Evening star., 1947-01-19


the issue of "free trade in the air
period in the American aviation ind
In the lush days Of war profit
lines were given international route
trolled" competition at home and alb
Now, plagued by accidents, a de-
cline in revenues which seems tenn
porary but certainly is drastic at
this time, and overexpansion In
some cases, the lines must marshal
their arguments against Pan Ans
about fight to enter the domestic
field with nonstop service at re-
duced rates.
Pan Ans claim to equal rights
with its competitors to operate both
domestic and foreign routes and
the arguments against it are con-
tanned in the largest record ever
compiled for the Civil Aeronautics
Board-more than 5000 pages OF
testimony before a CAB examiner
at preliminary hearing just COM
pleted.
Batteries OF attorneys on both
sides are now preparing briefs from
the great volume of testimony and
exhibits for filing with the CAB
prior to oral arguments sometime
next summer, with decision from
the board not expected before fall.
Profits Dropped Sharply.
The economic picture for the in
dustry has changed radically since
Pan Am, taking its cue from what
appeared a firm Federal policy OF
controlled competition, abandoned
its fight for community" operations
overseas and demanded the same
right to fly at home that the compe-
tition had been given to fly abroad
Net profits from airline opera
tions had fallen from the war peak
of s42, ,39S,691 in 1945 to 4,788,3l7 in
the first 10 monts of 1916, a drop
anticipated but doubly difficult to
assimilate in a period of high costs
for reconverting war equipment and
general expansion. Although no
figures are available for the last two
months of 1916, it is known that
passenger revenue fell OF sharply
except during the holiday season.
This was due, airline officials say,
to a series of disastrous accidents
grouped close together plus the
usual seasonal decline during winter
weather. Another element was
public reaction to a postwar period
of rapid expansion, when facilities
were jammed by pentup travel
demand and the airlines were
breaking in new stats to handle
the rush.
At the same time one Of Pan
Americans foremost competitors for
high-density traffic across the North
Atlantic, Trans World Airline, was
buffeted by circumstances over
which the management had little
or no control-the temporary
grounding of its high-speed Con-
stellations, the crippling pilots
strike, a fatal accident in Ireland
and a dispute between the manage
ment and principal stockholder.
Three Companies Made Money.
With the exception of TWA, how
ever, other members Of the "big
four" United, American apd East
ern, managed to show profit in 1916
despite heavy outlays for new equip
ment, although most of them lost
some money in the last quarter.
While TWA has Strengthened out
most of its difficulties, which caused
a loss of up to $1,000, 900 in 1916, the
general situation has forced curtail-
ment all along many lines, including
reductions in schedules and per-
sonnel, cancellations of contracts
for new equipment and cooperative
efforts to cut expenses.
At a time when Pan American is
proposing to connect 13 Of the
country's big population centers
with high-speed service at cents
a mile, at least one airline, TWA,
has put out the first feeler for an
increase in the domestic rate now
averaging about Az cents.
Too, half a dozen airlines have ap-
piled to the CAB for higher airmail
rates, including the only big operator
with headquarters in Washington,
Capital Airlines-PCA, which lost
over $4,000, 900 last year, due largely,
it was said, to rapid expansion and
the addition of many four -engined
transports.
Pan AIMS application, backed by
Washington and II other gateway
cities on its proposed domestic net
work, must be passed upon under
the law which charged the CAB
with regulating the airlines and
their passenger and mail rates to
encourage the development of a
strong industry "for the commerce,
postal service and national defense
of the United States"
Added Competition Resisted.
Moreover, an applicant must prove
public convenience and necessity"
The dozen airlines opposing Pan
AIMS application contend the added
will result in disastrous