AVIATION: Green Light for United

The Civil Aeronautics Board last week approved a strategic air transport deal: the purchase by United Air Lines of a 75% interest in Mexico’s twelve-year-old, 1,675-mile Lineas Aereas Mineras, S.A. LAMSA connects Mexico City with the U.S.* and with eleven important cities across the rich center of Mexico. Thus the one U.S. domestic airline which joined hands with Pan American Airways in sponsoring the “chosen instrument” policy for international flying after the war (TIME, Aug. 23) became the first (except for American’s direct flights to Mexico City) to compete with Pan Am below the Rio Grande.

Up to now, LAMSA has had a pretty tough time. From 1938 through last March it ended up with a net loss of 273,000 pesos ($56,500), and its present book value is only some $32,000. But United thought LAMSA’s prospects were worth $145,750 for 3,750 shares of stock. UAL also announced that it would sink $1,000,000 more in improvements.

CAB’s cautious approval was for “air service within Mexico only [and] will cease to be effective if LAMSA extends its operations beyond the borders of Mexico.” United officials insisted they had no further ambitions—not even for a new San Diego-to-Nogales route to link the two lines directly. But there was scarcely an airman alive who did not predict: 1) sooner or later LAMSA would compete with Pan Am in more than one Good Neighbor country, and 2) that when it asked for permission to do so, CAB would give it another green light.

* At Ciudad Juarez, across the border from El Paso, and at Nogales on the Arizona line.