AVIATION: Dog in the Manger

Last Thursday, passengers on Pan American Airways’ Friday plane from New York to London were called to the phone. They were informed that the flight had been canceled. Late that night, they were called again. The flight had been rescheduled—but only as far as Shannon, Eire. Said Pan American mysteriously: “This situation arises from Government restrictions [cutting] flight schedules . . . to London. We can give no assurance of onward transportation from Ireland….”

The new “Government restrictions” were Britain’s curt reply to Pan American’s Juan Terry Trippe for cutting his New York-London fare from $572 to $275. The restrictions were ordered by Britain’s Civil Air Ministry, headed by thin-faced Lord Winster, who recently drafted the bill to nationalize British Airlines. With those new rates, said Lord Winster’s Civil Air Ministry, Pan Am could fly to London only twice a week. If Pan Am raised its fares to at least $375, it could make seven flights a week.

In this determined move to impose its own minimum fares, Britain had the potent help of Pan Am’s chief competitor, American Overseas Airlines. In London, American Overseas’ board chairman, John E. Slater, joyfully told a reporter: the Air Ministry had given American the right to fly seven planes a week into England—at its present high fare of $572. Pan Am would be cut from five flights to two. Reason for this favoritism: American was “willing to let the Governments,” instead of competition, set the rates.

Pan Am’s rate-cutting was a crime in British eyes because Britain’s BOAC, charging $647, was not ready to compete with it. While Pan Am and American were getting surplus DC-45, BOAC continued to fly into Baltimore with Boeing clippers, which one British airman called: “A bit antique, you know.”

BOAC could scrap its obsolete clippers (as Pan Am plans to do), buy surplus U.S. landplanes. But the British Government prefers not to shock proud Britons by using U.S. planes. Britons fallaciously believe that their own planemakers will soon produce suitable landplanes. Actually, Britain’s first postwar landplane, the Tudor, will not be ready until spring, has no chance to compete with U.S. planes.

Thus British policy tends toward a dog-in-the-manger role. Instead of making BOAC efficient, it punishes U.S. airlines for their efficiency. Efforts to negotiate an Anglo-American air agreement have been blocked by Britain’s insistence on rate regulation by fixing fares on the level at which the most efficient operator could make a profit. Pan Am said that this was exactly what it was doing.

But the British suspected Pan Am of operating at a loss to corner the traffic, drive out competition. This Pan Am flatly denied. With full loads, and five flights a week, it insisted that it can make money. The British were still miffed.

Said one official: “Something more than rates is involved. It’s also a question of international good manners. After all, you don’t go across the street to your neighbor’s house and tell them you are having a bridge party in their parlor that night.”

But what Britain was trying to do was make up its own bridge rules, force everyone else to abide by them. Having failed in a direct attempt at the Chicago Air Conference to limit passenger capacity of lines engaged in world air transport, Britain was plainly trying to accomplish this indirectly. At week’s end it looked as though the British Government-American Airlines squeeze play had worked. Pan Am announced that it felt “reluctantly compelled” to offer to return to its prewar rate of $375, if the British would give Pan Am its “fair share” of American-flag flights to England.