AVIATION: End of the Line

Of all the nonscheduled airlines* that sprang up after World War II, none was a bigger hit with the traveling public—or more trouble to CAB—than Trans American Airlines. Put together by a former Navy lieutenant commander, an ex-Air Corps transport pilot, and two former Douglas Aircraft employees, the Trans American group of companies started cheap fares, forced scheduled airlines to cut-rate coach fares. Trans American built up a $16 million annual business. All told, it has carried more than 1,250,000 passengers without an accident. But it broke CAB’s regulations by shuffling planes about among five interlocking companies and operating like a scheduled carrier without a franchise to do so.

In 1955 CAB’s patience with this “flagrant” circumvention of the rules snapped, and Trans American was ordered out of business. The company went to court and in December 1956 was refused a rehearing by the Circuit Court of Appeals. Last week, with an appeal pending before the U.S. Supreme Court, Trans American got ready to quit; it leased five DC-6Bs to Eastern Air Lines for $12.8 million for five years, plus the rights to two more planes now on order.

The leasing at about $2,000,000 more than the planes cost originally left Trans American only three DC-45 now used in West Coast shuttle service and on military contracts, plus one old stand-by DC-3. By leasing before the Supreme Court rules, the owners got more than if they waited and then had to make a forced sale. If the court refuses to send the case back to CAB for a new hearing, Trans American will have only 45 days to close up in 21 cities and lay off 750 employees.

*Airlines which have no franchise from the CAB to fly regular schedules on specified routes.