8 December 2015 Leave a comment
Aviation Regulation – History and Practice
FOREIGN AIR MAIL CONTRACTS
The airmail legislation described in Part One did not apply to air transportation of foreign mail. Eventually, with the U.S. government strongly supporting mail service between North and South America, the U.S. Congress passed the Foreign Air Mail Act of 1928 to regulate such international service. This, however, was preceded by the formation of Pan American Airways and its inauguration of international airline services between the U.S. and Cuba.
Pan American Airways, Inc. (PAA) was founded on 14 March 1927 by Air Force Majors “Hap” Arnold, Carl Spaatz and John H. Jouett, later joined by John K. Montgomery and Richard B. Bevier, as a counterbalance to German-owned carrier “SCADTA” (Colombo-German Aerial Transport Co) that had been operating in Colombia since 1920. SCADTA was viewed as a possible German aerial threat to the Panama Canal. Eventually Montgomery petitioned the US government to call for bids on an U.S. airmail contract between Key West and Havana (FAM 4) and won the contract. However, PAA lacked any aircraft to perform the job and did not have landing rights in Cuba. Under the terms of the contract, PAA had to be flying by 19 October 1927.
On 2 June 1927, Juan Trippe formed the Aviation Corporation of America (ACA) with financially powerful and politically well-connected backing, and raised $300,000. On 1 July Reed Chambers and financier Richard Hoyt formed Southeastern Airlines. On 8 July Trippe formed Southern Airlines and on 11 October Southeastern was reincorporated as Atlantic, Gulf and Caribbean Airways. Trippe then proposed a merger between these three groups and in doing so played a trump card: He and John A. Hambleton, one of his backers, traveled to Cuba and persuaded the Cuban president to grant landing rights to the Aviation Corporation, making Montgomery’s mail contract useless as a bargaining chip. After much wrangling between the groups, including a meeting on Hoyt’s yacht during which Assistant Postmaster General Irving Grover threatened that if there was no deal he would not be awarding any contract to anyone, the Aviation Corporation of the Americas was formed, operating as Pan American Airways, headed by Juan Trippe. Later the corporation’s name was changed to Pan American Airways.
The deadline of 19 October still loomed, however. A Fokker F-VII aircraft was selected for the operation, but could not be used because Meacham’s Field in Key West was not completed and could not accommodate the aircraft. What transpired was an eleventh hour miracle. Pan American’s representative in Miami learned that a Fairchild FC-2 monoplane was in Key West, sitting out a hurricane threat. The aircraft was owned by West Indian Aerial Express (the Fairchild Group) and a deal was made to charter the aircraft. The pilot was offered $145.50 to carry mail to Havana that had just arrived on the Florida East Coast and Atlantic Coast Line railroads. The hurricane threat disappeared and the trip was made. The rest is history.
On 28 October 1927, the Fokker finally left Key West on Pan American’s inaugural international flight, carrying 772 lb. of mail.
Under the Act, Foreign Airmail contracts (FAMs) were put up for bidding and Pan American was able to win them, making it the only US-flagged carrier with authority from the U.S. government to carry mail to foreign countries on international routes. Operating authority to these countries, however, needed to be secured and at the time there was no framework within the US government to accomplish that. Pan American’s Juan Trippe was able to do it. He carried out then what the U.S. Departments of State and Transportation do today with respect to foreign routes.
Pan American established services first in the Caribbean, the whole of Latin America and eventually across the Pacific Ocean. Authority across the Pacific, however, was not Trippe’s original transoceanic ambition. It was the Atlantic. However the geopolitical situation coupled with technological limitations made that option impossible. The path to Europe was through Newfoundland. Unfortunately, negotiations between Trippe, Britain, Canada and Newfoundland in 1932 did not provide the access desired, although some understanding was achieved between Pan American and Britain’s Imperial Airways with regard to traffic rights. Because Newfoundland appeared to be in doubt, Trippe looked south. Unfortunately, the political situation in Portugal made it difficult for Pan American to negotiate for traffic rights there as well.
What is interesting here, with respect to the negotiations over Newfoundland, is that it was not the American government doing Pan American’s bidding. It was Juan Trippe. And it was Trippe who personally dealt with the governments of Britain, Canada and Newfoundland, following a pattern used when he negotiated traffic rights to countries in Latin America.
Any hope for trans-Atlantic operations, however, was dashed when, in April 1934, the British government demanded reciprocity with the United States over traffic rights. The British government spoke for Imperial and questioned why the U.S. government did not speak for Pan American, as both entities were instruments of national policy. Trippe had overestimated his diplomatic skills and his “go-it-alone diplomacy” was not working. He admitted that he did not see much future for Pan American in the North Atlantic. In addition the British, in 1934, had nothing like Pan American’s S-42, then the most advanced aircraft in the world. Until Imperial Airways had a similar aircraft that could cross the Atlantic to the United States, Pan American would find itself blocked from operating to Britain.
