an air 
taxi service between Santiago and the tourist 
districts in the southern lake regions of Chile. 
In July 1949, it was authorized to conduct 
scheduled service over this route and was des- 
ignated by the Chilean CAB to operate be- 
tween Santiago and San Carlos de Bariloche, 
Argentina. 
Authority 
for Chilean 
service 
into this Argentine tourist area is derived from 
the Argentine-Chilean Air Agreement of De- 
_ 
cember 1948. 
LIPA-SUR’s permit from the 
Chilean Government for scheduled services is 
of three years’ duration. 
ORE Tr-750 
Equipment: 
3 De Havilland Dragon 
2 Republic Seabee 
1 Percival Proctor 
Ownership: Believed to be 100 percent pri- 
vate Chilean. 
(3) Servicio Aereo Austral 
Routes: The newly-organized air taxi serv- 
ice has also been authorized to operate in the 
southern region of Chile. 
Equipment: 
1 De Havilland Dove 
1 Grumman Widgeon 
Ownership: Owned outright by Sr. Carlos A. 
Avel Krefft, a Chilean national. 
b. Foreign Scheduled Airlines. 
PANAGRA, the US carrier which started 
service to Chile in 1929, continues to be the 
largest single foreign carrier operating into 
the country. 
After many months of intense 
negotiation with the Chilean Civil Aeronau- 
tics Board, an arrangement was worked out in 
1948 permitting certain changes in PANAGRA 
service. 
This arrangement, however, was con- 
cluded only after Chilean fears had been al- 
layed that Santiago would be increasingly by- 
passed in PANAGRA’S operations from Lima 
and La Paz to Buenos Aires. 
BOAC (British Overseas Airways Corpora- 
tion), the only European carrier to operate di- 
rectly to Chile, terminates both its west and 
east coast services at Santiago, although the 
service between that city and Buenos Aires is 
reporte 
tinued. 
ard IA’ 
Royal 
feeds E 
Aires. 
A sp 
Argent 
sion of 
_* 
. 
yr 
A 
“ 
rw 
“SIDENT Is 
RE 
| 
| 
|
i 
reported to have been temporarily discon- 
route. 
Both airlines fly the route non-stop, 
tinued: 
In April 1948, LAN signed a stand- 
while a second Argentine carrier, ZONDA, 
ard IATA form inter-line agreement with the 
serves the two cities via Mendoza, Argentina. 
Royal Dutch Airlines (KLM), whereby LAN 
Under 
the Chilean-Argentine 
bilateral 
air 
" 
feeds Europe-bound traffic to KLM at Buenos 
agreement, moreover, a third Argentine air- 
Aires. 
line, Aeroposta, 
is operating 
twice-a-week 
A special agreement between LAN and the 
service between Punta Arenas, Chile, and Rio 
— 
Argentine carrier, FAMA, provides for a divi- 
Gallegos, Argentina, where connection is made 
sion of capacity on the Santiago-Buenos Aires 
_for flights to other points in Argentina. 
* 
ts 
| 
A. 
“a ? 
ARy FILER 
é 
1.2 
wi- 
ie 
| 
A. 
1e 
LO 
se 
1. 
| 
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| 
d 
e 
.
~ 
APPEND) E 
COLOmBia 
| 
Governmeny Organization for 
Avia. 
Regulations 
effecteg during 1948 Making 
ton 
the Current regulations Similar LO those Of the 
bj 
viation 
Clombia 
the 
Ponsi- 
Exchange Contro] *egulations have Seriously 
lity of a Directorate Of 
Aeronautic. 
flecteq 
tional 
ir 
ti 
Cidents Carly in 1947 Which were attributabie 
ibit 
opera 
an 
largely to lack of S°vemment attention to avi- 
—ibiting he Purchase of new “quipmen “nd 
| 
ation Matters the DAC 788 Teorgan ized Onthe 
Spare Parts. 
NOde] of the us Civi] Aeronauticg Administr,_ 
b. Regulation of Colombian Airlines 
| 
Hon and Siven increased Powers. The ang 
It is Colombian Policy to Promote domestic 
= 
Pandeg ~ 8anization now includes five depart- 
air transport enterprises and Protect them 
~Perations, in 
struction, 
from Outside SOMPetition 
Colombian, Airlines 
ration, 
BY a decree 
are Tequireg by law to be al least 
Percent 
tion) 
1948, a 
onal 
has 
OWned by Colombian Citizen, 
With the ey. 
| 
me 
Works 
to “Ordinate “nd regula © all 
(2.8 Percent) ip the Principa) Colombian air- 
forms 
of TANSportatioy, in Colombia 
Its 
line AVIANCA the Colombian, Governmen} 
embers Mclude the Director of Civit 
does not actively Participate in the commer. 
and @ repr sentative of the do. 
Cia] air anspor} fielq. Although the govern. 
Mestic 
The Chart below Indicates 
Ment d 
Not Subsig; 
airlj es dir 
t] 
it 
the 
ationship between the Civi] @Viation 
Pye: 
agenc; 
f Co} 
bi 
Provides limiteg aid through air mai) COn- 
. 
a. 
tracts AVIANCA had a Monopoly of Colom. 
Domest. 
Policy, 
bian air Mai] TANSportation UN ti] Decembe, 
Aviation 
1948 When the 5°vernment Signed 2 mail con. 
| 
Civil Aviation “e9islation 
| 
tract With 
sma]] rreguiar carvo Carrier 
With the 2SSistance Of the US Civi] Aviation 
SAM Which jig largely US-controljeg 
In ef- 
Mission 
Of the 
Manuag) of 
fect, AVIANCA’. Contract Makes jt the Posta] 
; 
Ministry of Public Works 
Ministry Of War 
Nationa) Councj) 
| 
of Transportat ton 
Directorat. Of Ciyj) Aeronautic, 
| 
"ngineering 
Instructio, 
Administratio, 
| 
ORE Tr-gsp 
Serr
“SECRSL, 
department for all the domestic air mail which 
it carries, because the airline is required to 
maintain its own postal agencies and to trans- 
port and deliver domestic air mail. 
The SAM 
service, which has been very successful, is also 
presumably required to act as a postal agency 
for the mail it carries. 
The Directorate of Aeronautics (DAC), the 
Colombian Government’s regulatory agency 
for civil aviation, has taken little action to 
control airline competition or regulate rates 
and routes. 
As a result, there was a postwar 
period of intense competition in Colombian air 
transport, including a severe rate war. 
The 
reorganization of the DAC in 1947 improved 
this situation somewhat, but the rate war con- 
tinued well into 1948. 
One of the major air- 
lines, TACA de Colombia, was forced to sus- 
pend operations early in 1947 and six smaller 
carriers suspended services during 1948 be- 
cause of financial diffeulties. 
Although three 
small companies, AFRYPESCA, Aerotaxi and 
SAETA, are also listed as scheduled Colombian 
carriers, only AVIANCA and LANSA are of 
much significance 
as scheduled 
operators. 
There are about five other small non-scheduled 
passenger or cargo services. 
c. Regulation of Foreign Airlines. 
Cabotage traffic in Colombia is reserved for 
the domestic airlines. 
Foreign airlines must 
receive a Foreign Air Carrier Permit to oper- 
_ 
ate commercially 
to Colombian 
cities, 
al- 
though most such operations are conducted in 
- 
accordance with inter-governmental air agree- 
ments. 
In 1948, Colombia’s previously restric- 
tive policy toward foreign non-scheduled oper- 
ators was considerably relaxed. 
d. Promotion of Other Aviation Activity. 
Colombian civil airports have been owned 
and developed for the most part by Colombian 
airline companies, but the Government seems 
to have in mind an eventual nationalization 
program. 
Private ownership of all civil air- 
ports forced each airline to develop its own 
facilities, until the government required the 
airports to be opened to all traffic in 1948. 
By 
that time, LANSA had built duplicate facilities 
at many points also served by AVIANCA, with 
the result that only the smaller companies 
were substantially benefited by the change. 
The government, however, now controls new# 
airfield construction and six new airports were 
completed during 1948 under Government 
sponsorship. 
In 1947, the Government of Colombia emé 
couraged the formation of an aeronautical ra 
dio organization to operate all air navigatio 
facilities. 
Since the airlines concerned were 
unable to agree on the details of such a plang 
however, 
nothing 
was 
accomplished, 
anc 
radio facilities are still maintained by the air 
line companies. 
As a result of surveys made 
by the US Civil Aviation Mission to Colombia 
in conjunction with Colombian officials, plans 
are being developed for installing a modern 
system of traffic control and airways commu 
nication. 
A law of 1948 authorizes the DAC to grant@m. 
each Colombian aero club a yearly subsidy.¢ 
No grants have been made to date, however, 
since none of the clubs, which are composed 
for the most part of wealthy persons, has beer 
in need of funds. 
} 
| 
The Instituto Tecnico de Aviacion (ITECA) 
@ 
continues to be the only school in Colombiag 
offering courses in all phases of aircraft me-¢ 
chanics and operation. 
Recently, however, 
§ 
reduced funds have curtailed its program. 
A®§™ 
plan is now under consideration by the DAC 
and the Colombian airlines for a training cen-4 
ter to develop operating personnel for the air 
lines. 
Although the government would con- 
tribute financially to such an organization, it 
would be operated as an independent com- 
pany. 
} 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Colombia has not followed a consistent or @ 
well-defined policy with respect to interna 
tional air transport. 
