Opening the Sky: American Proposals at Chicago
by WILLIAM A. M. BURDEN
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WE ARE so used to thinking of aviation as a technical subject — a matter of horsepower, speed, stratospheric flight, and jet propulsion — that we are likely to forget that the greatest obstacles to international air travel have been political and legal rather than technical.
The past twenty-five years have been a period of near anarchy in international air transport. Nations imposed on the operation of commercial aircraft restrictions which were almost incredibly severe in comparison to those regulating merchant ships, which are generally free to enter the ports of the world. Special permission was required merely to fly over a country, and many nations were selfish about granting even this privilege, hoping that they could trade their geography for some other advantage regardless of the effect on air commerce. Still more complicated negotiations were necessary before an airline could do business in a foreign country. The permission to pick up and discharge traffic was often restricted by limiting the number of trips that could be flown, regardless of the amount of traffic available.
There were no universally accepted technical codes for international airlines, although uniform procedures and reasonably high minimum standards were obviously desirable for efficient and safe operation. Finally, there was no world-wide international organization concerned with civil aviation.
These difficulties reflected the inadequacy of the pre-war international agreements on civil aviation — the Paris Convention of 1919 and the Habana Convention of 1928. The very existence of two such agreements — the former largely confined to European and the latter to American countries — implied a division of world aviation into compartments in a manner hardly consistent with the universal nature of air transport.
This obsolete international machinery was obviously incapable of coping with the utterly changed conditions of post-war air transport. The necessity of developing a new world agreement on air transport and air navigation, which would truly open the air for commercial aviation, and of creating a new set of technical standards was what we faced at the International Civil Aviation Conference when it met in Chicago last November.
The main point at issue at Chicago was whether a degree of real freedom of operation would be granted to commercial airlines by international agreement or whether air transport would be controlled by an international commission. The problem was further complicated in the public mind by the decision of the U.S.S.R. not to participate.
The Soviet Union’s abstention would seem to indicate that Russia does not intend to permit the civil airlines of other nations to cross her territory, and that it will be some time before she will engage in long-range international air transport on a large scale. Because of these limitations in policy, the U.S.S.R. obviously had no immediate interest in the most vital subjects under discussion at Chicago. Fortunately, despite the vast extent of Soviet territories, they lie athwart only a few of the air routes connecting the principal population areas of the world. The conference left the door open for eventual Soviet participation in the international organization which it created.
Of the fifty-four nations represented at Chicago the United States was the leader of the group advocating freedom. We believe that this new industry is economically sound but that it must be released from undue restriction if it is to achieve its potentialities. Our own international airlines are already nearly self-supporting. We feel that when the technical advances made during the war are applied to commercial aviation, many countries will find that their international air transport companies will fast shake off their dependence upon the national treasury and become profitable enterprises. Given free operation and technical progress stimulated by competition, a very large volume of traffic wall almost certainly be available to the airlines of the world. Under such conditions there will be ample opportunity for all who wish to fly.1
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FREEDOM of operation is desirable for countries with highly developed aircraft industries, which naturally wish to sell their services to as large a market as possible. It is equally advantageous to a vast body of travelers and shippers. We Americans feel it is also to the interest of small nations which are competent in aircraft operation, for it makes a far wider market open to them than would be possible under any quota system of dividing traffic. Because of our confidence in the commercial future of air transport, we are unsympathetic to the theory that it must be strictly regulated by an international commission at this early stage of its development. Regulation may prove necessary ultimately, but we feel that it should wait until experience has shown what the economic potentials and the problems of international air transport actually are.
We recognize that some wall say that we are motivated by self-interest in proposing a policy which would permit the most efficient operator to attract the most traffic. True, we have a technical head-start over the war-ravaged countries of Europe because of our huge production of transport airplanes and our wide experience in long-distance operation. We have no desire to take unfair advantage of this position and have announced our willingness to make our transport aircraft available, as soon as they can be spared from war work, to all countries which recognize the right of friendly intercourse with others. We point out that our supremacy in air transport is not solely due to the accidents of war; we were leaders in the field long before 1939. We feel that it would be criminal to condemn world air transport, to permanent restriction in an attempt to offset a temporary advantage held by one country. This in brief was the philosophy of the American delegation at Chicago.