The focus thus switched to the Pacific. After a “great circle” trans-Pacific route through the north was ruled out due to issues between the United States and the Soviet Union, it was decided to take the route that represented the longest distance between the United States and the Orient: the mid-Pacific.
Here, the issue of traffic rights was not a problem for Pan American. The route involved stops at Honolulu, Midway, Wake and Guam, terminating in Manila, all of which were under U.S. jurisdiction. At Guam and the Philippines, the U.S. Navy had established bases on the pretext of potential confrontation with Japan. Midway was being used by the Navy for war games staged in the area. Wake, a tiny island, discovered by Trippe in the New York Public Library, was an uninhabited coral atoll, and a minor trophy of the Spanish-American War. It was a critical point for the trans-Pacific flight. Trippe eventually got permission to use the island as a base.
On 24 October 1935 the U.S. Post Office awarded Trippe the trans-Pacific FAM and on 22 November, the China Clipper inaugurated service from the mainland United States across the Pacific.
U.S. REGULATION OF AIR TRANSPORTATION
The first instance of United States regulation of aircraft and airmen was in the Air Commerce Act of 1926. It defined “Air Commerce” as carriage by aircraft of persons or property for hire, and the navigation of aircraft in the furtherance of or for the benefit of a business. It established federal regulations regarding aircraft, airmen, navigational facilities and air traffic, including the development and maintenance of airways and aircraft altitude separation. The Act required that aircraft were to be inspected for airworthiness and were required to have markings on the outside for identification. It also provided the requirement that airmen be tested for aeronautical knowledge and have a physical examination completed to insure their physical fitness.
The Act also promoted civil aviation to attract capital and provide a legal basis necessary for its development. The Aeronautics Branch of the Department of Commerce was established by an amendment to the Act in 1929 and was responsible for overseeing and implementing the Act. The regulations promulgated would be known as Civil Air Regulations (CARs).
In 1935, the Federal Aviation Commission (FAC), a board created by Congress in 1934 to study airline regulation and recommend policy called for creation of a centralized and independent authority to regulate the airline industry. As a result Congress passed the Civil Aeronautics Act of 1938 that was signed into law by President Roosevelt. The Act established the Civil Aeronautics Authority (CAA) and transferred federal responsibilities for non-military aviation to that new independent agency. The Act also gave the CAA quasi-judicial and legislative functions related to economic and safety regulation. This included regulation of fares and routes the air carriers would serve. The CAA was also responsible for aviation regulations, airways, navigational facilities and air traffic control.
The Act created a three-member Air Safety Board that investigated accidents and made recommendations to eliminate the causes of accidents and also provided for an Administrator, who performed executive functions related to the development, operation and administration of air navigations, as well as the promotion of aviation. Airmail contracts were replaced by “Certificates of Public Convenience and Necessity”.
In 1940, President Roosevelt split the CAA into two agencies, the Civil Aeronautics Administration, which went back to the Department of Commerce, and the Civil Aeronautics Board (CAB). The offshoot of the original CAA retained responsibility for ATC, airmen and aircraft certification, safety enforcement, and airway development. CAB responsibilities included safety rulemaking, accident investigation and economic regulation of the airlines. The latter included passenger fares, air mail rates, route entry and exit, mergers and acquisitions and inter-carrier agreements. The routes of the then existing airlines were “grandfathered” and these airlines became later known as “trunks”, a term borrowed from the trunk railroads of the day. These trunk airlines were certified to operate on medium and long-haul interstate routes under Section 401 of the enabling legislation and were sometimes referred to as “401 carriers”. In 1942, L. Welch Pogue, Esq., was appointed Chairman of the CAB and served until 1946.
EARLY EUROPEAN AVIATION
In the United Kingdom, Aircraft Transport and Travel, a fixed-wing airline, operated the first international route in the world between Hounslow Heath outside London and Le Bourget near Paris. The airline also won the first British civil airmail contract between Hawkinge and Cologne. Handley Page, another airline, operated a London-Paris passenger service.
In France, Société Générale des Transports Aériens operated flights between Toussus, le Noble and Kenley (near Croydon, outside London), and Compagnie des Messageries Aériennes operated airmail and freight service between Le Bourget and Lille.
In Germany, Deutsche Luft Hansa was created in 1926 and became a major investor in airlines outside Europe, particularly in South America. The German manufactured Junkers, Dornier and Fokker aircraft were at the time the most advanced in the world.
In the Netherlands, KLM, the oldest continuously operating airline in the world made its first flight in 1920 between Croydon Airport, London and Amsterdam.
In Finland, Aero O/Y (now Finnair) started operations in 1924 between Helsinki and Tallinn, Estonia.