Colombian aviation offi- 
cials have stated that their country’s support 
at international conferences for proposals re- 
stricting Fifth Freedom privileges has been 
based upon Colombia’s desire to retain the bi- { 
lateral bargaining advantage inherent in con- 
trol of such privileges, rather than upon any 
policy designed to withhold Fifth Freedom’ 
traffic from foreign carriers. 
Nevertheless, 
Colombia continues to favor the early conclu-4 
sion of a multilateral agreement on air rights. 4 
Th 
of Di 
arrivi 
1948. 
in 
al. 
tions. 
traini 
the M 
proce¢ 
ston } 
Train: 
Colc 
Ameri 
nportat: 
Socied: 
Aereos 
ing 
Bi 
chief p 
part of 
tain ra 
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connect 
~ 
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S 
HARRY s 
TRUMAN 
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PRESTOR 
SECRETAR 
— 
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foot 
PAD 
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¥ 
CiUG 
Cc 
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Avia 
the c 
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(TAT 
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‘ 
SECRET/ 
‘ ‘ 
a
aré 
SECRE T 
In spite of efforts to renegotiate the 1929 
has been of great value 
in unifying the 
“ols new 
_"S were 
Olaya-Kellogg exchange 
of notes, the 
ex- 
country. 
»nment 
§ 
change still stands as the only air transport 
When 
SCADTA 
was 
reorganized 
as 
™ 
agreement between Colombia and the US. 
AVIANCA in 1940, its substantial German in- 
11a en-4 
One obstacle to the conclusion of a new bilat- 
fluence was removed. 
Since then, the airline 
tical ra- 
§ 
eral air agreement was removed by the US 
has been jointly owned by Colombian and US 
' gation 
Civil Aeronautics Board’s recent grant of a 
interests, the latter being represented by Pan 
el were# 
Bogota-New York route to AVIANCA under 
American World Airways (PAA). 
3 plan, 
§ 
authority. of the 1929 exchange of notes, 
Numerous Colombian airlines were formed 
Cc. and 
thereby placing AVIANCA on a more equal 
after World WarII. 
Some have disappeared, 
e air- 
footing with Pan American 
Airways 
and 
while a few others have ,survived as non- 
1; made 
PANAGRA. 
scheduled 
operators. 
Five new companies 
 ombia 
Colombia’s only 
other bilateral air agree- 
| ©°Mmenced operations during 1948, while six 
cluded with the UK and the Netherlands. 
scheduled operators in Colombia, three smaller 
iis 
b. International Organizations. 
enterprises (SAETA, AFRYPESCA, and Aero- 
orant 
Colombia has actively participated in and 
taxi) 
operate 
regularly 
scheduled 
flights 
aol dy 
| 
eiven firm support to the International Civil 
within the country. 
The respective share of 
b vever. 
Aviation Organization (ICAO). 
AVIANCA is 
the total Colombian passenger and cargo traf- 
b- pose d ft 
the only Colombian airline which isa member 
fic carried by each domestic airline during 
2: been 
& 
of the International Air Transport Association 
1948 is shown in the following table: 
(IATA). 
| 
Percentage of 
Percentage of 
[CA) 
§ 
c. US Technical Assistance. 
Passenger Traffic Cargo Traffic 
§ 
The US Civil Aviation Mission Agreement 
me- 
@ 
of December 1947 was implemented by the 
sgsarTa 
6.5 
-ver, 
| 
arrival of a US mission in Bogota in March 
AIDA 
0.4 
0.5 
. 
A 
Et 
1948. 
This group surveyed Colombian needs 
Aerotaxi 
0.2 
(less than .05) 
in air transport control, radio communica- 
Cees Shan 56) 
cen- 
tions, and flight and maintenance personnel... 
training. 
It participated actively in revising 
COn- 
the Manual of Regulations and in establishing 
Servicio Aereo 
1.1 
on, It 
procedures for personnel licensing. 
The Mis- 
Oil Companies and others 
4.1 
8.2 
( ~om- 
sion has also assisted in work on Aviation 
Although PAA holds a large percentage of 
Training and Scholarship programs. 
4. 
Airlines. 
- 
a. Colombian Scheduled Airlines. 
the stock in AVIANCA (47.7 percent), its abil- 
ity to control AVIANCA policies and opera- 
tions is limited by Colombian law, which stipu- 
lates that no stockholder, however many 
shares he may control, may vote more than 25 
| 
Colombia was the first country 
in Latin 
| ing 
America to enjoy the advantages of 
air trans- 
ao ag the total shares represented at any 
portation. 
Shortly 
after World War I, the 
ort 
Sociedad 
de Transportes 
Both AVIANCA and LANSA are financially 
bik.xs 
Aereos (SCADTA) commenced services link- 
S°UMd and have good safety records. 
AVI- 
en 
ing Bogota with 
Barranquilla, 
Colombia’s 
ANCA will continue to operate most of the ra- 
bi- 
chief port. 
Sinée the most EERE populated 
dio facilities until the proposed airways com- 
on- 
‘moun. 
munications system is actually established. 
iny 
OF & 
OF 
(1) AVIANCA (Aerovias Nacionales de Co- 
om 
1 ranges, separated by valleys in which the 
jompbjia §.A.). 
"$8, 
main population centers are located, the grad- 
Routes: 
| 
, 
lu- 
ual extension of air transport services to inter- 
Domestic: One group of AVIANCA routes 
stretches the full length of Colombia covering 
its. 
connect these centers and intermediate towns 
A 
. 
‘TARP 
or 
: S 
3S 
> 
AR 
* 
Y 
| 
‘ 
| 
‘ 
| 
;
SBCRET 
AIRLINES OF COLOMBIA 
( October, 1949 ) 
lir. 
Number of 
| ca. 
Airline 
Unduplicated 
Scheduled 
Aircraft 
Ownership 
( 
Route ‘Miles* |Miles per Week (various Types) 
| by 
be 
‘49.1% Private| 
Avianea 
6,962 
103,285 
an 
. 0.4% Other | 
t2z 
| 
no: 
Lansa 
3,644 
68,997 
{ 
99.5% Private) 
| 0.5% Foreign 
SAETA 
2,460 
Private| 
Aerotaxi 
~ 
695 
4,218 
100 % Avianca] 
# 
(3 
AFRYPESCA 
568 
1,418 
Unknown 
TOTAL 
11,954 
180,378 
ie 
* The term ‘‘Unduplicated’’ refers only to those route miles 
which are not duplicated by an individual airline. 
the mountainous central and western regions 
of the country. 
In this region are the major 
cities of Colombia, which are all served by 
AVIANCA. 
Another group of routes, served 
with less frequency, radiates out from Villa- 
vicencio and covers the western and central 
portions of the relatively flat, undeveloped 
eastern part of the country. 
International; 
AVIANCA’s 
international 
routes extend to Ecuador, the US, and Pan- 
ama. 
The route to Ecuador not only connects 
the two countries, but extends the full length 
of Ecuador. 
In April 1949, AVIANCA com- 
menced twice-weekly operations between Bo- 
gota and New York, via Barranquilla and 
Miami, on the basis of a permit granted by the 
US Civil Aeronautics Board in December 1948. 
Equipment: 
3 DC-4 
3 C-54 (cargo) 
16 DC-3 
8 C-47 (cargo and passengers) 
2 PBY-5A 
ORE Tr-950 
Ownership: 
Colombian nationals 
49.1 percent 
Colombian Government 
2.8 percent 
Pan American 
47.7 percent 
Other 
0.4 pércent 
(2) LANSA 
(Lineas 
Aereas 
Nacionales, 
S.A.). 
Routes: 
Domestic: In general, the routes of LANSA 
parallel those of AVIANCA, serving all the 
principal cities in the central part of Colombia. @ 
LANSA serves only three minor cities, Lorica, 
Fundacion and Valledupar (all in the north), 
not also served by AVIANCA. 
International: LANSA operates only one in- 
@ 
ternational route, from Bogota to Caracas, 
@ 
Venezuela. 
LANSA 
has an 
inter-company @ 
traffic agreement with the Venezuelan airline, 
@ 
LAV, on this route. 
| 
Equipment: 15 DC-3 
Ownership: 
Colombian nationals 
Foreign interests 
99.5 percent 
0.5 percent 
Ct, 
ow 
Paper 
wr 
oT 
S 
| 
'S SEcREr 
| 
c 
O 
‘4 
‘ 
‘4 
‘ 
|
(3) SAETA (Sociedad Aeronautica de To- 
lima, S.A.). 
Routes: Bogota-Girardot-Ibague 
Equipment: 4 C-47 (one passenger and three 
cargo) 
Ownership: Approximately 30 percent owned 
by AVIANCA. 
The remainder is believed to 
be in private Colombian hands. 
(4) AEROTAXI 
(Aerotazi 
de Colombia, 
Ltda.). 
Routes: Aerotaxi serves Barranquilla, Car- 
tagena, and about fifteen other cities in the 
northwestern part of the country. 
Equipment: 
8 Cessna 190 and 195 
1 Cessna 170 
Ownership: 100 percent owned by AVIANCA. 
(5) AFRYPESCA (Aviacion Refrigeracion y 
Pesca). 
Routes: AFRYPESCA serves approximately 
eight towns in the northeastern part of Co- 
lombia. 
