Document: 347 U.S. 74 S.Ct. 350 98 L.Ed. 513 DELTA AIR LINES, Inc.v.SUMMERFIELD, Postmaster General et al. CIVIL AERONAUTICS BOARD v. SUMMERFIELD, Nos. 222, 223. Argued Dec. 9, 10, 1953. Decided Feb. 1, 1954. Mr. Emory T. Nunneley, Jr., Washington, D.C., for C.A.B. L. Welch Pogue, Delta Air Lines. Hugh W. Darling, Los Angeles, Cal., Western Daniel Friedman, Summerfield Justice DOUGLAS delivered the opinion of Court. 1 Lines, petitioner in No. 223, is successor by merger to Chicago and Southern Lines (C & S). C § was an air carrier which conducted both domestic foreign operations prior merger. The present case involves subsidy mail pay its from 1946 through 1950. 2 In 1948 Board, on applications made 1944 1945, fixed a prospective annual beginning January 1948, Board Estimated would yield net return after taxes 7.4 percent that part investment allocable those operations. 9 786. following three years—1948, 1949, 1950—the rates operation produced more than $654,000 excess return. 3 applied Latin American routes. On October 18, 1951, issued order. Rates were retroactively November 1946, December 15, 1950, prospectively 16, awarded designed give 7 return, property. operations, past period, 10 future. 14 681. 4 fixing period refused offset against carrier's need earnings flights. It gave two 'considerations economic policy' position.1 First, said it put 'unjustifiable strain' if latter required carry international Second, concluded regulatory ends be better served maintaining 'the comparative status between operators have routes as do not routes.' 5 General's petition review Court Appeals reversed Board. 92 U.S.App.D.C. 256, 207 F.2d 207. cases are here certiorari argued with 67, 347. 6 As we already noted companion cases, 406(a) Civil Aeronautics Act, 52 Stat. 998, 49 U.S.C. 486(a), U.S.C.A. directs fix 'fair reasonable compensation transportation aircraft'. Section 406(b) provides determining 'shall take into consideration, among other factors, * each such sufficient insure performance service, and, together all revenue carrier, enable under honest, economical, efficient management, maintain continue development extent character quality commerce United States, Postal Service, national defense.' 8 mandate consideration' what need' is. Act thus poses initial question whether financial condition needs or has no one. did find had 'need' additional $654,000. merely exces profits should 'as matter taken account computing posture decision seems conformity law. answers effect 'may different carriers classes carriers, service.' may, therefore, rate service. Since may that, consistently rate-making decisions (see, e.g., Toll Bridge Co. Railroad Commission, 307 486, 494, 59 948, 953, 83 1414) at level will sustain particular unit. Therefore when fixes service attributable class made. That argument. There aspects traditional carried over Act. Thus held Transcontinental 336 601, 69 756, 93 911, retroactive only date application. We also clause wholly war functions. Id., page 604, pages 757, 758. But application this language 406(b). standard carrier.' measured entirety losses one division department. measure amount necessary 'together carrier' adequate maintenance development. And defines 'air 'any citizen States who undertakes engage *.' 1(2). wording precludes measuring any unit entity. 11 read Congress established special formula rate. While form must computed reference entire carrier. requirement revenues subsidy; there discretion disregard portion because policy considerations. words, which, revenue' meet objectives therefore limiting factor sense exceed it. construe apply manner, correct reversing 12 makes extended argument position elaboration reasons advanced offsetting rate.2 maintains maximum operating efficiency transportation—prominent Act3—will setting divisional rather system basis. This so. decide. adopted based even being 13 Affirmed. said: 'If adopted, almost invariable result instant case, used might have. Recognizing likelihood, hesitate burden robust segment industry obligations economically weaker part. For transport can kept financially sound, public ultimately benefit, putting aside consideration obvious advantage reduced compensation. Thus, anticipate carriers' earning continues strong, reductions fare possible, thereby giving impetus further industry. addition, improved earnings, able benefit themselves modern aircraft, methods affording safer cannot escape thought allow back shall subjecting unjustifiable strain. Many well along road self-sufficiency. our duty speed them their way, thwart them. 'It appears desirable fall fairly well-defined classes, enabled uniform groups provided, course, preserved excluding A every incentive operate efficiently retain earns inexcess estimated afforded administratively preserve been analyze within light results achieved others same class. comparison technique proved most satisfactory practicable available If time, difficult, impossible, suitable basis analysis. 'In view foregoing, S' resulting conclusion stems considerations policy; deciding legal power make offset.' 683. See note supra. provides: exercise powers duties consider following, things, interest, accordance convenience necessity— '(a) encouragement air-transportation properly adapted future defense; '(b) regulation manner recognize inherent advantages of, assure highest degree safety in, foster sound conditions transportation, improve relations between, coordinate by, carriers; '(c) promotion adequate, charges, without unjust discriminations, undue preferences advantages, unfair destructive competitive practices; '(d) Competition '(e) best promote safety; '(f) civil aeronautics.'

Category: 7