development of an air transportation system to meet present and future needs of our foreign and domestic commerce; to foster sound economic conditions in the regulation of air transportation; and the fostering of competition to the exter: necessary to assure the sound development of an air transportation system. It is Seaboard World's view that the public interest is broader than the interest of any one U.S. airline, regardless of whether that one carrier is at a competitive disadvantage with a foreign air carrier or carriers.

It is understandable that the Congress should wish to deal with the subject of competitive disadvantage of U.S. air carriers with foreign air carriers and to consider broadening the exemption power of the Board to meet this problem. How ever, in dealing with the problem, this Congress should consider that it is the U.S. air carrier industry which is at a competitive disadvantage with the foreig air carriers on a given route and not any one U.S. carrier. What is good for Par American is not necessarily good for the United States, but what is good for the United States is always good for Pan American and all other U.S. international flag carriers.

For this reason, Seaboard World Airlines would support legislation which would permit the Board, upon the finding that a U.S. air carrier/or carriers is are at a competitive disadvantage with foreign air carriers, to grant in the public interest an exemption either to that carrier or carriers or to any other carrier applicant for Section 401 authority. The Board should not be bound to grant the exemption only to the one carrier meeting competitive disadvantage with the foreign air carriers.

Seaboard World believes also that the bill should include procedural safeguards to assure that other U.S. air carriers are on notice of an exemption application by an air carrier for a route on the basis of a competitive disadvantage with s foreign air carrier or air carriers, and that the other U.S. air carriers should have an opportunity to present their views. The bill as presently drafted permits the Board to grant an exemption on its own motion provided it is approved by the President.

Seaboard World believes further that exemptions granted under present Section 416 of the Federal Aviation Act should not require Presidential approval These exemptions are often granted to meet emergency conditions and the courts have carefully circumscribed the limitations of the Section. To require the President to consider each such exemption application would add considerable tasks to the Presidency and because of the additional clearance procedure involved might interfere with efficient airline operations.

Finally, since this Subcommittee is considering the broadening of the exemption power in Section 416 of the Federal Aviation Act in one limited aspect, we of the all-cargo industry would like to urge that the Section be amended so as to permit the Board to grant exemptions from the provisions of the Federal Aviation Act upon the public interest finding that the exemption would further the development of U.S. flag all-cargo international air transportation. As the Subcommittee knows, the development of cargo requires as flexible all-cargo operations as possible. Cargo often originates not at major U.S. gateways, but at a variety of points within the U.S., and its foreign destination varies widely with the particular type of shipments. As the capacity of all-cargo aircraft becomes larger and as the development of U.S. foreign trade requires prompt and efficient distribution of U.S. products abroad by air, the CAB should be empowered to grant appropriate exemptions to permit the routing of all-cargo flights from initial origins to final destinations with the authority in the all-cargo carrier to make sufficient stops en route to permit an economically viable operation. Many foreign carriers already have this authority, or claim this authority; e.g., there are three foreign flag earriers operating all-cargo aircraft from Europe to New York via Montreal. Board should have the power to give the U.S. all-cargo carrier the same type of flexible authority. Not only will this help increase U.S. exports with the consequent beneficial effect on the U.S. gold flow position.

The

Seaboard World appreciates this opportunity to make its views known to the Subcommittee and trusts that this letter will be printed in the hearings of the Subcommittee on S. 3197. An identical letter is being sent to Chairman Magnuson of the Senate Committee on Commerce.

Respectfully yours,

JOEL H. FISHER,

Washington Counsel, Seaboard World Airlines, Inc.

Senator MONRONEY. The committee will stand in recess until 2 o'clock this afternoon.

(Whereupon, at 12:30 p.m., the subcommittee was recessed, to reconvene at 2 p.m. the same day.)

AFTERNOON SESSION

Senator MONRONEY. The Subcommittee on Aviation of the Commerce Committee will resume hearings on the bills S. 3197 and S. 3198. Our next witness is the distinguished legislative representative of the Air Line Pilots Association, Mr. James E. Meals. Will you come forward, Mr. Meals? We are happy to have you testify.

STATEMENT OF JAMES E. MEALS, LEGISLATIVE REPRESENTATIVE, AIR LINE PILOTS ASSOCIATION; ACCOMPANIED BY CAPT. CURTIS OLSEN, PILOT

Mr. MEALS. Thank you, Senator.

The Air Line Pilots Association thanks the chairman and members of the Senate Committee on Commerce for the opportunity to comment on the amendments proposed in S. 3198.

My name is James Meals, and I am director of governmental and legislative affairs. I am accompanied by Capt. Curtis Olsen, a longtime pilot for one of our major international carriers, who will stand ready to answer any questions that the chairman and members of this committee may have at the conclusion of our statement.