Ownership: Unknown 
Equipment: 1 C-47 
© 
b. Foreign Scheduled Airlines. 
The following foreign air carriers operate to 
or through Colombia, serving the cities indi- 
cated: 
| 
Pan American World Airways: Direct serv- 
ice from Barranquilla to the US, to Panama, 
and to Venezuela. 
Uraba, 
Medellin 
and 
Central 
(UMCA): Medellin-Panama. 
PANAGRA: Cali (on west coast service be- 
tween Panama and Peru). 
KLM (Royal Dutch Airlines): Barranquilla 
(on Aruba-Panama service) 
BOAC (British Overseas Airways Corpora- 
tion): Barranquilla (en route to Lima, Peru 
from Kingston, Jamaica) 
TACA de Venezuela: Bogota to Caracas serv- 
ice. 
c. Foreign Non-Scheduled Operations. 
As a result of a decline in import cargo and 
the virtual non-existence of export cargo for 
air transport, few US non-scheduled cargo 
carriers have taken advantage of Colombia’s 
liberalized policy toward this type of opera- 
tion since 1948. 
Airways 
> 
UMan 
AR 
A 
‘ 
} 
| 
| 
| 
-ivate! 
~ 
er 
vate 
| 
eign 
inca 
sate 
nca 
A 
i 
950 
‘ 
=. 
j 
iles, 
| 
] 
‘ 
NSA 
the 
ndoia, 
| 
 -Ttn), 
cas, 
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i 
‘ 
i
~ 
= 
APPENDIX F 
COSTA RICA 
1. Government Organization for Civil Avia- 
tion. 
A Civil Aviation Board was formed under 
the Ministry of Government in 1948 to control 
and regulate matters pertaining to civil and 
military aviation. 
The Board, similar to the 
Civil Aeronautics Board in the US, formulates 
rules and regulations for the registry of air- 
craft, licensing of pilots, granting of landing 
_ permits, and other matters pertaining to civil 
aviation. 
2. 
Civil Aviation Legislation. 
The Junta Government on 18 October 1949 
approved a new general civil aviation law, pat- 
terned largely on the civil aeronautics regula- 
_ tions of the US, and some changes suggested 
by the legal section of the International Civil 
Aviation Organization (ICAO). 
3. 
Costa Rican Civil Air Policy. 
Largely as a result of the political and mili- 
tary difficulties which have beset Costa Rica 
during the past two years, regulation of civil 
aviation affairs has been relegated to a rather 
minor consideration. 
Air transport, never- 
theless, plays a highly important role in the 
economy of Costa Rica, providing in many 
cases, the sole means of freight and passenger 
transportation between the capital and outly- 
ing sections of country. 
International air- 
lines continue to provide the most practical 
and popular means of passenger transporta- 
tion between Costa Rica and other countries. ; 
International traffic originating and terminat- 
ing in the capital, San Jose, showed a consid- 
erable decrease during 1948 as a result, no 
doubt, of the unsettled political conditions in 
Costa Rica. 
During the revolution of March- 
April 1948, and again during the attempted 
- invasion from Nicaragua in December 1948, 
the facilities and equipment of the domestic 
transport companies were commandeered and 
put to use for military purposes. 
None of the 
international facilities was molested, but for 
a short time during the revolution interna- 
tional airlines suspended operations to Costa 
Rica. 
There has been considerable discussion of 
several proposed sites for a new international 
airport near San Jose. 
Since the government 
does not have sufficient funds for the project 
and would have to depend on a loan from 
either a US bank, the local air companies, or 
the World Bank, improvement of the existing 
airport will probably be undertaken. 
The 
Junta of Government, however, has hoped 
that the US will become interested in the con- 
struction of an airfield at San Jose in view of 
its proximity to the Panama Canal. 
Other 
than this project, little expansion of existing 
facilities is planned. 
Costa Rica has concluded no bilateral air 
transport agreements, and is not a member of 
the International Civil Aviation Organization 
(ICAO). 
4. 
Airlines. 
a. Costa Rican Scheduled Airlines. 
Unless additional new airports are con- 
structed in Costa Rica, domestic air transport 
operations will be limited to approximately 
the present pattern. 
The three domestic air- 
lines which presently serve Costa Rica are: 
Compania 
de Transportes 
Aereos 
Centro 
Americanos de Costa Rica (TACA de Costa 
Rica), Lineas Aereas Costarricenses, S. A. 
(LACSA), and Aerovias Occidentales, S. A. 
(Occidentales). 
Most of the towns and vil- 
lages in the country with landing facilities 
are now served by one or more of these air- 
lines, while several points along the Pacific 
Coast and in Guanacaste are served by two 
or even three of the domestic companies. 
A 
highly uneconomic and intensely competitive 
condition in several parts of the country has 
. 
| 
“CRETAP 
L 
€ 
T 
T 
; 
; 
|
~ 
~ 
T 
resulted from the Civil Aviation Board’s prac-. 
tice of licensing virtually any route and any 
frequency requested by the local airlines. 
Thus, twice a week service by both TACA de 
Costa Rica and LACSA has, at some points, 
been on the same day instead of being stag- 
gered to furnish more frequent service. 
In 
spite of the interruption of services during the 
periods of fighting in 1948, TACA de Costa 
Rica lost very little money on route opera- 
tions and actually made money on the busi- 
ness of their maintenance and overhaul shops 
in San Jose. 
On the other hand, LACSA 
claims to have lost money throughout the pe- 
riod, but more recently it has begun to oper- 
ate at a profit. 
By a decree of 15 September 
1949 LACSA was designated the Costa Rican 
flag carrier for international | operations and 
especially to operate routes to Miami, New 
Orleans, and Brownsville. 
(As of 20 Novem- 
ber 1949, no application had been filed by 
LACSA to the US CAB for such routes.) 
Aerovias Occidentales, an American-owned 
company, started operations in 1948 with two 
Boeing 247-D’s which it operated on the lucra- 
tive west coast route until it became necessary 
to cannibalize one of the planes to obtain parts 
for the other. 
It is a shoestring operation 
and has had rough going from the start. 
At 
the present time the company is doing fairly 
well financially considering the fact that it 
has no shops and only the one plane which 
generally operates at capacity. 
In view of 
the age and condition of its equipment, Occi- 
dentales will not be able to operate much 
longer unless it can obtain new aircraft. 
1. Occidentales 
(Aerovias 
Occidentales, 
S.A.). 
Routes: Occidentales 
connects 
San 
Jose 
with a few points in the southern part of Costa 
Rica. 
Equipment: 1 Boeing 247-D 
Ownership: 100 percent private US. 
Occi- 
dentales was established by two US citizens 
and received official Costa Rican authoriza- 
tion to operate freight and passenger services 
in 1947. 
International operations 
are subject 
to special approval. 
2. TACA 
de Costa 
Rica 
(Compania 
de 
Transportes 
Aereos 
Centro Americanos 
de 
Costa Rica). 
Routes: TACA de Costa Rica operates from 
San Jose, Costa Rica’s capital, principally to 
the interior and to numerous points along the 
Pacific coast. 
Only one route extends to the 
Atlantic, serving Puerto Limon and extending 
along the coast into Panama to Bocas del 
Toro. 
Equipment: 3 DC-3 
1 Lockheed Hudson 
Ownership: Believed to be 100 percent pri-— 
vate Costa Rican. 
The present TACA de 
AIRLINES 
OF COSTA RICA 
( October, 1949 ) 
Number 
Unduplicated 
Scheduled 
Airline 
of Aircraft 
Ownership 
Route Miles* 
[Miles 
(Various Types) 
Occidentales 
211 
1,582 
100% U.S. 
TACA 
8,862 
100% Private 
| 
40% Private 
LACSA 
897 
5,710 
40% U.S. 
| 
20% Gov. 
TOTAL 
1,717 
16,154 
| 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
SECREL 
ORE Tr-1050 
wf 
SECRET 
Costa 
lowing 
Syster 
Panan 
howev 
by US 
S.A.). 
Rou 
Jose a 
and s¢ 
route, 
north, 
routes 
into 
Equ 
OwrT. 
|
>.ane which 
in view of ¥ 
ment, Occi- 4 
>rate much 
reraft. 
cidentales, @ 
San Jose 
irt of Costa # 
US. Occi- 
'S citizens 
Uthoriza- 
services # 
+2 subject 
§ 
de. 
‘de 
from 4 
ally to 
(ong the 
to the 
nding 
del 
Costa Rica was established in May 1948, fol- 
lowing its purchase from the TACA Airways | 
System by two residents of Costa Rica (see 
Panama, Section 4). 
There is some evidence, 
however, that these individuals may be backed 
by US interests. 
3. LACSA 
(Lineas Aereas 
Coslurricenses, 
S.A.). 
| 
Routes: LACSA originates all flights at San 
Jose and serves principally the northwestern 
and southwestern parts of Costa Rica. 
One 
route, San Jose-Los Chiles, extends to the 
north, outside 
these regions. 
One of the 
routes to the southwest, moreover, extends 
Panama to Puerto Armuelles. 
Equipment: 3 DC-3 
Ownership: 40 percent private Costa Rican 
40 percent US (Pan American 
World Airways) 
20- percent 
Government 
of 
Costa Rica 
LACSA was organized as a Pan 
American 
affiliate in 1945, 
receiving official Costa Rican 
authorization in December of 
that year. 
b. Foreign Scheduled Airlines. 
