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By exchange of notes dated October 27 and November 1, 1976, the United States and Brazil concluded an interim agreement for the operation of scheduled air services (TIAS 8445; 27 UST) pending a final resolution of outstanding issues. The agreement provides that Pan American World Airways would be able to operate services into Congonhas Airport, Sao Paulo, pursuant to a leasing agreement with VASP, a Brazilian airline, and that differences concerning the interpretation of the 1946 U.S.-Brazil Air Transport Agreement, as amended (TIAS 1900, 6672; 61 Stat. 4121; 20 UST 658), regarding change of gauge and unrestricted use of the above airport by Pan American would be discussed at a later date.

The agreement further provides for changes in statistical schedule filing procedures under existing prescreening arrangements with Brazil, permits dual numbering of flights under certain conditions, and commits both sides to renew the bilateral Air Transport Agreement provisions concerning rates and changes in routes.

U.S.-United Kingdom

The United Kingdom, on June 22, 1976, requested consultations under the provision of article 13 of the Air Services Agreement between the United States and the United Kingdom of February 11, 1946 (TIAS 1507; 60 Stat. 1499; 12 Bevans 726), as amended (the "Bermuda Agreement"), and simultaneously served notice of termination of that agreement, effective twelve months from the date of its receipt. The notice was given in a note from the British Ambassador in Washington, received on June 22, stating the British view that the agreement had become "out of date" in a number of respects and was conferring benefits on the United States much in excess of the

benefits to the United Kingdom. It recommended a substantial revision of the rights conferred by the agreement.

The British note also referred to difficulties that had been encountered in the interpretation and implementation of the agreement, particularly as regards capacity and fares. It suggested that understandings reached in 1974 and 1975 for establishing a close relationship between capacity and demand needed to be consolidated into a new agreement and systematic procedures established for implementing them. It described the provisions of the Bermuda Agreement regarding establishment of airline tariffs "unworkable" and usually disregarded.


The U.S. reply note, dated July 8, 1976, noted that the reasons presented by the British Government would be discussed in the course of consultations, but added that "the United States Government . . . does not share the view that the difficulties which have arisen in our civil aviation relations are due to basic deficiencies in the Air Services Agreement, nor does it agree that a substantial revision of the route rights conferred by the agreement is necessary at this time." It agreed to work constructively to conclude an agreement which would be equitable for both countries and for the traveling and shipping public.

Dept. of State File No. P76 0101-374. On Sept. 17, 1976, the Civil Aeronautics Board (CAB) ordered five British carriers to file all of their existing and proposed schedules of service between the United Kingdom, its territories and the United States pursuant to Part 213 of the Board's Economic Regulations. The CAB announcement stated that the British Government had recently issued a note setting forth frequency levels and equipment types which U.S. carriers could operate between the U.K. and the U.S. during the coming winter season. It stated that the United States regarded this British unilateral action, if implemented, as a violation of the Air Transport Agreement between the two countries. CAB Press Release 76-144, Sept. 17, 1976. On Oct. 14, 1976, the Dept. of State announced that during July and August the British authorities had expressed official concern that the levels of U.S. airline operations planned for the winter season would result in excess seat capacity in the Miami-London and ChicagoLondon markets, and they had imposed winter limitations on airline flights in those markets. The U.S. Government, according to the announcement, took the position that unilateral restrictions were inconsistent with the U.S.-U.K. Air Services Agreement, but had communicated to the British U.S. airline operation plans for the winter season, and those were found satisfactory. Dept. of State Press Release, No. 511, Oct. 14, 1976.

U. S.-Yugoslavia

Pending the negotiation of a full air transport agreement, the United States and Yugoslavia, on May 14, 1976, concluded an agreement by exchange of notes (TIAS 8305; 27 UST 2191; entered

into force May 14, 1976) relating to interim arrangements for scheduled air services and amending the nonscheduled air service agreement of September 27, 1973 (TIAS 7819; 25 UST 659). The main features of the interim agreement are as follows:

The Yugoslav Airline (JAT) is authorized to operate two nonstop roundtrip flights per week between New York and Belgrade.

Pan American World Airways (PanAm)-already serving Yugoslavia by special permit since 1964-is authorized to operate three roundtrip flights per week to Belgrade via Frankfurt.

- PanAm and JAT are required to work out mutual general sales agency agreements because of certain restrictions placed on PanAm in Yugoslavia including its ticket sales in local currency. These arrangements regulate sales by JAT in the United States as well as PanAm sales in Yugoslavia.

-The 1973 agreement on charter services between the United States and Yugoslavia is amended and restrictions placed on the total number of charter flights authorized for JAT.

- This agreement and the 1973 charter agreement are to expire on March 31, 1977.


Aircraft Crimes


Bilateral Agreements

On October 15, 1976, Cuba formally denounced the U.S.-Cuba Memorandum of Understanding on Hijacking of Aircraft and Vessels and Other Offenses, dated February 15, 1973 (TIAS 7579; 24 UST 737). The denunciation was made pursuant to the six-months clause of the agreement, to take effect on April 15, 1977. It was transmitted to the United States via the Swiss Embassy in Cuba, as representative of U.S. interests in Cuba.