The Air Line Pilots Association (ALPA) is a nonprofit organization representing all the pilots on all U.S. scheduled domestic and international carriers, with one exception. These pilots necessarily represent the greatest pool of pilot skills available to exploit and develop the potential of U.S. air commerce. They also represent airlines fully competitive with one another yet responsible to circumscription placed on them by U.S. Federal regulatory agencies. That these pilot skills can be of incalculable value to this Government, outside the field of commerce, is undoubtedly demonstrated by the response of U.S. airlines to Department of Defense airlift requests for Vietnam.

Within this context the ALPA wishes to voice its approval of S. 3198 as a useful and needed amendment to the act.

In our view S. 3198 will arm the Board to match certain other countries. The weapon of suspension of a foreign airline's services to the United States can certainly combat the discrimination practiced against U.S. carriers in certain countries. As other witnesses have decribed the general problems vis-a-vis the United States and certain other nations in the operation and interpretation of bilateral air transport agreements, we will define certain examples where this new authority would be useful.

Recently the Portuguese Government applied restrictions upon the capacity of Pan American and Trans World Airlines to and from Lisbon. The timing of this move was certainly related to the AlitaliaTAP blocked-space/TAP air carrier permit applications; leads to a conclusion that Portugal hoped to speed the Board in its approval of TAP's application by this action.

The result is that many U.S. air travelers will be forced to revise their travel plans with probable diversion to foreign flags and a

doublefold disadvantage to the United States: a further deficit i payments and a reduced opportunity for U.S. pilots-not to mentio the economic penalty to both airlines with their expenditures to provide the higher level of service anticipated before this sudden cutba Another example is in the situation of last year's decision by the Philippine Government to reduce the allowable frequencies of Pa American and Northwest Airlines to and from Manila. This actio was intended, apparently, to force this Government to grant PAL Tokyo rights on the U.S.-Philippine route. Despite the conditioning of PAL's permit on maintenance of both U.S. flaglines' existing schedules, nothing has occurred to restore them to earlier frequency

In France, Spain, Chile, Venezuela, and many other countries legislation or regulations exist to regulate the operation of foreig airlines to and from such countries. "Air Laws and Treaties of the World," published under the direction of this committee, lists other examples. The operation of these restrictions hamper this country's attempts to correct the deficit in balance of payments, denies the US air traveler a freedom of choice in air carrier, and derogates employ ment opportunities for pilots represented by the ALPA.

The Federal Aviation Act does not empower the Board to act except through full evidentiary hearings against a foreign-flag airline. The proposal suggested by S. 3198 will give the Board power to ac: instantaneously with an action discriminatory toward U.S.-flag air carriers. Had this power been available when the French Govern ment restricted U.S.-flag carrier cargo services last year, action against Air France might have removed these restrictions. Instead. U.S. air carriers are faced with a continued limit without present hope of resolution. And the same could be said of Italy's restrictions in air cargo service despite a favorable arbitration decision for the United States of the dispute.

The secret of equitable exchange of air services lies in proper bilateral air transport agreement descriptions and route annexes But an authority vested in the Board to suspend a foreign-flag airline permit can be of equally pertinent and effective use. We therefore urge the passage of this amendment, S. 3198.

Senator MONRONEY. Do you have any testimony or position or S. 3197?

Mr. MEALS. No, sir. We did not prepare a comment for S. 3197 | Senator MONRONEY. Are your pilots divided on this?

Mr. MEALS. Yes, sir.

Senator MONRONEY. No unanimity of position?

Mr. MEALS. No, sir.

Senator MONRONEY. On this there is unanimity?

Mr. MEALS. Yes, sir.

Senator MONRONEY. What are the circumstances of the air carg fight with Air France and Alitalia?

Mr. OLSEN. The French Government restricted the services of Par American and TWA and Seaboard Airlines to and from Paris, limiting both frequency and capacity of the aircraft. In other words, regard less of the capacity of the aircraft, they were limited on the load tha they could carry.

Senator MONRONEY. You mean it was an artificial limit below what the plane safely was capable of carrying?

Mr. OLSEN. Yes, sir. The 707 cargo airplane can carry something around 90,000 pounds total load. But the French Government restricted services to two per week per carrier, with a limit of 30,000 pounds or something of that order per flight.

Senator MONRONEY. Were there any conditions that they wanted met? Or were they simply restricting the U.S. service?

Mr. OLSEN. No, sir, the French were not restricted. At the time they imposed the restrictions this probably equaled the capacity of their 1049-G cargo aircraft. They were using Constellation cargo carriers, and at that time they had jets on board but had not taken delivery. Obviously the French company was trying to equate our airlift to Air France.

