Viewing page 17 of 206

This transcription has been completed. Contact us with corrections.

Chapter 1
INTRODUCTION AND BACKGROUND

This report deals with the question of the amount of competition, if any, that there should be between U.S. flag air carriers operating abroad. It seeks to review the results of past government policies and actions on this question and to set forth suggested guide-lines for future government action in the light of changing air transport and national interest defense. 

The present pattern of our international civil aviation and of the designation of multiple U.S. carriers to serve points abroad dates from the end of World War II. At that time, the Civil Aeronautics Board (CAB) and the President established route and competitive patterns, across the Atlantic to Europe and beyond, in the Pacific and in South America, which have largely determined the operations of our carriers over the last 15 years. In general, the concept which guided the CAB and the President in those proceedings might be described as limited or restricted competition. Under this concept geographical areas were carved out of major regions and assigned to a single carrier. (For example, Europe and the Middle East were divided into three areas.) Point-to-point competition between these carries was restricted to a very few points - usually major traffic points in each major region of the world, such as London, Buenos Aires, Tokyo, and the like. 

For the most part, the concept of limited competition has prevailed in the postwar period, but various events have brought about some departure from the basic concept. Thus, in the original North Atlantic Route Case, 1945 1/ competition in Europe was certificated only at London, Frankfurt, Lisbon and Shannon, the latter two points being certificated for competition largely for operational reasons. In 1950, however, the President directed the 

1/ Northeast Airlines et al, North Atlantic Routes, 6 CAB 319 (1945).