(b) For each month during which the average daily scheduled mileage exceeds the average daily designated mileage but does not exceed 45,000 miles for the period ended July 31, 1947, and 50,000 miles thereafter, the ton-miles of mail shall be computed as though the average load per airplane mile flown was a minimum capacity factor (computed to the nearest pound) which bears the same relation to the minimum capacity factor specified in (a) above for the respective period as the average daily scheduled mileage bears to the average daily designated mileage.

(c) For each month during which the average daily scheduled mileage exceeds 45,000 miles for the period ended July 31, 1947, and 50,000 miles thereafter, the ton-miles of mail shall be computed as though the average load per airplane mile flown was a minimum capacity factor (computed to the nearest pound) which bears the same relation to the minimum capacity factor specified in (a) above for the respective period as the daily base mileage bears to the average daily designated mileage, except that in no case shall the minimum capacity factor be less than 250 pounds.

The mail compensation derived by the application of the aforesaid rates shall be inclusive of, and not in addition to, the mail compensation heretofore received by Pennsylvania-Central Airlines Corporation for mail transported on and after January 14, 1947.

The aforesaid minimum capacity factors per airplane mile shall be applied to the direct airport-to-airport mileage between points served for the carriage of mail on each trip flown on a schedule designated or ordered to be established by the Postmaster General for the carriage of mail, provided, however, that if any scheduled flight is operated in two or more sections between any two points served for mail and mail is transported on more than one such section, the aggregate of the sections so used, for all purposes of deriving compensation pursuant to this order, shall be treated as a single flight, and the aggregate mail load actually carried on all such sections or the minimum capacity factor for one such section, whichever is greater, shall be applied to the airport-to-airport mileage flown by that section which covers the greatest airport-to-airport mileage between points served for mail.

The average daily scheduled mileage shall consist of the mileages of all scheduled trips, and the average daily designated mileage shall consist of the mileages of all scheduled trips designated or ordered to be established by the Postmaster General for the carriage of mail; such mileages shall be computed as though the mileage of each such trip were the airport-to-airport distance via all certificated intermediate points along the flight route between the terminals of each trip. The average daily scheduled mileage and the average daily designated mileage shall be determined for each calendar month by taking the average (computed to the nearest mile) of the daily mileages of regularly scheduled trips and of regularly designated trips, respectively, for the 7 days of the week, without regard to any variations of scheduled or designated mileages, respectively, on Sundays and holidays.

IT IS FURTHER ORDERED, That the aforesaid order fixing fair and reasonable rates shall be effective as of this date, all parties to the above-entitled proceeding having already waived all further procedural requirements short of a final decision by the Board fixing a temporary rate herein;

IT IS FURTHER ORDERED, That this proceeding remain open pending entry herein of an order fixing a final rate retroactive to such date as the Board shall then determine, which said final rate may be lower or higher than the temporary rate fixed herein.

8 C. A. B.-980

TABLE OF CASES DISPOSED OF BY ORDER

Alaska Air., Mail Rates

American Overseas Air., Mail Rates

Braniff Air., Latin American Mail Rates_

Challenger Air., Mail Rates.

Chicago and Sou. et al., Mail Rates.

Empire A. L., Mail Rate..

Florida Airways, Mail Rates

Los Angeles Air., Mail Rates..

Monarch A. L., Mail Rates_

Northwest Air., Transpacific Mail Rates-

Pacific Northern Air., Mail Rates__

Pan Am. Airways, Inc., Transatlantic Mail Rates_

Pennsylvania-Central Air., Mail Rates

Southwest Airways, Mail Rates-

Transcontinental & W. A., Transatlantic Mail Rates

Trans-Texas Airways, Mail Rates

West Coast Air., Certificate Amendment_

West Coast Air., Mail Rates___

8 C. A. B.

Page

979

974

971

948

945

956

958

978

961

954

953

977

980

963

975

966

973

969

982

INDEX DIGEST

[Numbers in parentheses following citations indicate pages on which subjects are considered]

ABANDONMENT

In view of the low volume of past, present, and prospective traffic, the operat-
ing conditions and cost encountered by the carrier, inconvenience and delay to
through traffic, and availability of other service, abandonment of service by Pan
American Airways to Burwash Landing, Yukon Territory, and Tanacross, Alaska,
is authorized. Pan Am. Airways, Burwash Landing-Tanacross, 852 (855).
ACQUISITION OF AIR CARRIER PROPERTY. See CONSOLIDATION,
MERGER, AND ACQUISITION OF CONTROL.

ACQUISITION OF CONTROL. See CONSOLIDATION, MERGER, AND ACQUI-
SITION OF CONTROL.

