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Organization of the Report

The balance of the present chapter of the report is a summary description of the current and prospective routes, markets, and competition of U.S. flag carriers.

Chapter II deals with the question of appropriate standards for multiple designation of U.S. carriers. It examines the basic economic conditions necessary for profitable operation and sets forth some suggested yardsticks of traffic flow and density which should be available to support competitive service.

Chapter III of the report covers the question of foreign competition, its effect upon the service and fares of our own carriers, and its ability to serve as a substitute for inter-U.S. carrier competition. As indicated above, one reason for establishing competing U.S. carriers abroad was to provide U.S. nationals with a means of traveling abroad by air, in safety and comfort and at economical fares. Because of the growth of effective foreign carrier competition this reason may be diminishing in importance and may have virtually disappeared in such areas as the Atlantic; it continues, however, to have considerable validity in other areas and will probably continue to have validity for some years to come. This is especially true in portions of South America and of the Far East. Because of the rapid rise of foreign competition in the last few years and because of the propensity for several of the foreign carriers to enter into consortiums, pools, or other cooperative arrangements, the effect of these trends on our carriers is also considered in Chapter III.

Chapter III also deals with the question of foreign competition in those situations where the foreign carriers have captured an unusually large share of the market. In the past five years, a situation has arisen with respect to certain countries (Australia, Scandinavia, Holland, Belgium and Switzerland are some outstanding instances) where their carriers have far surpassed our own in the carriage of traffic between the United States and the home markets of these countries. In each instance, the country

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