A small segment of informed American opinion, led by Pan American Airways, disagrees with this position and maintains that — regardless of the effect on the world as a whole — the self-interest of the United States would be best served by continuing the pre-war system of bilateral negotiation. Pan American argues that foreign shipping companies enjoy a tremendous competitive advantage over United States lines because of lower labor costs, and that the same situation will develop in air transport unless the entry of foreign airlines into the United States is severely restricted.
Many others, including other airlines, hold the analogy to be inaccurate. They point out that Pan American’s operating costs have so far been substantially lower than those of its foreign competitors. Since there is much less difference between American and foreign wage rates for the highly skilled labor required for aircraft operation and construction than there is in the rates paid the unskilled labor employed in shipping, they believe that the efficient operation of United States airlines will go far to offset differences in wage scales. Even under bilateralism we could not expect to serve foreign countries without allowing them to serve the United States.
The Latin American nations took the same liberal position as did the United States delegation. Despite the fact that many of them operate extensive internal airline systems and that some expect to operate international routes before long, they regard themselves as consumers as well as operators of air transport. They feel that they will benefit from as much air communication as possible with the rest of the world, even though part of that communication is provided by foreigners. Even under the restrictive pre-war system, they had freely granted European and United States trunk airlines permission to operate through their t erritories and had found it possible to develop flourishing air carriers of their own, side by side with the growing traffic carried on the through routes.
China and the lesser nations of the Far East were moved by the same considerations, as were those small European countries, led by Holland and Sweden, which had been successful in placing their air transport on a sound commercial basis before 1940.
Opposed to this philosophy of freedom was the doctrine of control proposed by the United Kingdom, Canada, France and a few other countries of continental Europe. These nations laid great emphasis on the importance of assuring “order in the air” by placing air transport under the economic control of an international commission. Control, they said, is required to prevent the subsidized operation of large numbers of almost empty aircroft by countries which wanted to run airlines for prestige purposes, regardless of the traffic they could attract. It is also necessary to assure every nation a “fair share” of international air traffic.
It was not surprising that economic control of air transport should be advocated by this group of states. Most European nations operated their airlines as government monopolies rather than commercial businesses. They were accustomed to controlling all types of international trade through pools or cartels and they saw no reason why air transport should not be subject to similiar restraint.
Control appealed to them for another reason: they were concerned about their future position in air transport. As war-ravaged nations, they felt that it would be a long time before their airlines could compete successfully with the United States, with its unlimited supply of transport aircraft and its great experience in long-distance operation. The offer of the American delegation to make modern transport aircraft available on non-discriminatory terms did not entirely allay this underlying fear.
It is interesting to note that the air transport policies advocated by the United States and Great Britain in Chicago represented a reversal of the historic economic policies of these countries. The United States, long an ardent protectionist nation, appeared as an eloquent advocate of free trade in the air; and Great Britain, long identified with the gospel of free trade and freedom of the seas, apparently forgot her bold assaults on mercantilism in the nineteenth century and favored restriction and control in the air.
This change in position is perhaps symptomatic of the change in the relative industrial strength of the two powers. The United States seems motivated by the same combination of self-interest and idealism that moved Great Britain to assume her historic attitude towards ocean transport. And the importance of free communication and transport to the world lends moral support to the present American position.
The handing over of civil aviation to an international commission would in itself be no cure for the dilemmas of international air transport. The practical effect of commission control can only be judged on the basis of proposals for the make-up of the commission and the rules under which it would operate.
The United Kingdom suggested that the international commission control the number of trips which the airlines of the various countries might fly on a given route and have the power to set fares upon appeal by an interested nation. The United States was fundamentally opposed to arbitrary control by a commission. Neither did the American group share the British fear that countries would indulge in a vast subsidy race to keep their airlines operating at a high level regardless of the traffic carried. Nevertheless we were willing to give serious consideration to frequency control by a semi-automatic formula, to be applied by a commission, which would make it impossible for such rivalry to occur.
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LENGTHY discussions of various possible formulas took place among delegates of the United States, Canada, and the United Kingdom. Those proposed by the United Kingdom and Canada were based on the principle that an airline might fly more trips only when its existing services had been more than two-thirds full for a considerable period. This principle was acceptable to us, but an insuperable obstacle arose when the United Kingdom contended that only the traffic carried direct from one’s home country — as distinct from the traffic picked up en route — should count in establishing the initial frequency of service and in increasing the frequency.