AGENCY

Following 3 C. A. B. 540, an exclusive traffic agency agreement is adverse to
the public interest where the agent for the air carrier conducts a rival form of
transportation throughout the same area, and whose interests now conflict to a
certain extent, and are likely to conflict increasingly, with the interests of the air
carrier. Especially is this true where the size of the area covered is so great as
to account for a substantial part of the carrier's income. Pan Am. Airways-
U. S. Lines Agreement, 609 (613).

AGREEMENTS. See also CONSOLIDATION, MERGER, AND ACQUISITION of
CONTROL; INTERNATIONAL AGREEMENTS.

In General: Where the parties are both common carriers, one by air and one
by sea, a working agreement providing for the sale of tickets for air transportation,
the handling of excess baggage of air passengers, and the assistance in clearance
of customs for air passengers affects air transportation within the meaning of
section 412 (a) of the Act, and is an agreement over which the Board has juris-
diction. Pan Am. Airways-U. S. Lines Agreement, 609 (611).

In order that the Board have jurisdiction of an agreement or contract for the
purposes of sec. 412 of the Act, it is not necessary that the contract be binding and
enforceable between the parties in a court of law. It is enough that the parties
in fact are carrying out, or intend to carry out, the provisions of the agreement.
T. W. A.-Delta, Equipment Interchange, 857 (859).

Agency: See AGENCY.

Interchange: Following 1 C. A. A. 723, since a minimum of 12 percent of a
carrier's flying equipment and 7 percent of its total assets may be leased from
time to time under the interchange agreement herein, the Board's approval is
required under sec. 408 of the Act. T. W. A.-Delta, Equipment Interchange,
857 (863).

In view of the improvements in service which would accrue to the traveling
public, the volume of traffic which would benefit thereby, and the fact that such
service would permit Delta Air Lines in conjunction with TWA to share in Detroit
traffic, the agreement for interchange of equipment on a rental basis at a connect-
ing point is approved. Id. (870).

Under the circumstances herein where deliveries of equipment under the inter-
change agreement may be made at any point other than Cincinnati only in cases
of emergency, approval of the agreement is not tantamount to authorizing non-
certificated scheduled operations by one of the parties. Id. (870).

Labor Negotiating: Since it is found that the terms of agreements creating the
Airlines Negotiating Conference which provided voluntary machinery for settle-
ment of disputes between member air carriers and their employes are not adverse
to public interest and do not violate any provision of the Act, approval is manda-
tory. Approval is given subject to the condition that it does not constitute
approval or disapproval of the conference as the proper bargaining representative
in any particular negotiations with any labor organization. Airlines Negotiating
Conference, 354 (358).

Operating: Following 6 C. A. B. 1041, since the parent company agreement
relates to, and implements the provisions of, the through flight agreement between
Pan American-Grace Airways and Pan American Airways, and such contracts
have been submitted as settlements of controversies existing primarily between
the two parent companies, the two agreements are considered as parts of a single
transaction for the purposes of this case. Pan American-Panagra Agreement,
50 (54).

Since the parties have not contemplated continuance of other provisions of the
agreement if the agency provisions are disapproved, the entire agreement is dis-
approved. There is no indication that the contract was not a sound exercise of
managerial discretion when executed and no fraud or restraint of trade has been
shown. Since immediate cancellation might have an adverse effect on the parties
it is made effective 90 days from date of decision. Pan Am. Airways-U. S. Lines
Agreement, 609 (615).

Pooling: The paragraph of the through flight agreement providing for nego-
tiation of a pooling arrangement of certain revenues and traffic and to agreements
for nonstop services between points on two different routes of the two carriers is
disapproved, since this may be done without affecting other phases of the agree-
ment and it is deemed inappropriate to indicate even tacit approval thereof.
Pan American-Panagra Agreement, 50 (61).

Pooling agreements like other agreements which tend to eliminate competition
generally are contrary to the public interest except in unusual circumstances.
Ïd. (61).

The pooling agreement between the two carriers involved herein, providing for
sharing bases and facilities, and alternating flights with the provision that if either
party cannot make its scheduled flight the other may substitute if it so desires,
is approved for a future period of 1 year to allow time for a permanent solution,
since, although agreements eliminating competition are not favored, under the
unusual circumstances surrounding Alaska air transportation, without the elimi-
nation of destructive competition, one or both carriers would have been unable to
develop their traffic into a scheduled operation. Juneau Mail Routes, 127 (132).
Supplemental: The approval of the interchange agreement herein does not
extend to supplementary agreements which may be entered into pursuant to the
terms of the original agreement, and any such supplementary agreement must be
filed with the Board for approval. T. W. A.-Delta, Equipment Interchange,
857 (872).

Through Flight: Under the through flight agreement between Pan American-
Grace Airways and Pan American Airways for charter and operation of the air-
craft of the former over the routes of the latter carrier north of the Canal Zone,
no amendment of the certificate of Pan American-Grace Airways is required, since
the control and responsibility will not rest in that carrier and there will be no hold-
ing out to the public that it is the carrier certificated to operate north of the Canal.
Pan American-Panagra Agreement, 50 (53).

