AVIATION: Freight War

For the dog-eat-dog air-freight business, the showdown had come. So far as the independent carriers could make out, the issue was plain: Would the scheduled airlines, which had been slow to wake up to air freight’s possibilities, be permitted to drive the independents out of business? The scheduled lines’ weapon was a rate war — the 12¢-per-ton-mile tariff recently proposed to the Civil Aeronautics Board by American, United and Pennsylvania-Central Airlines. What roweled the independents was their firm conviction that the scheduled lines could do the job only with the help of their Government “subsidies” in carrying air mail.

Some 1,000 ex-service flyers started freight lines at war’s end, but only eight lines of-any consequence are still flying. The biggest of these is Slick Airways, Inc., of San Antonio. Last week, the line’s young (26) president, Earl F. Slick, who is also president of Independent Airfreight Association, laid the independents’ case before the President’s Air Policy Commission. “If this rate goes through,” he warned, “we’ll all be bankrupt in six months.”

Slick argued that on present air-freight volume, the proposed rate was less than cost. Slick knew what he was talking about. His line had flown 14 million revenue ton-miles in 1946, almost as much as all the scheduled airlines together.

Like the other independents, Slick had done this without any Government help —and lost $1,300,000 doing it. (He hopes to start making money this month.) But the regular airlines, said Slick, making the case for the independents, get 45¢ to $5.01 a ton-mile for carrying the U.S. mail. “How,” he demanded, “can they have it both ways? If they can afford to carry freight for 12¢, why do they need 45¢ for mail?” Answered he: “It is an obvious attempt to drive us to the wall.”

American Airlines’ Board Chairman C. R. Smith pointed out that Slick himself had started the rate war—and thus had driven many another independent to the wall (Slick’s biggest competitor, California Eastern Airways, Inc. was ready to seek a merger with Slick). Slick had cut his rates to 12¾¢ in August. The scheduled airlines, getting big new planes, were able for the first time to meet this cut by shifting their displaced DC-4s to air freight. (American alone was transferring six DC-4s.) The independents’ best hope was that CAB would disallow the new rates, but it was hardly likely that it would not allow some cuts. The future looked dark for the independents.