Intermediate traffic is absolutely essential to the economic operation of long-distance routes, and it is on such routes that air transport can perform its greatest service to mankind. The importance of intermediate traffic is indicated by the experience of our long-distance routes in Latin America. On the Pan American Airways route from New York to Buenos Aires, for example, only 30 per cent of the traffic carried to Rio de Janeiro is traffic originating in the United States, the remainder consisting of persons who board the airliners at points outside the United States. When one gets down as far as Buenos Aires, the proportion of traffic from the United States falls to 15 per cent.
Under the British proposal that the amount of service operated be governed by the amount of through traffic, a United States line on a route from New York to Calcutta via London, Rome, and Cairo might be flying three schedules a day to London but only two a week to Cairo and one every two weeks to Calcutta. The number of trips which could be flown on the further sections of long routes would be so low as to make the service unattractive to the traveler and uneconomical for the operator. It would probably be impossible, if such a rule were applied, for a United States line to operate on a business basis beyond Western Europe or, in South America, beyond Rio de Janeiro and Lima.
A limitation on carrying intermediate traffic hardly seems consistent with the theory that one of the main purposes of international regulation is to prevent the running of largely empty aircraft. In fact the only argument advanced by the United Kingdom for limiting the pickup of intermediate traffic was that, unless it were limited, the through trunk airlines would carry so much of the traffic between countries thousands of miles from their homeland that it would be impossible for locally owned airlines to build up a satisfactory international business.
It was contended by the United States that through schedules on these long-distance routes would be so infrequent and irregular, compared with the competing local international services, that the local services would always carry the bulk of the traffic between adjacent countries.
Here again the solicitude of the British for the smaller powers appeared to be misplaced. At Chicago the majority of the small countries indicated that they did not fear competition from trunk route services; on the contrary, they would find them a convenience for their citizens. This is not surprising, for the provision proposed by the British would have made it impossible for any small country to become an important carrier of the world’s traffic by air. Norway, for example, could never have been a great seafaring nation if she had been limited to carrying Norwegian trade. Nor could the Dutch KLM airline have become a great carrier between Europe and the Far East had Holland been limited to Dutch traffic. Control on this basis would not have been a logically justifiable attempt to secure “order in the air,” but restriction in a narrow sense.
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ONCE it became clear that there was an honest but irreconcilable difference of opinion on the subject of control, the conference abandoned the idea of frequency control by formula or by an international commission with regulatory power. Taking the opposite tack, it proceeded to establish as much freedom of air transport operation as the varying points of view of the nations present permitted.
The discussion of freedom was in terms of the socalled “five freedoms of the air.” These freedoms — which are really privileges, since every country reserves the sovereignty of its air space — are as follows: —
1. The privilege to fly across the territory of a contracting state without landing.
2. The privilege to land for non-traffic purposes. 3. The privilege to put down passengers, mail, and cargo taken on in the territory of the state whose nationality the aircraft possesses.
4. The privilege to take on passengers, mail, and cargo destined for the territory of the state whose nationality the aircraft possesses.
5. The privilege to take on passengers, mail, and cargo destined for the territory of any other contracting state and the privilege to put down passengers, mail, and cargo coming front any such territory.
Presented in this artificially worded fashion, the privileges look as complicated as a mathematical formula. It was necessary to separate them because the nations of the world are just nibbling at the idea of freedom of the sky. Some are willing to accept it in only tiny doses, and others in larger amounts.
The first two freedoms may be called “privileges of flight” since they grant no privilege to pick up or discharge traffic. Freedoms three through five might be called “privileges to trade,” since they pertain to doing business in the countries granting them. All five of these freedoms are necessary to the sound economic operation of international air transport. Taken together, they would make it possible for an airline to operate without any further special permission on any direct route from and to its homeland, picking up and dropping traffic at all countries along the route, as do steamship lines, and flying as many schedules as the traffic justified. They would not permit the carrying of internal traffic between two points within a foreign country.
This is the objective, the ideal toward which the world began moving at Chicago, moving somewhat hesitantly, it is true, but still moving. Thirty nations agreed to grant the two “privileges of flight,” and twenty to grant all five privileges. All the Chicago agreements come into force when accepted by the governments of the states that signed them, or when adhered to by states that did not sign them.