Agreement between two carriers providing that aircraft operated by the first
carrier between South America and the Canal Zone may be chartered by the
second for through flight operations on the scheduled service of the latter from
the Canal Zone to continental United States, with such operations to be under
the second carrier's responsibility and control and for its account, is approved as
not inconsistent with nor adverse to the public interest since the through-flight
service will eliminate the inconvenience to its users of changing planes at Balboa
make possible substantial benefit and economies to both carriers through use of
the United States carrier's maintenance bases and training facilities, and enable
them to develop more traffic and compete more effectively with other carriers in
the arca. Id. (60).

The through flight agreement herein is designed to eliminate conflict between
the parties and promote harmony and as such is beneficial to the public. Held,
that under the circumstances of this case the general purpose and intent of the
agreement is consistent with the public interest. Id. (61).

The Board's approval of the through flight agreement herein is not to be
construed as a specific approval of the preference provisions for the through
traffic. Should discrimination against local traffic occur the Board can, upon
complaint or upon its own motion, investigate and remedy such practices. Id. (62.).
The through flight agreement herein is approved for a period of 3 years in order
to afford latitude for any necessary adjustment in the service pattern in South
America, which is presently undergoing changes through inauguration of additional
services by nationals and outside countries. Id. (63).

Any changes in accounting under the through flight agreement approved herein are to be reported to the Board, it appearing that some of the provisions for payment for services performed by each party may be subject to different interpretations. Id. (63).

AIR CARRIER. See also CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY (CHOICE OF CARRIER).

Self-Sufficiency: Regardless of how meritorious the argument that the carriers have need for entering lucrative traffic markets may be where there is a large volume of traffic, it can have little weight in relation to routes with relatively small traffic flows. In view of the moderate volume of traffic over the CincinnatiNew York route, the placing of a need carrier into competition with two carriers already established would tend to weaken rather than strengthen such carrier. Cincinnati-New York Additional Service, 152 (160).

The term "fostering sound economic conditions" as contained in sec. 2 cannot be construed as a mandate to the Board to expand small carriers to the point where they are all equal in size and opportunity. It would be unsound to put in more carriers than the traffic can support. This language applies to the industry generally and is coextensive with other principles of convenience and necessity enunciated in the Act. Mississippi Valley Case, 726 (734). AIRCRAFT. See EQUIPMENT.

AIR PATTERN. See NATIONAL AIR TRANSPORTATION SYSTEM.
AIRPORTS

Congestion: While there is no problem of airport or airways congestion in the use of the East River bases in New York City, present airport congestion at LaGuardia and other principal airports in the area is such that an additional great volume of arrivals and departures would unduly burden the facilities and tend to create operational hazards, and the instant proposal insofar as the land airports serving metropolitan New York are involved must be denied. Air Commuting, Inc., New York City Area, 1 (2). ALASKAN AIR TRANSPORTATION

Mail: The volume of mail carried under star mail contract by the two carriers, coupled with the importance of the communities served and the certification of the Postmaster General, justify the conclusion that the public convenience and necessity require mail authorization between Juneau and Ketchikan, Alaska. Juneau Mail Routes, 127 (132).

Need for Service: Following 1 C. A. A. 811, certification by the Postmaster General relative to postal needs is entitled to great weight in determining public convenience and necessity, and such certification, together with advantages to the public in both mail and passenger service demonstrated by actual operation, leads to certification of the route between Juneau and Skagway, Alaska. Juneau Mail Routes, 127 (131).

The irregular route authorization of Alaska Coastal Airlines between Juneau and Skagway is changed to a temporary regular route in view of the Postmaster General's certification as to the advantages to the public as demonstrated by actual operations. Id. (131).

Pooling Agreement: The pooling agreement between the two carriers involved herein, providing for sharing bases and facilities and alternating flights, with the provision that if either party cannot make its scheduled flight the other may substitute if it so desires, is approved for a future period of 1 year in order to allow time for a permanent solution, since, although an agreement which eliminates competition is not looked upon with favor, under the unusual circumstances surrounding Alaskan air transportation, without the elimination of destructive competition, one or both would have been unable to develop its traffic into a scheduled operation. Juneau Mail Routes, 127 (132).

Temporary: Because of changing conditions in Alaska, some of the flexibility of Alaska Coastal's irregular route is retained and mail service on its JuneauSitka routes is authorized only on a temporary basis permitting further consideration after a period which should allow conditions to become more stable. Juneau Mail Routes, 127 (129).

Authorization to carry mail to carriers who have been able to obtain financial backing and to operate profitably without mail pay, even though on a temporary basis, will not lessen their ability to obtain financial assistance but will enhance that ability. Id. (129).

Following 4 C. A. B. 161, a temporary amendment may be made to a permanent certificate. Id. (130).