Costa Rica receives scheduled international 
airline service from three foreign-flag carriers. 
Pan American World Airways (PAA) provides 
a number of services to San Jose, over which 
traffic is carried to points throughout Central 
and South America and to the US. 
The PAA 
routes serve Costa Rica directly from both 
Managua, Nicaragua, and Tegucigalpa, Hon- 
duras, continuing on to David and Panama 
City, Panama. 
KLM (Royal Dutch Airlines) 
connects San Jose with Panama City and 
points throughout 
its extensive Caribbean 
network. 
Connections via KLM are also made 
for Europe. 
San Jose is also the southern 
terminus 
of TACA 
El] Salvador’s 
Central 
American 
services, which 
extend through 
Managua as far north as Mexico City and New 
Orleans. 
. 
PRESIp TRUMAN 
ENT 's 
«ff 
PILP 
v 
4% 
| 
$ 
‘ 
Drl~ 
. 
A de 
. 
| 
| 
fa 
~ 
| 
. 
| 
|
APPENDIX G 
CUBA 
1. 
Government Organization for Civil Avia- 
| 
tion. 
Cuban civil aviation, as well as various forms 
of land transport, is regulated by the National 
Transport Commission (CNT), a dependency 
of the Ministry of Communications. 
Although 
the general functions of the CNT are pre- 
scribed by law, there is considerable competi- 
tion between the Ministry of Communications 
and the CNT for control over certain aviation 
matters. 
With respect’to international route 
questions, final authority appears to rest in 
the Ministry of Communications (subject to 
the approval of the President of Cuba). 
The 
Inspector General of Airports exercises con- 
siderable influence within the CNT. A Civil 
Aviation Advisory Committee, composed of 
influential Cuban aviation personnel, is called 
upon from time to time to act in a purely ad- 
visory capacity to the CNT. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
Decree No. 4144 of 3 December 1948 circum- 
scribing the authority of the CNT cancelled 
Decree No. 3534 of 25 October 1948, but re- 
affirmed the provisions of previous decrees 
giving the Ministry of Communications final 
decision in certain matters handled by the 
CNT. 
b. Regulation of Cuban Airlines. 
The Cuban Government has not yet been 
laced with the necessity of formulating strict 
policies or regulations to govern its domestic 
alr services. 
The Cuban attitude toward air- 
line competition, for example, is not yet clear. 
Until 1943, Cubana was the only airline oper- 
_ ating in Cuba. 
Since that time, the govern- 
ment has issued permits to both Expreso and 
Aerovias “Q” to operate routes which would 
compete 
with Cubana 
service. 
The 
only 
‘oute now being operated within the area 
served by Cubana (domestically, all of the 
island of Cuba east of Habana), however, is 
the Aerovias “Q” route to Varadero. 
The few. 
competitive routes established within Cuba by 
Expreso in 1945 have since been discontinued. 
On the other hand, both Aerovias “Q” and the 
newly organized Aeropostal operate between 
Habana and Nueva Gerona, on the Isle of 
Pines, and Expreso has also served that island, 
but at Santa Fe. 
It is the practice of the National Transport 
Commission (CNT) to issue permits for inter- 
national routes to any duly constituted Cuban 
company. 
In this connection, the govern- 
ment takes the position that simple majority 
control by Cubans constitutes Cuban owner- 
ship and effective control. 
It is also the prac- 
tice of the government to support permit ap- 
plications by all such Cuban companies in a 
foreign country, when such applications are 
based on permits issued by the CNT. 
The 
Cuban Government’s support of a particular 
Cuban application for a foreign permit, there- 
fore, does not necessarily indicate that the gov- 
ernment favors that airline over any other. 
On the other hand, political connections ap- 
pear to determine to a large degree the favors 
received by Cuban airlines for their operations 
within the country. 
The Cuban Government does not subsidize 
any Cuban airline directly. 
However, Aero- 
vias “Q”, Expreso, and Aeropostal receive an 
indirect subsidy in the form of free use of the 
Cuban Army airfield Camp Colombia, which is 
more accessible from Habana than the regu- 
lar commercial airfield Rancho Boyeros. 
Because of the importance which the gov- 
ernment attaches to continued domestic and 
international service by Cubana, an impasse 
in Cubana’s labor-management relations in 
September 1949 prompted the government to 
intervene. 
The dispute 
involved 
Cubana’s 
plans to resolve its serious financial difficulties 
through economies in operations (principally 
SEC 
SS.CRE-P— 
| 
ri 
| 
bial 
| 
| 
‘ 
| 
| 
| 
a 
| 
| 
| 
| 
Pac 
d 
| 
| 
re
wage and personnel reductions), which are 
opposed by certain elements of the govern- 
ment, as well as the labor force and the 
unions. 
As a result, the stockholders of Cu- 
bana, no longer desiring to continue the com- 
pany on a losing basis, voted on 31 October 
1949 to dissolve and liquidate the company if 
within one month the Board of Directors had 
failed to arrange for future operations on a 
sound financial basis. 
Pan American World 
Airways (PAA), moreover, a 48 percent share- 
holder, had already refused assistance to Cu- 
bana until the company is put on a more eco- 
nomic operating basis. 
It is improbable that 
the majority of Cubana’s stockholders actually 
desire dissolution of the company at this time, 
however, and their recent action may have 
been designed to influence the government to 
take whatever steps are neCessary to assure 
continued 
Cubana 
service. On the other 
hand, it is doubtful that the government is 
willing to assume the burden of operating the 
company, as it is being urged to do by labor 
in the event that Cubana votes to dissolve. 
It 
seems probable, therefore, that the govern- 
ment will effect a compromise solution ensur- 
ing the continued operation of Cuba’s most 
important 
domestic 
and international 
air 
carrier. 
c. Regulation of 
Foreign Airlines. 
Cuba, the gateway to Middle America, has 
permitted many scheduled international car- 
riers to provide service to and through Ha- 
bana, both because of the revenue accruing to 
Cuba from the airlines’ traffic, and because 
the Cuban Government feels that competition 
among these carriers tends to keep rates down 
and provides incentives for improved services. 
Foreign airlines must receive a permit from 
the National Transport Commission (CNT). 
Bilateral air agreements concluded by Cuba 
with other countries govern the terms of per- 
mits issued to airlines of those countries. 
Non-scheduled carriers, to obtain permis- 
sion to operate to Cuba, must demonstrate to 
the CNT that no established scheduled airline 
can provide the service in question. 
Cuba has 
insisted on recognition of its right to prohibit 
non-scheduled commercial aircraft from land- 
ing in Cuba if it so desires. 
(See Section 3. 
b.) 
d. Promotion of Other Aviation Activity. 
Improvements are being made on several 
airports throughout Cuba. 
Expansion of the 
existing runways at Rancho Boyeros, the prin- 
cipal Habana airfield, is now in progress, and 
the government has encouraged contractors 
to plan construction of other air facilities, 
especially a new airport nearer Habana. 
This 
encouragement has included the suspension 
for five years of import duties on materials 
destined for the construction and operation 
of airports, as well as the cancellation for ten 
years of taxes on profits, capital, dividends, 
and interest for persons or companies con- 
structing and operating airports. 
A cooperative 
aeronautical 
organization, 
Aeronautical 
Radio 
Company 
of 
Cuba 
(RACSA), was formed by the airlines late in 
1947 to coordinate all aviation communica- 
tions. 
With the exception of Aerovias “Q”, 
which has its own communications system, all 
of the major airlines which operate in or 
through Cuba are members of RACSA and 
receive its services. 
Labor difficulties delayed 
commencement of operations until April 1948 
and have recurred intermittently since that 
time. 
The Cuban Pilots Association is composed 
entirely of the more than 60 Cubana pilots. 
There are about seven private flying schools 
in Cuba. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
While Cuba believes that certain benefits are 
to be derived from competition among foreign 
air carriers flying to Cuba, it has attempted 
to minimize such competition on those routes 
flown by its own carriers and to assure Cuban 
airlines of a certain share of the traffic. 
Cuba has concluded only three bilateral air 
agreements, of which those with the UK and 
Peru 
are 
Bermuda-type. 
Little 
is known 
about the third agreement, signed recently 
with Mexico, but it is possible that it contains 
restrictive provisions, in view of Mexico’s pre- 
vious restrictive policy. 
Under the Mexican 
agreement, Cuba was granted the Habana- @ 
Merida-Vera Cruz route (presently flown by 
: 
Aerovias “Q”), while Mexico retained 
a mo- @ 
nopoly over the Mexico eee ¥ 
route. 
~* 
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or ch 
schec 
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|
Intermittent negotiations between the US 
and Cuba have not produced a bilateral pact, 
largely because of disagreement over what 
constitutes substantial ownership or effective 
control of an airline. 
b. International Organizations. 
Upon deposit of its unreserved ratification 
of the Chicago Convention in June 1949, Cuba 
was admitted as the 54th member of the Inter- 
national Civil Aviation Organization (ICAO). 
When Cuba had earlier ratified the Conven- 
tion in April 1947, it had made a reservation 
on Article 5 in the belief that the Article al- 
lowed non-scheduled commercial operators to 
land in Cuba without obtaining prior approval 
from Cuban authorities, thus contravening 
Cuban 
law. 
Cuban 
objections 
have 
been 
withdrawn in view of the current widespread 
practice 
of interpreting 
the 
“limitations” 
which may be imposed on such flights as per- 
mitting any country to prohibit them. 
