OVERSEAS AIR ROUTES
FOR the U.S. international airlines, the biggest problem of 1957 has spawned the bitterest argument. The problem: increasing competition from foreign carriers, largely because the U.S. is letting more and more foreign lines get into choice U.S. markets. Last week, as Pan American World Airways inaugurated a long-contemplated polar route from San Francisco to Paris, the French government threatened to halt the flights unless its Air France got a similar route—and the U.S. State Department quickly said that it would consider the matter.
The incident was the newest in a long series that has embroiled U.S. airlines in a dust-raising quarrel with the State Department. Airmen charge that State's Office of Transport and Communications, the branch responsible for working out air agreements, is dispensing U.S. routes to foreign operators with far too lavish a hand, and getting little—or nothing—in return. The cumulative effect, say the lines, is that while U.S.-flag carriers flew 80% of all transatlantic traffic in 1947, today they account for slightly less than 50%, even though almost 70% of all passengers are U.S. citizens.
U.S. airmen complain that the U.S. is badly out-traded whenever a new route agreement comes up for negotiation. The airlines point to the 1955 agreement with West Germany's reborn Lufthansa, under which the Germans got rich routes to half a dozen cities up and down both U.S. coasts in return for landing and pickup rights at six German cities. They argue that The Netherlands' KLM Royal Dutch Airlines won new routes last April which will give the Dutch $15 of revenue for every $1 the U.S. gets in return. The latest: a route across the U.S. for Australia's Qantas Airlines which will produce at least $4,000,000 annually in return for concessions (including a route over the South Pole for the U.S.) that U.S. airmen flatly call "worthless."
The great danger, argue the lines, is that by granting foreign rights on prize routes the Government has weakened the competitive position of U.S. lines to the point where the industry may have to come back begging for subsidy payments.
For its part, the State Department argues that the U.S. gets seemingly little only because it has long since won most of what it wants from foreign nations. Most of the basic air agreements were negotiated between 1946 and 1948, when the U.S. was the only nation with the aircraft and the capital to operate overseas routes. Now that other nations can buy the planes and keep them flying, the U.S. must give them a crack at its own markets.