The reasons for the Cuban decision were declared to be those stated by Prime Minister Fidel Castro in his speech of October 15 concerning the crash of a Cubana Airlines aircraft near Barbados on October 6, in which 73 persons were killed. Prime Minister Castro attributed responsibility for the crash to the United States, and in particular to the Central Intelligence Agency.

Secretary Kissinger categorically denied any U.S. responsibility for the crash. In a news conference on October 15, he stated:

First, in my speech to the United Nations I condemned terrorism as an instrument of national policy pursued by any nation, for whatever cause. The United States is not engaged in any activity of this kind, and the charge by Fidel Castro that the United States or its government or any agency of the government had anything to do with the explosion of that airliner is totally false.

Secondly, we think that it is an act of complete irresponsibility to encourage hijacking at this moment at a time when . . . one of the biggest of human problems is the taking of hostages that cannot possibly influence political decisions or foreign policy decisions. ... we will hold the Cuban Government accountable for any actions that result from their decision.

Dept. of State Bulletin, Vol. LXXV, No. 1950, Nov. 8, 1976, pp. 573-574. Immediately after the Cubana crash the United States offered the Government of Barbados, which was investigating for possible sabotage or mechanical malfunction, the technical assistance of the National Transportation Safety Board to help in the investigation. Dept. of State Press Briefing, DPC 191, Oct. 8, 1976.


Private Air Law

Warsaw Convention

Liability of Carrier

Krystal v. British Overseas Airways Corporation, 403 F. Supp. 1322 (1975), was an action brought by airline passengers against the airline under the Warsaw Convention (TS 876; 49 Stat. 3000) to recover for physical and psychological injuries incurred when an airplane was hijacked en route from Bombay to London in 1974. On cross motions for summary judgment, the U.S. District Court for the Central District of California held, on September 18, 1975, that recovery for mental distress was permitted under the Warsaw Convention.

The Court based its opinion on the effect of the Montreal Agreement of 1966 on article 17 of the Warsaw Convention. It stated:

This Court is of the opinion that the effect of the Montreal Agreement is to permit recovery for mental distress. Under the Agreement, the signatory airlines agreed, inter alia, that they would print on their tickets a notification to the passenger of the possible applicability of the Warsaw Convention. The Civil Aeronautics Board Order which set out the terms of the agreement repeated the phrasing of art. 17 in noting the basis for recovery. 31 Fed. Reg. 7302 (1966). But the actual notice to which the airlines agreed changed the relevant wording to "death . . . or personal injury. . .

It appears that such notice is determinative of the issue. The fact that "wounding . . . or bodily injury" is replaced by "personal injury" in a document intended to notify passengers of the extent of airline liability, suggests an intention to clarify the type of injury which is compensable

This Court is, of course, aware that other courts have reached contrary conclusions.

This Court is of the opinion that such interpretations of art. 17 are untenable. It cannot be said, with finality, that the drafters of the Warsaw Convention intended to preclude recovery for mental distress.

In short, this Court considers that the wording of the Warsaw Convention is subject to more than one interpretation on its face. When taken in conjunction with the modification appearing in the notice to passengers dictated by the Montreal Agreement, the comprehension of article 17 must be read to include mental injuries.

On October 12, 1976, the Supreme Court denied certiorari in Trans World Airlines, Inc. v. Day, No. 75-1354, 45 U.S. Law Week 3273 (1976). It thus left standing the ruling of the U.S. Court of Appeals for the Second Circuit in Day v. Trans World Airlines, Inc., 528 F.2d 31 (1975), that TWA was liable for injuries to passengers in a terrorist attack at Hellenikon Airport in Athens in 1973, which occurred while the passengers were at the terminal's departure gate. The U.S. Court of Appeals held that the terrorist attack in the terminal building was committed in the course of the operations of embarking within the meaning of article 17 of the Warsaw Convention (49 Stat. 3000; TS 876).

The Supreme Court's denial of certiorari accorded with the suggestion of Solicitor General Robert H. Bork, who filed an amicus curiae brief reading, in part, as follows:

In our view, boarding procedures that take place within an air terminal building can constitute "operations of embarking" within the meaning of article 17 of the Warsaw Convention. We believe that the contrary view espoused by petitioner, i.e., that the phrase "operations of embarking" refers only to those boarding procedures that take place outside the physical confines of the air terminal building, would unjustifiably restrict the intended operation of the Convention and the subsequent Montreal Agreement. The purpose of the Warsaw Convention. . . is to regulate "in a uniform manner the conditions of international transportation by air in respect of the documents used for such transportation and of the liability of the carrier." In connection with the second of its two objectives, the uniform regulation of carrier liability, the Convention specifies, inter alia, the circumstances under which a presumption of liability arises (articles 17, 18, and 19), the defenses available to the carrier to rebut that presumption (articles 20 and 21), and the maximum monetary liability per passenger (articles 22 and 23). Article 17 provides a presumption of liability "if the accident which caused the [injury] took place on board an aircraft or in the course of any of the operations of embarking or disembarking."

The legislative history of the Convention is instructive as to the meaning of article 17

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