A\l- 
though not a full-fledged member of ICAO un- 
til 1949, Cuba has indicated an active inter- 
est in its proceedings by sending observers to 
most meetings of the organization. 
Cubana is a member of the International 
Air Transport Association. 
c. US Technical Assistance. 
Various technical specialists have been as- 
signed to Habana for short periods of time by 
the US Civil Aeronautics Administration. 
4. 
Aijrlines. 
a. Cuban Scheduled Airlines. 
_ Only four Cuban airlines can be considered 
Scheduled operators at present, although there 
are three or four other Cuban air transport 
companies attempting to organize scheduled 
or charter services of various types. 
The four 
scheduled 
airlines 
are: 
Cubana, 
Aerovias 
“Q”, Aeropostal, and Expreso. 
From 1929, when it introduced domestic air 
transportation to Cuba, until 1943, Cubana 
was the only airline operating in Cuba. 
It 
- Operated exclusively within the country until 
1946, when it was authorized by the US to 
add the important Habana-Miami route to its 
System. 
Cubana provides such valuable serv- 
ice to Cuba both domestically and inter- 
nationally that the government has inter- 
_vened in an effort to prevent Cubana’s current 
SEGRET 
financial difficulties from forcing dissolution 
and liquidation of the company. 
The wholly Cuban-owned Aerovias “Q”, or- 
ganized in 1945, has also experienced consider- 
able financial difficulty, but is gradually ex- 
panding services under the close supervision 
of Manuel Quevedo, its president and general 
manager, who is principally responsible for 
having built Aerovias “Q” into the most stable, 
dependable, and efficient airline in Cuba. 
It 
is still awaiting CAB action on its request for 
additional lucrative routes to the US. 
For 
many months, Aerovias “Q” was the only 
Cuban carrier to enjoy the privilege of using 
the military field, Campo Colombia, which is 
nearer Habana than the regular Habana com- 
mercial airport, Rancho Boyeros. 
Cuba Aeropostal commenced scheduled op- 
erations on its Habana-Isle of Pines route in 
May 1949. 
It has recently applied to the US 
Civil Aeronautics Board (CAB) for a permit 
to operate scheduled passenger service on its 
present non-scheduled cargo route to Miami. 
Aeropostal appears to be backed by the influ- 
ential 
Jose M. Aleman, former Cuban senator 
and cabinet officer. 
The President of Aero- 
postal denies that Aleman owns or finances 
the company, but admits that he has aided in 
obtaining permits from the government. 
In 
any event, Aeropostal apparently has very ade- 
quate financial resources. 
Expreso inaugurated service on several do- 
mestic routes in 1945, but all domestic opera- | 
tions except that to the Isle of Pines were dis- 
continued some time later. 
Internationally, 
however, Expreso is continuing to operate 
more or less regular flights between Habana 
and Miami, while its application for renewal 
of its permit for this route is being considered 
by the CAB. 
The company’s financial situa- 
tion has steadily deteriorated, and its opera- 
tions have been unstable. 
This condition is 
largely the result of insufficient revenue and 
the death of a former Expreso benefactor, who 
had provided funds and equipment for the air- 
line. 
Expreso’s airmail contract, moreover, 
was cancelled by the Cuban Government in 
June 1949 for failure to adhere to schedule. A 
new contract, however, was signed in August, 
providing an increased rate for transporting 
mail. 
Although its present owner is reported- 
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AIRLINES OF CUBA 
( October, 1949 ) 
Number. 
Unduplicated 
Scheduled 
Airline 
of Aircraft 
Ownership 
Route 
Miles 
* 
| 
oute 
Miles 
: 
iles perWeek (Various Types) 
Aerovias“Q” | 1,205 
| 12,920 
eg 
100% Private 
52% Private 
Cubana 
6,587 
71,127 
48% U.S. 
Aeropostal 
1,162 
| 100% Private | 
xpreso 
325 
54% U.S, 
TOTAL 
8,200 
93,049 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ly Rafael Mendoza, a close friend of President 
Prio of Cuba, the favors Expreso expected from 
its close government connections have not 
materialized, and its future is very uncertain. 
(1) Aerovias “Q”, S.A. 
Routes: Aerovias 
“Q” 
connects 
Habana 
with Varadero, a north Cuban resort, and with 
the Isle of Pines. 
Two international routes 
are operated by Aerovias “Q”, providing serv- 
ice from Habana to Key West, Florida, and 
to the Mexican cities of Merida and Vera Cruz. 
Aerovias “Q” has also applied to the US Civil 
Aeronautics Board for permission to operate 
from Habana to Washington and New York, 
as well as to several additional points in 
Florida. 
Equipment: 5 DC-3 
1 C-47 (cargo only) 
2 C-46 
Ownership: 100 percent private Cuban. 
Aerovias “Q” was organized in 1945 and be- 
gan scheduled operations the following year. 
(2) Cubana (Compania Cubana de Avia- 
cion, S.A.), 
Routes: In its domestic services, Cubana 
operates throughout all of Cuba east of Ha- 
bana with from one to seven round-trips daily. 
In addition to Cubana’s Habana-Miami inter- 
national service, the company operates sched- 
ORE Tr-1150 
uled service from Habana to Madrid, with 
non-traffic stops at Bermuda, the Azores and 
Portugal. 
Equipment: 1 DC-4 
7 DC-3 
2 Lockheed Electra 
Ownership: 52 percent private Cuban 
| 
48 percent US (Pan American 
World Airways) 
Cubana was established in 1929 and has 
been affiliated with Pan American World Air- 
ways (PAA) since 1932. 
In 1945, PAA’s in- 
terest was reduced from 100 percent to 52 per- 
cent and in 1947, in order to satisfy the Cuban 
Government requirement that effective con- 
trol of Cuban airlines be retained by the coun- 
try’s nationals, PAA further reduced its hold- 
ings to the present figure. 
(3) Aeropostal (Cuba Aeropostal, S.A.). 
Routes: Aeropostal’s only scheduled service 
is a domestic route from Habana to the Isle of 
Pines. 
Aeropostal operates 
internationally, 
however, between Habana and Miami in con- 
tract cargo service, including the transport of 
Cuban air mail. 
Equipment: 
2 DC-3 
4 C-46 (cargo only) 
1 Lockheed Lodestar (com- 
pany use only) 
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Ownership: 100 
percent 
private 
Cuban. 
Aeropostal was organized in August 1943. 
‘ 
(4) Expreso (Expreso Aereo Inter-Ameri- 
cano, S.A.). 
Routes: Expreso 
operates 
ome 
domestic 
route, from Habana to the Isle of Pines, serv- 
ing a different city than that served by Aero- 
vias “Q” and Aeropostal. 
Expreso also oper- 
ates a service from Habana to Miami, pres- 
ently carrying cargo only. 
Equipment: Expreso leases 2 C-46 aircraft. 
Ownership: 60.46 percent private Cuben. 
39.54 percent US (made up of 
small holdings). 
Expreso was founded in 1942 and started 
service in 1943, on the Habana-Miami route. 
b. Foreign Scheduled Airlines. 
Cuba is served by eight foreign-flag sched- 
uled carriers, including four US, two European 
and two Latin American airlines. 
These car- 
riers, which are listed below, all serve Habana, 
and Pan American World Airways also oper- 
ates extensive Caribbean 
services through 
Camaguay, Cuba. 
Airline 
Nationality 
Route 
Pan American 
US 
US to Caribbean 
World Airways 
area, 
Central 
and 
South 
America 
Chicago and 
US 
US to Venezuela 
Southern 
Braniff Interna- 
US 
US 
to 
South 
tional Airways 
America 
National Airlines 
US 
US to Cuba 
KLM (Royal 
Nether- 
Netherlands 
Dutch Air- 
lands 
West 
Indies, 
lines) 
Europe ( and 
South America 
to US 
BOAC (British 
UK 
UK to Cuba 
Overseas Air- 
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tion) 
CMA 
Mexico 
Mexico to Cuba 
LAV 
Venezuela 
Venezuela to US 
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APPENDIX H 
DOMINICAN REPUBLIC 
1. Government Organization for Civil Avia- 
tion. 
The principal civil aviation authority of the 
Dominican Republic is the Aviation Division 
(Negociado de Aviacion), which functions un- 
der the Secretary of State for War and Navy. 
Attached to the Aviation Division is an Aero- 
nautical Commission consisting of the follow- 
ing five members selected by the Executive 
Power: two members from the Military Avia- 
tion Corps, a specialist on legal matters, a 
technical engineer, and a meteorological tech- 
nician. 
The functions of the Commission are 
to cooperate with the Aviation Division in the 
promotion, development, and regulation of all 
forms of civil aviation. 
This Commission is 
apparently the administrative agency of the 
Aviation Division. 
2. 
Civil Aviation Legislation. 
The functions of the foregoing civil aviation 
agencies are outlined in a new civil air navi- 
gation law (No. 1915) passed in February, 
1949. 
This law constitutes an expansion of 
previous legislation of 1937 and 1945, and in- 
corporates new features based on the experi- 
ence of other countries with similar legisla- 
tion. 
‘There appear to be no provisions which 
constitute a significant change from recog- 
nized international and domestic practices in 
the regulation of civil air transportation. 
3. 
Civil Aviation Policy. 
