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6/ How international airline fares and rates are made

matters, however, its authority is more strictly limited to the power to disapprove those which are unjustly discriminatory. Despite this legislative hiatus, however, the Board considers that it is bound to control foreign rates and is enabled to do so in another way. The whole organization of international aviation is dependent on agreement between operators, but the only way in which U.S. carriers can enter into such agreements legally and without prosecution under the stringent terms of U.S anti-trust legislation is by a specific finding by the CAB that any such agreement is not contrary to the public interest. Thus, if CAB disapproves all or part of any IATA resolution, the anti-trust act prevents U.S. carriers from being a party to it - and if they cannot be bound by it, no other carriers would want to be.

CAB's international repercussions

Strictly speaking, the powers of the CAB affect directly only U.S. operators and those foreign-flag airlines who fly into U.S. territory. Yet the Board's decisions and its theories of public utility regulation have worldwide repercussions, due to the inter-relationship of all fares and rates and the fact that U.S. airlines operate into all Conference areas. And in much the same way, of course, other governments have an equally wide influence on the pattern of world agreement because they are served by many foreign airlines, because their own carriers have far-flung routes, or because their scattered territories provide stepping-stones for purely cabotage routes on which they have sole control of rates.

IATA Conference discussion of agreements must therefore be carried on at two levels simultaneously. On one level, they are a balancing of the needs and proposals of the airlines themselves; on the other, they seek to reach an accomodation of the interests, theories of regulation and expressed desires of many different nations.

Government by consent

In the final analysis, then, agreement reached under these conditions represents the best practicable accommodation possible between a myriad of interests. One American observer of the process (Eric Bramley in PEGASUS) has summed it up this way:

"The Conferences, in many ways, are like the U.S. Congress -- you can criticize its workings and you may have your private opinion of some of the people in it, but it remains an indispensable and necessary machinery for the government of the country by the consent of those who live in it. Congress and Conference both, in the final analysis, work by compromise and their results are, therefore, seldom 100 per cent satisfactory to anyone."

Under these circumstances, the persistence of the Conferences during ten years of hectic postwar air transport expansion and development is in itself a substantial achievement. Its success, from the airline point of view, is attested by the fact that it has proved sufficiently effective and flexible to meet the requirements of operators of every size and typo --