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Battle Royal. For the first time, Pan Am is now facing serious competition by U.S. airlines on its richest routes. A fortnight ago, Braniff Airways started a new service to Rio de Janeiro. For ten years Trippe had argued against more U.S. competition on international routes (although some customers had felt that as Pan Am's competition increased, its service improved). Instead he propagandized for a monopoly-like "community company" (one U.S. flag line owned by U.S. airlines, railways, etc.) which was, in effect, a "chosen instrument," as the best way to meet foreign carriers. Almost all other U.S. airlines were against it. They feared—without reason, says Trippe—that he and Pan Am would end up running the show. Trippe shelved his plans.
"If Congress and CAB want competition," he says, "we'll be glad to operate under that policy. It will just be a matter of time to find out who's right."
Though the question has not been finally answered, the evidence so far seems to be proving Trippe right. The three U.S. airlines in the North Atlantic—Pan Am, T.W.A. and American Overseas Airlines (a subsidiary of American Airlines)—were carrying 71% of the air passengers on the North Atlantic a year ago. Now, because of gains by foreign airlines, U.S. lines carry only 61%. American Overseas is already pulling out of the field. It is ready to sell out to Pan Am, if CAB permits, because it does not think there is enough business for all. In a two-way race, T.W.A. would not be able to furnish tough competition for Pan Am for long, unless it was shored up by heavier subsidies and other means. If competition alone were the deciding factor, Pan Am might soon, in effect, be the U.S. chosen instrument in the North Atlantic by default.
Pan Am is also in a mood to get in and compete in the U.S. domestic field. It is mulling over plans to buy into National Airlines on the East Coast (TIME, March 21) and Western Airlines on the Pacific, thus get its foot into the domestic door for the first time. All the deals would have to be approved by CAB, but CAB apparently takes a favorable view of them. CAB is already echoing what Trippe said three years ago, that there is not room enough for all the airlines now flying and that "sensible mergers" should be made.
Trippe hopes that eventually CAB and U.S. airmen will come around to his way of thinking, as some of them have already done. In any case, he holds that the big job of U.S. airlines is not merely to scramble to get the biggest share of present business, but to go after the new business. Says he: "We've passed out of the exploration stage. Now we're going to cross the bridge into volume operation. There's a tremendous market to tap. This business is just getting started."
* Of the 775,000 who crossed the Atlantic in 1948, about 225,000 flew. But the fast-expanding airlines expect to overtake the shipping lines by 1955.