The Compania Dominicana de Aviacion C. 
por A. (CDA}, organized in 1944, is the only 
Dominican air transport company ever to op- 
_ 
erate within the country. 
It does not receive 
a -direct subsidy from the Government, but 
has a 20-year contract for the carriage of air 
mail. 
Foreign scheduled airlines must receive spe- 
cial authorization from the Executive Power 
to operate into the Dominican Republic. 
For- 
eign non-scheduled carriers are allowed traf- 
fic privileges in the country under the limita- 
tions of the new civil air law or regulations 
made for its application. 
Cabotage privileges 
may be acquired only by special permission, 
which is not known ever to have been granted. 
After two years of intermittent negotiations, 
a Bermuda-type air agreement was finally 
initialed by the US and the Dominican Repub- 
lic on 19 July 1949. 
This is the Dominican 
Republic’s only bilateral air agreement. 
The Dominican Republic became a member 
of the International Civil Aviation Organiza- 
tion (ICAO) upon ratification of the Chicago 
Convention in January 1946. 
It has been 
represented at most ICAO meetings, but has 
not taken an important part in the proceed- 
ings. 
4. 
Aijrlines. 
a. Dominican Scheduled Airlines. 
Organized as a Pan American World Air- 
ways (PAA) affiliate in May 1944, Compania 
Dominicana de Aviacion, C. por A. (CDA), the 
only airline ever to operate within the country, 
began commercial 
operations 
two months 
later over two domestic routes out of Ciudad 
Trujillo to Santiago, and to La Romana via 
San Pedro de Macoris. 
Other domestic routes 
have been added gradually. 
Although CDA 
has never operated scheduled services outside 
the Dominican Republic, it does conduct rela- 
tively 
extensive 
charter 
operations 
inter- 
nationally. 
Under the terms of the recently 
concluded US-Dominican Republic bilateral 
air transport agreement, CDA has been au- 
thorized by the Dominican Government to op- 
erate services to Miami and to Puerto Rico. 
PAA personnel manage the company, 
but 
Dominican Air Force pilots do the flying. 
CDA was operating the following undupli- 
cate route mileage and weekly scheduled mile- 
age as of 1 April 1949: 
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Unduplicated 
Miles Scheduled 
Pan American World Airways (PAA) serves 
Route Miles 
Per Week 
Ciudad Trujillo on routes from the US (via 
351 
2,622 
Camguey, Cuba and on some flights Port-au- 
Routes: CDA’s network 
connects 
Ciudad 
Trujillo with Barahona and La Romana on 
the south coast, Monte Cristi and Puerto Plata 
on the north coast, and San Juan cnr Santi- 
ago in the interior. 
Equipment: 2 DC-3 
2 C-46 
| 
1 Beechcraft C-45 
Ownership: 60 percent private Dominican 
40 percent US (Pan American 
World Airways) 
b. Foreign Scheduled Airlines. 
The Dominican Republic is served by five 
foreign scheduled 
airlines, through which 
connections may be made to points in the US, 
Central America, and South America. 
Prince, Haiti) to Puerto Rico, points in the 
Lesser Antilles, Trinidad, and Caracas, Vene- 
guela (via Curacao). 
British West Indian Airways (BWIA) con- 
nects Ciudad Trujillo with Kingston and 
points in the Lesser Antilles. 
Royal Dutch Airlines (KLM) operates to 
Ciudad Trujillo from Miami 
(via Kingston 
and Port-au-Prince), directly from Curacao, 
from Caracas 
(via Aruba), and from Bar- 
ranquilla, Colombia (also via Aruba). 
Aerovias Brasil stops at Ciudad Trujillo on 
its service from Brazil to Miami (via Port-of- 
‘Spain and Caracas). 
Caribbean-Atlantic Airways (CAA) operates 
direct service between Ciudad Trujillo and 
San Juan, with connections for the Lesser An- 
tilles. 
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APPENDIX | 
ECUADOR 
1. 
Government Organization for Civil Avia- 
tion. 
Civil aviation in Ecuador is the responsi- 
bility of the Department of Civil Aviation 
(DAC) acting under the jurisdiction of the 
Ecuadoran Air Force Command. 
The latter, 
in turn, is a dependency of the Ministry of De- 
fense. 
The DAC is understaffed and its ac- 
tivities are limited By the necessity of strug- 
gling for funds in a ministry which naturally 
places defense needs ahead of civilian require- 
ments. 
Despite these handicaps, the DAC 
has gradually assumed increased direction 
over civil aviation matters. 
It will probably 
be transferred soon to the Ministry of Public 
Works and Communications. 
Creation of an 
aviation board is under consideration. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
The Aerial Traffic Law (No. 946) of 12 Sep- 
tember 1936 stipulates that control over do- 
. 
mestic and foreign aircraft in Ecuador shall 
be exercised through domestic legislation and 
in accordance with international agreements. 
In 1947 the new administration cancelled the 
restrictive measures which had imposed heavy 
taxes on airline income and ticket sales. 
Dur- 
ing 1949, the DAC undertook to prepare new 
aviation legislation and regulations, for which 
a need had developed as air services increased 
after the war. 
This legislation was to be pre- 
sented to the Congress in August 1949, but 
has been tabled for further consideration. 
b. Regulation of Domestic Airlines. 
Although Ecuador is anxious to develop all 
phases of civil aviation, that country is second 
only to Paraguay in its lack of civil aviation 
development. 
Ecuador’s difficult terrain fa- 
vors extensive use of air transportation, but 
lack of funds has prevented adequate develop- 
ment of air services and facilities. 
Ecuador’s 
~ 
PE 
inability to meet the emergency transport re- 
quirements of the recent earthquake disaster 
illustrated the country’s need of a more ex- 
tensive air transport network. 
The US air- 
line, PANAGRA, and the Colombian carrier, 
AVIANCA, provide the only dependable serv- 
ice in Ecuador and these airlines serve only a 
few Ecuadoran cities. 
Civil aviation, however, has gradually ex- 
panded in Ecuador, especially since govern- 
ment policy becamemore liberal after the 1947 
change of administration. 
Two Ecuadoran 
airline companies have been in operation for 
over two years and a few marginal companies 
were being organized during 1949. 
With gov- 
ernment policy encouraging expansion, pros- 
pects for continued development of the air 
transport industry in Ecuador are favorable. 
Operation of airlines is left to private inter- 
ests, the government neither subsidizing nor 
financing commercial air services. 
c. Regulation of Foreign Airlines. 
Ecuador and Bolivia are the only two Latin 
American countries permitting foreign airlines 
to operate cabotage services. 
Under contract 
with the Ecuadoran Government, PANAGRA 
and AVIANCA both serve a half dozen points 
within Ecuador and connect it with other 
countries through international services. 
PANAGRA’s contract to operate in Ecuador, 
which expired in February 1949 after twenty 
years in force, was renewed in May 1949 after 
much discussion with DAC officials. 
No ma- 
jor difficulties were encountered, but there 
was some rewording of the contract as a result 
of the government’s desire to secure more con- 
trol over all air companies. 
Braniff Airways, the second carrier desig- 
nated by the US for west coast service in South 
America, stops at Guayaquil on its Houston- 
Rio de Janeiro flights. 
It recently secured an 
air mail contract with the Ecuadoran Govern- 
ment. 
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d. Promotion of Other Aviation Activity. 
Development of air facilities has. been left 
to the airline companies, principally because 
public funds are lacking for that purpose. 
The limited funds which have been made 
available to the Ministry of Defense for air- 
field construction have been used by the Air 
Command primarily for the development of 
military airports. 
A few civil fields, however, 
are being improved and expanded, and others 
are gradually being built. 
Many Ecuadoran 
towns, for example, have taken the initiative 
of preparing landing fields in order to attract 
air services. 
The Shell Company of Ecuador 
has also developed a few airstrips for its op- 
erations in the country. 
Under its new contract, PANAGRA will con- 
tinue to be charged with radio and traffic 
control operations, the government retaining 
a supervisory authority. 
Presumably PANA- 
GRA’s past concern over inadequate compen- 
sation for this service, as well as difficulties in 
enforcement of traffic control regulations, has 
been satisfied in the new contract. 
The Aero Club de Guayaquil has an active 
ground instruction program, but does little 
actual flying. 
Private flying is limited by 
lack of funds for the acquisition of desired 
equipment and spare parts. 
The Escuela Militar de Aeronautica, subsi- 
dized entirely by the Ecuadoran and US gov- 
ernments, is the only aviation school in Ecua- 
dor, and provides training for the Ecuadoran 
Air Force (FAE). 
Its training program has 
been aided by the personnel of an advisory US 
Air Force Mission to Ecuador. 
A Pilots Union was formed in 1948, compris- 
ing civilian pilots, mechanics and navigators, 
employed by either national or foreign lines 
within the national 
territory. 
This group 
was organized to increase the professional 
skills of its members. 
Although the Union is 
permitted to seek legislation to this end, its 
statutes prohibit it from engaging in any 
other political activity. 
There is no airframe or aircraft engine in- 
dustry in Ecuador. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Ecuador has encouraged all forms of for- 
eign air transportation to serve the country. 
Since no Ecuadoran carrier flys international 
routes, the Government is not concerned over 
competition from large international airlines. 
Ecuador’s only bilateral air agreement was 
signed with the US 9 January 1947 and be- 
came effective 24 April 1947. 
it is a Bermuda- 
type agreement. 
b. International Organizations. 
