AVIATION: Eagle among Chicks

In the air-freight business, crowded with weak chicks, an eagle appeared last week. American Airlines Board Chairman Cyrus Rowlett Smith announced that American intended to operate “an effective nonscheduled air cargo service.” Its “effectiveness” caused shivers to 2,730 new small operators, many of whom are veterans flying surplus planes. They now charge an average of 20¢ a ton mile. American plans to carry cargo at rates ranging from 18¢ down to the unheard-of low of 11¢ a ton mile for big shipments on long hauls.

Nonscheduled carriers cried that this was a rate war to drive them out of business. It would not be so much a war as a massacre. Most nonscheduled carriers operate on a shoe string; American had millions to pour into the fight.

Airmen doubted whether American itself could make any money carrying freight at 11¢ a ton mile. American claimed it could, if it got enough business. But most airmen thought that American was less interested in profits now than in killing off competition.

Board Chairman Smith, an ex-major general, was well aware that he might be accused of putting veterans out of business; he hastened to defend American’s air cargo plans. In full-page newspaper ads he pinned a discharge emblem on American by pointing out that it employed 6,000 veterans, was therefore “the largest veterans group in air transportation.” The little business veterans, who would prefer to be the largest group themselves, were not impressed with the general’s logic.