The restrictions were to be removed by 1966. This hasn't been done and U.S. carriers are still limited in frequency and capacity. Senator MONRONEY. In other words, by terms of the bilateral agreement reached with France, the agreement that limited us in cargo capacity was to go off on what date?

Mr. OLSEN. Sometime the first part of 1966.

Senator MONRONEY. And although the time had arrived and they didn't have the equipment, they held us back to two flights a week? Mr. OLSEN. They took delivery last September, I believe it was, of the first of their 320-C's, 707 cargo airplane. I think they have two cargo airplanes at the present time. I don't know the size of the total cargo fleet they have on order. But France, in addition to these restrictions, for a while had a diurnal restriction on service in and out of Orly. The restriction is still there. So that they can limit the time of service offered as well.

On certain flights, particularly the cargo flight northbound out of Italy, this could pose a problem. It might mean you would arrive in Paris and be unable to depart until the next morning. This is a very subtle form of restriction. Although it applies equally to all carriers. Senator MONRONEY. How is that effective?

Mr. OLSEN. This is an airport restriction. This is something outside the bilateral.

Senator MONRONEY. A flight time delay.

Mr. OLSEN. Yes, sir.

Senator MONRONEY. So it would arrive in the evening and be held over until the next morning.

Mr. OLSEN. It could be held over until the next morning. I believe 2,300 hours local; 11:00 p.m. is the last departure you can make out of Paris in any case, with four-engine size. I think there is a midnight for the Caravelle. But for both Pan American and TWA, with a late afternoon cargo flight north out of Rome, through Paris to New York, this could pose an operational problem.

At that time, of course, Air France, at the time they put the restriction on, Air France was operating Constellations with no diurnal limitations on takeoffs or landings whatsoever.

Senator MONRONEY. That has been restored now so that normal. takeoff time is allowed?

Mr. OLSEN. No, sir. The night restriction is still in effect at Paris. This applies to all carriers operating four-engine jets in and out of Paris.

Senator MONRONEY. You mean not just the United States?
Mr. OLSEN. Not just the United States.

Senator MONRONEY. How about Air France?

Mr. OLSEN. It applies to all carriers. This is an airport restriction It is not the result of the French Government.

Senator MONRONEY. Is it for the purpose of traffic control c anything related to safety, or is it arbitrary?

Mr. OLSEN. The nighttime restriction is for purposes of having peaceful night's sleep in the vicinity of the airport for the residents Senator MONRONEY. It is a noise factor.

Mr. OLSEN. It is; yes, sir.

Senator MONRONEY. Do you think it really is? Or is it a matter of giving unfair competitive advantages to Air France taking off at 6 in the evening?

Mr. OLSEN. It gave Air France a competitive advantage whe they were operating piston flights, although it could be made up if they left very, very late at night and the jet could operate in time to catch it on the way. Air France could offer cargo departures then around the clock, whereas the U.S. carriers would obviously be penalized by having an 8-hour period in which they couldn't operate anything through Orly.

Senator MONRONEY. We are liable to face that problem here, the problem of noise suppression and complaints.

Are there any other examples of cargo discrimination to limit the capacities or numbers of flights?

Mr. OLSEN. Two years ago the Italian Government notified this Government that cargo fell outside the bilateral. The bilateral defines the carrier's principals as cargo, property and/or mail. This country I am sure has always taken the position that cargo and property are identical. But the Italian Government stated that their position is that the cargo was outside the bilateral and forced the US. Government into negotiations and arbitration. Over a year ago the arbitrating commission ruled in favor of the United States, that cargo fell within the bilateral and that the Italian Government could not properly restrict us offering cargo service to or from Italy, by U.S. carriers. I think both Panama and TWA are at the frequencies they had at that time.

Senator MONRONEY. Are these frequencies limited by the bilaterals?
Mr. OLSEN. No, sir.

Senator MONRONEY. It is just unlimited-cargo capability?
Mr. OLSEN. Yes, sir.

Senator MONRONEY. When they chose, they cut it down to maybe two flights.

Mr. OLSEN. The Italian Government notified us that they would allow us each two flights a week. I believe I am stating this correctly. Airlift into National operates Alitalia cargo flights. They operate four per week. Eventually Alitalia will buy its own cargo aircraft. If they increase their frequency, they may allow us to increase ours. Senator MONRONEY. But on an equal basis?

Mr. OLSEN. This seems to be the Italian position.

Senator MONRONEY. You haven't had this same thing in passengerspace limitations?

Mr. OLSEN. No, sir.

Senator MONRONEY. You can run as many passenger flights as you desire?

Mr. OLSEN. That seems to be the case.