Ecuador continues to desire membership 
in the International Civil Aviation Organiza- 
tion, but cannot afford to join. 
c. US Technical Assistance. 
A US Civil Aviation Mission served in Ecua- 
dor on the basis of an agreement signed in De- 
cember 1947. 
Negotiations for continuation 
of this assistance were terminated early in 
1949, and a formal request for the return of 
the mission to Ecuador is now under consid- 
eration by the US. 
4. 
Aijrlines. 
a. Ecuadoran Airlines. 
Ecuadoran airlines are issued permits to 
Carry passengers and freight in service to 
designated 
cities and towns without fixed 
schedules. 
Although they are therefore not 
strictly scheduled operators, service is main- 
tained on a more or less regular basis by the 
two airlines listed below. 
There are about 
four other companies conducting small-scale, 
non-scheduled 
operations, 
and another 
is 
about to be organized.* 
(1) ATECA (Aero Transporto Ecuatoriano, 
C.A.). 
Routes: ATECA serves Guayaquil, Quito, 
Manila, and Esmeraldas in competition with 
Trasandina. 
In addition, ATECA serves Tul- 
can in the extreme north on the Colombian 
border, and Macara in the extreme south on 
the Peruvian border. 
The company is also at- 
tempting to initiate service to the eastern 
* ATECA and TRASANDINA were merged during 
April 1950 with a recently organized airline SANTA. 
Operations with 4 C-47’s and 1 C-46 are now con- 
ducted under the name of SANTA (Sociedad Ano- 
nima Nacional 
de Transportes Aereos). 
Services 
nearly duplicate the routes of PANAGRA and Avi- 
. 
anca (see section 4. b.) 
AREA (Aerovias Euatorianas, C.A.), another re- 
+ 
cently organized airline, operates a flourishing busi- 
ness which provides strong competition for SANTA. 
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AIRLINES OF ECUADOR 
( October, 1949 ) 
Number 
| 
Airline 
Unduplicated 
Scheduled 
of Aircraft 
Ownership 
Route Miles* 
|Miles per Week|(Various Types) 
ATECA 
780 
3,128 
. 
.| 
100% Private 
Trasandina 
629 
3,766 
100% Private 
TOTAL 
1,409 
6 ,894 
* The term ‘‘Unduplicated’’ refers only to those route miles which 
are not duplicated by an individual airline. 
ORE Tr-1250 
“Oriente” region of Ecuador, which the gov- 
ernment has been anxious to develop, but 
which is still sparsely populated. 
Equipment: 2 C-47 
1 Stinson Reliant 
3 Stinson Station Wagon 
1 Piper Cruiser 
Ownership: 100 percent private Ecuadoran. 
(2) TRASANDINA 
(Trasandina Ecuatori- 
ana, C.A.). 
Routes: TRASANDINA operates through- 
out the most populous portion of Ecuador, 
serving Quito and Esmeraldas in the north, 
Guayaquil and Manta in the central region, 
and Cuenca in the south. 
Equipment: 1 C-46 
2 Ownership: 100 percent private Ecuadoran. 
b. Foreign Airlines. 
PANAGRA operates cabotage services con- 
necting the cities of Quito, Guayaquil, Cuenca, 
Manta, and Esmeraldas, using DC-3 aircraft. 
It has been designated by the Ecuadoran Gov- 
ernment to give radio communication and 
radio navigational aid to all aircraft in ac- 
cordance with fixed rates of compensation. 
PANAGRA and another US carrier, Braniff 
International Airways, both operate inter- 
national service along the west coast of South 
America, landing at Guayaquil in Ecuador. 
DC-4 and DC-6 aircraft are used by both air- 
lines. 
AVIANCA, the Colombian airline, connects 
Ecuador with Colombia to the north, and in 
addition provides scheduled service within 
Ecuador to Quito, Guayaquil, Cuenca, and 
Manta, using DC-3 aircraft. 
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APPENDIX J 
EL SALVADOR 
1. Government Organization for Civil Avia- 
tion. 
Control over civil and military aviation in 
El Saivador rests with the Chief of Aviation 
under the Ministry of National Defense. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation. 
Since there are no airlines operating services 
within El Salvador, there has been little need 
for legislation on aviation. 
A few minor mat- 
ters, such as air mail rates, have been regu- 
lated by executive decrees. 
The Salvadoran 
Government signed a contract in October 1947 
with TACA, S.A. (which was incorporated un- 
der the laws of E] Salvador in 1939 and is 
therefore popularly known as TACA El Sal- 
vador) designating this airline as its “chosen 
instrument” for international services. 
This 
contract will continue in effect until June 
1954. 
b. Regulation of Salvadoran Airlines. 
In contrast to most of the countries of Cen- 
_ 
tral and South America, El] Salvador has re- 
garded aviation as of only minor importance 
to its internal economy, principally because 
the country’s small size makes rapid air trans- 
portation 
unnecessary. 
El Salvador 
there- 
fore has few fixed policies toward civil aviation, 
other than to assure continued international 
service to the capital, San Salvador. 
It was 
_this consideration which led to El Salvador’s 
designation of TACA El Salvador, an airline 
_ 
controlled by US interests, as its “chosen in- 
strument” for such service. 
Largely because 
of the importance attached to TACA service by 
EF! Salvador and other Central American coun- 
tries, the US Civil Aeronautics Board (CAB) 
granted this airline a three year permit in 
' March 1949 authorizing operations to the US 
as a foreign air carrier. The Salvadoran Gov- 
ernment interceded in TACA’s behalf before 
the CAB during consideration of the TACA 
application. 
c. Reguiation of Foreign Airlines. 
El Salvador is served by two foreign-fiag 
scheduled airlines, Pan American World Air- 
ways (PAA) of the US and SAHSA of Hon- 
duras. 
The government has opposed the ad- 
mission of any other scheduled airlines, how- 
ever, since it feels that the country’s air trans- 
port requirements are being adequately served 
by the present carriers. 
Air cargo potential 
increased sufficiently after the war, however, 
for the Salvadoran Government to authorize 
a US non-scheduled cargo airline to join in 
the cargo service to the country in 1948. 
d. Promotion of Other Aviation Activity. 
Although the administration which came to 
power in December 1948 has passed no laws 
and made no policy statement respecting civil 
aviation, it has taken more interest than the 
previous administration 
in building up a 
small, efficient military air force and in pro- 
moting the Civil Air Club of El Salvador. 
The 
club operates under a permanent concession 
by the legislature permitting duty-free entry 
of flying equipment, parts, accessories and 
gasoline for club members. 
Only occasional 
flights have been made, however, and no flight 
training or ground instruction is given. 
The 
government is not known to have given the 
club any direct financial support. 
Weather and radio navigation facilities at 
San Salvador are owned and operated by PAA. 
3. 
International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
El] Salvador has had no occasion to adopt a 
fixed air traffic policy and has concluded no 
bilateral air agreements. 
b. International Organizations. 
El Salvador is a member of the International 
Civil Aviation Organization (ICAO) by virtue 
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SECRET 
of adherence to the Chicago Convention in 
June 1947. 
It is impossible, however, for El 
Salvador to appoint delegations with adequate 
technical qualifications to participate actively 
in conferences of ICAO and other interna- 
tional organizations. 
Its delegates are ad- 
mittedly appointed “in order to help the US 
in the voting.” 
| 
c. US Technical Assistance. 
A US Air Force mission has been assigned to 
El Salvador since 1947 and has been assisting 
with the re-establishment of the Salvadoran 
Air Force. 
The current favorable attitude of 
Salvadoran aviation officials toward the US 
may be attributed in large part to the influ- 
ence of this mission. 
4. 
Aijrlines. 
a. Salvadoran Scheduled Airlines. 
TACA, S.A. (or TACA El Saivador), the only 
airline incorporated in El] Salvador, is an oper- 
ating subsidiary of the US-controlled TACA 
Airways, S.A., a non-operating holding com- 
pany in Panama which owns a 98 percent in- 
terest in the Salvadoran airline. 
Prior to the 
organization of TACA El Salvador in 1939, 
other Central American operations of the 
TACA System had emphasized cargo traffic. 
The inauguration of international passenger 
service by TACA El Salvador brought TACA 
into intense competition with PAA’s Central 
American operations, to which TACA subsidi- 
aries had formerly provided only supplemen- 
tary service. 
TACA El Salvador originally served only the 
Central American countries, but has since 
expanded operations to the US and Mexico. 
In May 1948, however, TACA El Salvador 
signed an agreement with TACA de Hon- 
duras under which the latter now actually 
operates the Central American international 
routes. 
International service from El Salva- 
dor to Mexico and the US, however, is still 
operated by TACA El Salvador. 
It is reported 
that this policy was directed by the Waterman 
Steamship Corporation (which controls the 
holding company, TACA Airways, S.A.), in 
order that TACA El Salvador might concen- 
trate on the services to Mexico and the US 
which supplement Waterman’s surface trans- 
portation 
operations. 
TACA 
El Salvador’s 
present permit to operate to the US as a for- 
eign air carrier was granted by the CAB in 
February 1949, to be effective for three years. 
The extent of TACA’s operations as of October 
1949 is indicated below: 
Unduplicated 
Miles Scheduled 
Route Miles 
Per Week 
TACA, S.A. (TACA 
2,566 
23,789 
Salvador) 
Routes: TACA, S.A. links both El Salvador 
and Guatemala with Mexico City and New Or- 
leans. 