All privileges were granted on a provisional basis terminable on a year’s notice. They were granted only for reasonably direct routes from the homeland, thus establishing the principle that the legitimate purpose of international air transport is to connect one’s home country with the other nations of the world. They were embodied in supplementary documents so that all nations might adhere to the main air navigation convention, while only those which wished to give and receive the various freedoms need adhere to the supplementary agreements.
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THE establishment of internationally accepted modern technical standards and procedures was essential if the airlines of the world were to operate safely and smoothly in the post-war period. As transport aircraft speed through the sky, perhaps crossing half a dozen small countries in a dozen hours, it is necessary that there be universal agreement as to certain technical matters. Obviously it would be confusing and unsafe to require an international airline to circle airports to the left before landing in one country, and to the right before landing in the next. Ground radio facilities should be standardized as much as possible so that transport planes in international flight do not have to carry a multitude of receivers and transmitters. Meteorological information must be transmitted in standard codes, and aviation maps must use standard symbols.
The task was not an easy one, despite Mayor La Guardia’s amiably facetious remark that agreement should be easy in this field because “everyone is against bad weather.” It is a tribute to the sincerity and objectivity of the technicians that they were able in the brief space of a month to agree tentatively on, and to draft, technical annexes covering twelve varied and important phases of air transport operation. If the conference had accomplished nothing else, this work would have justified all the time and effort expended.
The conference made a third contribution by drafting a new Convention on International Civil Aviation, which sets forth modernized basic regulations governing international civil aviation and establishes a truly world-wide aviation organization. The new International Civil Aviation Organization (ICAO) will come into being on a three-year interim basis (with a seat at Montreal) when twenty-six nations have formally accepted the Chicago Interim Agreement on Civil Aviation, and on a permanent basis when the same number of countries have ratified the Chicago Convention. It is made up of an Assembly, on which all the contracting states are represented, each state having a single vote, and a Council of twenty-one members responsible to the Assembly.
The ICAO will be principally advisory and consultative, but instead of being limited to the technical field, as was the International Commission for Air Navigation established by the Paris Convention, it will have important economic responsibilities. It is responsible for collecting and publishing information relating to the operation of international air services, including the costs of operation and subsidies paid. It is empowered to “investigate, at the request of any contracting State, any situation which may appear to present avoidable obstacles to the development of international air navigation.” If it is of the opinion that the airports and air navigation facilities of a contracting state are inadequate, it may, if that state consents and within the limit of available funds, build, maintain, and administer the necessary facilities. It is responsible for adopting international standards and recommended practices and keeping these practices up to date by amendment of the technical annexes of the Convention.
What will come after Chicago? The conference made an excellent beginning: subject to formal approval by their respective governments, thirty-nine nations have agreed on a single air navigation convention and upon the draft of a single set of technical standards of international flying. They have agreed to create a single international aviation organization to administer the convention and to study international civil aviation. Most important of all, the first step has been taken in granting privileges of free operation to commercial airlines by international agreement. Thirty nations have exchanged the privilege of transit and non-traffic stops. More will doubtless agree to this privilege later.
Much more limited progress was made in granting air transport real freedom to do business. Only twenty countries, comprising 35 per cent of the world’s population, have so far agreed to exchange the five freedoms which grant practically complete freedom of the air except for local traffic — cabotage. They include the United States and China; three European countries, Sweden, Holland, and Denmark; Mexico and nine small Latin American states. Many bilateral agreements will still be necessary to begin post-war air transport operations.
The real test of the success of Chicago will be whether the small but immensely significant area of freedom to trade expands. The conviction of Great Britain and many other European countries that restriction is necessary is based on factors which may well change as the world returns to normal. Britain’s dependence on the export of goods and services will continue, but when she and the other war-ravaged countries again have their airlines operating normally, they will have more confidence in their ability to compete effectively for world air markets. If, as we believe, long-distance, through services prove not to interfere seriously with local operations, the imagined perils of the fifth freedom will disappear. Finally, if world air travel expands in the manner in which the United States expects that it will, there will be less fear that the airlines of any nation will starve to death unless guaranteed a “fair share” of available traffic.
- The conference could not deal with the question of whether the Axis nations will be allowed to engage in commercial aviation. This problem is left to the Peace Conference.↩