And in the Soviet Union, the Chief Administration of Civil Air Fleet was established in 1921. Later, a German-Russian joint venture was established to provide flights to the west from Russia. Domestic operations were begun in 1923 by Dobrolyot and from 1932, all operations were carried under the name “Aeroflot”.
European Airlines Recognized as Airmail Carriers
The period of 1920-1927 was a period of significant development for air transportation but the postal administrations and airlines were in the dark as to future possibilities for international airmail. By 1924, the idea of using aircraft for the transportation of mail began to gain momentum, and in September, 1927, at a conference called at the suggestion of the Air Transport Committee of the International Chamber of Commerce held at The Hague, an agreement was reached that established airlines as officially recognized carriers of the mail. The Conference also initiated rules and regulations concerning the acceptance and rapid delivery of airmail, a rate-making structure, the expeditious handling of airmail by countries without air services, and the basis of accounting procedures for international airmail. Another provision agreed was that the PAR AVION labels should have a blue color and, when the mail did not actually travel by air, such labels or annotations should be crossed out.
EUROPEAN CONSOLIDATION AND EXPANSION
In the United Kingdom, there was a movement toward consolidation to compete with the subsidized French and German airlines. In 1924, Imperial Airlines was formed through a merger of four airlines, and was able to compete with these French and German carriers. In addition the airline began survey flights to far-flung parts of the British Empire. The airline also ordered the Handley Page W8f City of Washington.
In France, Air Union was formed in January 1923 and later merged with four other airlines to become Air France in 1933.
After consolidation survey flights, Imperial Airlines extended its operations during the late 1920s and 1930s to the furthest reaches of the British Empire. Destinations included South Africa, Australia, British India, Rangoon, Singapore, Basra, Karachi, Hong Kong, etc. The aircraft, however, were small, with a capacity of fewer than 20 passengers, and the passengers consisted of the wealthy or British men doing colonial administration, business or research.
Air France’s operations depended on links to points in North Africa and Indochina.
KLM in the Netherlands also depended on links to its far flung colonies, including the East Indies.
Germany, however, lacked colonies but began expanding services with the airship Graf Zeppelin in regular scheduled passenger service between Germany and North and South America. Airship Hindenburg entered passenger service and successfully crossed the Atlantic 36 times before crashing at Lake Hurst, New Jersey, in May 1937.
One point of interest here is that during this time the state-owned flag carriers of several European nations were establishing “foreign routes” to their own colonies in Asia, Africa and the Indian Sub-Continent, all without the need to obtain traffic rights. Privately owned Pan American did not have this luxury and was required to obtain traffic rights to operate not only to the European countries, but to their colonies as well.
The maps below illustrate the typical route systems of two key international airlines prior to and during World War II. The U.S. carrier, Pan American, obtained its authority through negotiating for landing rights at overseas destinations. The foreign carrier, Imperial of Great Britain offered overseas destinations through its colonies. As previously noted, Pan American’s initial transpacific authority came about by virtue of U.S. control of waypoints between San Francisco and Manila. The authority to Hong Kong came about after Pan American’s Juan Trippe used his previously obtained landing rights in Portuguese Macao to pressure the British to grant him landing rights in Hong Kong. At the time, the China National Aviation Corporation (C.N.A.C.) was yet another subsidiary of Pan American. Note the extent of operations in Latin America.
SITUATION AT THE EVE OF WORLD WAR II
By the late 1930s, Pan American had launched trans-Atlantic flights with the Boeing 314 flying boat. The British and French were operating trans-Atlantic flights as well, but only under mail contracts. Pan American was the only airline with the capacity to accommodate passenger traffic.
At the same time, U.S. domestic airlines (and Pan American) were looking at high-capacity-long range landplanes (DC-4 and Lockheed Constellation).
War was looming in Europe and at the same time, Pan American began experiencing problems with its Boeing 314 operation due to bad weather in the winter months. Both these factors prompted a shift to a southern route that nearly doubled the flight time between the European continent and New York. The route departed Lisbon and stopped in Bolama (West Africa), Port of Spain and Bermuda before arriving in New York.
On the eve of World War II, Juan Trippe recognized that a shift from flying boats to landplanes on trans-Atlantic routes was inevitable. He was initially interested in acquiring the pressurized Lockheed Constellation and was “given permission” by Howard Hughes to acquire it. However, the war started and both DC-4 and Constellation production was shifted to the war effort.
For all intents and purposes, the world’s airlines shifted their operations to wartime, including Pan American and the U.S. domestic airlines. Other than the U.S. regulations that governed the U.S. carriers, international commercial aviation was governed by the provisions of the Paris Convention of 1919 and the Havana Convention of 1928. It would soon become obvious that both were obsolete.
END OF PART TWO
The next installment of this story, Part 3, will cover World War II, the Chicago Convention of 1944, ICAO, Air Services Agreements, the Freedoms of the Air, the concept of the “Chosen Instrument”, IATA and the Bermuda Agreement of 1946.