These services connect directly with 
service to the capitals of Costa Rica, Nica-. 
ragua, and Honduras, which is operated by 
TACA de Honduras under contract to and in 
the name of TACA El Salvador. 
Equipment: 
2 DC-4 
8 DC-3 
Ownership: 98 percent owned by TACA Air- 
ways, S.A., which in turn is controlled by US 
interests (Waterman Steamship Corporation). 
b. Foreign Scheduled Airlines. 
San Salvador, the capital of El Salvador and 
the only point receiving service in the coun- 
try, is served on Pan American World Airways’ 
routes which parallel those of TACA, S.A. 
through most of Central America. 
The PAA 
service, in general, is more extensive than that 
of TACA. 
Moreover, connections with other 
PAA routes are made at Mexico City for points 
in the US, at Merida, Mexico, for Habana and 
the Caribbean, and at Panama 
for South 
America. 
Servicio Aereo de Honduras, S.A. (SAHSA) 
> 
also operates to El Salvador from Tegucigalpa, 
Honduras, via other points in the latter coun- 
try. 
c. Foreign Non-Scheduled Operations. 
Skytrain Airways, Inc. of New Orleans re- 
ceived a temporary landing permit from the 
Salvadoran Government in August 1948 and 
commenced fairly regular cargo flights be- 
tween New Orleans and El Salvador. 
This 
operation soon included as many as two flights 
weekly, carrying such varied cargoes as live- 
stock and small automobiles. 
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APPENDIX K 
GUATEMALA 
1. 
Government Organization for Civil Avia- 
tion. 
Civil aviation activities in Guatemala are 
under the jurisdiction of the Ministry of Com- 
munications and Public Works, acting through 
its dependency, the Directorate General of 
Civil Aeronautics (DGAC). 
The government- 
owned airline, Compania Guatemalteca de 
Aviacion (AVIATECA), however, operates un- 
der the direction of the Ministry of Economy 
and Labor. 
It is being urged by some Guate- 
malan officials that AVIATECA be transferred 
to the Ministry of Communications and Pub- 
lic Works, in order to unify governmental con- 
trol over all phases of civil aviation. 
2. 
Domestic Civil Aviation Policy. 
a. Civil Aviation Legislation, 
A new basic civil aviation law, based on 
Venezuela’s 1944 Civil Air Law, was made effec- 
tive by the DGAC on 7 April 1949, after con- 
sultation with AVIATECA, other aviation enti- 
ties in Guatemala, and the foreign airlines 
serving the country. 
To supplement this law, 
new civil air regulations are now being formu- 
lated by the DGAC. 
b. Regulation of Guatemalan Airlines. 
The Guatemalan Government has granted 
the wholly government-owned 
instrument, 
AVIATECA, a monopoly of all internal freight 
and passenger traffic. 
The airline, of course, 
is heavily 
subsidized 
by the government. 
Since surface transportation in Guatemala is 
very poor, there is a great need for air charter 
services to supplement AVIATECA’s opera- 
tions and to accommodate 
tourists, 
finca 
(plantation) owners, businessmen, and others 
who desire transportation to many isolated 
parts of the country. 
To date, however, no 
firm has been successful] in obtaining the re- 
quired license to operate in this manner. 
The 
government’s principal objection to this type 
of operation seems to be fear of competition 
with AVIATECA. 
In actual fact, however, 
charter services would almost certainly be of- 
fered only to points which AVIATECA does not 
or is not equipped to serve, such as small pri- 
vate landing fields. 
c. Regulation of Foreign Airlines. 
The concession of Pan American World Air- 
ways (PAA) to operate air and ground serv- 
ices in Guatemala is due to expire in 1950. 
Since the company has a number 
of bitter op- 
ponents scattered throughout the executive 
and legislative branches of the Guatemalan 
Government, PAA will probably experience 
considerable difficulty in renegotiation of its 
contract. 
The government has been largely 
responsible for a number of recent difficulties 
experienced by PAA with respect to its native 
employees in Guatemala. 
Moreover, there are 
indications that Guatemala will choose to in- 
terpret PAA’s contract rights in such a man- 
ner as to invalidate an agreement providing 
for compensation to PAA if its facilities should 
be taken over upon termination of the present 
contract. 
This 
restrictive 
attitude 
of the 
Guatemalan Government may be designed 
only to harass PAA further. 
On the other 
hand, in view of Guatemala’s known desire to 
extend AVIATECA’s operations, the govern- 
ment’s policy may indicate that pressure is 
being exerted on PAA as a means of influenc- 
ing the US Civil Aeronautics Board’s decision 
regarding AVIATECA’s current application 
for a permit to establish scheduled service to 
the US. 
If AVIATECA initiates scheduled service to 
the US, Guatemala’s policy toward both sched- 
uled and non-scheduled foreign airlines will 
probably become even more restrictive. 
At 
present, TACA Airways is the only other sched- 
uled foreign airline serving Guatemala. 
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d.-Promotion of Other Aviation Activity. 
Three first-class airports were built by the 
US during the war under the Airport Develop- 
ment Program: Guatemala City, Puerto Bar- 
rios, and San Jose. 
The latter two have been 
turned over to the Guatemalan Government 
by the USAF, while the third is presently in 
process of being transferred. 
Each of these 
three airfields has a 6,000-foot paved runway. 
Several other good airfields of smaller size are 
also in operation. 
Since there is still no air 
charter service in Guatemala, several isolated 
finca owners have also cleared small landing 
strips, have acquired aircraft and have taken 
flight training in order to improve their trans- 
portation situation. 
Substantial progress has been made recently 
in private flying in Guatemala, principally on 
the initiative of two US nationals who reacti-| 
vated aero club flying in that country after 
the war. 
Their company, known as Aviones 
Centro-Americanos, was under contract to the 
Aero Club de Guatemala to operate that club, 
its flying activities and ground school. 
The 
company also acted as local distributor for 
Cessna aircraft and the products of Continen- 
tal Motors and Bendix Aviation Corporation. 
There has been considerable pessimism con- 
cerning the future of the excellent training 
- program of this organization since it was an- 
nounced that management of the club would 
pass to Guatemalan control at the end of 
March 1949. 
_ PAA and AVIATECA still jointly maintain 
the radio aids to navigation in Guatemala, 
while PAA and the USAF operate meteorologi- 
cal 
stations. 
Various 
arrangements 
have 
been proposed for increased Guatemalan par- 
ticipation in these services, 
3. " International Civil Aviation Policy. 
a. Air Traffic Policy and Air Agreements. 
Guatemala has recently assumed a more re- 
strictive attitude toward foreign airlines, par- 
ticularly since its chosen instrument, AVIA- 
TECA, has sought to initiate scheduled service 
over aroute tothe US. 
(See Section 2, c.). 
Guatemala has no bilateral air transport 
agreements. 
b. International Organizations. 
Guatemala became a member of the Inter- 
national Civil Aviation Organization (ICAO) 
in April 1947, and has been represented at 
most meetings 
of that organization. 
The 
country, however, has not taken an active part 
in ICAO activities. 
Guatemala is unable in- 
dependently to supply the air navigation and 
meteorological aids recommended by ICAO, 
but would probably participate in joint sup- 
port programs for these facilities, with outside 
assistance. 
' 
c. US Technical Assistance. 
(See Section 2, d, concerning wartime, US- 
built bases recently turned over to Guate- 
mala.) 
4. 
Aijrlines. 
a. Guatemalan Scheduled Airlines. 
Guatemala’s only airline, AVIATECA, is a 
government-owned entity expropriated by the 
new administration after the 1944 revolt. 
It 
is heavily subsidized, has good maintenance 
standards, 
and has achieved 
an excellent 
safety record. 
AVIATECA desires to under- 
take international services and has applied for 
a permit to operate to the US, which is now 
under consideration. 
Inauguration of these 
services, however, may also depend on the out- 
come of AVIATECA’s plans to acquire three 
Martin 202 aircraft. 
In October 1949, AVIATECA was operating 
the following route miles and miles scheduled 
per week: 
Unduplicated 
Miles Scheduled 
Route Miles 
Per Week 
1,490 
11,558 
AVIATECA (Compania Guatemalteca de 
Aviacion). 
Routes: AVIATECA’s routes, which are at 
present only domestic, are concentrated in the 
vicinity of Guatemala City, radiating from 
that city in all directions. 
Connections are 
also maintained with a lesser network in the 
northern part of the country. 
Equipment: 6 DC-3 
Ownership: 100 percent Guatemalan Gov- 
ernment. 
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b. Foreign Scheduled Airlines. 
. 
Skytrain Airways, Inc. has operated up to two 
| 
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Pan American World Airways (PAA) and 
DC-4 flights weekly from New Orleans serving 
40) 
TACA. Airways, Inc. both serve Guatemala 
Guatemala and El Salvador, while NATS Air 
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City from New Orleans, as well as from Mexico 
_ Transportation Service (NATS) of Oakland, 
. 
The 
: 
City and points in Central America. 
California has operated a single C-47 in weekly 
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ine. 
c. Foreign Non-Scheduled Operations. 
New York and Miami. 
The NATS service was 
and 
_ 
Two US non-scheduled freight carriers op- 
originally contracted for by the Guatemalan 
AO. 
erate fairly regular services to Guatemala. 
Government. 
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